The participants represent the major players in the industry: John Brouse, president and chief executive officer of Highmark Blue Cross Blue Shield; Dr. Dennis Hurwitz, president of the Allegheny County Medical Society; Charles O’Brien, president and chief executive officer of West Penn Allegheny Health System; Paul O’Neill, chairman of Alcoa and prime mover of the main local health care initiative; and Jeffrey Romoff, president of UPMC Health System.

		Introductory remarks by: Paul O'Neill Charles O'Brien John Brouse Dennis Hurwitz Jeffrey Romoff

Much of the following discussion focuses on efforts to develop standards of care that would reduce medical errors and the use of technology to achieve that goal.

For a primer on reform efforts under way through the Working Together Consortium, please refer to page 2.

The participants’ introductory remarks appear next to the photographs of each on this and the following two pages. They paint a picture of the state of the industry that includes a variety of factors:

Doctors are in a desperate state of frustration as their profession continues to lose control of its destiny and prerogatives in the face of pressure to cut costs and improve patient care.

Hospitals face excess capacity and a competitive atmosphere that threatens to undermine their financial viability and primary mission.

Insurance companies must attempt to respond to public demand to cut costs while the number of medical procedures increases and the health industry deals with a relatively older population base.

Consumer representatives attempt to institute Herculean reform that is likely possible only by bringing the competitive and wary factions together.

They are attempting to forge a new way that is fraught with liability for all yet may hold the promise of improvements and savings that could revolutionize what is now known as "the industry."

Q: How are you doing at getting the community of health care providers and consumers together, and what are you hoping to get agreement on? How far away is such agreement, and what are the difficult issues that keep it from happening?

O’Neill:  Without the other four people here and the 40 or so people who have been involved in these conversations for the last couple years, there is nothing. This is about trying to create a community of common interests in what I call a precompetitive issue.

You cannot find anyone who says it is our God-given right to hurt people and to make mistakes with medication and give people infections when they come to the hospital. Insurance companies don’t take any particular joy in harassing people and making things difficult. But when you say all of that, the systems that we have in place are producing the results that we are getting.

We need a dedicated effort within all the associated institutions to do their part to create actual change.

We have invited state Attorney General Mike Fisher because of the legal problems that exist about having straight-up conversations about reducing overcapacity and keeping records where people freely admit that they made a mistake so we can all learn from it.

It is almost not OK to say you made a mistake. When the national data show that we are killing 185,000 people a year, we know we have problems. But we need a legal procedure or something so that we can work intelligently to collect data. We are not going to be able to make improvements unless we can always admit when we made a mistake, share the information about why it occurred, pass it around and change our system -- so that we don’t make the mistake over and over.

To make this a national laboratory, we have to have an expansive view of what we are doing. We must be able to say we are going to create a system that is at the leading edge of the use of electronics and technology in medicine and agree once and for all what medical records ought to look like and what reimbursement documents ought to look like.

I can’t figure out what the hell my statements mean when I go to get a physical. Somebody else probably could, but I don’t have a clue. I think I have at least average intelligence.

		Benchmark charts: Page 1 Page 2

I was in Rome a few weeks ago. I stuck my plastic card in the ATM machine. It gave me 600,000 lira. It knew who I was and it gave me a receipt. Now, it is damn difficult to interact with a medical system like that, but it is technologically possible.

Q: If you had a shared risk, exposure for torts and liability and people were forthcoming about accidents, would you think you would uncover a lot more mistakes than are admitted at present?

O’Neill:  I think so, because the system is against finding error. Docs are not supposed to make mistakes. If you go and talk to most of the people who are on the boards of health care delivery places, they don’t spend a lot of time looking at the data or understanding the systems that need to be modified in order to make sure you don’t make mistakes.

