by
Jeffrey C. Bauer, Ph.D.
Senior Fellow for Health Policy and Programmes Center for the New West, Denver, Colorado
Introduction
Knowledge has unquestionably been one of the most valuable resources in the health sector of the United States’ economy during the 20th century. Enviable economic returns have been earned by the physicians, pharmaceutical companies, insurance carriers, and other economic units which have controlled the know-how required to diagnose a disease, manufacture a prescription drug, sell a health plan, or otherwise manage patients’ access to health care resources. Examination-based certificates to provide specific health services, minimum educational requirements for professional practice, state insurance licenses, and federal patents to protect returns on investments in new drug development are examples of formal mechanisms based on the existence of identifiable and organised knowledge bases in health care.
The knowledge-based relationship between professional power and economic returns has been sta-ble for so long that casual observers could be tempted to extrapolate their understanding of it into the future. However, a fresh inquiry into the nature of the relationship strongly suggests that its 20th century foundations are rapidly crumbling. The corresponding situation of health care knowledge in the early 21st century is likely to be very different. An historian’s explanation of the production, mediation, and use of knowledge in the health sector over the past 100 years is essential for those who want to understand the changes that are taking place. However, a futurist perspective is just as important for those who need to understand the evolving relationships and their implications.
This paper is based on the premise that the relationships of health care and knowledge in the United States are being radically transformed by information technology, privatised reform, competitive market forces, consumer empowerment, and other forces that were not prevalent in the past century. It describes and contrasts proposed understandings of old relationships and new ones that are developing to replace them. Above all, it seeks to initiate a dialogue that will help health professionals and resource allocators (e.g.managers of health care organisations, public policy makers, purchasers of health plans) to examine the implications of their decisions in the context of new and unprecedented circumstances.
Evolution in the meaning of knowledge
The dynamism described here goes beyond the changes expected in production, mediation, and use of traditional knowledge. The meaning of health care knowledge itself is changing. Positing simulta-neous evolution in both the meaning and processes of knowledge requires a complex analysis, but inves-tigating health care knowledge with a univariate model runs the serious risk of yielding irrelevant or erroneous conclusions.
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In other words, the issue is not simply trying to understand new ways to process the same old knowl-edge or even the same old concept of knowlknowl-edge. Rather, the focus of inquiry must be how new processes will produce new understanding of the realm of possibilities for human health and medical care. An intro-ductory review of basic definitions will build a case for a two-factor dynamic analysis and show why changes in the meaning and content of knowledge are potentially just as important as changes in its production, mediation, and use.
Knowledge is often and usefully defined as the third tier in a conceptual hierarchy (Chapter 2 in Cleveland, 1985). The first tier of the structure is data, the raw figures that describe an observation or quantify the workings of a system. Data by themselves do not tell us anything useful; they need to be organised into meaningful categories to produce the hierarchy’s second tier, information. Data do not start to have meaning and impart information until they are transformed into measures of central tendency (e.g.mean, median, mode) and measures of dispersion (e.g.deviation, variance) that allow standardised descriptions and comparisons of what is of interest. The next step is knowledge, the purposeful application of information to decision-making.
The fourth and final tier of the conventional hierarchy is wisdom, the art of consistently making good decisions based on experience. That lofty topic will be left to the philosophers.
Knowledge as the measure of well-informed health care decisions is certainly a timely issue because modern industrial countries are all asking how their medical care delivery systems could be improved by better knowledge. Questions abound. What new knowledge would allow us to produce a healthier pop-ulation? What do we need to know to reduce the costs of producing health services? How can information technology be used to improve the quality of care? Good answers to these questions are not so common.
As shown by the universality of current efforts at health reform, every modern industrial country wants to know how to fulfil the political imperative of spending less on health care without failing to meet the social imperative of maintaining access and quality (see Raffel, 1997).
Consequently, the most important measure of the processes of producing, mediating, and using knowledge in the future might be the extent to which these processes lead to better (i.e.more knowl-edgeable) decisions about allocating health resources. From an economic viewpoint, the processes have no value if they do not ultimately yield tangible improvements in the delivery of health care services. We will have gained nothing if the processes of production, mediation and use only efficiently produce use-less knowledge.
