Tuesday, December 21, 2010

Interviews with Dr. Fisher on National Public Radio

These links are to the shortened and full length recent interview on National Public Radio by Dr. Fisher regarding his new (Dec. 2010) e-book, The Ten Questions Walter Cronkite Would Have Asked About Health Care Reform.

Short interview

Full-length interview

Sunday, November 28, 2010

My New E-Book - Free of Charge

I invite you to download my e-book, The Ten Questions Walter Cronkite Would Have Asked About Health Care Reform.

Absolutely free of charge. Get it here.


Also included in this e -book are a recipe for real health care reform, a physician survey regarding health care, and relevant essays.

Kenneth A. Fisher, M.D.

Wednesday, November 3, 2010

The Misguided Debate on Health Care Reform

Our political parties and its leaders presented two unacceptable alternatives to the American public during the health care debate. The president and his party concentrated on the evils of the health insurance industry while pursuing the commendable goal of universal coverage. They conveniently did not explain that insurance rates are determined mathematically by actuaries and that our present problems are primarily caused by the huge costs of the entity being insured, health care. Neither party had the courage to inform the public that Medicare and more so Medicaid are subsidized by private insurance. The president’s party ignored the crisis of government overspending and debt accumulation facing most western nations including ours. Their solution was a massively complex and expensive law. Ignored also was the significant negative impact the cost of health care (17% of gross domestic product) is having on manufacturing and exports along with the loss of high paying jobs. The present law is estimated to increase health care spending to a whopping 20-22% of gross domestic product, which will put an even greater drag on our economy.
The other party decried the expansion of government, the uncertainty of the law on small and large businesses, the law’s large costs and its individual mandates to be monitored by the Internal Revenue Service. They ignored the need for universal coverage and like the other party did not discuss the negative impact health care costs are having on our society. Instead, they also focused on insurance.
Neither party addressed the cost pressures that Medicaid is having on state budgets, diverting much needed funds from K-12 public education. The federal government needs to absorb the full cost of this program. If we as a nation are to decrease our alarming poverty rates we need to spend much more on acculturating and educating our children, especially those coming from disadvantaged backgrounds.
Neither party had the courage to address the real problems of health care. It consumes too large a fraction of our economy sacrificing the education of our youngsters and causing the decline of manufacturing. The goal of health care reform must be to provide universal coverage while spending a smaller fraction of our resources. Our leaders were not humble enough to ask the physician community why other advanced societies, while moving to a mix of private and government funded care, are able to provide universal coverage at much less cost and what reforms would be needed to obtain this goal. On this blog are many suggestions as to how to accomplish this.

Friday, August 6, 2010

Answer to question #10: What is the result of cobbling together various constituencies in trying to pass a health care reform bill?

Apparently because the Obama administration wanted to avoid the intense objections from the various constituencies that defeated the Clinton health plan, these parties were invited to participate in the planning and drafting of the new plan. Horse trading took place at the White House and intense lobbying involving hundreds of millions of dollars was part of the Congressional process. Some of the involved parties were: the AARP (representing those over 50 y/o), pharmaceutical companies, The American Medical Association (AMA), hospitals, unions and insurance companies.

The AARP became a firm supporter although approximately half of the funding for the new plan, $523 billion over ten years, was to come from decreases in Medicare spending, the national insurance plan for those 65 years and older. This age group is a major constituency of the AARP. Spending for regular Medicare enrollees will average a decrease of $22 in 2011 becoming $290 in 2014. For Medicare Advantage, planned cuts will be $195/enrollee in 2011 eventually reaching $1,267 in 2014. Please see question # 6 documenting that attempted decreases in spending during Medicare’s 45 year history have not been successful. What did AARP receive in exchange for this support(1)?

1)AARP provides supplemental (Medigap) insurance for regular Medicare, the numbers of which will increase as Medicare Advantage shrinks.
2)AARP Medigap insurance is exempt from the prohibition of pre-existing condition exclusions.
3)AARP executives are exempt from the $500,000 insurance executive limitation on salary.
4)AARP insurance is except from the planned tax on insurance companies.
5)AARP insurance is exempt from the need to spend 85% of its premium income on medical claims.

