From Medco Perspectives: A Prescription for National Healthcare Reform
The David Snow Healthcare Policy Speech: Background
On September 19 2008 at the National Press Club, David Snow, who by most accounts has performed well since being appointed Chairman and CEO of Medco Health Solutions in 2003, moved beyond the boundaries of corporate healthcare to offer, in the words of his press release,
… a pragmatic blueprint for fixing America’s inefficient health care system that, for the first time, is designed to address the root causes of the problem. Unifying the strengths of both the public and private sectors, Snow’s plan is designed to reduce the nation’s health care expenses by as much as $1 trillion - almost 50 percent of current expenditures - while extending affordable, high-quality care to more Americans.
While this post focuses primarily on a reference within that speech to patient compliance as a major healthcare problem, the context in which that reference occurred is also significant. Because few of the accounts of the speech I have found devote any attention to this background material, I am providing some basics before addressing the issue of treatment adherence.
Mr. Snow has more than 25 years of experience working in healthcare organizations prior to signing on at his current job. He previously held executive positions at Oxford Health Plans, American International Healthcare, Inc. and US HealthCare, Inc. as well as creating and running Managed Healthcare Systems, Inc. (now renamed AmeriChoice).
His ascension to the leadership of Medco, described below in the excerpt from Newsweek, is itself of interest:
In March, it [Medco] named David Snow Jr. as its new CEO. In January, Snow bolted the No. 2 job at WellChoice (WC ) operator of Blue Cross & Blue Shield insurance plans in New York. Just weeks before, WellChoice CEO Michael Stocker was diagnosed with prostate cancer. Snow’s move left Stocker and others at WellChoice puzzled. Snow did not explain his move then and declined to explain it now. A Medco spokesman told me Snow left WellChoice when it became clear he was still some years away from realizing his ambition to be a CEO.
His work at Medco has been well compensated. In 2004, his total compensation, according to Salary.com, was a bit over $9 million. His 2006 total compensation, calculated by a different formula and reported in Forbes, was $1.9 million. Pharmalot dec;ares Snow “earned a $1.18 million salary last year [2006], along with $1.7 million from a non-equity incentive plan, and stock and options that were valued at $7.2 million at the time these were awarded a year ago. Snow, 52, also received $44,809 in ‘other compensation.’” In any case, Mr. Snow earns a nice living.
At the National Press Club Speech, Snow, according to The Kaiser Daily Health Policy Report, not only presented his healthcare strategy but also critiqued the healthcare policy proposals of both presidential candidates:
… Medco Health Solutions CEO David Snow on Tuesday at the National Press Club in Washington, D.C., said that the McCain health care proposal would “create chaos,” Bloomberg/Bergen Record reports. Snow said, “I’m very frightened of the conversations that try to shift responsibility away from employers to individuals,” adding, “There will be more uninsured.” Snow said that the health care proposal of Democratic presidential nominee Sen. Barack Obama (Ill.) also would pose problems, adding that he is “not a big supporter of either” candidate.
Finally, the tone of Snow’s presentation is, I believe, meaningful. Consider this excerpt from the same press release:
“Despite the urgent need, experience shows that health care reform must be evolutionary, not revolutionary, to be accepted by the American public,” Snow said. “We must agree upon an end-to-end strategic road map now, so that we can begin the journey to reform in earnest. Our commitment to this road map needs to persevere over an extended period of time to realize this opportunity. The payoff for doing this right is huge; the penalty for failure will burden generations to come.”
Not exactly your standard businessman’s, matter of fact, Chamber of Commerce speech, is it? Along with the implicit nationalistic evangelism and recruitment to a crusade, those phrases are convey a certain political panache, not unlike, say, a future candidate’s speech?
I am a tad disappointed I couldn’t find a “My fellow Americans” sort of cliche in the speaker’s notes or locate a form on the Medco web site for ordering “Vote For Snow” bumper stickers. Consequently, the only support I have for my speculation that this presentation was an audition of sorts for a potential political candidate is my observation that an ambitious, successful, experienced business executive gave a ruffles and flourishes speech before the National Press Club calling the nation to the task of fiscally responsible healthcare reform and criticizing the healthcare proposals of the two major presidential candidates.
Just call it a hunch.
David Snow On Patient Compliance - And Other Issues1
One reason the context is important is that it may explain David Snow’s predilection for absolute pronouncements in this speech.
He offers, for example, “Three Rules for Reform:”
- First, keep it simple – in business, complex solutions always fail.
- Second, revolutionary reform is rejected by our society; instead, we need incremental, evolutionary change with a deliberate and phased approach.
- Finally, and most importantly, we must define the roles of the private sector and the government. Each has an important but distinctly different responsibility and every time we cross those lines it results in failure – without exception.
- The government’s function is to promulgate and regulate.
- The private sector’s function is to operate and innovate.
[emphasis mine]
The final tally: three points, two explicit absolutes (with bonus points for the redundant “without exception”).2
I, for one, find it difficult to believe that someone with 30 years experience in the healthcare industry, a field enamored of needlessly complex responses to problems, has never once been aware of a complex business solution succeeding, if only by random chance. I can certainly call to mind a few strategies that succeeded in spite of their complexity (not to mention inaccurate premises, mediocre execution, and bad timing - being lucky is a wonderful thing).