A desirable advance would be process changes that give fair value to negative knowledge, that is, know-ing what not to do. The US health care knowledge base has long been biased against reportknow-ing research that accepts the null hypothesis (i.e.failed to find a statistically significant relationship between an exper-imental effect and an observed outcome). We have suffered from the publication bias perpetuated by journal editors who only accept articles that “prove” the existence of a relationship. We could benefit at least as much from the publication of good studies that demonstrate no relationship between a medical intervention or health policy and a desired outcome. A good policy on the production, dissemination and use of knowledge would equally respect positive and negative knowledge.
A proper knowledge policy would also impose stringent quality standards on the processes that cre-ate data and turn them into information and knowledge. Sadly, the overall quality of the existing knowl-edge base is abysmal.* The majority of clinical and policy studies published in the United States are seriously flawed by poor data, bad experimental methodology, political power and/or inappropriate sta-tistical analysis. Even the most prestigious journals are often (but not always) guilty of imparting consid-erable misinformation. Erroneous information is likely to produce flawed knowledge, so formal concern
* A detailed defence of this controversial position is a central theme of Bauer (1996). The author has used this as a text for several years in teaching statistics and research methods at the Medical School of the University of Wisconsin-Madison, and nearly all the practising physicians in the classes concurred in a generally low assessment of the quality of the existing knowledge base in health care. The author has also successfully defended this position more than a dozen times as an expert witness in civil litigation. US federal courts have independently come to the same conclu-sion as the result of challenges to expert testimony presented in the famous product liability case about breast implants, Daubert vs. Dow Corning. Federal courts now scrutinise expert testimony with Daubert quality standards which are much stricter than the requirements for publication in a typical health care journal.
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with the quality of the components of knowledge needs to be elevated to the level of policy if we are to move forward by design rather than luck.
Formalised attention to the quality of data might lead to the creation of a system for rating the com-ponents of knowledge on a multi-dimensional scale. We currently lack a qualitative instrument that makes it possible to decide whether existing data and information are worthy of attention. Parameters to be considered for inclusion in a rating system might include:
– Scope of knowledge: the relative degree of knowledge about a topic, ranging from virtually none to almost complete.
– Age of knowledge: the currency of the knowledge, from outdated to up-to-date.
– Cost/benefit ratio of knowledge: the value of the knowledge in use relative to the cost of acquiring it.
– Reliability of knowledge: the accuracy with which the underlying data measure the object of interest.
– Validity of knowledge: the extent to which a knowledge base is truly relevant to the subject of concern.
These parameters are tentative and conjectural, but they reflect a need to favour the development of knowledge that has inherent value. In the absence of a comparative scale, we may be allocating scarce resources to sub-optimal use. Which is worth more: investment in 100% knowledge about a disease that affects very few people, or investment in 50% knowledge about a health problem that affects nearly everyone? We cannot currently answer such questions because we lack consensus on the qualitative dimensions. Some attention to this issue might improve the future returns to expenditures on the pro-duction, mediation, and use of knowledge.
Finally, the near-term evolution in health care knowledge will almost certainly see visual elements added to the database. A good illustration of this expansion of the concept of knowledge is already avail-able in radiology. Actual diagnostic images – not just radiologists’ verbal interpretation – are increasingly stored in Picture Archiving and Communications Systems (PACS), and search engines are already being developed to retrieve them by image characteristics. For example, researchers can pursue knowledge of breast tumours by retrieving and studying all mammograms exhibiting specific morphological features.
This image-based research process is much more powerful than the traditional review of radiologists’
written reports which may have differences or errors in professional judgement.
This example is just the “tip of the iceberg”. The emerging ability to store and analyse visual images relating to health care creates remarkable new possibilities for creators and managers of knowledge. We will be able to watch and study visual images as they change over time, just as we can already follow the movement of a storm via radar images. It is necessary to develop and apply visual skills for creating health knowledge in the 21st century, just as scientific literacy and numeracy were developed to under-stand the production, mediation, and use of health data in the 20th.
