Monthly Archives: March 2012

Let’s Be Fair with Congress – Give Them Performance-Based Bonuses

It looks like Congress may actually vote to prohibit itself from using insider information to trade on the open markets. (See here.) This seems about right. And about time. But it sells our Congress short as well. To be fair, we should give them a financial incentive to do well. Not simply the incentive of getting re-elected. That skews things.

Instead we should offer our Members of Congress performance-based bonuses. They don’t get paid much and have to maintain two forms of residence – in their home districts and in DC (though some now sleep in their offices in Washington – we should ask the department of health if this is within code).

Here’s what we would do: first determine what each member of Congress‘ responsibilities are. Here are some suggestions:

  • They all have to deal with constituents’ complaints (social security, medicare, Veterans affairs, etc.). This could be the basis of simply keeping their jobs – re-election would be a function of how well they respond to constituents’ needs. This way we wouldn’t have to vote based on ideology or political determinism, but on service. Isn’t this what we do for our plumbers and lawyers – if they do a good job providing service we call them next time we have a problem. If they don’t, we get a new one. We don’t really care if they are Dems or Republicans, if they think a balanced budget is of higher priority than social welfare, or if they believe the war in Iraq is right or wrong.
  • They all are on various Congressional committees. Make sure each committee has a strategic plan and measure them on its goals and objectives. So if you are on the Agriculture Committee and have an objective to revise corn subsidies (say, objective 2.3), then if the revision occurs within certain boundaries a bonus is payable.
  • How secure are the American people?  If the first purpose of government is to secure the life and liberty of the American people, then use a “Security Index.” How much have we achieved peace within the constraints of how our enemies are assaulting us? I’m sure the Pentagon and CIA can come up with a peace/war index related to this issue. The State Department would also be involved – they claim they can do better at obtaining objectives than the Pentagon, and Congress should be providing oversight of the Executive Branch, so how well they can negotiate security-related issues worldwide would be another bonus area.

Then there are lots of other areas that could be part of each individual Congressman’s bonus plan, or an aggregate bonus point: poverty level improvement, reduced health uninsured, increase in overall wealth of the nation, or average wealth per capita, or reduced disparities in wealth (the “Occupy” folks could work to help set the disparity index as a bonus objective, instead of making camps in city parks), education goals, creativity/innovation indexes to show how our citizens are improving the lives of the world or the nation, etc.

Right now it seems we think about a lot of these things and roll them all into one bonus plan: re-election. But that is too simplistic and broad and doesn’t give Congress the true feedback they need as to their competencies and ways to improve.

A small bonus plan (say 15% of salary, or about $11 million total; $25,000 per senator or congressman) might just give our poorly paid Congressmen an opportunity to improve their performances, bring home some more bacon, compensate them for having to maintain two residences, and give a token of appreciation from the American public – assuming they earn it by meeting their bonus objectives.

So here’s a sample bonus plan with the performance objective, portion of bonus (out of 15%), and performance measures based on threshold (below which no bonus is paid) and various levels to obtain maximum bonus for the objective:

  • Security Index    4%    Objective:  citizens are safe at a 95 level    Threshold:  80  Maximum bonus:  95 or above;  Interpolate bonus in between  (Note:  I’m making this one up for now – I don’t know if there is a security index extant.)
  • Agriculture committee objective 2.3     3%    Threshold 1%:  pass bill out of committee   Maximum bonus 3%:  Bill passes through both houses and is signed by president; Bill passes through one full legislative body 2%
  • Federal budget  balanced 5%    Threshold:  2% below balanced budget.  Maximum bonus: 1% surplus.  Interpolate in between.
  • Poverty level (current level 15.1%) reduced below 14%   3%    Threshold: 14.5%.  Maximum bonus:  14%.  Interpolate in between.

All new approaches take some iteration until we get it (partially) right.  I’m not suggesting this is the only way to do it, just one possible way with many details to work out.  For example, because our ability to collect data to confirm some of these objective data points may take several months after the end of the year, bonuses would be paid when all data are finally collected.  Perhaps this would be an incentive for Congress to allocate more funds for enhanced data collection?  Because congressional sessions run for two years, bonuses would be paid every two years based upon the final results of the congressional session.  Hence every two years a Congressman or Senator would have the potential for a $50,000 (plus or minus) bonus.  Maybe knowing that they have to complete their tasks to get their bonuses will incent them to spend more time legislating in the second year, and less time electioneering?