I believe AARP like many other non-for-profits serves a national need; however, they should not be allowed to sell commercial products, i.e. insurance, credit cards, etc., for financial gain as these activities subvert its true mission.
The pharmaceutical companies as part of the deal with the White House spent $100 million on T.V. ads in favor of the Obama health care plan. In exchange for their support the industry was able to limit its losses.

1)Nothing in the bill would cost the industry more than $80 billion total, that would include closing the Medicare part D donut hole (the law closing the donut hole is extremely complex and will not be in full effect till 2020, For details see, “ Closing Medicare’s ‘Drug Donut Hole’” by Christopher Weaver ).
2)Medicare would not negotiate drug prices as a single entity.
3)Re-importation of drugs to obtain lower prices would continue to be prohibited.
4)Exclusivity for the new field of biologic drugs (drugs from living cells) will be extended for twelve years versus the originally proposed five years.

Not only did the pharmaceutical industry succeed in protecting its high profits, but there was no attempt to objectify drug research, such as by having the funds funneled through the National Institutes of Health to assure good experimental design and the honest reporting of results.
The American Medical Association (AMA) did not mount an objection to the reform bill and was thus able to obtain several concessions.

1)A $300 tax on physicians who serve Medicare and Medicaid patients (this tax was proposed in spite of the fact that Medicare and Medicaid do not even pay cost for the services received) was defeated.
2)A tax on the lucrative cosmetic surgery industry was defeated.
3)A 5% decrease in payment to the top 10% of Medicare billers was defeated.
4)The AMA was able to obtain a temporary slight increase in reimbursement for primary care doctors instead of a decrease.
5)The AMA was able to maintain its monopoly on billing codes which accounts for about $80 million/year.
Each year since the Balance Budget Act of 1997 which created the sustainable growth rate (SGR) payment method for physicians there was supposed to be a decrease in Medicare physician payments if physician billing costs increased to a greater extent than the overall economy. If in any given year Congress overrides the decrease it becomes cumulative for the succeeding year. Congress has prevented these decreases over the years so that the projected decrease this year was just over 21%. The AMA did not accomplish its major goal of a repeal of this formula because of the billions of dollars this would have added to the cost of health care reform. A temporary halt to the decrease was passed with the resolution of this issue still in doubt. More importantly, the Congress did not require the AMA to develop the tools needed for doctors to care for all Americans at a cost in line with that of other industrialized countries.
Hospitals hoped to come out about even from health care reform.

1)Hospitals gained by having many fewer non-paying patients when the bill is in full effect.
2)Many of these newly insured patients will be covered by Medicaid; therefore the hospitals will still lose money providing care to this population.
3)Hospitals also accepted a further decrease in Medicare payments of $155 billion over the next ten years; thus hospitals with mostly Medicare and Medicaid patients will face severe financial stress while those with mostly privately insured patients will prosper.

Hospitals could have created a physician and nurse mechanism to eliminate non-beneficial care thus saving Medicare and Medicaid substantial amounts, and then they would have been in a better position to argue for higher payments for appropriate care that would more than cover their costs.
Unions’ objective was to postpone or eliminate the proposed tax on Cadillac health insurance plans. In a deal with the White House this tax was postponed till 2018 to allow time for the unions to restructure their contracts with employers. The unions were not asked to develop a system to minimize non-beneficial care which would be in their interest as our excessive health care costs are a major reason why working families have not seen an increase in their standard of living. Our excessive health care cost, by decreasing the competitiveness of our goods in the world market, has also led to a decrease of good paying manufacturing jobs in this country.
The insurance industry was very active politically trying to make this law as friendly as possible to its interests. It received several benefits.

1)The industry successfully blocked a government run public option.
2)The industry gained 30 million new customers with government subsidies.
3)Beginning in 2014 insurers must provide a specified minimum of benefits for which they can charge more than for catastrophic insurance.

On the other hand there were several financial negatives for the insurance industry.

1)Insurance companies will no longer be able to deny coverage because of pre-existing
2)There will be no life time limits on the amount that can be paid.
3)There will be no waiting period before coverage will take effect.
4)There will be no, “rescission”, dropping coverage when adults become sick.
5)Profits on Medicare Advantage programs will be curtailed as payments will significantly
The lobbying activity directed to Congress was intense to ensure that these special interests groups protected their turf (2).