Key relationships and mediators in the creation of knowledge
Complexity is a key characteristic of the relationships among the various entities involved in produc-tion, mediaproduc-tion, and use of knowledge in the health sector. Indeed, analysis of the interplay between con-stituencies could be conducted from several perspectives, but a “7-p” transactional model – patients, providers, practitioners, payers, purchasers, pharma, pofessoriat – is adopted here to simplify the anal-ysis. Some of the most important historical relationships are used, but this is by no means the only approach. The model initially reflects the legal parties to health care transactions: patients, providers, practitioners, and payers. (Consistent with a worthwhile distinction made by the Joint Commission for the Accreditation of Healthcare Organizations, or JCAHO, providers are defined as organisations, such as hos-pitals and medical groups, and practitioners are defined as professionals, such as physicians and nurses.) A fifth “p” is added for purchasers (i.e.the employers who buy employee health plans), a sixth “p” for pharma (i.e.the pharmaceutical industry), and a seventh for the professoriat, or academia. This “7-p” con-cept provides a useful framework for the remainder of the discussion.
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The most significant area of interest for present purposes is probably clinical knowledge. It has mainly been produced in the United States predominantly by three constituencies: professors, pharma and the largest payer, the federal government (e.g.the National Institutes of Health). In the past, relations between these three parties have been collegial, but they are becoming more competitive. Some key forces behind the changes are the rising costs of product liability and litigation, political constraints on research brought about by social conservatives (the “religious right”) and animal rights activists, acceler-ating mergers and acquisitions within pharma, near-term loss of patent protection for a large number of brand-name drugs, and disintegration of government health policy. Further, the traditional role of the uni-versity is threatened by academic inertia and by intrusion of for-profit corporations into adult education.
Analysis of the current dynamics suggests several other significant changes in the making. For exam-ple, venture capital has created an amazing number of start-up companies dedicated to pharmaceutical research in highly focused areas. These companies have tended to draw many top researchers away from academia, upsetting the historically congenial “town-gown” relationship in health care. The phenomenal expansion of the computer as a research tool also creates many opportunities to increase the knowledge base both in breadth and in depth (e.g.the Human Genome Project). All things considered, analysis of these forces suggests that the professoriat’s loss is pharma’s gain. Universities will probably decline in importance as contributors to knowledge, and the pharmaceutical industry will assume a more powerful role. Pharma’s highly successful entry into the managed care business and the professoriat’s simulta-neous failure to develop managed care products are offered as additional evidence in support of this conclusion. The government’s future involvement in health care knowledge seems relatively stable.
The situation is equally interesting in the overlapping realms of providers, practitioners, and private (i.e.non-government) payers. These three entities have produced extensive knowledge about paying for health care in the uniquely American way since the creation of Medicare and Medicaid in 1965. Now, the Health Insurance Portability and Accountability Act of 1996, also known as HIPAA or Kennedy-Kassebaum, is forcing all three constituencies to work together to “simplify” reimbursement. (However, the evolution of payment simplification immediately brings to mind the well-known French observation, “Plus ça change, plus c’est la même chose”.) Their hard work may ultimately produce a new claims-processing system, but it is unlikely to produce new knowledge that will have any other impact on health care.
These constituencies are also preoccupied with the “Y2K” problem that will wreak havoc if comput-ers are not reprogrammed to recognise the year 2000. Once that problem is solved, they will turn their attention to the even more daunting task of coping with the new universal patient identifier required by HIPPA. The complexities and uncertainties of payment reform will almost certainly keep these three groups so busy that they will not have time to produce desirable new knowledge (e.g.how to get appro-priate services to uninsured populations, how to define medical necessity in order to fulfil the promise of managed care).