Who determines the ultimate bonus objectives and whether they are met? An independent panel of non-lawyers appointed by the Supreme Court, of course.

I’ve already submitted my application to be appointed chairman.


In this case Scott Gottlieb has it wrong

A couple of weeks ago Scott Gottlieb wrote an op-ed rant in the Wall Street Journal entitled, “Meet the ObamaCare Mandate Committee.” I usually enjoy Gottlieb’s op-eds, though often don’t agree with him. He is usually thoughtful, even if he has a really negative view of the FDA, for example. I don’t share this view, but find his arguments thought-provoking. [I’ve told Peggy Hamburg in the past that I think the FDA does good work given its mandate and available resources. This is from many years and a number of companies in my venture capital portfolio that have had to get FDA clearance for devices or drugs. The FDA has an important population medicine role and it fulfills it very well.]

In Gottlieb’s current case, though, I can’t say I can even appreciate his viewpoint. It isn’t thought-provoking as much as significantly misleading and even poorly argued. Gottlieb, who seems to think that any cost considerations in medical decision-making is the equivalent of the Devil doing her dirty work, argues that the US Preventive Services Task Force (USPSTF) has been given too much power within the context of the Accountable Care Act, AKA ObamaCare.

The USPSTF has been in business since the mid-1980s. It was the first significant federal body to use carefully reasoned data analysis and literature searches to make recommendations related to screening for disease, or risk factor reduction. After thorough analysis of existing data about a screening test, preventive medication, or prevention counseling technique, the
USPSTF issues a letter grade on any particular item as follows:

Grade A The USPSTF recommends the service. There is high certainty that the net benefit is substantial.
Grade B The USPSTF recommends the service. There is high certainty that the net benefit is moderate, or there is moderate certainty that the net benefit is moderate to substantial.
Grade C Note: The following statement is undergoing revision.
Clinicians may provide this service to selected patients depending on individual circumstances. However, for most individuals without signs or symptoms there is likely to be only a small benefit from this service.
Grade D The USPSTF recommends against the service. There is moderate or high certainty that the service has no net benefit or that the harms outweigh the benefits.
I Statement The USPSTF concludes that the current evidence is insufficient to assess the balance of benefits & harms of the service.

The USPSTF uses very high criteria for determining these letter grades. ObamaCare determined (in my view appropriately – I’ll elaborate in a moment) that a recommendation of “A” or “B” would automatically qualify for full coverage in the federal mandate for benefits coverage. Thus Gottlieb is correct when he states that this committee “is empowered to evaluate preventive health services and decide which will be covered by health-insurance plans.” But he implies that this committee exists solely to do such a thing, and that its forward-going tour de force will be to wield power to force costs on the health care system by covering what it likes, and also reduce costs by downgrading items it doesn’t like.

[I say in my view appropriately because when I was Medical Director at Aetna in 1988 I helped develop a prevention rider that was based on the USPSTF’s recommendations – it was the only unbiased, evidence-based screening and prevention group in the nation at the time. Subsequently the American College of Preventive Medicine’s board of regents recommended that the Clinton Health Care Reform plan include the USPSTF’s recommendations also. I chaired the policy committee of the ACPM at that time.]

Back to Gottlieb. He also slams the USPSTF because of its change in screening recommendation for mammography in 2009. Many advocacy groups didn’t like the change because it reduced the frequency and starting age of screening for breast cancer (see chapter 5 of Prevention vs. Treatment by Dianna Petitti, vice-Chair of the USPSTF at the time). So, Gottlieb doesn’t like (a) the power the USPSTF possesses, (b) the fact that its recommendations may increase some costs, (c) the fact that some of its recommendations may decrease some costs if recommendations are not A or B, and (d) the fact that advocacy groups may have less clout than they have in the past.

You can’t have it both ways, Scott. Do you want evidence-based medicine? Do you want effective medicine? Or do you want only unbridled freedom for anyone to do anything they want, causing the out-of-control spiral of health care costs already burdening the system?

