Unbelievable Promises Monopolized Care—UPMC

It took UPMC only three months to close a community based hospital that had been in operation for over 100 years.  In 1996, when UPMC purchased Braddock Hospital, did the residents of Braddock have any idea of the demise that would follow?

Braddock, a struggling post steel mill community composed of elderly, low income, and African American residents, utilized the community hospital not only as a source of health care but as a community center. Braddock Hospital, the newest building in the community, also served as a place to get a hot meal in the cafeteria and had the town's only ATM.  It also was the community’s largest employer. The building was slated for demolition in order to build shops and restaurants.

UPMC, a non-profit organization, promises in its mission statement to provide health care to those in need, not to refer them to a bus schedule to travel to a sister hospital.

UPMC (Unbelievable Promises, Monopolized Care) continues to dictate health care while providing million dollar bonuses to their CEO and administrators. They do this by purchasing  facilities only to close them, building multi-million dollar facilities near other non-UPMC facilities, purchasing physician practices, and providing care based on the type of insurance the patient carries.

Decreased census and increased operating expenses have been cited as reasons for the closure of Braddock Hospital. But, if you close the obstetric and oncology units your census will certainly decrease. They also did not include the number of admissions to behavioral health, alcohol, and drug detoxification beds. Braddock was said to have a 69% occupancy rate, which was above standards. Former employees and patients stated they were directed to transfer patients to another UPMC facility regardless of the need.

Traveling to another UPMC facility is not always feasible for the elderly, or those on a fixed income with no means of transportation except for public transportation. If one is sick enough to go to the hospital or emergency room because of an injury or bleeding should they have to wait on the street corner for a bus and make transfers before reaching the hospital. Not every hospital visit necessitates an ambulance and many cannot afford to pay for an ambulance for non-life threatening situations. Would an UPMC official have his family take numerous buses to the hospital? These people probably have physicians waiting for them and their own private rooms.

Despite public outcry and lawsuits the residents of Braddock have received little conciliation. They did receive minimal satisfaction in a civil rights injunction; an agreement was reached that provided van service to doctor's offices in the area for an additional three years. But they still have no local facility to receive health care.

Yes, healthcare has become a business where the elite profit (like the steel mills before their closure and UPMC) and those in need continue to be the victims of circumstance (like the community of Braddock).

Accountable to Whom?

An article by Ezekiel Emanuel and Jeffrey Liebman promises “the end of health insurance companies.” According to these former Obama administration advisors, they will be made obsolete by accountable care organizations (ACOs).

The Affordable Care Act provides for the establishment of ACOs to serve Medicare and Medicaid patients. Essentially, a group of health care providers (doctors and/or hospitals) form an ACO and sign a contract with the government to provide care for a large group of patients. They receive a bundled payment based only partially on services provided. Some part of the payment is based on the quality of the health care they provide and their ability to control costs.

In theory, cost control can be done by better coordination of patient care, for example, with the help of computerized records. Since so much of medical care is unnecessary or harmful, a lot of money could be saved, provided the incentives were greater than the profit to be made through overtreatment. It should at least be possible to measure whether money is being saved in comparison to the current fee-for-service system.

Measuring quality of care is more difficult. But it is crucial, since without it, the incentive structure of ACOs might encourage them to withhold necessary care from their patients. But what are the criteria of good health, and how could they be measured without incurring additional expense? Health care research focuses on hospital admissions and readmissions as an indicator that the patient is not healthy, but this is an imprecise measure of health which only becomes apparent after the patient's situation has deteriorated. Like other health indicators, it can be manipulated by denying treatment.

It is possible to imagine ACOs working well under Medicare with proper oversight from government. Nevertheless, there are problems. If an ACO is to be responsible for prevention as well as treatment, subscribers must remain in the system long enough for the ACO to reap the savings that come with prevention. This is possible in a single payer system, but not in this country where there is a lot of client turnover. Also, to be accountable for all their clients' health care needs, an ACO must include specialists in all health problems, which means it must be quite large. But large organizations have greater market share, which discourages competition and leads to higher prices—just the opposite of what ACOs are supposed to do.

However, Emanuel and Liebman are suggesting that ACOs will dominate the private health care market as well. In fact, hospitals are already buying out competitors and hiring more doctors, and insurance companies are merging with hospitals in anticipation of forming ACOs. This trend is evident in the Pittsburgh area. The University of Pittsburgh Medical Center (UPMC), the largest hospital chain, has bought out competitors and has gone into the health insurance business as well. Meanwhile Highmark, the region's largest health insurer, has purchased West Penn Allegheny, the only major hospital chain not owned by UPMC. Not surprisingly, this morning's paper reports that Pittsburgh has the highest hospital care costs of any city in the U. S.

Apparently we can look forward to a brave new world in which, when we purchase health insurance, either alone or through our employer, we affiliate with an ACO which promises to keep us in good health. But Austin Frakt, a health care policy expert who is sympathetic to ACOs, suggests that they “are fine and good for Medicare, but somebody needs to think through the consequences for the private side of the market.”