I’ll give you an obvious example. Still in most places, doctors write a prescription, right? So the nurse and pharmacist can figure out what the hell to do. (O’Neill scribbles a squiggly line). It’s almost that bad. I mean, I see what my physician writes on prescriptions. It doesn’t need to be that way. With a Palm Pilot, you can put on all the drugs. Hook yourself up to the Internet, and it could be electronically transmitted to the pharmacy. It goes into the patient’s permanent record and into the billing cycle. It is all technologically available.

Q: What is the nature of the resistance?

Romoff: There are fundamental structural issues about getting a grip on the health care system and fundamental structural issues that lead to the frustrations of physicians. This is a cottage industry. There are very few high-tech manufacturing companies that are a cottage industry. Are there cottage pharmaceutical companies in this country? Not anymore. Are there cottage aluminum companies? Not anymore. In order to build the kind of infrastructure necessary to generate the information and to change the behaviors so that the information can be gathered -- and then so that behaviors can possibly be changed in order to reduce medication errors -- you need an enormous investment in an infrastructure.

And quite frankly, given the kinds of stress and constraints in the health care community, I think it is going to be increasingly difficult to develop infrastructure improvement.

Now Paul [O’Neill] will say it should be difficult because the amount of money that that system will save by saving lives and doing it right will amply pay for it. I think that’s a valid point. But crossing that bridge and making sure there are rewards is essential. The average physician is filling out this form for this and this form for that, which goes in hospital A, which is different from hospital B. It becomes a major burden.

The UPMC is investing an enormous amount of money in precisely those kinds of infrastructure to house that information and is happy to share that information. What we say in return is, if we are going to be the only ones to say that we have X medication errors, I think we are in a sense disadvantaged. But so be it.

Q: What are your views on the worth of the reforms the Working Together Consortium initiative is proposing and on their prospects for success?

Hurwitz: We really are excited about the opportunity of some unified method of giving quality care. A piecemeal approach at every location a doctor works is very counterproductive and without any true incentives to follow through.

You have a practice pattern, and that pattern will show up over a period of time a performance that is either good or not as good as the community. We don’t even have an ability to do that. So the physicians, with the best intentions, have no way of comparing their performance.

The county society is intrigued by this possibility. Sure, we want to do better, but at this point it would be a lot of time and effort looking at lot of data. And I’m not sure you will know you are getting anywhere for all you are putting into it.

The theme of the Consortium’s effort is to improve physician performance. With that in mind, physicians realize that the medical-legal issues are very threatening and not resolved by any means.

Brouse: We are supportive of the Consortium’s work. In fact, this effort has to be successful. Beyond that, we believe it is imperative for us to work with the physician community and with employers and other health care institutions to develop -- I hate the term -- but a physician report card. We are not satisfied with what we have.

Q: Do you mean that Highmark itself is going to provide physician report cards to clients and is going to cover these clinical matters?

Brouse: We are working not on particular clinical matters, but we are working with physicians to try and identify a profile of a physician. How many procedures has he done? And quality, etc. It’s very preliminary. One of the initiatives that we are very excited about -- tying into prescriptions -- is that by the end of 2000, our members should be able to call up on a secure site and find out what a particular patient has received in the way of medication in the past and what he is currently taking. There will be an immediate identifier that flashes if there would be potentially adverse interactions. We are not there yet, but we think these sorts of things, on an incremental basis, will clearly speak to the issues that the Consortium is trying to achieve.

O’Brien: On the data analysis and practice sides, the areas the Consortium has identified are worthy ones. And we have folks working with them.

Q: And the prospects for success?

O’Brien: It’s going to be a complicated task. If it were an easy task, it would have been done already. I would focus on one other piece of it, and that’s the technology side. I don’t consider myself a technology guru, but I’ve had an interest in health care information systems over a 30-year period. It’s always right around the corner. There have been, however, particularly over the last 10 years, tremendous advances in segments of information systems.

But the gut fact of information technology as it is used by most individual physicians or nurses or physical therapists is: It is an unnatural act. And with the technology that currently exists, it’s not necessarily easy to use. They have to go out of their way to do it.