Let’s look at each of the complaints Gottlieb poses:

1. The USPSTF has some power. Yes, it does. Why is this a problem? He doesn’t say. He tries to argue that it is because it has made decisions in the past that he doesn’t like. But no one can argue that the USPSTF has been arbitrary and capricious in its decisions. It has looked at the evidence, modeled the harms and benefits (where information is available), and dispassionately made recommendations. Is that wrong? Would we rather have politicians making coverage decisions that usually have been arbitrary and capricious, mostly because of the politicians’ personal experiences only, or pressures from advocacy groups that then get resources that are far disproportionate to the diseases for which they advocate? I don’t think so. One way to get that arbitrary and capricious decision out of the hands of those who are (as Kahnemann would say) fast thinkers without using their slow thinking is to put it into the hands of those who can think slowly and methodically.

We know that advocacy groups and individuals don’t necessarily care about the evidence, they care about their advocacy mission. The USPSTF is scrupulous about avoiding conflicts of interest (financial) and conflicts of commitment (advocacy). Most medical specialty societies and advocacy groups can’t avoid these conflicts by definition.

Gottlieb is further worried that “the task force will surely recommend against many services that patients now take for granted, while mandating full insurance coverage for things that they’d be just as happy paying for.” As medicine advances we learn that some things don’t work which we thought did, and some things do work which we may not have thought did. Why shouldn’t coverages be shifted appropriately once we have this new information? Are we stuck in using arsenicals for syphilis and not antibiotics because patients (and physicians) are now “taken for granted?”

2. A or B recommendations will increase costs. Yes, they might. As Louise Russell points out in chapter 3 of Prevention vs. Treatment: What’s the Right Balance? (Oxford University Press, 2011), not all prevention is cost-saving. Some is merely cost-effective. Until now the USPSTF has not considered costs in its evaluation and recommendations. It can start doing so given the mandate from the ACA. But will it? It’s not clear. However, Scott complains that it is allowed to. Wait a minute. He also complains that prevention might cost money. Wait a minute. He also complains that some prevention might be dropped because it isn’t cost-effective. Wait a minute. I’m confused. Do costs matter or not? Does effectiveness matter or not? Gottlieb needs to tell us – is he for or against effectiveness as a criterion for coverage? Is effectiveness more important in prevention than treatment, or less so (or equal)?

3. C, D, or I recommendations may decrease costs. See #2 above. Plus: insurers still have the option to cover them. But why would they consider covering a D or I recommendation? A D recommendation says that the screening method creates more harms than benefits. This is a good reason to avoid its use. If an individual wants to pay for it to expose himself/herself to the harms then one can ask why an insurer should get involved. Further, one could even ask why an insurer should be on the hook to cover the treatment that likely will be required for the harms once this poorly informed and evaluated decision is made by the patient and provided by his/her physician.

For an “I” recommendation there isn’t enough information to know if screening or treatment is of any value. In essence this makes it like an “experimental” decision, except it is not being done in a controlled clinical trial, but simply out of ignorance by patient and provider. By what right does a patient have to get this paid for by the commons?

That leaves “C” recommendations, for which the evidence is not solid and the patient and physician need to have a lengthy discussion of its value and risks. Leaving aside the problem that most physicians don’t have the time to provide full information and explanation/discussion of these issues with patients, (and indeed don’t – see the February American Journal of Preventive Medicine article about this), the C category is one for legitimate discussion and disagreement perhaps. In this case insurers can decide based on the marketplace whether coverage is appropriate or not. Here is where advocacy groups and conflicted treatment specialists can weigh in with some clout.

4. Per #1 above, advocacy groups may have less clout than in the past because they have less influence on the USPSTF. But they still can argue their cases in responding to proposed recommendations – the recommendations are provided as drafts for a defined time period for comment before issued. They also can still advocate for increased research funding for their causes. The research is (and should be) outside of insurance coverage. First prove something works. Then let it be covered. Otherwise we’d be covering a lot of nonsense simply because one party or another claims it works.

I do agree that the process should be transparent. I doubt if the Task Force members would feel significantly different. Except they should be able to go about their work initially undisturbed by advocacy groups. If the task force misses a key study, the advocacy group has the option of pointing it out to them when the draft recommendation is released for comment. The recommendations are released usually about the same time as the evidence base review is released, usually in a peer reviewed journal.

And to go to Gottlieb’s introductory and concluding paragraphs about contraception. The actual coverage decision for that was not made by the USPSTF, but by a different body. The Obama administration could have rejected that recommendation for political reasons, and is modifying it now (like with the allowance of over-the-counter sales to minors of emergency contraception). How can Gottlieb imply or fault the USPSTF for that decision?

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