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American Medical Quality System

Objective

The question is how to get from where we are in health care as a nation to where we want to be. Where we want to be is for clinics like Sumner and hospitals like LDS to be the rule rather than the exception. The results of such a transformation nationally would be:

  • More primary care doctors spending time coordinating patient care and reducing unnecessary admissions to hospitals and emergency departments.
  • Fewer hospitals, diagnostic centers, specialists, and ambulatory surgery centers delivering only needed care and delivering it more efficiently.
  • Preservation or improvement in physician incomes and the profit margins of high-value hospitals.
  • Demonstrable improvement in the quality of care.
  • Money freed up to cover the uninsured and reduced cost of health care.

To get there, three actions are required:

  1. Establish benchmarks for quality medical practice.
  2. Discover the best processes required to achieve benchmarks and then teach those processes to providers.
  3. Implement and finance pilot programs incorporating Medicare, Medicaid, and private payers that will pay doctors and hospitals a share of the savings from their efficient practice.

The operational plan is to create a voluntary group of linked high-performance hospitals and clinics in all regions of the country that would act as vanguards and examples of high-value medicine. This group would prepare the way for widespread changes in payment policy by Medicare (and likely many private payers, too). Physicians who choose to participate in the pilot programs would be exempt from future cuts in Medicare fee-for-service payments in those programs. The process would be publicly visible and would work to gain public support and understanding. A public/private partnership called the American Medical Quality System would be responsible for implementation.

American Medical Quality System

Payment reform is the key to improving the value of health care. As long as there is no business case for quality in medicine we will see no improvement in its value. Fee-for-service medicine is inherently inflationary because doctors are paid for every service they provide, needed or not, duplicated or not. It provides no business case for value.

Current efforts at payment reform are widely-distributed among organizations and individuals with differing motivations and commitments; projects are often under-funded with little administrative support for participating providers; and none involve traditional Medicare along with other payers.

For the effort to result in the needed structural change in US medicine a single entity should provide administrative support for providers, fund the pilot projects, and discover the necessary information to conduct them. The conditions for optimal pilot projects are:

  • The approach should be from the bottom up, not the top down—that is, it must be clinic-by-clinic and hospital-by-hospital. Policy makers don’t like to hear this because it seems too slow, but they should put themselves in the position of the doctors, hospitals and clinics that are being told that they will be “paid for performance.” Earning a share of the savings from efficient practice will require doctors and hospitals to literally start a new business, one requiring new investments for an entirely new way of practicing medicine.
  • They must incorporate public programs (Medicare and Medicaid) and private insurers so that the pilots involve all patients of a provider. Hospitals and doctors cannot reconfigure their entire practices for only a portion of their patients and cannot be expected to respond to a plethora of different reporting requirements.
  • Most doctors and hospitals do not know how to practice efficient medicine. They never had to and are, in fact, paid not to. Successful methods will have to be discovered and taught.
  • Start-up administrative and financial support will be necessary for participating providers.
  • The quality of care of participating providers must be routinely measured and reported to the public. In a system that shares the savings from efficient practice with providers, patients should know that they will receive needed care.

W. Edwards Deming found that to change an organization, the square root of the number of units needing change had to be turned. If business principles apply to medicine, and they must, then 64 hospitals and several hundred clinics could begin the process of reforming US healthcare.