1)In 2009 total lobbying costs were $3.47 billion.
2)The health care sector accounted for $544 million.
3)The pharmaceutical industry spent $267 million, the largest lobbying effort ever spent by a single industry in one year.
4)The entire health industry spent $1.4 million /day.
5)In 2009 more than 3,300 lobbyists were working on health care, 6/Congressperson.
6)About 330 of these lobbyists were former Congressional staffers or a member of Congress.
7)Senator Max Baucus, chair of the Senate Finance Committee that crafted the bill, received $2 million for his reelection campaigns from the health sector over the past five years.
8)Other members of Senate Committee on Finance, Democrats and Republicans, also received large sums for their reelection campaigns.
9)In all the health industry contributed $27.6 million in campaign contributions to members of Congress in 2009 and early 2010.
10)In 2008 President Obama received campaign funds of $19.5 million from the health industry.
In summary the health reform bill, The Patient Protection and Affordable Care Act, is in reality a very expensive insurance law the crafters of which did not make the effort to try to understand the forces presently at work causing us to spend so much more per person than any other modern society. The proven amounts of non-beneficial care delivered in this country are truly staggering. Instead we have a bill that does meet the worthwhile goal of nearly universal coverage, but at a price our nation cannot afford.
(1) www.john-goodman-blog.com/war-on-seniors (accessed 8/2/2010)
(2) Tomasky M. The Money fighting health care reform. The New York Review of Books 2010; 57:1-8

Friday, July 30, 2010

Answer to question # 9: When can a patient reasonably choose care, when are choices reasonably limited and who decides under those circumstances?

Reasonable and desirable choices by patients:

1) Avoid destructive behaviors such as tobacco, alcohol, illegal drugs, severe obesity, reckless driving, use of knives and guns.
2) Learn as much as possible about any present disease/s states and be diligent in caring for oneself.
3) Refuse any or all undesired treatments at any time within the confines of sound mind and of legal age.
4) Find a trusted physician so as to develop a therapeutic relationship, difficult in this age of 10 – 15 minute visits, to help create and sustain a constructive dialog between patient and physician.
5) Realize that the motive of drug and device advertizing directly to the public is to maximize profit and not necessarily maximize patient care.
6) Educate oneself as to realistic expectations from modern medicine and its limitations.
7) Learn about the cost of medical care in the United States, why it is so much higher than in other developed countries and how significantly this affects the standard of living of the middle class.

When are patient choices limited?

1) In obvious end-of-life situations, aggressive care is actually not in the patient’s best interest as it prolongs suffering with no hope of benefit and often causes a more painful and protracted mourning period for the family.
2) In the presence of serious organ dysfunction, depending on the organ/s involved options become progressively limited as dysfunction progresses.
3) In technical situations requiring the acquisition of considerable medical knowledge and judgment the physician is in the best position to define the options and understand the limitations.
4) Patients frequently overestimate the capabilities of modern medicine leading to unrealistic requests for various treatments. In this situation it is the physician’s responsibility to address these unrealistic expectations and not accede to the irrational.

Who should be making these decisions?

1) In most instances the patient along with the physician should decide on a care plan that is both reasonable and beneficial.
2) Physicians and the medical team must not deliver treatments knowing it/they will not be beneficial or superior to a simpler course of action.

Thursday, July 29, 2010

Answer to question # 8: How are state budgets affected by having to assume about 50% of the cost of Medicaid?

Medicaid, founded in 1965 along with Medicare, provides health care for U.S. citizens and legal immigrants who are under financial duress, with funding shared between the federal government and the states. As of 2008 the federal government funded, on average, about 56% of Medicaid costs with the remainder paid for by the individual states. On average, the states component amounted to 17% of their general fund spending. Eligibility for Medicaid unlike Medicare is relatively complex. Besides poverty other criteria include childhood, blindness, pregnancy, disability, residents of nursing homes and those with HIV/AIDS. In 2007 Medicaid provided insurance for 60.5 million people, including 29.5 million children and 5.6 million adults over age 65 (dual eligible with both Medicare & Medicaid), mostly for nursing home and long term chronic disease care. Medicaid payments subsidize about 60% of nursing home residents and about 37% of all child births. Without significant changes in the program, projections for future Medicaid costs as a percentage of state budgets is expected to reach 35% by the year 2030 (Deloitte Center for Health Solutions – 2010). This projection is based on our aging population (those with dual eligibility) which will require increasing amounts for the care of chronic conditions in both nursing homes and in the community.