I don’t want to use the example of a retail clerk, but essentially they are there, among other things, to do data entry. The physicians and nurses and physical therapists are there to provide care and not to do data entry.

The technology in some areas is getting close to emulating a natural process, but it is not there. Until it actually turns that corner and becomes an easier process, the quality of data that you will get will be very uneven.

And as people are stressed, it will be incomplete. That, then, belies the second point that we have tons of data. We have relatively little information. The other piece of that technology curve is we sometimes run the risk of getting overwhelmed with data. Part of the intelligent process is trying to turn it into useful information.

The third part of it is then looking at how do you use it? We have all been through these kinds of arguments where people end up fighting over the data. I am very much an advocate of finding out who does something the best and figuring out what they are drinking and what the processes are. But I think the difficulty health professionals have on these data issues is they believe they are just going to be asked to add one more millisecond out of their day for each patient.

Hurwitz: Each patient has a decision tree that has to be uniquely designed for them. But that shouldn’t fall far from the standard operations that are community standards, which we don’t have. We need to have.

But I want to get back to John Brouse’s statement on physician reports cards. Ultimately, it would tend to revolve around claims made. It could become, and it has become in the past a situation where one doctor has 100 patients and can treat them for $50,000 dollars worth of business a year instead of $100,000. He is probably a better doctor if you are paying the bills. He is not necessarily a better doctor if you happen to be those $100,000 patients.

Q: It seems we have a system that is totally resistant to standards. Is it just sort of blowing in the wind? How can you have any Western Pennsylvania way of doing things without somebody who is a czar and is in charge saying, ‘This is permissible and this isn’t?’ And doesn’t it have to be somebody who is, in a sense, outside of the system?

Romoff: I think that’s exactly the way it should be. And if you want to know the essence of what I encouraged Paul [O’Neill] and the consortium to do, it’s basically to organize the major health care subscriber base of this community. Not just the Consortium, but also the labor management groups here that are beginning to ask for report cards, to rate insurance companies, to rate provider companies.

I think society made a terrible mistake -- an unintentional one -- when everybody found out that costs were skyrocketing. They were always skyrocketing in health care. We just found out, ‘Oh, it just happened in 1992.’ They turned to the most logical place that they could, which was to the insurance companies, to try to moderate them.

And I think, through no fault of the insurance companies and without a drop of malice, they were completely ill-equipped to do so. They had no history of moderating costs. They had no technology to moderate costs. They had nothing. And now, in response to public pressures, you look at United Healthcare. They are now backing off even what were primitive efforts to moderate costs. The providers had no interest in moderating costs. The physicians, as Dennis [Hurwitz] characterized, were relatively impotent.

But I can name the 10 to 20 individuals who can explain the majority of the money and thereby affect the care, for better and for worse, in this community. You can them put in a room, and you have the people responsible for paying for, providing and insuring most of the care. However you want to do it, you can get it done.

Q: When you say "get it done," what do you mean?

Romoff: I mean bringing the kind of expertise to the monitoring group. Bring in the group of subscribers who are paying the bills around here. Bring in outside, objective expertise that benchmarks this community against every kind of evidence-based technology that exists. Start affecting where people shop, what insurance companies they use. Make demands. Incentivize insurance payments to those people who conform with a set of standards that are out there. Make sure providers are direct contracting. In a funny kind of way, by centralizing, you will have a competitive marketplace. But it will be competitive about things that matter -- quality and value. And ultimately costs will follow.

O’Neill: Jeffrey [Romoff] and I have a lot of agreement, but I want to define the terms more carefully than he did. He used some terms that are really important. He used the term evidence-based, but he didn’t add medicine to it. There are some fledgling efforts to actually practice evidence-based medicine.

Q: What is evidence-based medicine?