Growing division within the ranks of providers and practitioners will further divert attention from the research and development that would improve health care. One example is the simultaneous introduc-tion in 1998 of Medicare+ which is designed to provide more managed care opintroduc-tions under Title XVIII of the Social Security Act and implementation of provider-sponsored organisations (PSO) in order to pro-vide competition for the traditional payers. A more subtle diversion will be the ongoing encroachment of qualified non-physician providers (e.g.advanced practice nurses, clinical pharmacists, therapists at mas-ters’ level) on the market that US physicians have monopolised since the early years of this century (see Bauer, 1998). The ensuing intra-group and inter-group confrontations will seriously strain the co-operation necessary to produce, mediate and use knowledge across professional boundaries. New data and infor-mation will undoubtedly be generated within the various groups, but, in light of the increasing competi-tion, they will increasingly be treated as proprietary knowledge. In other words, the future is likely to see significant deterioration of the collegial relationships that supported widespread dissemination of knowledge in the past.
Purchasers have taken a lead in only one area related to knowledge, the attempt to define quality of care. Through the National Council for Quality Assurance (NCQA), many of the nation’s largest corporate purchasers of health care have financed the development of the Health Care Employer Data Information
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Set (HEDIS). HEDIS only provides a limited snapshot of health care services, but it does allow purchasers to compare competing health plans on approximately 30 criteria which include delivery of preventive services and compliance with selected care protocols. HEDIS has not significantly advanced the science of measuring the quality of health services, but it has established the practice of using “report cards” to compare different providers and practitioners. Comparative rating systems are definitely a new type of health care information in the United States, but the questions of whether they constitute good knowl-edge remains unanswered. The initial instruments that claim to measure quality appear to suffer from oversimplification.
The changing nature of knowledge-based relationships within and among the seven “p” is significant, but this does not imply that the production of important knowledge will decline. Indeed, even more resources are likely to be devoted to producing valuable knowledge, as the dramatic increases in invest-ments in information technology over the past two to three years suggest. The key difference between the past and future is that owners of the new knowledge will be able to profit directly from it in compet-itive markets. New knowledge will be more proprietary and less public as a result of the recent shift in government policy from ensuring collaboration to promoting competition.
The “winners” in the new knowledge marketplace are likely to be the corporations within each sector.
No single “p” group is destined to dominate the others, but early evidence suggests that pharma is posi-tioning itself to be the leading sector. Providers of speciality services under managed care plans are also making investments that arguably enhance their prospects for success as a result of superior, proprietary knowledge. This might not happen if the largest payer, government, showed signs of returning to more collaborative policies. For better or worse, it does not. Promoting competition and punishing fraud and abuse seem to be the hallmarks of government policy for the foreseeable future. Consequently, privati-sation will probably be a key characteristic of American health care knowledge in the near term.
Special interests and health care knowledge
Each of the seven “p” groups is a special interest, working diligently to protect its position in the US health sector. However, a generic assessment of each group’s current actions suggests major differences in the priority assigned to knowledge as a strategic goal. While there are exceptions, group-specific sum-maries are presented here as a basis for further discussion.
Practitioners are engaged in an intense battle for market share. Until recently the unchallenged lead-ers because all other health professionals operated under their authority, physicians are becoming a con-siderably less cohesive group than they have been for nearly a century. Traditionalists are engaged in defensive action to protect the “good old days” of solo, fee-for-service practice. However, a growing num-ber of recently trained doctors are becoming comfortable with managed care, particularly the notion of working for someone else and sharing authority with corporate managers. Producing new knowledge does not seem to be a high priority for either group. A relatively small group of doctors from all backgrounds are starting to think and act like entrepreneurs who wish to redefine clinical practice and are those likely to develop new knowledge on how to manage health care resources (see Weed, 1997). These progressive
“healer dealers” have no time for the American Medical Association because they are busy meeting with venture capitalists.
Hospitals, health systems, and other organisational providers are currently so preoccupied with mergers/acquisitions and internal reorganisation that they have very little time to devote to knowledge that would improve the services they actually deliver to patients. Providers’ remaining energy is absorbed in complying with the constantly changing and ever-expanding regulations of the Health Care Financing Administration. The only organisation that forced providers to think differently about their future, Columbia/HCA, virtually disintegrated as a market power in late 1997. Providers are unlikely to be leaders in the development of new knowledge paradigms in the coming years, but many will have the capital and infrastructure to apply knowledge generated elsewhere.