This projected large drain on state budgets is due to the unfortunate circumstance we have with our entitlement programs (Social Security, Medicare and Medicaid). They are in effect government sponsored ponzi schemes where one generation, instead of paying for its future care (i.e. with health savings accounts), is dependent on its funding by the succeeding generation. With our aging population and less workers per retiree this method of funding becomes impossible. Another factor is the addition of about 14 million people to the Medicaid roles by the newly passed Patient Protection and Affordability Care Act with the federal government paying 100% of the additional care costs from 2014 through 2016, decreasing thereafter from 95% in 2017 to 90% in 2020. However, the states will have to absorb all the additional administrative costs estimated to be $32 billion from 2013 -2019 (Heritage Foundation Jan 14, 2010 Edmund Haislmaier). With the additional 14 million added to Medicaid, we as a nation are documenting that about 75-80 million Americans not of retirement age (about one-fourth of our total population) live near or below the poverty line. In essence, many, if not most, of this segment of our population lack the skills to be productive in an advanced worldwide economy.

As of 2006 Medicaid costs to state budgets were $100.6 billion, while that of Kindergarten to grade 12, $208.3 billion. The recent recession has significantly increased state expenditures for Medicaid putting a further strain on the ability of the states to properly fund public education. Although both state and federal funding for Medicaid consumes many hundreds of billions of dollars annually, it does not cover provider costs which necessitate cross-subsidization by private health insurance (see question #7).

As state funding is the major source for public education, the need to fund ever increasing Medicaid expenses by the states compromises our ability to adequately educate our young, thereby putting our nation’s future economic well being at risk. An Op-Ed in the Washington Post (Matt Miller, July 24, 2010) documents the recent decrease in the standard of living of many millions of our middle class. This is because post World War II we were the only advanced economy left intact so that the world had to buy from the U.S. There are now many advanced economies in the world and the U.S. is not developing the capital or the properly educated work force to re-industrialize our nation, increase our productivity and thus improve the standard of living for many Americans. We need a massive investment in public education, such as, much greater teacher to pupil ratios, longer school days and a 48 week school year, so that all Americans can participate in an advanced worldwide economy. For the states to afford this expenditure Medicaid would have to become a totally federal program necessitating a much more rational health care system (see question # 2).

Thursday, July 15, 2010

Answer to question # 7: How Does Private Insurance Essentially Subsidizing Medicare and Medicaid Affect Working Americans?

A study published in 2006 using 1993-2001 data from California helps answer this question. (1)
1) California hospitals in general reflect those in the nation as a whole, but are more urban and with a higher percentage for-profit.
2) For each 10% decrease in Medicare and Medicaid payment there was a 1.7% and 0.37% increased cost to private payers respectively.
3) By 2001 hospital Medicare/Medicaid revenues were 9.77% below cost which caused a 1.66% increase in private payer costs.
4) These increases in private payer costs were $632,000/hospital/year totaling $210 million for the 311 general acute care hospitals.

The authors commented that reductions in Medicare/Medicaid payments to below cost could be addressed by hospitals in several different ways: lower staffing ratios, increases in efficiency, changes in service mix (emphasis on more costly procedures), less uncompensated care, lower profitability, and increased income from private insurance. All these mechanisms are used to varying degrees by different hospitals as government programs arbitrarily decrease payments.

But what does the average worker with a family of four pay for this cross-subsidization of government programs? This question was addressed by a 2008 study by the Milliman Consultants and Actuaries funded by the American Hospital Association, American Health Insurance Plans and two Blue Cross associations. (2)

Milliman examined national hospital and physician costs along with Medicare, Medicaid and private insurance payment data to calculate their results. Medicare and Medicaid paid 48.9 billion and 39.9 billion yearly less than and private insurance 88.8 billion more than the cost to offset the government programs underpayment. This amount raises private insurance costs for hospitals by 18% and doctors by 12%. The Milliman study calculated that for a family of four with private insurance cost-shifting increased their yearly health care premiums by 10.7% or $1,788. They reported that the employer paid $1,115 more and the family $673.

