Presentation made at the Medical College of Wisconsin Annual Alumni Clinical Conference

1. WELCOME
MEDICAL COLLEGE OF WISCONSIN
46th Annual Clinical Conference
March 2, 2012
“Healthcare Crisis: The Cure”
Roger H. Strube, MD (retired)
Author – Managed Care Consultant

2. The Health Care Crisis
The health care crisis is a two headed dragon:
COST CRISIS – QUALITY CRISIS

3. The Goal
Stimulate Critical Thinking about Healthcare,
the Root Causes of our Crisis and the Fix
American health care is in a dual crisis
The crises are both financial & care quality
Quality and Cost are inversely related but directly connected
High cost of medical care:
– 70% medical goods and services
– 30% administration (insurance)
– Retards our economic recovery
– Makes American business less competitive

4. THE COST OF HEALTH CARE
The Cost = 18% of GDP
$2.49 Trillion per Year
(2011)

5. Health Care Financing
All American health care is financed by the
worker/taxpayer.
The taxpayer finances over half the medical goods and
services (Medicare/Medicaid, military, Veterans
Administration, prisons, government employees,
elected officials, Indian Health Service, etc.)
In addition, the worker (not the employer) pays for
private (insurance) health benefits.
There is no Free Lunch.

6. Health Care Financing
The public sector (tax payer) finances over half American health care.
Private sector financing is administered by risk-managing for-profit indemnity
insurance corporations.
– This methodology costs up to 30% of the health care dollar ($747 billion)
– The cost includes shareholder profit and egregious salaries & bonuses
for executives
Alternatives:
– Medicare/Medicaid for everyone (Universal Health Care – the German
methodology) – administrative cost about 3% to 5%
– Give the budget to the AMA and let the doctors figure it out (the
Canadian methodology) – “Trust me, I'm a doctor.”
Is it moral, ethical or even reasonable to give health care dollars to private for-profit
corporation investors and support inflated salaries and egregious bonuses to
executives? Is there a better way? Can Americans become “self-funded” and
become the largest “risk group” in the world?

7. Health Care Financing
America must reform the health care financing methodology
if we want to save our health care delivery system and the
economy. The cost savings could be 20% of the $2.49
trillion ($498 billion per year).
If America becomes self-insured and claims processing
becomes a not-for-profit commodity, where do the savings
go?
– Reduced labor cost for employers?
– Increased wages for workers?
– Larger fees for physician services?

8. Health Care Financing – End Game
All Americans will be “pooled” into the largest risk group in the
world. This is the definition of Universal “coverage.”
Taxpayer dollars, rather than excessive for-profit insurance
company premium dollars shall finance the system.
Private not-for-profit Third Party Administrators (TPAs) or
Administrative Services Only (ASOs) shall process claims.
I have essentially described “Medicare & Medicaid for Everyone”
- But -
For this to happen, our health care quality crisis must be resolved. Health care
delivery must be reformed and re-engineered.

9. The American Health Care System
Reform of the American
Medical-Industrial Complex

10. American Health Care Compare
The World Health Organization ranked the American
health care system 37th in 2000.
In 2010 the N.Y. Commonwealth Fund found that
American health care ranks highest in cost and last in
performance among seven industrialized nations.
(Australia, Canada, Germany, the Netherlands,
New Zealand, the United Kingdom and the USA)

11. The Dartmouth Atlas
http://www.dartmouthatlas.org/
Studies published in the Dartmouth Atlas establish:
- 40% of medical goods and services are unnecessary or harmful
– My impression is that the number is closer to 50%
- Health care costs and unnecessary care increases with
increased supply of providers
– Competition does not work to reduce medical cost
The reaction of our legislators
at the state and federal level is predictable.

12. The Cause/Blame – It's Complicated
The drivers of our run-away cost and quality crises:
- A complex, expensive financing methodology (Up to 30% or $747 billion)
- FFS provider reimbursement (Major driver)
- High cost of advanced technology (Over rated)
- Excessive cost of pharmaceuticals (Major driver)
- Advertizing to create demand for goods and services (Inconvenient)
- Patient insatiable demand for unnecessary medical care (Annoying)
- Medical malpractice (Minor element)
However, nothing of significance happens in our health care
system without direction or participation of a provider. Our
health care crises are, “Just what the doctor ordered.”