O’Neill: It’s an idea that says there are better and worse ways to do things. So that if you want to get the most likely beneficial outcome, these are the things that you do. And you do them on a rigorous basis, and you do them every time exactly the same way. And you produce better results. It’s about rigorous process definition that systematically works to eliminate exposure to errors. It doesn’t matter whether it’s administrative, medication, surgical, or nutrition errors. It’s about process improvement that is relentless.

One of the difficulties that we have with this is there isn’t a place to go find this formula. We need to work together to create systems that produce better value for even less resources than we are currently spending. It is not an easy thing to do, and it is not something that a bunch of people with financial muscle can just say, ‘By God, we are going to make this happen.’

It’s one of the things that’s wrong with what has been attempted in the past. To say to John Brouse, ‘Get your damn insurance costs down’ is stupid. He has no control over costs. He reimburses whatever he gets charged. He can’t get his costs down. He is doing the best he knows how to do unless he redesigns the system. In order to redesign the system, he has got to make some investments in information systems, in technology, in physician education. And we have got to do a better job of educating users. Because a lot of medication errors occur after people leave the hospital. They go home and take double dosages or half dosages, and they end up back in the hospital because they didn’t get briefed about how to avoid making a self-induced medication error. It requires the participation of all of the players in order to make it happen.

Q: Does it really or can you lead by example?

O’Neill: I know Jeff Romoff’s system better than I know the others. They have already made a big investment and are dedicated to making an ever-bigger investment in information systems. I think they haven’t crossed the bridge of saying to a physician, ‘You are going to practice here, you are going to practice our way with information technology. And we are going to make it easy for you with hand-held digital converters of voice sounds into digital records’ and all the rest.

I want to go back and touch on a point that Chuck [O’Brien] made about coverage, because it is so unbelievably annoying to me. Intelligent people sit around and wring their hands about we have 44 million uninsured people. And Clinton is finally saying, ‘Oh God, look how bad it is compared to when I was trying to get my health program through.’

I think we know how to solve this problem of coverage. It’s really not too complicated. We just need to get ourselves together and say, ‘Every American has a personal responsibility to pay for their own health and medical care.’ At the end of the day, all of the money that comes out of the federal government comes from us one way or another. Now, we understand that medical needs come in a lumpy way. They are not uniformly distributed across the population, and they are not uniformly distributed across your age.

So we need to have a facility so that people can, in effect, save for the lumpiness of their medical care requirements. We probably ought to impose this when people are out of school, say when they are 22. Everybody over 22, you have got to demonstrate that you have got the wealth and income to protect the society against your adverse selection.

At the end of the day, it does mean something to be an American. We are going to see you get medical care, but you are going to pay for your own. Now, aside from the lumpiness thing, which suggests an insurance mechanism so we can pool our interests, we need to take care of people who don’t have enough wealth and income to take care of their own.

And we ought to have that conversation straight up. And we, the people, ought to give them the money. Those of us who have more than the minimum standard of wealth and income to pay for our own need to share the payment for the other people. It’s not all that complicated. But we can’t have a decent conversation.

The issue is when are we going to grow up as a society and stop screwing around with each other and admit what our responsibility is? And accept that responsibility for running a civilized society.

Hurwitz: You are essentially suggesting that, sort of like driving a car, you have to have auto insurance. If you are over the age of 21, you have to have health insurance.

O’Neill: Think about it as a three-person society. Really simplify this down to where the rubber meets the road. If you have a three-person society, would you let somebody say, ‘The rest of you are going to take care of me once I get sick?’ The hell with that. You’d say, ‘Hey, we are all responsible for this individually.’ It’s the same on a broad stage. We all need to be responsible for our own. To the degree we can’t afford it, the society ought to afford it for us.

Romoff:: If there is one thing you know about medicine, it is that, to the extent you can ascertain evidence-based medicine or best practices, it is going to be obsolete in a year.

This is an organic situation. One of the most interesting things about medicine is that I will be shocked if our successors are sitting here 10 years from now even using the words that we are using today -- because of what we are investing in genetics and in all kinds of new technologies.

