From 3M Health Information Systems
Podcast Episode Transcript: Financing U.S. health care to invest in the future
Gordon Moore: Welcome to 3M’s Inside Angle podcast. This is your host, Gordon Moore. With me today is Rebecca Etz, PhD. She is an associate professor of Family Medicine and Population Health at Virginia Commonwealth University and co-director of the Larry A. Green Center, Advancing Primary Health Care for the Public Good. Dr. Etz has deep expertise in qualitative research methods and design, primary care measures, practice transformation, and engaging stakeholders.
Welcome, Dr. Etz.
Rebecca Etz: Thank you very much for having me, Gordon. It’s a pleasure.
Gordon: You are one of the key people I think nationally who was convening talking about researching and spreading the message about what makes up a rational health system that gets the results that people want and expect. And I’d love for you to explore that with me, and especially the relationship that health care, and health care delivery, has to do with the way we finance health care.
Rebecca: I’d love to talk about that. It’s one of my favorite topics.
Gordon: So with that, just start with, what’s your work at the Larry Green Center, and then, how does that flow into the premise that I just said?
Rebecca: Sure. The Larry Green Center is all about advancing primary healthcare for the public good. And we really mean that. So if you go to our website, what you see is that we say we’re interested in bridging the chasm, which is fairly large, between the business of medicine, which is a necessity, and the lived experience of the human condition. It’s always tough when you take somebody’s life which exists in three dimensions and you have to reduce it to two dimensions when we create a medical record or any kind of interaction or exchange. So we really look at, how can we lessen the harm that’s done when you reduce that to a two-dimension sort of representation?
We do that through a number of ways. One of the ways we do it is through the Person-Centered Primary Care Measure, which is a measure we’ve created that really is less focused on biological clinical outcomes and workflow processes, and more focused on the interactions that happen in everyday primary care, and what’s most meaningful and important about them to clinicians and their patients. The people who deliver primary care and the people who go there for help.
We also run a regular survey during the pandemic to actually know what’s going on on the ground in primary care, because so much of what we do is actually not captured in any structured datasets. So we don’t know what’s happening. And how can we possibly identify problems and fix them if we don’t know what’s happening? A lot of that is propagated by the way we are compelled to collect data. And a lot of that is motivated by payment.
One of the things that we did at the Larry A Green Center was we realized that there is incredible historical division in all the different people that are involved in primary care. And it’s a division that made sense and it was meaningful when all these different groups were created and they have their own demands and they’re competing with each other. But we also can’t survive that mess anymore. It’s like primary care is a beautiful mess, and what are the parts of this mess that we can no longer live without and what are the parts of the mess that we can no longer survive? So we work on that.
One of the things we did was we took the survey results, “What’s going on in primary care during the pandemic?” And finance was one of the first things to really scream out for attention. And we asked the seven largest primary care physician organizations if they would get together and talk to each other and to us about having a common voice about what’s needed to fix this incredibly broken system.
We do get asked why we didn’t include nurse practitioners and physician assistants. We actually don’t care what your certification is. It just turns out that it was the survey data that allowed us to pull people together because of what it was finding, and it was the physicians that were participating most in the survey. So that’s whom we were able to call on.
But one of the things that we talked about is the ways in which the current payment system absolutely fell apart during the pandemic. It in no way was able to support the care being delivered. It was not flexible. It was so tied to little minutiae of everyday practice, that is business practice, that it wasn’t able to support the everyday realities of care and the ways they had to change during the pandemic.
What this meant was we talked with these organizations, they came together, and, oh my god, I was incredibly humbled by what they managed together. It was really a sight to see. And they all really agree on the level that exists above payment, and that’s finance. So, finance is sort of the philosophy of how we fund care. Payment is how we pay for it. We can only pay for things that we are structured to pay for, and the finance system structures us.
So I said, “Well, let’s look at the finance system. What’s here that we need to change?” And they were very clear and they actually all agreed right from the start, our current finance system for healthcare is based on cost. How much does something cost? We pay for something based on how much we think it costs. Maybe we have a little plus, a little margin of profit, which everybody needs in order to earn a living. But it’s based on costs. And we are driving to control costs because we think that costs are too high.
What that does, kind of ironically, is cause the most focus and attention on the things that cost the most, and the least amount of tension on the things that cost the least. It’s also very short term in its vision. It looks only at what’s immediately in front of you and not what’s coming down the pike.