There is no question that our government must decrease its healthcare expenditures. The present method of arbitrarily decreasing reimbursement however, has not decreased expenditures and has caused cost-shifting to those with private insurance, in other-words a hidden tax that is decreasing the standard of living for working Americans. Cost-shifting has caused a detrimental sequence of events: private insurance becomes more expensive thus more companies and individuals drop their health insurance, many become uninsured and some become Medicaid patients, budgetary pressures lead to more decreases in government program payments thus causing more cost shifting, etc.

The prudent way to decrease expenditures for both governmental and private health insurance alike is to decrease health costs for both entities. This can be done by understanding and dealing with the reasons why we as a nation spend about $700 billion dollars/year (see question # 2) on non-beneficial inappropriate care. By doing the following we can decrease costs for both government and private insurance: Congressional amendments to the Patient Self Determination Act, The Americans with Disabilities Act, The Emergency Medical Treatment and Active Labor Act with the phrase, “within the bounds of good medical practice”, initiate the immediate availability of physician review to assure beneficial care, and create a Federal Health Care Bank to handle several administrative issues.
1. Zwanziger J and Bamezai A. Evidence of cost shifting in California hospitals. Health Affairs 2006; 25: 197-203 (PMID 16403754)
2. Available on http://www.ahip.org/content/default.aspy?docid=2516 and click on full report (accessed 7/7/2010)

Tuesday, June 15, 2010

Answer to Question #6: Have the decreases in Medicare payments been successful and how have these policies affected American medicine?

To meet budget demands, Congress has made many downward adjustments to the payment schedule since Medicare’s inception in 1965. When first created, Medicare paid prevalent private insurance rates to hospitals and physicians. Additionally, physicians were able to bill patients directly and could charge more than the Medicare rates, with the difference either paid by the patient or by supplemental insurance. Starting in 1972, because of federal budget issues, Medicare imposed limits on physician payments using its newly defined “Medicare Economic Index”. In the 1980’s physicians became limited in billing patients above the Medicare payment rates and had to submit bills directly to Medicare’s intermediaries. Hospitals were limited in per diem nursing, room and board charges, ancillary (testing) charges and increases in costs/stay.

1984 was the beginning of Congress’s unilateral control over Medicare fees. The prospective payment system was first introduced using Diagnosis Related Groups (DRG’s) by which hospitals were prospectively paid according to diagnosis with possible modifiers. In 1992 Congress instituted a complex scheme, the Resource Based Relative Value Scale, as the method by which to reimburse physicians. Although ostensibly created to improve reimbursement for evaluation and management, this payment system has not done so and has instead dedicated more resources to specialization and technology.(1) Skilled nursing care, home health visits, rehabilitation and long term hospital stays were changed from reasonable cost to fixed federal government reimbursement also in 1992.

Starting in 2000, hospital outpatient payments went from a cost-based to a fixed price system. A Robert Wood Johnson survey of physicians in 2009 found that 62% reported adequate reimbursement by private insurance while only 9.2% reported adequate reimbursement by traditional Medicare (2) (Medicaid pays even less). An American Hospital report (2008) found that for American hospitals in 2007, 58% received Medicare payments less than cost while 67% received Medicaid payments less than cost with total hospital losses from these programs totaling $32 billion. (3) Hospitals make up these losses by cross subsidization from private insurance. In essence because of these inadequate Medicare/Medicaid payment amounts, premiums paid by those with private insurance subsidize these benefits. This is a hidden tax on the working middle class. Unfortunately Congress has not had the courage to either limit benefits or raise taxes to cover Medicare/Medicaid costs.

