Best Care Anywhere

by Phillip Longman

  Instead, the big cause of skyrocketing health-care costs has been an increasingly intensive use of technologies and treatments that, when we look at their effects on the population as a whole, have brought negligible, if any, improvement in public health and longevity. For example, from 2000 through 2005, American cardiologists performed more than seven million coronary artery angioplasties, arthrectomies, and stent insertions, at an estimated cost of $170 billion. Yet only in recent years has there been any research to determine whether these procedures work any better than simple noninvasive treatments, such as aspirin or cholesterol pills, for patients with stable coronary disease. Turns out that they don’t.8

  Similarly, most patients with back pain, including those with herniated disks, do not need back surgery, as has been shown by numerous studies over the years. Yet back surgery is among the most common operations in the United States, accounting for more than $16 billion in hospital charges (excluding physicians’ fees) for over 300,000 procedures in 2004.9 And of course, though treatment fads come and go, we’re still waiting for any truly effective treatment for cancer, let alone a cure. I am grateful to this day that Robin and I instinctively resisted suggestions from her doctors that she opt for a bone marrow transplant combined with high-dose chemotherapy. In the 1990s, tens of thousands of breast cancer patients received this expensive, painful, and once-faddish treatment before “modern” medicine eventually got around to doing clinical trials to see if it works. Turns out it doesn’t.10

  Americans spend more per person on health care than any other country, and we have very little to show for it except more medical bills and lots of ineffective, unnecessary, and even harmful treatments. The latest confirmation comes from a study published in the New England Journal of Medicine in 2009.11 It found that Medicare patients in New York State see so many specialists and receive such intensity of care that their per capita cost to government is nearly twice that of Medicare patients in Hawaii. Yet for all the extra operations, pills, and consultations New York seniors receive, they have no aggregate benefits in health or longevity to show for it.

  Indeed, due to their increased exposure to staph infections, medical errors, and the trauma of unnecessary surgery and overmedication, patients in institutions that spend the most per capita have worse health outcomes than those in institutions that spend the least per capita. By extrapolating from such disparities in medical practice and outcomes, researchers have demonstrated that about a third of all health-care spending in the United States could be eliminated, even as the quality of health care improved dramatically.12

  Even some Third World countries have better life expectancy than the United States, despite minuscule spending on health care. In Costa Rica, for example, total health-care expenditures per person come to just $1,165 a year. And Costa Rica has little more than half the doctors per capita that the United States does. Yet compared with the United States, life expectancy at birth is one year longer for men and exactly the same for women. Moreover, though infant and child mortality rates are higher in Costa Rica, the adult population has a substantially better chance of becoming elderly there than here. In the United States, the chance of dying between age fifteen and sixty is 13.74 percent for men and 7.8 percent for women. In Costa Rica, the chance is 11.5 percent for men and 6.9 percent for women.13

  American Health Care’s Unexpected Champion

  And so I was eager to accept Fortune’s assignment and set off to discover what had gone wrong with America’s health-care system and who could fix it. My assumptions going in were typical of those held by many Americans, particularly those with conservative, pro-market views and instinctive distrust of government. For example, I assumed that the biggest single cause of the American health-care crisis was that too many of us pay for most of our care using other people’s money. Hadn’t the big explosion in health-care cost started after the enactment of Medicare and Medicaid, along with the vast expansion of tax-subsidized, employer-provided health insurance plans?

  Another under-examined assumption I brought to this project was that American health care, as inequitable and inefficient as it may be, was nonetheless the most scientifically advanced in the world. Didn’t tens of thousands of rich foreigners fly in desperation to the United States every year in search of treatments they could not get at home? Outside of veterans hospitals and some chronically mismanaged and underfunded “St. Elsewheres,” the American health-care system seemed the envy of the world, even if it cost too much and left too many uninsured. And I believed this was true precisely because it was the least “socialized.”

  Yet, as I started asking experts for suggestions about who was delivering the highest-quality, most cost-effective, innovative, and scientifically driven health care in America, I kept hearing an answer I could not believe. It contradicted all that I thought I knew about health care and medical economics, indeed, about markets and governments in general. Yet these experts backed up their assertion by pointing me to study after study, all published in prestigious, peer-reviewed journals. These, too, I found literally incredible at first. If their claim was so true and obvious, why did so few Americans know about it? Why was there no talk of it in all our health-care debates?

  Yet the hardcore data were overwhelming. They were also confirmed by the testimony of ordinary patients and doctors I talked to, and eventually by the evidence before my own eyes when I started touring facilities. Moreover, when I reflected on all that Robin and I had experienced during our ordeal—the fragmented care and record keeping, the difficulty in keeping track of patients, the amount of effort devoted to gaming insurance paperwork, and above all, our lack of a long-term relationship with the institutions that provided her care—it all started to make sense.

  At first I was depressed by what I learned because it was so counterintuitive, so against the received wisdom of America’s business class, that I knew the editors of Fortune would never feature it on their cover. And I was right. We agreed on a kill fee with no hard feelings. Business is business. But as I pondered the deeper implications of what I had learned, my depression lifted, and I became excited.