14. The American Quality Crisis
Definition of Quality Care:
Quality care is:
Appropriate, Effective, Efficient and Accessible.
Compared to all other large industrialized democracies,
the American Medical-Industrial Complex fails on all
four counts:
– 2000 WHO Health Care System Ranking #37
– 2010 Commonwealth Fund concluded the American
health care system the worst of 7 largest economies

15. Doing the Right Thing
and the Thing Right
The American Medical-Industrial Complex cost and
quality crises are predominantly the result of
physicians failure to do the “Right Thing” at a rate
about 40% to 50% (e.g, 9 of 10 MRIs unnecessary).
This failure delivers, at the direction of our physicians,
about $1 trillion in unnecessary medical goods and
services per year.
Failure to do the “Thing Right” (malpractice) is a small
portion of the crises (< 1%).

16. Blame vs. Fault
The flawed decisions made by physicians are
clearly to blame for our health care crises.
To manage our crises, we must understand why
physicians provide unnecessary goods and
services 40% to 50% of the time.
The providers and their decisions are to Blame –
But the Fault is with our decision-making process.

17. The Dysfunctional
Decision Making Process
Physicians use global subjective memory-based
decision-making – or – intuition.
(shoot from the hip – or - draw, shoot, aim)
Although most physicians have huge memory banks of
medical information, it is impossible for the human
mind to recall the small subset of relevant data that
apply to a unique patient in real time.
Physicians are on Mission Impossible.
(This is why pilots use check lists – read “Criteria.”)

18. Playing the Blame Game
I didn't say the crisis is your fault...
I said I was blaming you.

19. American Health Care Mythology
Failure to recognize our flawed decision-making
process as the foundation of both the cost and quality
crises has resulted in false assumptions about the
causes and misguided proposals regarding reforms.
(Treating the symptom without understanding the disease)
If we don't understand and address the fundamental
financing and decision-making problems, the
unintended consequences of misguided remedies will
overwhelm our system and economy.
Ockham's razor – The simplest solution is the most likely.

20. American Health Care Myths - #1
We're Number One !
False
Actually we are number 37 according to
the World Health Organization in 2000
- and -
The Commonwealth Fund study in 2010 indicates we
have done nothing to improve our standing among
the seven industrialized nations evaluated (still 7th).

21. American Health Care Myths - #2
Competition will reduce cost!
False
Between Providers – The Dartmouth Atlas study
demonstrated increased cost with greater numbers of
physicians.
Between Insurers – The price of the premium is
determined by medical costs, administrative costs
and profit. Providers generate medical costs. Insurers
process the claims and tack on 3% to 5% profit.

22. American Health Care Myths - #3
Universal Health Care is like
European Socialism !
False
Actually, it is more like good old-fashioned American
Socialism. Universal Health Care (single purchaser
system) is the methodology used to finance services for:
Medicare; Medicaid; military; V.A.; Indian Health Service;
public safety; Post Office; government workers;
politicians; etc. Health care for over half the population is
financed using taxpayer dollars.

23. American Health Care Myths - #4
“Socialized” health care systems
have excessive waiting times
and delays in treatment !
True (but not valid)
To understand that this claim is True but not valid, you
need to answer the following question:
What is the appropriate waiting time for
unnecessary medical goods and services?

24. American Health Care Myths - #5
Employers pay for employee benefits!
False
The cost of labor is the sum of wages, taxes and
benefits. Benefit dollars come out of the
worker's pocket. Wealth is transferred from the
worker to the provider using dollars collected
by the employer and managed by for-profit
insurance corporations.
Universal Health care brakes the golden handcuffs the employer has on the worker.