Has Congress’s attempts at limiting Medicare payments because of budgetary concerns been successful in limiting costs? The Medicare Payment Advisory Commission (MEDPAC June 2008 Healthcare Spending and the Medicare Program) answered this question.
With a 9.7 percent annual average rate of growth, nominal Medicare spending grew considerably faster over the period from 1980 to 2006 than nominal growth in the economy, which averaged 6.2 percent per year. Medicare spending has grown nearly 12-fold, from $37 billion in 1980 to $432 billion in 2007.
Hospital and physician costs continued to increase in total and per capita with Medicare/enrollee growth in spending increasing at a rate that is about 1% lower than private insurance from 1970 through 2006. The growth rate of private insurance costs at only 1% greater than Medicare is quite remarkable since private insurance has cross subsidized Medicare and Medicaid at increasing amounts as these government programs have decreased their reimbursement rates.

Despite successive decreases in Medicare payment rates, Medicare spending has continued to parallel the increases in private insurance, but at a slightly lower rate. The reason is, in large part, the changes fostered by these decreases in Medicare payments to the culture of American medicine. The changes to American medicine include: inadequate primary care, excessive use of technology, outdated and uncoordinated information management, emergency departments feeling the need to completely work up patients rather than making the decision to admit or send home, the revolving door of nursing home patients to and from hospitals with no chance of overall benefit, hospitals' need to over-utilize procedures and testing to stay solvent because of Medicare/Medicaid reimbursement, inadequate training of young doctors in the basics of history taking, physical diagnosis and lack of reliance on clinical judgment, drug and device companies advertising along with excessive influence over Congress and medical societies.

With these unsuccessful previous attempts to control Medicare spending by decreasing payments and not addressing the multitude of these other issues, it does not bode well for the success of the recently passed health care reform law as it is supposedly financed in large part by decreasing Medicare spending.
1. Vladeck BC. Fixing Medicare’s Physician Payment System, New England Journal of Medicine 2010;362:1955-1957 (PMID 20445166)
2. http://www.rwjf.org/pr/product.jsp?id=48454 table 3
3. http://www.aha.org/aha/content/2008/pdf/08-medicare-shortfall.pdf

Tuesday, June 8, 2010

Answer to Question #5: How Can We Remedy the Imbalance of Too Many Sub-Specialists and Not Enough Primary Care Doctors?

According to David S. Goodman and Elliot S. Fisher (New England Journal of Medicine April 17, 2008):
“… between 1979 and 1999, the physician supply per capita grew by 45% in primary care, 118% among medical specialists, and 21% among surgical specialties, yet four of every five new physicians settled in regions where the supply was already high”.

Additionally, the authors suggest that an unrestricted expansion of the physician supply would add to our fragmented specialist driven health care system because of the reimbursement systems underpayment for primary care. In Massachusetts since 1976 the physician-to-population ratio has doubled, now having the highest ratio including primary care in any state in the union, yet the medical society repeatedly makes claims of a physician shortage and patients report an ever increasing shortage of primary care.

These authors hypothesize that besides a skewed physician distribution the reasons for this disparity is the inadequate payment for primary care services forcing physicians to spend less time with each patient, referring more cases to specialists and having hospitalists care for their hospitalized patients and restricting their practices to patients they already know. This is because new patients take much more time during their initial visit.

Demonstrating that this problem is not a shortage of physician numbers, in the same issue of the Journal John K. Iglehart documented that in the U.S. there was an increase ratio of active physicians per 100,000 populations from 144.7 in 1960, to 278.5 in 2000 and expected to be 294.2 in 2020. As stated by Drs. Goodman & Fisher, the key for improvement is, “…..improve care coordination and chronic disease management; and accelerate efforts to reform payment systems so that they foster integration, coordination, and efficient care”. I propose a payment system designed to adequately reimburse primary care physicians based on being able to spend 1hr. for each new patient and 1/2hour for each return patient and some time to follow their patients in the hospital.

Concerned about the primary care workforce Dr. John D. Goodson recently wrote (Annals Internal Medicine June1, 2010), about various aspects of the Patient Protection and Affordable Care Act (PPACA). With thirty-two million Americans newly insured, our specialty oriented physician workforce (70% specialists) will be poorly suited to provide adequate primary care services, health maintenance and coordinating care of those with chronic diseases.

The bill reauthorizes funding to expand primary care by providing financial assistance to programs and individuals for five years. The law establishes a National Health Care Workforce Commission to recommend actions by Congress to meet physician manpower needs. The problem is that in the past these programs have languished for lack of funds. With Medicare funding being curtailed to help fund this new law and expanding federal deficits, I doubt that these recommendations will reach reality.

