Arnold Milstein, M.D., the newly appointed member of the Medicare Payment Advisory Commission, thought better of using the word "bias" to describe what he'll bring to the federal panel that advises Congress.
"I think I'll call it a private-sector inclination to trust market solutions to performance problems," said Milstein, who puts that proclivity for the private sector to service as medical director of the Pacific Business Group on Health and as a consultant with Mercer Human Resources Consulting.
Milstein, who has a bachelor's degree in economics from Harvard and a master's degree in public health from the University of San Francisco to go with his medical degree from Tufts, is a co-founder of the Leapfrog Group. The national business coalition is pushing evidence-based referrals, computerized physician order entry and hospital-based intensivists to improve quality of care and reduce members' employee healthcare costs.
In March, a coalition of 28 large U.S. employers announced a plan to mine data to create hospital and physician report cards around quality and cost measurements and distribute the information to their 2 million employees to create "a more open and rational" healthcare market.
Milstein is a consultant to the project, called the Care Focused Purchasing Initiative.
In a telephone interview today, Milstein said "performance incentives cannot by themselves lift American clinical performance to the level that it can be, and needs to be, but it's hard to imagine achieving a much higher level of performance without them."
"Even through people may be intrinsically motivated in performing their work -- and I believe physicians are -- they tend to put more effort into it when they're incentivized," he said.
Several prominent medical informaticists were critical of the Care Focused Purchasing Initiative when it was announced (See "Employer coalition announces new quality initiative," MP Stat, March 25 [purchase required]) because of its announced reliance on administrative claims data.
Milstein is unmoved by the arguments.
"I think the evidence is that claims data can be used for crude, but not refined, performance comparisons," Milstein said. "And such crude performance comparison can, as the private sector has already demonstrated, be augmented with supplement clinical data selection, as exemplified by the recently enacted CMS quality reporting provisions.
"Last, but by no means least, the inadequacy of current data to make refined comparisons is a self-imposed handicapped, in that a modest expansion of the routinely collected data would allow more refined performance comparisons," he said. "No one ever wrote in stone that what's on the UB-92 and the CMS-1500 (standard data reporting forms) is immutable. Those limitations didn't come down from heaven. It's a self-imposed limitation that the healthcare industry could modify if it wished.
"I think over time the choice will be between primitive performance comparisons based on voluntary, inadequate data feeds or more refined data comparisons based on collaborative data feeds. It's really up to the healthcare industry."
Milstein, for all his enthusiasm for the private sector, says there are legitimate roles for government involvement in healthcare IT promotion: as a regulator to facilitate competition and, "more importantly, and more relevant to MedPAC, government is a very large purchaser, and it's payment policies could substantially influence American hospitals and doctors to enhance performance."
Milstein's first MedPAC meeting will come in July at the commission's annual planning retreat outside Washington.
Step one, he said, will be to try to learn from other commissioners what they view as the barriers to and the facilitators of a more performance-sensitive environment.
"Arriving as an outsider, the prudent first step is always to listen to those who have struggled with the problem," he said.
What he'll bring to the commission, aside from his private-sector leanings, is knowledge of some private-sector successes and a hard-nosed business attitude toward overcoming what psychologists call optimistic bias.
"In general," he said, "I think a lesson emerging from the private sectors is that provider performance transparency and provider performance-based incentives significantly affect investment in performance management and performance improvement."
Optimistic bias, he said, is the belief that, irrespective of what statistics may show about performance shortfalls within a group that you are a member of -- say the American Hospital Association -- there is nonetheless in the human psyche the tendency to look at that negative data and believe it does not apply to you.
"The power of transparency is to offset the very strong inclination toward optimistic bias," Milstein said.
That said, Milstein engaged in some optimism of his own.
Despite decades of talk about reducing costs and improving healthcare quality through the deployment of information technology and quality reporting, and little action, Milstein said it may be the right time for people to finally realize they need to make things happen.
"As America staggers under the dual blows of increased insurance costs and the very stark messages from the IOM that healthcare is unreliable, it's getting very high up everybody's radar screen," he said.