The reason that matters is because a lot of primary care is about upstream causes to health harms. It’s not the immediate broken arm and repair. It’s about paying attention to lifestyle and health behaviors and mental wellbeing and physical wellbeing, and knowing that attention to these things early on can prevent disease and disease burden later on. Right? So we need a finance system that isn’t focused on just the present but allows us to invest in the future.
In fact, in other countries where they see healthcare not as a cost-based system but rather they see it as an investment in community health, they pay for it differently as a result. They are willing to put money in to support team-based care, and they are less worried about the counting of little things, of little widgets, and more worried about paying for the wholeness of health as delivered by really a community of solution, primary care working with public health, working with behavioral health, and everybody else.
Gordon: So I’m thinking as you described that the classic phrase “an ounce of prevention,” and I’m thinking, US healthcare system I’ve heard described as brilliant. I once talked with a colleague from Norway who was cycling around Marin County before we had a meeting in San Francisco, and said, “I couldn’t believe it. I found a PET scanner in this little community hospital in Marin County. In all of Norway we have no PET scanner.” He was astounded. I think we have this brilliant system that has incredibly flashy stuff but it seems like we’re spending so much, 10x or 100x, cleaning up a mess that maybe we could have gotten in front of in some instances, in some times.
I think about all the chronic condition guidelines that say, “We’re going to work with somebody on their diabetes and their cholesterol. The first thing we should do is to work with them as much as we can on lifestyle and behavior change.” And I think about lifestyle and behavior change being the underpinning of so many different chronic conditions and anxiety and wellness and all of these other factors.
And then I think of the reality in practice where clinicians are running room to room, they don’t have time. What I’m getting is that we should think less that this is part of the payment system, because that’s how the checks are written, and more about this is how we’re financing healthcare. I’ve heard that there’s a big difference in how much of the medical dollar goes to primary care in the US compared to other countries. Do you have any insight on that?
Rebecca: Unfortunately, the number of medical dollars that go to primary care everywhere is actually low. It’s just I think worse perhaps in the U.S. than in other countries. Outside of the U.S., the average might be something like 12 to 14 percent going to primary care. In the U.S., it varies depending on which report you read, but conservatively it’s about 6 or 7 percent going to primary care.
This is probably something that your listening audience knows, but just in case they don’t, primary care handles a little over 50 percent of all office-based visits every year in the health system. So in the last year that we have, which is 2019, which we have data, primary care handled about 450 million visits. And it does that with roughly one-third of the workforce and with roughly 6 percent of the budget. So that’s a huge disparity.
The ways in which it’s paid are based on a really arcane and outdated system. It was created with good intentions and good meaning. But it is created on a system that was developed about 40 years ago and based on our knowledge 40 years ago on how medicine was conducted and how it was performed. And our technologies and our abilities, as well as the ways in which we get sick, have all changed in 40 years. Surely the payment system should change with it.
And lots of times we tried to change but it’s very hard to change a payment system if the financial system that feeds it doesn’t change. So we may in fact decide that we want to pay for things differently, but if written into the Social Security Act in the 1960s are the definitions that we have to enact payment, then we’re stuck, we can’t change things.
I’ll give you an example. During the pandemic, telehealth was incredibly important. Without telehealth, we would have lost all access to our patients. In the first three weeks of the pandemic, about 85 percent of primary care practices went from in-person care to telehealth. This is kind of old news for a lot of people.
I like to just take a pause on it and underscore it for a minute. Healthcare is the fourth largest industry in the US. We’re a country of 320 million people. It is the fourth largest industry in the U.S., and primary care is its largest platform. And in three weeks, it completely changed how it delivered care. That’s capital investment in the infrastructure, that’s adoption of new technology and new software platforms and new hardware, that’s training of staff for a new workflow process, that’s calling all the patients and getting them all to change all of their appointments. They did everything in a three-week span. Many of them went virtual in about four days.
So this was a dramatic change across the country. And at the time, there was no financial model for it. There was no federal investment to replace the capital that practices expended. There was no federal support for the training that was required. There was no support for the visits that then happened. Your primary care visit that you might get $85 for now happening via telehealth, if it’s on video, it might have $20; if it’s from phone, it might have been $3. And I would remind everybody that 22 percent of the country doesn’t have broadband. It was absolutely responsible and necessary for the good of public health and the delivery of care during the pandemic. There was just no way around it. And yet there was also no financial structure to support it.
Practices continued to provide care, clinicians skipped their salaries, staff got furloughed, people cut down on hours, only extending their contacts on computers and phones. And they still weren’t paid and they still haven’t been made whole. They could apply for provider relief fund, they could apply for PPP. You add up all the stuff they could apply for, they maybe could have gotten 2 percent of the 80 percent that they lost. It’s actually absurd.