The bill states that the Secretary of Health And Human Services should adjust the Resource Based Relative Value Scale (RBRVS) to enhance payment for primary care. The law provides for a 10% increase of present day payments to primary care physicians for five years and increases Medicaid payment to Medicare levels for 2 years. The problem is that the RBRVS is deeply flawed, grossly underpaying for evaluation and management. Congress since 1991 has been unable to fix it and it should be scraped. Medicare payments, although higher than Medicaid are still inadequate to cover costs. Because of the long training period for physicians, by the time these increases could affect decisions, they will have expired, keeping in mind that it will take decades to increase the ratio of primary care to physician specialists.

A new Center for Medicare and Medicaid Innovation to help create new payment and service models was created. These new models would include expanded bundling, a single doctor payment for a disease event and follow-up, capitated payment that would cover hospital and doctor fees for an illness and a managed care type plan that would accrue monies to the providers for care costing less than expected. Other ideas to be tested are: a patient centered medical home (which in my opinion is what primary care physicians should be doing all the time) and Accountable Care Organizations that will contract with the Center of Medicare and Medicaid Services for complete medical care for a group of patients retaining any profit. The problems are as I see them is that physicians have not been trained to avoid excessive testing and rely on clinical judgment, the public has unrealistic expectations of medical care along with demands for non beneficial care, and the mistrust of managed care type models have not been addressed.

The reasons that many young doctors wish further specialty training are not limited to economics. In this age of molecular biology and advanced patho-physiology young doctors want to learn more, This makes them better doctors, not only in their area of specialization, but better doctors in general. Their skill set does not have to become narrower with appropriate further training. There are no active mechanisms in this law to change the physician and patient culture that pervades our system - too many tests, too much non-beneficial care, excessive demand for drugs and devices. The way to meet the need for greater primary care capability within a reasonable time frame is to have medicine and pediatric sub-specialists provide primary care for their patients who do not have ready access to a primary care physician.

Tuesday, June 1, 2010

Answer to Question # 4: Why do teaching hospital costs vary to the degree that they do, even though their physicians are salaried and do not charge f

Using the Dartmouth Atlas of Health Care data an article in Time magazine (June 29, 2009) by Michael Grunwald compares the costs as revealed by Medicare spending per patient in the last two years of life in five major large hospital teaching centers, all with salaried physicians. The costs itself are of some importance, but more importantly they reflect the style of medicine practiced at each medical center. From most expensive to least they are: UCLA Medical Center $93,842, Johns Hopkins Hospital $85,729, Massachusetts General Hospital $78,666, Cleveland Clinic Foundation $55,333 and Mayo Clinic $53,432. The reasons for these differences are variable but do not include physician entrepreneurship. Although the medical center was paid for the physician services on a fee-for-service basis, the physicians were paid by salary or in some cases on an hourly basis.

There are many known factors causing these differences and many that are harder to define. Certainly the idea that the physicians at the Mayo and Cleveland Clinics have access to information that is unavailable to UCLA, Mass. General and Johns Hopkins in this computer age is absurd. Thus comparative effectiveness research may be somewhat helpful, but it will not solve the problem of making the more expensive centers more like the less expensive ones. There is little to no difference in the availability of advanced technology, but outcomes are possibly worse in the more expensive centers. The more that is done having no benefit the greater the chance of mishaps. The more expensive hospitals have more beds; the patients are in the hospital more often and have more consultant and sub-specialist visits. Alas more (The American Way) is not better. There are of course other complicating factors; hospitals serving less privately insured patients need to maximize billing to compensate for the fact that government programs do not cover the costs of their activities. Even for salaried physicians there are subtle but real pressures to enhance income.

Each teaching center has its own medical culture which is the result of many forces, both historical and economic. The physicians of the Mayo Clinic have a long tradition of quick informal consultation, creating an environment of collegiality and helpfulness not requiring costly formal consultation. The patients at the Mayo and Cleveland Clinics frequently travel long distances for their care and are thus probably more amenable to a conservative approach and more likely to have private insurance; as time passed these institutions developed a more conservative practice of medicine utilizing less consultation, hospital days and ancillary testing.