I suggest, as an alternative explanation, that Mr. Snow may have been speaking figuratively rather than literally - in sound bites.
Keep that in mind when considering the compliance points from the speech.
The crux of the speech resides in the specific policy recommendations:
I have five suggestions. Each is simple [emphasis mine] and leverages the appropriate roles of the public and private sectors in a manner that, taken as a whole and aggressively pursued in a phased approach, creates an opportunity to reduce current healthcare expenditures by as much as $1 trillion. They include:
• Wiring Healthcare
• Fixing Medicare’s Financial Fundamentals
• Eliminating Medical Liability and Defensive Medicine
• Increasing Compliance and Reducing Errors
• Promoting Healthy Lifestyles
Mr. Snow goes on to elaborate briefly on each of these points. I have excerpted the portion dealing with patient compliance:
Encourage Compliance and Reduce Errors
It has been independently documented that we could save another $177 billion related to improving compliance and reducing errors.
The fact of the matter is that doctors are well paid to offer their advice, but all too often, patients simply don’t follow the instructions. In the case of diabetes, which currently afflicts 5 percent of the population and whose treatment accounts for 15 percent of all drug spending, only 7 percent of diabetic patients are controlling the three primary factors that could mitigate the effects of their disease and allow them to live a healthy and productive life.
As a result, this noncompliance may lead to blindness, renal failure, amputations, increased hospitalization, and other complications that magnify the suffering and the expense related to diabetes.
The burden is not the patients’ alone. Research shows that it currently takes 17 years from the time a medical protocol is proven effective to the time that it becomes a widely used standard of practice by physician. …3
One cannot help but note that no solutions are offered for the “simple” problem of noncompliance. In contrast, Mr. Snow explicitly assigns responsibility for correcting the other four problems to the federal government and gives some direction on how to go about those tasks. Excerpts follow:
Wire Healthcare
This is an area where government leadership through policy could become a catalyst for an immediate positive response by the private market. It’s happened once before. In the 1970s, hospitals billed Medicare using a paper-based system that in its best day was inefficient and expensive. To stimulate change, the government promulgated payment rules whereby hospitals would be reimbursed only for claims that were submitted electronically. The private sector stepped in with technology solutions and, virtually overnight, electronic claims clearinghouses sprang up and all hospitals began billing electronically. Problem solved.
Fix Medicare
Culturally, we are conditioned to expect and implement heroic methods, even in cases where treatment is futile, and often resulting in unintended negative and painful consequences for the patients and devastating financial consequences for Medicare. This inherently uncomfortable issue forces us to confront our own mortality and requires strong leadership with candid conversation – it can’t be left to doctors, hospitals, or insurers. Government needs to set policy and establish rational rules for the level of care based on medical science – it’s not the private sector’s role to pass judgment on hope. Protocols based on scientific standards would ease the burden on families, physicians and, yes, patients. This is not withholding or rationing essential healthcare – it’s stepping up to the important and necessary reality so that resources are available to those who can be helped.
Address Litigation and Defensive Medicine
Tort reform eliminates ridiculous litigation, averts the waste related to physicians performing unnecessary tests as they practice “defensive” medicine, and could reduce healthcare costs by another $200 billion a year.
Wellness and Prevention
Here’s where we must have inspired and credible political leadership to fill the current void and raise the collective national consciousness.
Most of us can remember how government-led campaigns changed behavior through vivid imagery that etched into our memories messages with impact: Smokey Bear’s sad reminder that “Only you can prevent forest fires”; the crash-test dummies Vince and Larry, serving as a testimonial for seatbelt safety by suggesting that “You can learn a lot from a dummy”; …
The private sector can never be expected to drive behavioral change, although we’ve seen employers make valiant attempts at implementing programs to lower healthcare costs – efforts that unfortunately are doomed to fall short. These range from positive reinforcement – discounted health club memberships and bonuses for employees who meet certain fitness targets – to surcharges for employees who smoke. Meantime, HMOs and other insurers have adopted low- or no-cost preventative programs for baby wellness visits, routine check-ups, mammographies, and other procedures that are designed to detect issues early instead of simply providing treatment after the fact. Such initiatives are only likely to succeed if we make wellness a national imperative, something that requires political leadership and personal responsibility. In the end, each of us must take on greater accountability for making positive choices in our lifestyle.
I do think one could make the argument that a parallel strategy to that suggested for enhancing Wellness and Prevention (i.e., “inspired and credible political leadership to fill the current void and raise the collective national consciousness”) could also be implemented to enhance compliance. Even so, kind of public service announcements and ad campaigns to which Mr. Snow points have not, to my knowledge, shown more than short term gains when applied to patient compliance (e.g., ad campaigns to encourage participation in mammogram screening). And, more to the point, Mr. Snow did not himself suggest that as a compliance solution.