This is because the finance system could not flex to allow for the payment models that were required to be responsive to the pandemic. And even when we tried, it was difficult. Because while we could say, “Sure, you could use telehealth,” what about HIPAA? What platforms were you allowed to use? It was a while before anybody said you could use Facetime or Zoom or Skype. These were the things patients had. We didn’t have HIPAA-compliant platforms.
It was then a while before we realized, “God, lots of the country doesn’t have broadband, what are we going to do about them?” The exaggeration of health disparities that happened because of the digital divide was huge. Even as we had CMS say at the start of this year that they would pay for telehealth at parity, it’s only one payer. The average practice has 16 to 20 contracts with different insurers and they all demand different things. This is one of them.
And this one said, “Sure, we’ll pay at parity,” but they’re still held accountable to telehealth as defined in 1964, and later updated, but still defined as has to be only if you’re in a rural area, has to be only if you don’t have access, you don’t live anywhere close to a medical place, has to be a conversation of at least 10 minutes or more. There are all these requirements that actually don’t match the way health had to be delivered or healthcare had to be delivered during the pandemic.
It is the finance system that stood in our way and these legacy regulations that require an active reform. Those were the things that we have to prioritize if we’re going to want to make a real difference.
I think we also have to understand that changing the finance model does not just mean primary care. It doesn’t live in a vacuum. It means understanding you have to change how you pay for primary care, health care as a whole, public health, behavioral health, social services. It’s a complete package.
Sweden is number one in the world usually in health outcomes but they actually have a pretty bad primary care system. Number one, because they spend more than anybody else on their social services. And good for them. I sometimes get my primary care colleagues saying, “Oh, god, don’t tell people that, don’t say that, because then they’ll think, ‘Oh, you just invest in social services and you don’t need any money for primary care.'” That’s absurd, right? I mean, we know that oncologists aren’t responsible for the majority of health but I sure as hell want them around when I need them. The same would be true for primary care. We have to invest in all the things. They work together as a package.
But one of the things that we learned to a dramatic extent during the pandemic is that, in the U.S., we believe in a very strong doctrine of individualism and personal responsibility. And we believe that finance decisions made by the government should not interfere with people’s personal prerogatives. The problem with that is that health is not won and lost in individuals. It’s won and lost in communities. And if we don’t come to realize that, we’re never going to survive.
So, all the other countries, where they actually did really well responding to the pandemic, it’s because they understood it wasn’t just about the medical and it wasn’t just about the social. It was also about civil society and how the whole addressed the pandemic, not just individuals. It’s about being part of a collective.
Our finance model has to allow for that. And right now, it creates regulatory obstacles to allowing for information flow between public health and primary care. Exactly what you don’t want in the first pandemic of your lifetime is to have obstacles keeping public health and primary care apart. Exactly at the time that you don’t want obstacles, we have an inability to coordinate primary care which is incredible at prioritizing need and is well-suited to let us know who needs to be vaccinated first, to CVS and Safeway, which may have the distribution system that allows for lots of shots in the arms very quickly. But the greatest number is not the same thing as the greatest need. And we’re getting that backwards.
So if we could change the finance system and understand that it’s not about encouraging responsibility in individuals alone, but it is also about enabling the social to work together, if we could understand that primary care is based in relationships, relationships are a bank of trust on which we draw when we face uncommon conditions and want people to trust in a vaccine that happened at five times the speed any other vaccine has ever been produced in, that in the time of uncertainty about an illness that we’ve never faced before, you want that trust bank to draw on.
It requires investment. It requires spending some time and energy in it before it’s needed. And that’s what primary care is about. It’s about establishing that connection. We need to honor that and pay for it.
Right now what we pay for are services, individual, discrete cogs, like a cottage industry. If you imagine having to spend your day only getting to do the things that you could define as discrete packages with a work utility to them that had a clear connection to an end outcome, you wouldn’t be able to do things like call your family. You wouldn’t be able to just randomly go for a walk or meet friends at the movie theater, when we’re not in a social shutdown.
There’s no reason why we have to structure primary care the way that we have. There’s no reason why we have to structure health care the way that we have. It’s a fix to a dysfunctional system. And if we can fix the dysfunction of the finance, we can fix the dysfunction of the payment.
Gordon: When I think about act of congress, I get very weak in the knees. It makes me very nervous. Is there anything sub act of congress that would move us forward?
