Tag Archives: salaried providers

A Step Away From the Past and Into the Present and the Future – An Old Doc’s Look at Health Care Reform

My son James recently sent me a link to a New Yorker article on health care delivery with this question: “Is Kaiser [-Permanente] like the Cheesecake Factory?” He might also have asked, “Is military medicine like the Cheesecake Factory?”

Health Care Reform - Change and Hope

In “Big Med – Restaurant chains have managed to combine quality control, cost control, and innovation. Can health care?”, Boston surgeon and medical writer Atul Gawande tries to apply the lessons he learned, as a result of a meal at a Boston-area Cheesecake Factory, to health care delivery. While noting that the Cheesecake Factory chain has managed – very well – to control both cost and quality while assuring an excellent customer experience, Dr Gawande points out that medicine doesn’t do nearly as well.

According to Dr Gawande, even in the erudite halls of Boston’s vaunted teaching hospitals – presumably models of the best medical care America has to offer – physician approaches to patient care are individualistic – even idiosyncratic; this results in patient complication rates that vary by as much as threefold within the same hospital; and patient / family experiences have historically been almost invariably wretched. While these hospitals may be at the forefront of research and innovation in health care, they don’t seem to be doing a very good job of delivering quality “every day health care” to “every day patients”.

What are the lessons health care could learn from Cheesecake Factory?

The first is a consistent – and consistently good – product. In the restaurant business, consistency means “standardization”, a consistent way of doing the same thing over and over again. My first lesson in medical consistency came during residency: I trained in a Chicago hospital that catered both to “carriage trade” patients and people from a very poor “mile-square” area in the City. In caring for our patients, our attending physicians very early on cautioned us to use the same care procedures for both the very rich and the very poor, because the instant we tried to “customize” our care (either for the rich or for the poor), we risked introducing opportunities for  medical mistakes. Undoubtedly, in medicine just as in the cooking business, you need to apply the individual judgement of a well-trained and experienced professional to each case. But doctors are notoriously a restive group, very protective of their independence. How do you get a “herd of cats” to practice in a consistent manner, even while permitting those individual judgment calls that hone the standardized approach to each individual patient’s needs? Here, I believe, is the first place my Kaiser-Permanente and my military experience becomes instructive. In both Kaiser and the military, practitioners are salaried. Thus, they aren’t competing with each other for patients and for income. I believe this makes for an environment that encourages true collegiality and a sense of “we’re all in this together”. When you combine true collegiality with a strong culture of “best practices”, I think it becomes relatively easier to develop a department-consistent (or even a hospital-consistent) approach to any aspect of medical care delivery. Of course, this takes effective leadership – something both the military and the Kaiser-Permanente model have spent some resources in cultivating.

Another lesson from my experience not necessarily highlighted in Dr Gawande’s piece is the importance of “doctor-based” decision-making. My favorite example comes from northern California Kaiser-Permanente. I was the chief of urology at my Kaiser hospital. At one of our quarterly Chiefs meetings at the Oakland, California headquarters of The Permanente Medical Group, the 13 of us were pondering a question brought to us by the Chief of the 13 Chiefs of Medicine: what should “company policy” be regarding the use of PSA screening for prostate cancer? Then, as now, with the possible exception of one or two very well circumscribed situations, the data are not at all certain. And then, as likely we would now, we argued the pros and cons at some length. Finally, with no consensus forthcoming, we turned in frustration to the representative from “Higher Headquarters” and begged “What do you want us to do?”. The answer was “You are the content experts. When you decide a policy, that shall be the policy of Kaiser-Permanente.” (We’d probably be urged, today, to look for a “best practice” model to follow, subject to change, of course, as experience and research refined our understanding of the medical matter at hand.) What a reassuring message I could bring back to my colleagues, and to my patients! No “bureaucrat” is making health care decisions for you!

