Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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The Nature of Peer Review:


George Ross Fisher, M.D.

Congress and the Business Community want someone to define high-quality medical care, presumably, so someone can report it is provided by the health insurance programs which Congress and Business claim to pay for. Since a snappy definition has not yet been recited, we are beginning to hear growls that quality medical care may be a myth; Uwe Reinhardt just said it was a mystical concept. Lest Congress and the Business Community be tempted to act on the assumption no one can prove their policies are harmful to the nation's health, let me give a try at defining medical quality.

My theme is non-Platonic. Plato, as you recall, was the ancient Greek who had us all searching for the Good, the Beautiful and the True. Absolutes. Plato was a far more skillful proponent of absolutism that I am an attacker of it, and Platonism resurfaces in ideas like high-quality care. Take the illustration which occurs to me every time the matter is raised. Albert Schweitzer was a surgeon who won a Nobel Prize for his work in Africa, where he devoted his life. Now, a Nobel Prize should certainly satisfy Uwe's idea of the elevated social plane of European medical care. But I have been told by surgeons who visited his shop that Schweitzer was a perfectly terrible surgeon. As one put it, he would not have been permitted on the staff of even a Veterans Administration hospital. Whether that assessment is accurate and fair is less important than recognizing that it might well have been true that a perfectly terrible surgeon could go to the heart of darkness and greatly improve the quality of medical care. Quality of medical care consists of making the most of the resources available.

Dr. Pierson, the president of AMRRC, can undoubtedly tell similar stories about China, just as most doctors my age can tell stories about making do with little under wartime conditions. I doubt if anyone seriously denies that you c\ut your suit to fit the cloth, so I wish now to extend the idea by describing peer review in three historical contexts of available community resources. In other words: Yesterday, Today, and Tomorrow.

All through the fifteen years I worked in utilization and PSRO peer review, the context was cost-based reimbursement. Hospitals were given a blank check and urged to give unlimited access to the very best medical care. There were no financial excuses for an institution failing to have the latest equipment, hiring adequate numbers of the best-trained personnel, and organizing effective management. If in spite of having a blank check, a hospital nevertheless had substandard buildings, equipment or personnel, or if in spite of having everyone still made a bad job of it, we peer reviewers felt justified in assuming that hospital must be lazy, ignorant or hopelessly incompetent. Some such idea crept into the malpractice courtroom, too.

With the advent of prospective pricing at the beginning of 1985, the environment has suddenly seemed to change. Hospitals are now paid a fixed price per case, and reimbursement is no longer unlimited. Some of us imagined that peer review would be forced to make some allowance for limited resources under the new system; you can't criticize people for not using a machine they don't have and can't get. Since the waste under the old system was fairly obvious even to those who didn't want to see it, it was welcome that cost/ effectiveness should replace money-no-object as the environment within which to assess reasonableness. The money tree had attracted a number of carpetbaggers which it might be beneficial to be rid of. Merit is less important in a system which rewards everyone regardless of merit. So peer review is greatly changed by the new DRG payment system, right? Sadly, no.

For one thing, we still have mostly the same people with the same mindset doing the reviewing. Nowhere is paralysis of imagination more evident than in the bureaucrats controlling the money for peer review. Furthermore, no one has as yet completed the sacrament of carrying a snappy definition of medical quality to the staffers of relevant congressional subcommittee chairmen, to be duly transmitted to The Department for regulations, which will then be duly held in abeyance by OMB, until somebody who has dinner with the President finds a chance to whisper in his ear. Mundane obstacles are indeed present, but the main problem with changing the posture of peer review lies in the fact that the resource environment hasn't changed much, DRGs and prospective pricing, notwithstanding.

Hospitals as a group enjoyed a 6% margin of profit on their costs during 1985, instead of the hardship and losses originally predicted for a prospective pricing system. Therefore, the context within which peer review took place is essentially unchanged from the days of cost reimbursement. "Shame on you for shabby work when you are making a pile of money" is not greatly different from "shame on you for a shabby job when your resources are unlimited". From the physician's point of view, breakeven would be no tragedy for a nonprofit hospital, particularly when physicians so far have felt so little fiscal constraint.

Physician organizations have a glint in their eye, just waiting for some unlucky administrator to propose reductions of medically needed resources, without prior elimination of medically unneeded resources. Competition between physician and administrator for limited resources is likely to come some day, possibly some day quite soon. But at the moment, most of the economies have been derived from reducing the stimulated expenses which took place during 1984. When it became known that prospective pricing was coming and that it would be based on costs during 1984, to magnify that base year, it became very sensible to incur every imaginable cost during 1984, to magnify that base year. Hospitals put on fat for the coming winter, and most of the surplus employees fired so far can be regarded in an accounting sense as temporaries hired in 1983-84 for the purpose.

Well, what of tomorrow? There is little doubt that the idea is in some minds to handle the prospective pricing system by the business-school prescription, as follows: Cut the budget until something bad happens; if nothing bad happens, cut it again. Eventually, something bad will happen, so then pull back a little; optimum expenditure for the line item has been bracketed. Under this classic formula for managing something you don't understand, one problem is to avoid a total wreck. Therefore, the main job of peer review organizations is to maintain credibility, carefully identifying how much or little shabbiness existed when resources were unlimited, and remorselessly showing how with limited resources there is probably more shabbiness. But we must also remember that we will be carrying unwelcome news, which Government and Business will wish to suppress. It is not useful, Uwe, to announce in advance what you would consider being shabbiness because it alone might be spared, while budget cuts remorselessly destroy services more difficult to quantify. With bureaucrats, you have to hit hard and unexpectedly with evidence that they have palpably done wrong; you need a scandal. The higher they rise in the bureaucracy, the less they fear failure and the more they hate criticism. Let's hope we can be shrewd and alert peer reviewer guerrillas, so the scalps we then display scornfully to the public will be early sentinel effects, comparatively non-damaging to the public while still devastating as trophies. on the other hand, if we prove to be indolent and docile peer reviewers, constriction of medical resources will only be halted by shoddiness which is past denying.

If it seems almost inevitable that we will have to play out this guerrilla warfare, there is still a chance that loss of will by Congress and the Business Community may make the worst features of it unnecessary. Perhaps they will see their efforts were misguided in two main ways. First, like Platonists, they misapprehend that medical quality is independent of the cost when in fact it is largely defined by it. Secondly, they have come to believe their own rhetoric that the cost of medical care is their problem; they may come to recognize that it really isn't their money, anyway. Congress is merely dispensing the public's tax dollars, and Business is merely administering a tax dodge in fringe benefits. When it isn't your own money, and you don't really know what you are talking about anyway, a few lurid scandals can sometimes convince you that some other dabblings would be more useful.

Originally published: Thursday, September 27, 2018; most-recently modified: Thursday, May 09, 2019