Pilot Programs

How do you know when the problem solvers have hit rock bottom? How do you know when they have exhausted every possible idea in the search for a solution to a nagging problem and come up empty? How do you know when they’re ready to throw in the towel and grasp at any last desperate hope — no matter how fleeting, no matter how far-fetched?

Answer:  They start a pilot program.

This is about the only idea for controlling costs in the Patient Protection and Affordable Care Act (PPACA, ObamaCare), and before I heap on it all the scorn and opprobrium it so richly deserves, let me say that on rare occasions pilot programs can generate very useful insights. Two examples come to mind.

Did you know that before there was a modern welfare state, the federal government actually did a test run? Called the Seattle-Denver Income Maintenance Experiment (SIME/DIME), they guaranteed the participants a minimum income, regardless of their wages or marital status. The results were stunning — at least stunning to the research community. Once couples realized they didn’t have to stay together for economic reasons, large numbers of them split up. Think about that. Before the welfare state created all the tragedy and the social pathology and dysfunctionality that we are living with today, federal government planners knew in advance what was going to happen!

The other interesting multimillion dollar experiment was conducted by the RAND Corporation.  This project created another notable result. People with high deductible insurance (about $2,500 at today’s prices) spent about one-third less on health care without any adverse affects on their health. Think about that. Almost thirty years before Medicare Part D created first-dollar coverage for drugs and PPACA created first-dollar coverage for preventive care we knew that first-dollar coverage for anything in health care creates huge amounts of waste!

Both these experiments reveal two important things about pilot programs: (1) it is possible to spend an enormous amount of money to learn something ordinary people with an ounce of common sense (people without PhDs) probably could have told us anyway and (2) no matter what we discover, politicians are likely to do what is politically expedient for them to do in any event.

Returning to the problem at hand, the pilot programs called for under PPACA have an explicit purpose: to discover ways of lowering the cost of care without reducing quality. Yet even if a project turns out to do just that, the experiment is of no value unless it can be replicated. As explained in a previous Health Alert, this implicitly assumes the engineering model will work.  That is, it assumes experimenters can discover the best way to practice medicine and that regulators can then force doctors all over the country to copy the model.

Will that work? It’s worth remembering that we have been trying this model in education for a quarter of a century with no success whatsoever.

Meanwhile, we have hundreds of natural experiments that have cropped up all over the country without the federal government spending a dime. These are the islands of excellence — examples of low cost, high-quality care that have emerged despite being penalized for doing so under the current third-party payment system. If the Dartmouth researchers are to be believed:

  • If everyone in America went to the Mayo Clinic for his care, we could lower the nation’s health care bill by one-fourth.
  • If everyone in America went to Intermountain Healthcare for her care, we could lower national health care costs by one-third.

Trouble is, not everyone can go to these two places. Of course, if every other medical establishment practiced the way doctors at Mayo and Intermountain practice, we could achieve the result that way. But, as Hamlet said, there’s the rub. We don’t know how to replicate what doctors do at the centers of excellence. We can’t even write it down on paper.

We have previously reported on a research project by Atul Gawande, Donald Berwick, Elliott Fischer and Mark McClellan that identified 10 hospital referral regions (HRRs) as health care islands of excellence. What did they learn from this exercise? Not very much. For example:

  • Despite the conventional wisdom that ideal medicine requires salaried doctors, only two follow the Mayo Clinic in this respect.
  • Two others pay on a traditional fee-for-service basis; and the rest have mixed-payment schemes.
  • Despite the conventional wisdom that a greater ratio of primary care physicians to specialists is essential, the regions are all over the map in this regard as well.
  • One is twice the national average; two are below it; and the others ranged from 14% to 52% above the national average.

So how do we get everyone else to practice medicine as successfully as these 10? As summarized by Gawande, the top performers have these characteristics:

  1. Leadership.
  2. Altering financial incentives.
  3. Using measurement to provide a force for restraint.
  4. Engaging with the community to help others see “how much high costs and poor quality are harming the greater good.”