The dominant characteristic of today's corporations is that they are not accountable to anyone except perhaps their stockholders. A combined health insurance-medical care corporation will have strong financial incentives to charge as much as possible for health insurance while providing as little health care as possible in return. At least under the current system, the patient is caught between two corporations pushing in different directions. If their insurance company is trying to deny them care, there is a good chance that their doctor will come to their defense and insist that they receive medically necessary treatment. If the insurance company and the doctors are all part of the same corporation, who will defend the patient's interests? Without third party oversight, what is to keep the patients from being harmed when their very lives may be at stake?

It is possible that a conscientious employer might provide oversight of an ACO with which it affiliates, since companies may want to keep their employees healthy. However, this is certainly problematic, and, in any case, individual health care subscribers are on their own under this system. I don't see how the entire country can shift to ACOs without substantial government oversight. This, of course, will be strongly resisted by hospitals and insurance companies, in part because it would start to take on the characteristics of a single payer system.

Many countries—Germany, Japan and Switzerland are examples—have systems in which both health care providers and insurers are private entities. But these countries have tight government regulation of medical services and fees. These private entities are required to cover everyone and they are permitted to make only modest profits, if any. And why should they make large profits? Under a single payer system, insurance companies are completely unnecessary, while doctors and hospitals can be limited to a “reasonable” fee for their services. If they want to increase their income, maybe they should be allowed to compete for higher wages by demonstrating that they can keep their patients healthy and, as a consequence, control costs.

Although I have serious doubts as to whether ACOs will work in our private health care system, they may be a good idea when embedded within a single payer system.

Too Much of a Bad Thing

I've just recently caught up with a 2007 book by journalist Shannon Brownlee, Overtreated: Why Too Much Medicine is Making Us Sicker and Poorer. Although some of the specific policies she cites are being changed by the Affordable Care Act, her basic argument is worthy of our attention.

Most advocates of single payer health insurance are justifiably concerned about undertreatment, as represented by the 45,000 Americans who die every year from lack of adequate health care, but overtreatment is part of the problem because it drives up costs and convinces people that we can't afford health care for all. Overtreatment accounts for one-third to one-fifth of all health care spending, which amounts to $500-$700 billion in waste per year. In effect, the poor get too little health care because the rest of us get too much.

Overtreatment also leads to deaths and illnesses caused by too much medical care. The book is filled with these horror stories. In fact, almost anything that puts us in that house of confusion we call a hospital increases our risk of becoming a victim of medical error. Brownlee places the death toll for unnecessary care at 30,000 per year. (Unfortunately, although Brownlee includes footnotes, the sources of some of her statistics, including those in this and the preceding paragraph, are not cited.)

Overtreatment comes in several varieties. Unnecessary surgery is a huge problem, since it usually costs $50,00-$100,000 per operation. Heart and back surgery are the worst offenders. Researchers at Dartmouth first documented overtreatment when they noticed large regional and hospital differences in surgery rates that were not explained by illness rates in the area. Unnecessary tests cost less per incident, but are much more frequent. A special problem brought on by too many imaging tests, from mammograms to CT scans, is that reading the results is prone to error and leads to the “discovery” of non-problems, resulting in further unnecessary procedures. Finally, there are two chapters on the pharmaceutical industry, its creation of “illness” (“restless leg syndrome,” anyone?), and its marketing of ineffective and sometimes harmful drugs. (The definitive work on this subject is Marcia Angell's The Truth About the Drug Companies [2005])

Brownlee suggests several reasons for overtreatment. The Medical Institute has estimated that only 4% of medical streatments (drugs, tests, surgical procedures, etc.) are backed by strong scientific evidence of their effectiveness. Another 50% are supported by weak evidence; the rest have no support at all. In this environment, there are huge opportunities for subjective judgments by doctors, who are under pressure from all sides to do something rather than wait and see.

Our largely fee-for-service payment system is another cause of overtreatment, since the more treatment they provide, the more the medical establishment gets paid. To make things worse, both Medicare and insurance companies overpay for some treatments, especially surgery, and underpay for others, such as emergency and psychiatric care. Hospitals allot major resources to these profit centers (“centers of excellence”), while closing emergency rooms and psychiatric wards in spite of unmet demand. Brownlee labels this system “supply-driven demand.” If a hospital has too many beds, the beds somehow miraculously get filled. When the hospital spends several million dollars on a new MRI, the doctors request many more scans. An oversupply of heart specialists leads to an excess of heart surgery. Drugs advertised on television get prescribed, and so forth. Brownlee charitably suggests that this is a result of unconscious biases.

The solutions are fairly obvious. They will be costly to implement, but will pay off in the long run. First of all, research on the effectiveness of medical treatments is badly needed. It must be conducted not by the manufacturers of drugs and medical devices, but by disinterested university-based researchers whose work is supported by the government. Secondly, organizations such as the Veteran's Administration and Kaiser-Permanente have been shown to reduce costs and improve treatment outcomes by coordinating patient care. This is accomplished in part by good computer tracking. It also requires assigning each patient to a general practioner who knows the patient well enough to recognize her in the grocery store. Brownlee strongly believes we need more generalists and fewer specialists. Finally, it requires a reimbursement system that rewards doctors for producing good patient outcomes, rather than paying them a piece-rate for each procedure.

Overtreated belongs on everyone's short shelf of books about health care policy.