An IT Trojan horse ... Feds should stay out of ‘evidence-based’ medicine
September 2004

By Regina Herzlinger

Want the federal government telling you how to treat your patients?

If a coterie of bureaucrats and legislators has its way, it soon will. Undeterred by prior rejections of government- controlled healthcare systems, such as the Clintons' plan, they devised a new tactic-a Trojan horse dubbed with the suspicion-lulling name of ``pay for performance.''

Here is their story: The federal government will create information standards that enable smooth transfer of electronic data among healthcare providers. So, when a Bostonian gets a chest pain in Buffalo, physicians can easily retrieve his or her complete medical record for easier, faster diagnosis.

Sounds good? Well, one can quarrel with the federal government's role-after all, the massive retailing industry managed to create its universal codes without Uncle Sam's help. But the private healthcare sector has so far failed to provide much-needed electronic medical records. Can the feds play a useful role here?

No. There are Greeks hidden in the healthcare informatics horse-federal congressional and executive branch leaders. Although they sure don't look like Brad Pitt-improbably cast as Achilles in the movie ``Troy''-they are as strong and determined as his namesake. Having snuck their Trojan horse into unsuspecting doctors' offices and hospitals, the feds plan to use the resulting data to measure their quality of care. Because the sector has few accepted measures for risk-adjusted quality outcomes-the death and illness rate of different providers-they focus instead on the process of care. Those judged as low performers because they do not comply with the federally mandated processes will be financially penalized in an initiative dubbed ``pay for performance.''

With the feds controlling both the measures of quality and amount of pay, competitive markets will shrivel and die. The resulting healthcare system will reflect their ideas of value for the money, not yours or mine. Imagine, for example, the consequences of a federal pay for performance for bread. I prefer dense, sour Baltic ryes; others opt for soft, cottony white breads whose baking process and ingredients fundamentally differ from that of ryes. Federal pay-for-performance bureaucrats armed with cookie-cutter recipes can unilaterally drive some bread bakers out of business.

The federal government can shape the practice of medicine to its will because its Medicare program not only paid for 17% of 2002 U.S. healthcare expenses, but also because all other insurers slavishly follow Medicare's payment lead. Although private insurers typically pay more than Medicare and Medicaid, they all rely on Medicare's rates and payment codes.

HHS' Agency for Healthcare Research and Quality is the guerilla unit developing guidelines for federal management. In recent congressional testimony, the AHRQ depicted its mission as determining not only the effectiveness and quality of clinical services, but also the ways in which we organize, manage, deliver and finance healthcare. Under its tutelage, the feds will not only tell doctors how to practice medicine but also how they may organize and manage their practices.

This activity is cloaked under the disingenuous mantel of evidence-based medicine, implying brilliant scientific studies that dispassionately determine the clinical and organizational practices that work best. But evaluators of scientific studies can be hopelessly biased, ferociously determined to protect the theories on which they based their careers.

The history of medicine is filled with shameful stories of peers working to suppress important discoveries. Judah Folkman's paper elucidating the agent within existing cancer tumors that suppressed the growth of new ones was rejected for publication in peer-reviewed journals for nearly a decade, thus delaying the important drugs his research has since enabled. And, contrary to the notion that clinical research demands the massive resources of a federal government, small groups of physicians working on their own do make important contributions. The infamous list of important medical research suppressed because it challenged peer-reviewed opinion can be easily extended to, for example, the role of inflammation in coronary disease, sunshine on health status and carbohydrates on body weight.

The prospect of the federal government's running any industry is frightening-plain and simple socialism. But it is especially chilling at a time when the unraveling of the human genome promises to elevate medicine into a real science, in which cause and effect can be linked. The ``science'' of medicine is currently so primitive that the efficacy of many clinical interventions remains unproven and the precise targets of the drugs we take unknown. Researchers are now using the genome to identify and ameliorate the genetic causes of diseases and disabilities. While killing white-bread producers may not constitute a national tragedy, killing off medical innovation with federally prescribed recipes for healthcare quality certainly is.

The problems the pay-for-performance initiative seeks to conquer are quite real. The practice of medicine is erratic and its organization is excessively fragmented, especially for chronic disease victims who account for 80% of healthcare costs. And with all providers paid the same, excellence is not financially rewarded.

But who can best solve these problems: a political, monopolistic, potentially self-protecting group that purports to represent our interests? Or you and me, consumers and providers, in a market-driven healthcare system?

If you opt for a consumer solution, insist on receiving information about the real quality of healthcare-the death and illness rates of physicians and hospitals by procedure or disease, adjusted for the severity of illness of the patients-and control of payments, so that we, not the federal government, can judge value for the money.

Regina Herzlinger is the Nancy R. McPherson professor of business administration at Harvard Business School, Boston.

©2004 Modern Healthcare