Rebecca: There is. I get myself into trouble all the time but I don’t know how to do other than to just say what I’m thinking, and anybody can contact me and let me know how absurdly wrong I am. But I would say that right now it is the big employers that have more power in healthcare than congress or than CMS, or any of our federal agencies. The big employers are simply bigger and they drive the market.
If the big employers were willing to say, “This is what we stand for, this is what’s important, the resilience of our workforce, we want to invest in them, and we want to allow them to have a personal doctor that will help monitor their health, help them with preventive services as well as when they’re in need. We’ll pay attention to their social circumstances to allow them to draw upon their unique assets and not just identify their peculiar deficits.” They would be happier, more well-rounded people. And happy, well-rounded people are strong producers and contributors to their community. And I think every employer would be interested in investing in that.
There was an article that came out, I can’t even remember when it was, I want to say it was like 2004, in the Washington Journal. It was, I think it was Paul Grundy at the time that was talking about it, and he was the CMO for IBM then. They found, as an international employer, that for every dollar they spent on preventive support for their employees, they saved $5 in healthcare costs. It’s part of what prompted them to really push insurance companies in the US to accept a model like the Patient-Centered Medical Home as an example of high-quality care and worthy investment. And it was a good step in the right direction.
But, it’s been 20 years, can we take a second step now? I think it’s okay. I think the same realization, that the models have changed, the technology has changed, the nature of medicine has changed. The things we get sick from, the way we get healed, all these things have advanced. We need to allow advancement with them. And I think it’s the employers who actually have the ability to say, “We will no longer accept the unacceptable. We believe in the value of a healthy and happy workforce and we are willing to support it. We demand that our covered employees be able to receive the relational primary care that we have 40 years of research showing results in better health and longer health.” Why not?
Gordon: I’m thinking there’s a CEO of a large company who might be listening, and they’re thinking, “All right, I’m into it. Where do I turn to learn more about this and get on the bandwagon?”
Rebecca: Sure. There are a number of resources you can go to. One of the first I would point to is what used to be the Pacific Business Group on Health, is now called the Purchaser Business Group on Health. It’s based on the West Coast but they released a statement from the 40 jumbo employers that are part of their organization about what they consider advanced primary care to be that should be paid for. And that it should be paid for not in a fee-for-service-like way but it should be paid for in a bundled payment kind of way where there’s a certain portion that is capitated and paid prospectively, so that practices can know and depend on a reliable base of income and plan accordingly for the health of the population.
The Center for Professionalism and Value in Health Care produces a lot of really wonderful material on what works for financing primary care and what does not. And they have great guidance. So does Stephanie Gold and Larry Green, published an article in the Milbank Quarterly. In which they evaluate all the different payment systems supporting primary care right now. And they identify which payment models offer the most benefit both to employers and to the population. It’s wonderful.
The Robert Graham Center, which is a think-tank in D.C. that’s associated with the AAFP, they also have a tremendous amount they do about what sorts of payment models appear to be most successful for primary care. As does the Primary Care Collaborative, run by Ann Greiner, in D.C. It’s a partnership of 60 organizations that includes employers, payers, really all sectors of healthcare, even patients. And they do fabulous work.
The Commonwealth Fund just produced a report that has the six payment reforms that need to happen to support healthcare, one of which was a change to the way we paid for primary care as I was describing. The Milbank Memorial Fund produced a similar report. POLITICO came out with a statement like a week ago and identified change in payment for primary care as one of the things we need to be doing.
Primary care has been screaming about this for decades. The problem is it’s not sexy, it’s not specialist, it’s not high-dollar things, it’s not focused on cancer or some real, tangible thing. Eighty percent of what primary care handles has no diagnosis. It’s a collection of symptoms that are brought to us in a presentation. And we just have to figure out what’s going on. And without the results from any lab work, without a diagnosis, we need to figure out how to help you. It’s not as easy to point to as a PET scan or an MRI. It takes a little bit more effort. But it turns out that it’s that everyday contact that primary care has with people handling 90 percent of what their needs are, with simply their heads and their hands, that makes for the most value.
So I would point your folks to those, number of places that I just mentioned. They’re all really well-respected national efforts, basically all agreeing around the same thing, what a good model of support for primary care would be right now.
Gordon: That is fantastic. There are so many topics that I would like to get into but I’m hoping that we might be able to engage your time to discuss how would we know if we’re getting this kind of care. Is there a way to differentiate through measures? You touched on that before and I’m excited to explore that in a possible future podcast.
So, Dr. Etz, thank you so much for your time.
Rebecca: Thank you, Gordon. It’s absolutely a pleasure.