In closing, Mr. Snow observes that while the federal government, individual patients, clinicians, and hospitals have either directly caused this set of problems or failed to take advantage of opportunities to correct them, there are - thank goodness - some organizations making heroic efforts to save us from ourselves.
After earlier bemoaning the unfair demonizing of HMOs, he approvingly notes that
HMOs and other insurers have adopted low- or no-cost preventative programs for baby wellness visits, routine check-ups, mammographies, and other procedures that are designed to detect issues early instead of simply providing treatment after the fact.
And, he modestly allows that “At Medco, we’re doing our part,” and goes on to list the specific ways in which Medco is indeed doing its part, including, with respect to adherence,
Leveraging the power of information to prevent errors and drive greater compliance, we’re a founding member of one of country’s largest organizations to process electronic prescriptions, creating the equivalent of a superhighway that shuttles information between the prescriber, payer, and pharmacy.
I suppose I should have expected the commercial; still, it hardly lends credibility to the remainder of the talk and it tends to polarize stakeholders in healthcare. As a physician who didn’t automatically follow every idiotic protocol shoved at me4 and as a sporadically noncompliant patient, I’m a tad miffed about the tenuous proposition that, in contrast to the sins of my fellow clinicians and patients, HMOs and Medco are “doing their part” to increase the effectiveness and efficiency of healthcare.
Conclusions
The good news is that David Snow wants to put adherence to treatment on the national agenda, albeit as part of a group of healthcare issues that inflate the cost of medical care. I may have mentioned once or twice my conviction that patient compliance should be a national healthcare priority.
And, some of his points are so on target (i.e., I agree with them) that they do seem to be no-brainers. For example, tort reform5 seems an area in which it is possible for government to act quickly and decisively to effect a sweeping change that could save huge amounts of money, in this case by eliminating the necessity to practice defensive-expensive medicine.
On the other hand, the idea that the Feds can, as Mr Snow suggests, shift public opinion and clinical practice sufficiently to rescue Medicare by curtaining care for those for whom there is little medical hope6 seems a mathematically valid concept formulated in an ivory tower than a politically pragmatic program. Perhaps it’s a negotiating point - or one of those ideas floated as a trial balloon early in a campaign.
Because, however, I am familiar with and have thought much about treatment adherence, I especially object to the notion that there is anything “simple” about noncompliance other than the fact that it is, indeed, a prominent and very expensive problem.
Providing a few of the many available statistics that indicate the extent and cost of noncompliance is hardly a step toward a solution. If that were so, every review of patient compliance and every web site on the subject (including this one) would have eradicated the scourge years ago.
I agree that noncompliance is a problem. The thrust of this speech is that straightforward solutions exist when I’m not convinced an accurate model or conceptualization of the problem exists.
Returning readers may recall an earlier post which dealt with the claim that a prosthetic tooth capable of releasing a controlled dose of medication at regular intervals would, in the words of its press release, “mean, finally, an end to the 2500 year-old patient compliance conundrum.”
Marshall Molar, Medication Modulator
My vision of the tooth hailed as the solution to patient noncompliance
The conclusion to that post included this admonition:
IntelliDrug [the drug-dispensing tooth] seems a legitimate, scientific project that could have an impact in some cases in which medication noncompliance is too dangerous or too costly to risk and the patient is cooperative.
Transforming an expensive potential tactic to improve adherence among a relatively small group of individuals into “an end to the 2500 year-old patient compliance conundrum” makes the project seem a joke and leads to mistrust of any future claims of effectiveness, however reasonable they might otherwise be.
My recommended solution to this problem follows:
Don’t make ridiculous claims for a
compliance-enhancing device or program
David Snow doesn’t claim he can put “an end to the 2500 year-old patient compliance conundrum,” but in his National Press Club speech he does implicitly claim that noncompliance (or at least the cost of noncompliance) can be simply and significantly improved. My contention is that this has a remarkable resemblance to a ridiculous claim and that no such simple solution is possible. In any case, none is offered in the National Press Club talk.
If there is a solution, Mr. Snow should spell it out.
Alternatively, I am available for appointment in Mr. Snow’s adminstration to a cabinet level position - say, Grand Exalted and Beloved Vizer of Healthcare Alignment - from which I could promulgate any treatment adherence policy necessary.
If nominated, …
Footnotes
- Mr Snow’s complete presentation is available at Medco Perspectives↩
- The absence of an “always,” “never,” “none,” “without exception,” or similar absolute qualifier in the second point causes one to wonder if Mr. Snow is less confident of its validity.↩
- Note that patient compliance with treatment recommendations and clinician compliance with medical protocols are conjoined. While both are legitimate concerns, combining them seems more complex and confusing than helpful. Consequently, this post focuses only on patient compliance.↩
- For the record, not every protocol is idiotic. And, I did follow the idiotic ones that only robbed me of my time and effort but didn’t seem to hurt anyone↩
- I suspect is is my occupational biases that prompt me to immediately think of tort reform as an example.↩
- Snow phrases it as “Government needs to set policy and establish rational rules for the level of care based on medical science – it’s not the private sector’s role to pass judgment on hope.”↩