And if that’s not the recipe you were hoping for, be aware that what you just read is as specific as it gets. All this is coming from someone who explicitly endorses the “engineering” approach to medical practice.

Comments (8)

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  1. Devon Herrick says:

    I often talk with people at conferences who argue that comparative effectiveness research and practice guidelines can be used to force inefficient hospitals to perform like Intermountain Healthcare.

    This is a tempting argument but it makes about as little sense as management consultants telling nearly defunct Kmart to “just copy what Walmart does”.

    Kmart undoubtedly would if it could. But entrench management, with a long history of poor strategic planning, who presides over under-performing assets is not something that can be changed in an instant from the top down. The same is true of poorly-performing hospitals or providers who make a living off the gaming the (inefficiente) system.

  2. James says:

    I believe there is actually more commonality between the 10 systems that perform at high levels. If I had to pick the common thread, it would be that they actually function as integrated systems. Look closely at Scott & White, for example, since they are in Texas. They function as a common health care system with everything tied together — right down to a shared medical record. This factor shows up in other high-performing health care systems, to include the VA (which performs at a very high level).

    I tend to agree with John that the lessons of pilots are often wasted. It is referred to as “pilotitis” in some circles. A pilot ais n attempt to get around all of the things that keep the status quo screwed up. The problem is that it doesn’t then turn into momentum to change the status quo. It is kind of like trying to lose weight by dieting for one day out of the year.

  3. Greg Scandlen says:

    Ideology always trumps experience, at least in health policy circles. We have done innumerable demonstrations of Health Information Technology, Pay-For-Performance, chronic disease management, capitation, and on and on. All have failed to lower costs or improve care.

    Yet none of that matters a whit. We keep thinking if we change the name of the approach, this time it will work. So now instead of “Managed Care Organizations” we will put all our eggs in the “Accountable Care Organization” basket — without having the faintest idea of how an ACO is different than a MCO.

    I’m so glad we have an educated elite running the show.

  4. Tom H. says:

    Pilots are going to accomplish nothing.

  5. Bruce says:

    Hard to belive that anyone takes seriously the idea that pilot programs run from Washington are going to control health care costs.

  6. Roger Federar says:

    I know what is this, I have my mother who suffers of cancer the cervix uterus and the situation that she passes is awful, the aches are strong and the doctors him chemotherapies make each 2 weeks, medicines prescribe him as Vicodin, besides that narcotics are powerful and as I found out by findrxonline that they calm the d chronic smells, but the illness looks similar good that the women make papanicolau examination to be able to detect to time and they have the enough time for fighting her this way of effective way.

  7. JGregory says:

    John. Answer to your question is when the rats start getting off the ship for more comfortable surroundings. Like Rahm going to Chicago to run for mayor.

  8. Chris Ewin, MD says:

    Pilotitis…I like it. Well-intended but rarely useful..Agree with Scanlen’s thoughts.
    Gawande correctly states that part of the problem is fee for service. Different communities have different needs and marketplaces.

    I live in Fort Worth and have seen quite a few of my patients go to Scott and White for a check-up….But, they are often lost in follow-up. Patients still have no where to turn. It is good for Temple Texas and the surrounding area. But these are islands.

    We need navigators…Docs can only take good care of so many patients and do it well (we think).

    e.g.- my last patient (85yo) today had glioblastoma multiforme (the most aggressive brain tumor). Surgery one year ago. I was present when they removed 98% of a golf ball tumor). 1 year later – with Radiation & Chemo, he has no evidence of tumor. His older friends have convinced him to get a second opinion at MD Anderson. After researching this tonight and speaking with his oncologist, she noted that Duke is the place to be for a second opinion in her opinion. That’s where most of the research is being done. She is giving the same treatments as they are and he is in remission. And, she thinks it’s good to get a second opinion if patients wants it.

    The point being is that we all need a guide thru the system. We need a person you trust to give you feedback on all your questions that arise over and over again.

    In terms of pilotitis…Vision without execution is just hallucination.