25. American Health Care Myth #6
Malpractice settlements and fear of malpractice
drive up health care costs !
False
Malpractice claims cost our system < 1%
In spite of excessive use of unnecessary
diagnostic studies, failure to diagnose remains
a top cause for malpractice actions.
We practice “shotgun” medicine when we do not “know” what is necessary.
How could we know? We use a dysfunctional memory-based process.

26. The Cure
The Stone Age didn't end for the lack of stones.*
New tools change the way we work and play.
– What are the new tools?
– How should they be designed?
– How should they be applied?
Advances in Medical Technology will come,
- however -
Just because you can doesn't mean you should.
*Remember, we still have stone cutters and buggy whip manufacturers.

28. Electronic Health Records
Are today's E H R s designed to maximize
the potential of available hardware and
software technology to improve the quality of care?
- OR -
Are available E H R s programed
to emulate paper charts and facilitate billing?
Have we gone from the “Paper Storm”
to “Chaos at Light Speed?”

29. Electronic Health Records
(Questions to ask about an EHR)
How is the patient data organized?
– Is the vendor's E H R an electronic representation of a “source oriented”
- “billing oriented” paper chart? (Chaos at Light Speed)
- or -
– Is the data “patient problem oriented” to bundle information to follow and
communicate care management for specific patient problems?
Does the E H R have integrated decision support tools
(standards, criteria, pathways, etc.)?
The individual patient “owns” his/her chart. Who “owns” the information you
generate as you create your global practice database? It's your art and
documentation of your decision-making process – do you own it?

30. The Golden Rule
“He who has the gold makes the rules.”
- Strube Corollary -
“He who has the data holds the gold.”

31. A look at the Future of
the American Health Care System
IBM / Watson* famously competed with the best the TV show
“Jeopardy” had to offer and easily won.
The medical division of IBM / Watson is piloting a system
combining medical artificial intelligence with the Wellpoint
data base of 1.5 million patients.
How will these new tools effect the Medical-Industrial Complex?
How will the new tools effect how you practice medicine?
* Thomas J. “Watson” - The man who made IBM

33. A Vision of the Future
Physicians must leap the chasm between our present dysfunctional
global subjective memory-based decision-making process (intuition)
- to -
Exercising Judgment in decision-making using new electronic tools
founded on objective evidence-based medical science, standards
and criteria integrated with patient data using medical AI in real time .
Medical artificial intelligence (AI) applied to electronic patient data will
not replace physicians. Our value to society and our conception of
self-worth shall be based on our Art and the Judgment exercised
during the application of these new tools, rather than the size of our
dysfunctional memory banks or the scores we achieve on specialty
certification exams.

34. The Future of Health Care
My Vision
Financing – Taxpayer supported Universal Health Care
administered by private non-profit TPAs & ASOs.
– Claims processing becomes a commodity at 3% to 5% saving $498
billion
Health Care managed and delivered by private providers using
state of the art problem-oriented E H Rs with fully integrated
medical artificial intelligence decision support tools interfaced
with the TPA/ASO for direct submission of claims and direct
deposit of payments.
– Elimination of taxpayer financing of unnecessary care saving $996 billion
– Elimination of micro-management by fiscal intermediaries
– Malpractice limitations for providers using the system

35. Democracy and Capitalism
American Democracy is the best system of governance
in the world.
American Capitalism is the best economic system ever
developed regarding the Pursuit of Happiness.
For Life & Liberty, not so much.
American Socialism is what supports Life and
preserves Liberty so we may Pursue Happiness.

America has socialized: the military; public safety; education; infrastructure,
and health care for over half the population.

America needs “Socialized” Universal Health Care (Medicare/Medicaid)
for the rest of our population.

36. American Health Care Has Overwhelming
Cost & Quality Problems
We have not succeeded in solving
all our problems, indeed we feel
we have not entirely succeeded
in solving any of our problems.

37. Are the Questions
as important as Answers?
The answers we have considered
have served to raise
a whole new set of questions.
In many ways we remain
as confused as ever.

38. Critical Thinking
and Managing Ambiguity
However, we now feel
that we are confused
on a higher level
and about more important things.