Payers are expanding the quantity of health care data at a remarkable rate, but there is no clear evidence of a co-ordinated strategy to turn the data into beneficial knowledge. Indeed, the notion of infor-mation entropy comes to mind when one ponders the sheer volume of data generated by the management
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of patient accounts. The best hope for learning something useful from payers’ numbers may come from the new tool of “data mining”, as more providers and practitioners adopt electronic medical records. Speciality companies are beginning to demonstrate the value of looking simultaneously at payers’ databases and medical records in new ways, and significant progress may be made. Ironically, a branch of the federal gov-ernment (Agency for Health Care Policy and Research, AHCPR), which was a pioneer in creating outcome-based knowledge from payers’ data, was ultimately “punished” for encroaching on private markets.
The professoriat seems to be in a general state of turmoil. With a few notable exceptions, universities have not been successful in redefining their roles in response to changing circumstances. Many R&D activities are still being conducted in universities, and overall resources for academic R&D seem to be increasing. However, this growth seems to be accompanied by a shift in motivation from the academic (i.e.doing pure research to serve society) to the entrepreneurial (i.e.doing applied research for specific sponsors). Universities have worked hard over the past decade to diversify the sources of their research funding and are likely to continue to be heavily involved in producing health care knowledge. Whether they will be long-term leaders is another question. Many university-based research laboratories are heavily dependent on private funding, and top researchers are increasingly willing to leave academia for private industry when they are on the verge of making major discoveries.
In addition to facing “real world” economic temptation, professors in the United States are struggling to preserve their traditional role as editors of academic journals that disseminate health care knowledge.
This task has become rather difficult, given changes in the publishing business. Paper, printing, and dis-tribution costs have all risen dramatically over the past few years, yet the number of journals has prolif-erated with the growth of special interests. Journals also lost advertising revenue as drug companies began promoting their products directly to consumers in other media, and library subscriptions have declined. The outlook for traditional health care journals is bleak, but the impending demise of hard-copy distribution does not necessarily doom the professoriat’s traditional role of managing knowledge distribution. The key to continued success is to manage the shift from print to electronic transmission. If professors do not promptly assume leadership in this area, there are many other “editors” waiting to take their place. Providing adequate editorial control over the quality of on-line information will be a real chal-lenge in the world of electronic publishing. Gresham’s Law stands as a serious reminder of the chalchal-lenge.
Bad knowledge will drive out good knowledge without proper leadership and safeguards.
Pharma, as already noted, is probably positioned to become a leader in producing knowledge that will change health care in the greatest number of ways. Pharmaceutical companies are already the obvi-ous leader in applications of biological science to diagnostics and therapeutics. They are also extensively involved in development of knowledge that will influence virtually all aspects of health care delivery.
Pharmacy benefit management companies are only the most visible examples of a growing number of pharma-linked ventures that are quietly developing databases to achieve competitive advantage in vir-tually every sector of the health care market. Of the seven “p” groups, pharma also best fits the condition of Sutton’s Law. It’s where the money is.
The patient is last, but definitely not least, in this analysis. Patients are not at all likely to become developers of health care knowledge in the United States, but for a variety of reasons, they may soon become major forces in its mediation and use. For example, consumer protection has recently emerged as a major force – in some instances, almost the only force – in current efforts at health care reform. Con-sumer choice is also rising fast in areas as diverse as the “death with dignity” and patient self-determina-tion movements. Furthermore, self-care is now recognised as a major opportunity for market growth. But the most significant force may be the political and economic power of the “baby boomers” who are just entering their prime years. This is the generation that pushed out two US presidents, ended a controver-sial war, made a lot of money, and otherwise became accustomed to believing that people ought to listen to it. Their potential role in reshaping the future of health care knowledge must not be underestimated.
Other key determinants of innovation
This perspective on the state of health care knowledge in the United States at the end of the 20th century is reinforced by two other significant forces: i)the rapid development of telemedicine as an enabling