Managing Medical Costs and Care

A stalwart of Mass General medicine says that, without better coordination, the explosion of healthcare innovation will mean chaos for medical costs.

By James J. Mongan, MD

Incredible scientific innovation and soaring medical costs were two major forces impacting U.S. health care during the seven fruitful years that James J. Mongan, MD, spent as president and chief executive officer of Partners HealthCare, Massachusetts General Hospital’s parent organization.  On the last day of 2009, he stepped down.

James J Mongan, MD on medical costs
James J Mongan, MD

He was succeeded by Gary Gottlieb, MD, formerly president of Brigham and Women’s Hospital. During his tenure, Dr. Mongan oversaw the expansion of the system’s integrated healthcare network throughout eastern Massachusetts. Partners is the largest private employer in Massachusetts. Before assuming the leadership of Partners, Dr. Mongan served as president of MGH for seven years. Before that, he was executive director for 15 years of Truman Medical Center, the major public hospital system in Kansas City, Mo., and he was dean of the University of Missouri-Kansas City School of Medicine. In  the 1970s, he worked on Medicaid and Medicare legislation in Washington D.C. Dr. Mongan is on the board of the Commonwealth Fund and chairs its Commission on a High Performance Health System.

Major nationwide efforts to enact universal health care and to find smart alternatives to current methods of paying for medical costs have all carried his imprint, and he fought tirelessly for the Massachusetts healthcare reform law that has extended medical coverage to more than 400,000 residents, bringing the state’s ratio of uninsured down to three percent, the nation’s lowest.

The rapid march of medical science during the past several decades has led to an explosion of new and better drugs, more precise tests, improved procedures and increased treatment options — clearly good news for patients. But this expansion of knowledge and technology also has come with a downside. The processes that provide the framework for organizing and managing care in our healthcare system haven’t kept pace with this biomedical transformation. More knowledge has made the practice of medicine more diffuse and specialized. So the landscape has become increasingly fragmented — indeed, chaotic.

With such a high degree of specialization, our system, frankly, is failing to deliver much-needed coordination and communication among primary care physicians, strings of subspecialists, multiple institutions and homecare providers. The enormous mismatch between growing medical knowledge and our ability to manage it is one of the greatest contributors to quality problems in the U.S. health system.

Even when innovation makes a particular treatment cheaper, the total medical cost may rise as more patients take advantage of the improved option.

Amid Chaos, Medical Costs Climb

Amid this chaos, medical costs continue to climb at a rate ranging between seven and 12 percent annually. While advances may lead to better outcomes, such improved treatment comes with a hefty price tag. Even when innovation makes a particular treatment cheaper, the total medical cost may rise as more patients take advantage of the improved option. Looming on the horizon are promising therapies for some of the most devastating disorders, and we must not slow down our progress despite growing pressures to control medical costs. Our challenge is to build a more economically efficient system of care delivery that will enable us to control expenses responsibly while allowing progress to flourish.

The key to creating a more efficient and cost-effective care delivery system is to inject organization into the chaos. We should do three key things to create change: encourage physicians around the country to join or start organized groups and then to link themselves with each other electronically; move away from the current fee-for-service system toward payment that focuses on value; and do a better job of managing care for chronically ill patients.

The first tactic involves caregivers communicating, coordinating and aligning themselves in an organized manner around patients’ specific needs. Traditionally, practicing medicine has involved a doctor hanging out a shingle, and the majority of care today is provided by individual physicians or small practices that are unconnected with hospitals or other providers, either physically or electronically. Care, therefore, tends to be uncoordinated and disjointed. A greater acceptance of large group practices and physician networks would not only help patients get higher-quality integrated care, but would enable providers to compare practice patterns and support ongoing learning. Such a cultural change, however, is doable only if we can preserve that all-important sense of physician autonomy and individual zeal.

One of the best ways to link places and providers is through the use of electronic medical records, or EMR. EMRs enable providers to have at their fingertips the information they need to make the best decisions for their patients. At Partners, the widespread use of EMR has helped us better coordinate care, cut down on unnecessary tests and reduce medical errors. Several other healthcare systems  across the country also have been on the forefront of using EMR successfully, including Intermountain Healthcare in Utah, Vanderbilt University Medical Center in Tennessee and Kaiser Permanente on the West Coast. Still, many more providers must be willing to invest in health information technology if our country is to move toward a more organized approach to care.

Fixing our illogical and complicated payment system, will be essential to control rising chaos and medical costs.

Proactive Medical Care for Chronically Ill Patients

The second tactic, fixing our illogical and complicated payment system, will be essential to control rising chaos and medical costs. The fee-for-service approach rewards providers for doing more and thus tends to encourage overuse of tests, services and visits and has no built-in incentives for increased quality or efficiency.

Lastly, by making available continuous, collaborative, proactive medical care to chronically ill patients, we have demonstrated that we can keep them healthier. Through regular monitoring and a close relationship with an involved team of caregivers, problems can be detected early,  helping to prevent trips to the emergency room, hospitalizations and expensive and prolonged treatments.

Making headway in these three areas was a significant challenge and an important goal for me at Partners HealthCare, and I am proud of the progress we made. Our system, with its mix of entities and cultures, serves as a testing ground of sorts for ideas aimed at turning chaos into organization. One of the wisest decisions Partners’ founders made was to preserve and support the individuality of people and institutions within the network. As a result, Partners today still preserves and balances each institution, while also developing an organized, cohesive system committed to ensuring that patients receive the best care at any point, at any place in the system.