But the good news is that physicians, actually are extraordinarily responsive to information.

Q: Does this health care market suffer or thrive as a result of the competition in place among providers?

Hurwitz: Physicians have been very concerned about the marketing that goes on. And about institutions that must provide to the common welfare needing to one-up each other -- going beyond the informational to the selling. Some of this competition seems to be taking premium dollars that otherwise, some would say, could go to faculty positions.

Romoff: The problem with your question is that no one knows what the words mean. From UPMC’s perspective, it is not our responsibility to make the rules. It is our responsibility to follow the rules. If the rules are competitive, we’ll be competitive. If the rules are changed, we’ll follow them. Apparently, the rules these days are competitive.

What competitive means in every other industry is there are several thing that, as Dennis [Hurwitz] points out, are entirely undesirable and unattractive. There is always going to be marketing. There is nothing competitive that is not marketing, and it is always unattractive in health care. As a premier health care marketer, I will say that it always means waste.

Let’s take the West Penn-AGH situation. And let’s take it directly. Highmark and West Penn elect, for the purpose of enhancing competitiveness, to save a situation, which is fundamentally bankrupt, and invest both West Penn money and a substantial amount of Highmark money.

At the same time, if they are successful, it will probably be the undoing of, say, St. Francis or Mercy.

You want to talk about evidence-based medicine, let’s talk about the first piece of evidence. It was expressed by John [Brouse] that there are too many beds and an overcapacity in this marketplace. In a competitive model, something is going to give. Another organization is going to suffer or another set of organizations.

So I don’t think we thought it out.

The truth about competition? The whole purpose of competition in American society is it eventually becomes self-limiting if there is no intervention from the outside.

There are winners and there are losers. Normally the losers go one direction. In this case, the losers may not go one direction. But in the normal thing, the winners win and the losers lose. And the amount of capitalization necessary to come back into the market to compete with the existing winner becomes prohibitive. So it eventually matures into an oligarchical situation.

Virtually every industry in this country has matured into an oligarchy, if not, in the case of Microsoft, an outright monopoly.

If you are going to look at competition in health care, may I suggest you look at insurers. Because there is substantial evidence that demonstrates that if you want to have a competitive market in health care, that you will get a bigger bang for your buck if you have competitive insurance companies.

We don’t have competitive insurance companies in Western Pennsylvania. We have a very successful Highmark, which is something between 65 and 75 percent of the commercial market. There isn’t competition in insurers, something I hope to repair.

So you define the rules, and we will live by the rules. But I assure you, there is no way to say ‘Let’s have competition’ without an enormously high price.

O’Brien:  I don’t think there is a complete answer. In part, I agree with Jeff [Romoff] in that society sets the rules of the game and we have to play with it.

You can look at the noncompetitive systems in the pubic health service. The VA -- would you want to get your health care there? The answer is no.

Clearly there is no market that is purely competitive. There are some markets that are purely a monopoly or regulated. In health care, the problem is very fuzzy.

Somebody said we want to have absolutely anything we want at any time of the day or night. We want to have it when we want it, and we don’t want to pay for it.

That’s a conflict that ripples through not just health care but a variety of things. Americans are a very impatient people. We invented 7-11 so we can get it anytime we want. And that’s sort of the way we look at health care as well. The result of that is you’ve got a system that has got some imperfections.

Romoff: Pittsburgh is in an extraordinary position to, if it decides to, have not only the best health care, but also health care that it actually can oversee and offer in the best interests of this community. If Pittsburgh takes that initiative in health care -- which it seems to want to do in economic development, improving the rivers, building stadiums and electing county executives -- it can do something spectacular. If it doesn’t, we’ll see.

Hurwitz: Physicians are a bright and highly motivated part of our population who are reaching their limits as to the disenfranchisement of the direction of medicine. I believe we are so frustrated and so desperate that we view this effort to look at quality review and the benchmarking of medical care as one of the last life savers we have before chaos. So we will welcome this.