  A solution to America’s health-care crisis does exist, I realized. Better than that, you don’t have to rely on mere theoretical speculations or econometric simulations to see how it might work, nor do you have to wait around for a revolution in technology. You don’t even have to travel to some far-off foreign country like Sweden, or even Canada, to see it in operation.

  It’s already up and running, right here in America, with hospitals and clinics located in every state, plus the District of Columbia and Puerto Rico. It is, in fact, the largest integrated health-care system in the United States.

  Most of its doctors have faculty appointments with academic hospitals. Over the years two have won the Nobel Prize for medicine. Its innovations have included the development of the CT scanner, the first artificial kidney, the development of the cardiac pacemaker, the first successful liver transplant, and the nicotine patch, plus many advanced prosthetic devices, including hydraulic knees and robotic arms.

  Health-care quality experts also hail it for its exceptional safety record, its use of evidence-based medicine, its health promotion and wellness programs, and its unparalleled adoption of electronic medical records and other information technologies. Finally, and most astoundingly, it’s the only health-care provider in the United States whose cost per patient has been holding steady in recent years, even as its quality performance is making it the benchmark of the entire health-care sector.

  Though comparatively few Americans, especially among coastal elites, have any contact with it these days, and even fewer qualify for its services, its example shows that it is possible to make vast improvements in the quality, safety, and effectiveness of the health care all Americans receive, and to do so for but a fraction of what an unreformed health-care system would cost. We need only open our eyes, open our hearts, and open our minds.

  ONE

  Best Care
Anywhere

  When you read “veterans hospital,” what comes to mind? Maybe you recall the headlines about the three decomposed bodies found near a veterans medical center in Salem, Virginia, in the early 1990s. Two turned out to be the remains of patients who had wandered off months before. The other patient had been resting in place for more than fifteen years. The Department of Veterans Affairs admitted that its search for the missing patients had been “cursory.”1

  Or maybe you recall images from movies like Born on the Fourth of July, in which Tom Cruise plays an injured Vietnam vet who becomes radicalized by his shabby treatment in a crumbling, rat-infested veterans hospital in the Bronx. Sample dialogue: “This place is a fuckin’ slum!”

  By the mid-1990s, the reputation of veterans hospitals had sunk so low that conservatives routinely used their example as a kind of reductio ad absurdum critique of any move toward “socialized medicine.” Here, for instance, is Jarret B. Wolistein, a right-wing activist and author, railing against the Clinton health-care plan in 1994: “To see the future of health care in America for you and your children under Clinton’s plan,” Wolistein warned, “just visit any Veterans Administration hospital. You’ll find filthy conditions, shortages of everything, and treatment bordering on barbarism.”2

  Former congressman and one-time attorney for the Department of Veterans Affairs, Robert E. Bauman, made the same point in 1994, in a long and well-documented policy brief for the libertarian Cato Institute. “The history of the [VA] provides cautionary and distressing lessons about how government subsidizes, dictates, and rations health care when it controls a national medical monopoly.”3

  And so it goes today. If the debate is over health-care reform, it won’t be long before some free-market conservative will jump up and say that the sorry shape of the nation’s veterans hospitals just proves what happens when government gets into the health-care business. In 2009, the organizers of the Tea Party took it up again on their Web site: “LOOK AT THE VETERANS HOSPITALS AND ALL THE PROBLEMS OUR VETS HAVE EXPERIENCED. WE MUST KEEP THE FEDERAL GOVERNMENT OUT OF HEALTHCARE.”

  Yet here’s a curious fact that few conservatives or liberals know. Who do you think receives better health care? Medicare patients who are free to pick their own doctors and specialists? Or aging veterans stuck in those presumably filthy VA hospitals, with their antiquated equipment, uncaring administrators, and incompetent staff?

  An answer came in 2003, when the prestigious New England Journal of Medicine published a study that used eleven measures of quality to compare veterans health facilities with fee-for-service Medicare. In all eleven measures, the quality of care in veterans facilities proved to be “significantly better.”4

  Here is another curious fact. The Annals of Internal Medicine in 2004 published a study that compared veterans health facilities with commercial managed care systems in their treatment of diabetes patients. In seven out of seven measures of quality, the VA provided better care.5 A RAND Corporation study published in the same journal concluded that the VA outperforms all other sectors of American health care in 294 measures of quality.6

  Or consider this: In 2006, a study comparing the life expectancy of elderly patients in the care of the veterans health system with elderly patients enrolled in the Medicare Advantage Program showed that the mortality rates were “significantly higher” among the latter. The study found that the average male patient had a 40 percent decreased risk of death over the next two years if he was cared for by the VA rather than through the Medicare Advantage program. For women, chances of dying in the next two years were 24 percent less at the VA.7

  It gets stranger: In 2007, the Milbank Quarterly published a study showing the VA outperforming Medicare, Medicaid, and commercial health care in key quality indicators, including diabetic care, control of hypertension, and preventive care such as mammography. The disparities are often stunning. For example, the VA successfully treats its patients with high blood pressure in 77 percent of cases, while the commercial health-care success rate is just 67 percent.8