Back to the Cheesecake Factory, Professor Gawande takes notice of the extensive use of computers, with screens at face level throughout the kitchens. These provide the company recipes and serving suggestions, readily accessible throughout all 160 restaurants in the chain. Both the military and Kaiser-Permanente have adopted extensive computer operations throughout their systems. In fact, Kaiser was looking to introduce system-wide computerized health care records and data sharing as early as the late 1980s. Computerized systems permit a secure sharing of medical information – lab test results, radiology images and medical history information – at every hospital and clinic in the system. The value of this is immeasurable in the reduction of unnecessarily duplicated tests and exams, and the easy discussion of such things as Xray images between specialists within the system. When my wife was facing arthroscopic knee surgery recently, her orthopedist just pulled her MRI images up on the screen right there in the exam room and went over them with her and me in detail! With the computerization of health records comes a similar easy collaboration between primary care provider and a specialist or specialists who might be located – at least in the military – half way around the world. The Kaiser organization offers an electronic version of a patient’s health record – on a thumb drive – that he or she can take on vacation, at nominal cost.

The Cheesecake Factory has an active product development establishment that produces an updated menu about every six months. Each of the military services has the equivalent – a research arm which searches for innovations in preventive medicine and the special health requirements of people operating in challenging environments whether that be in submarines, in space, or in the mountains of Afghanistan. The Kaiser-Permanente Division of Research, based in Oakland, California, has published more than 4000 peer-reviewed medical articles in its 50 year history. In 2010, its budget of nearly $100,000 supported more than 50 researchers involved in more than 200 research projects largely but not exclusively oriented to the health of large populations.

Both the military and the Kaiser-Permanente systems of health care offer a feature Dr Gawande doesn’t mention – the regionalization of very specialized care. For example, in northern California, Kaiser-Permanente’s more than 3 million patients receive their cardiac surgery at specialty centers in San Francisco and Santa Clara. Neurosurgical care is centered in Redwood City and in Sacramento.  The military system has similar echelons of care, from clinics to primary care hospitals to specialty hospitals. This regionalization avoids unnecessary duplication of expensive specialty care and equipment, and, as a bonus, assures that super-specialty surgeons and physicians are constantly busy – one determinant of successful outcomes.

Then there is the matter of “size”. The Cheesecake Factory, with its 160 restaurants, experiences economies of scale in purchasing of everything from eggs to refrigerators. The Department of Defense medical establishment is huge – the largest in the country. If if were so oriented, its huge purchasing power could effect amazing savings of scale. One example of Kaiser-Permanente marketplace power comes from some years ago. As the story goes, one domestic insulin manufacturer bought out its competition and then announced a large increase in the price of insulin. Promptly the northern California Kaiser pharmacy operation, as a major purchaser of insulin,  reached out to a large Scandinavian insulin producer and offered to partner with them to bring product to market in the US. This effort was successful, and the price of insulin dropped promptly.

Health care reform, in my view, requires one more thing that was implicit in Dr Gawande’s New Yorker restaurant piece: competition. Even while it was struggling to grow in its early years, the Kaiser-Permanente organization realized that healthy competition is a necessity. From the early 1940s, the Kaiser mantra became something like “unless patients have choices in the care they receive, we will have no opportunity to show how good we really are”. When I was practicing Navy medicine as a General Medical Officer, lo, those many years ago, I remember resenting my patients going to the doctors “downtown”, on the civilian side, for their care. I knew we were giving every bit as good care as the “townies” did, but the knowledge that our patients had a choice kept us all on our toes to do the best we could, even in the”captive” care system that is military care.

There you have it: consistency of medical procedures while encouraging the application of sound judgement; salaried health care providers to eliminate destructive competition and encourage collegiality and unity of approach; doctors- or professionals-driven policy decision-making based on consensus best practices; extensive application of computer technology to record keeping, data sharing and promulgation of consistent practice; regionalization of super-specialized care; scale of economy based on large regional or national systems of organization; and vigorous competition among provider systems.

By way of background, I practiced medicine in all three practice settings: active duty military (Navy, for 3 years), fee for service in a small multispecialty group (5 years), and in the large northern California Kaiser-Permanente Health Care system (20 years). In addition, with 20 years in the Naval Reserve, I had contact and conversations with physicians from around the country who practiced in a variety of settings. These experiences all convince me that a salaried system of care providers virtually eliminates the extra and often unnecessary medical procedures engendered by the fee-for-service model where a physician is paid for each procedure carried out. Fee-for-service puts the emphasis, in my view, on health care providers (the more procedures, the higher the income), rather than their patients and what’s best for them. It’s much more natural for salaried providers to be driven by what’s best for their patients, since salaries are going to be paid whether procedures are performed or not.

©2012 Thomas L Snyder