  And low-tech medicine is not the only arena where the VA excels. In the late 1990s, the VA adopted a National Surgical Quality Improvement Program that was soon imitated by private-sector surgeons, but with less than perfect results. In 2009, for example, the Journal of Surgical Research published a study of outcomes of coronary surgery at a VA hospital versus other hospitals. Even though the VA patients were considerably sicker on average, suffering nearly twice the rate of myocardial infarction, for example, their mortality rate after surgery was barely half that of those treated outside the VA system.9

  The most recent data point comes from a study of cancer care published in 2011 in the Annals of Internal Medicine. It compared the treatment of older male veterans in the VA with that received by older men under traditional, fee-for-service Medicare. It found the VA offered care that was as good and often better, with the VA particularly exceeding in diagnosing colorectal cancers at earlier stages and at adhering to recommended treatments, including surgery for colon cancer, chemotherapy for lymphoma, and bisphosphonates for myeloma.10

  According to Nancy Keating, an associate professor of health care policy at Harvard Medical School and the lead author of the study, several factors account for these results. Care at the VA “is much better coordinated than most other settings,” she explains. The VA also “has a good, integrated medical record. Their doctors all work together and communicate more effectively. There are no incentives for the overuse of cancer treatments because [VA] physicians are not rewarded financially for prescribing more drugs or procedures.”11

  In an editorial accompanying the study, the Annals surveyed these and other demonstrations of the VA’s superior care, as well as the ongoing efforts to repeal “Obamacare,” and argued that the true “public option” should be giving all Americans access to the VA model of care. “Despite the clamor of special interests, corporate lobbying, and the particular American distaste for government-run institutions, the public option may yet find its voice in the latest round of accomplishments demonstrated by the [VA],” the highly prestigious journal predicted. “Thanks to proposals to repeal the historic Patient Protection and Affordable Care Act, it is ironic that the moment for reconsideration has returned—and with it, the opportunity to celebrate more vociferously the triumphs of the country’s largest integrated and publicly funded health care network.”12

  Or consider what veterans themselves think. Sure, it’s not hard to find vets who complain about difficulties in establishing eligibility. Many are rightly outraged that the Bush administration decided in 2003 to deny previously promised health-care benefits to veterans who don’t have service-related illnesses or who can’t meet a strict means test. Yet these grievances are about access to the system, not about the quality of care. Veterans groups tenaciously defend the VA health-care system and applaud its turnaround. “The quality of care is outstanding,” says Peter Gayton, deputy director for veterans affairs and rehabilitation at the American Legion. The Legion lists among its top legislative priorities a bill that would entitle veterans to trade in their Medicare benefits for treatment by the VA. Its annual survey of deficiencies at the various VA facilities (and of course they exist and often create headlines) is put into context by the publication’s title: A System Worth Saving.

  The VA also consistently receives extremely high satisfaction ratings, as measured by the American Consumer Satisfaction Index compiled by the University of Michigan. In 2009, 88 percent of VA patients expressed satisfaction with the care they received. The last time Medicare was compared in the same survey, in 2006, it scored in the low seventies. Private health insurance companies consistently score worse.13

  Perhaps the surest measure of the VA’s performance is the number of vets who are voting with their feet: despite tightened eligibility rules and the declining population of veterans, the number of patients enrolled by the VA increased from 3.3 million in 2000 to 5.3 million in 2010.

  Outside
experts agree that the VA has become an industry leader in safety and quality. Dr. Donald M. Berwick, president of the Institute for Healthcare Improvement and one of the nation’s top health-care quality experts, praises the VA’s information technology and use of electronic medical records as “spectacular.” The venerable Institute of Medicine notes that the VA’s “integrated health information system, including its framework for using performance measures to improve quality, is considered one of the best in the nation.” The Journal of the American Medical Association (JAMA) noted in 2005 that the VA’s health-care system has “quickly emerged as a bright star in the constellation of safety practice.”14 Another study published in JAMA finds that the VA is also distinguished by its ability to overcome racial disparities in health care by doing a much better job than other health-care providers in keeping African-American patients alive.15

  In 2007, the prestigious British medical journal BMJ noted that while “long derided as a US example of failed Soviet-style central planning,” the VA “has recently emerged as a widely recognized leader in quality improvement and information technology. At present, the Veterans Health Administration offers more equitable care, of higher quality, at comparable or lower cost than private-sector alternatives.”16

  The Honda of Health Care

  Stranger still, all the while that the VA has been winning these encomiums, it has tightly contained its cost per patient. Even as inflation in the rest of the U.S. health-care sector has been running in double digits, the VA is not only raising the quality, safety, and effectiveness of the care it provides, but also controlling costs. As Harvard’s John F. Kennedy School of Government gushed, in awarding the VA a top prize in 2006 for innovation in government: “While the costs of healthcare continue to soar for most Americans, the VA is reducing costs, reducing errors, and becoming the model for what modern health care management and delivery should look like.”17