The wide variations between the costs of care in these fine large teaching hospitals give pause to the concept of the widely touted proposal of bundled payments. This is because many of the patients in these prestigious hospitals are members of the managed care organizations that have evolved over time. Again, it is the medical culture, the skills the physicians have in history taking, physical diagnosis, interpretation of simple tests, ability to conceptualize cases, understanding probabilities and risk-to-benefit ratios along with the ability to communicate effectively.

This difference in medical culture as a primary cause of differences in cost is well documented by Dr. Atul Gawande in his article, The Cost Conundrum, in the June 1, 2009 New Yorker magazine. He compared two centers in Texas, McAllen and El Paso. McAllen spent twice as much ($15,000 vs. $7504) as El Paso per Medicare enrollee/year. Dr. Gawande found that McAllen’s much higher costs were clearly due to an over-delivery of medical care by doctors, without better results.

Dr. Gawande reported on another community, Grand Junction, Colorado which practices in a fee-for-service setting. It had achieved Medicare’s highest quality of care scores. They provide this excellence as one of the lowest health care cost areas in the country. The secret: the physicians have the courage and spirit of collegiality to meet regularly in small groups to review each other’s charts and discuss how to improve care. This is in marked contrast to that found in most centers of aggregated impersonal computerized review. In addition they implemented a regional electronic medical record system reviewing each other’s data, somewhat akin to my suggestion of a national medical record.

We need a medical culture on the national level that is willing to support and effectively teach each other while regularly reviewing cases. We must provide evidence-based care tailored to each patient’s needs. This idea is similar to my suggestion of an active real time peer review system.

Question #3: How Should We Address the Issue of A Gross Domestic Product of 17% Price Manufacturing and Jobs Out of This Country?

During the recent health care debate one of the stated goals was that any health care bill should not increase the federal deficit. There was no discussion on the effect that the percentage of gross domestic product (GDP) devoted to health care has on the overall economy and jobs. There was also no discussion on how a negative effect on the economy would decrease tax revenue and thus have a profound effect on the federal deficit. According to this line of reasoning two issues arise regarding the Patient Protection and Affordable Care Act:

(1) will there be a significant increase in the percentage of GDP devoted to health care and
(2) if there is a significant increase of GDP devoted to health care would this cause a decrease in good paying American jobs?

Answer to (1): The Chief Actuary of the Centers for Medicare and Medicaid Services, Mr. Rick Foster, has calculated that when this law is in full effect it will increase the percentage of GDP devoted to health care to 21% and that the cost containment efforts will be largely ineffectual.

Answer to (2):
In addition to the business roundtable assessment Cathy Arnst wrote in Bloomberg Businessweek July 23, 2010, “The rate of growth in U.S. health care costs has outpaced the growth
rate in the gross domestic product (GDP) for many years. In 1940, the share of GDP accounted for by health care spending was just 4.5%. By 1990, it had reached 12.2%, and 16% in 2005, when health care spending totaled nearly $2 trillion, or $6,697 per person, far more than any other nation. This year health care spending is on track to equal 18% of GDP” and that a recent Rand study revealed that this imbalance (especially when % GDP devoted to health care reaches 20%) versus other countries does have a negative impact on our economy and jobs. This newer information coupled with this statement from the Henry J Kaiser Foundation and the Health Research and Education trust, “Health care costs skyrocket in United States, threatening to bankrupt national economy”, adds credence to the concept that no matter how we pay for health care, our excessive costs must be successfully addressed for us to pass prosperity on to our children. Not only will these excessive relative health care costs cause jobs to decrease , but by hampering economic activity it will also decrease federal tax revenues adding complexity to an already difficult problem.

How would a rational society deal with the problem of meeting its need for universal coverage while at the same time get its percentage of GDP devoted to health care more in line with other countries?

1. Deal with the pivotal meaning of Dr. Relman’s statement, “Doctors, in consultation with their patients- not insurance companies, legislators, or government officials – make most of the decisions to use medical resources, thereby determining what the United States spends on health care”. (New England Journal of Medicine September 24, 2009).
2. Understand the forces (i.e., perverse payment system encouraging an overly technological style of medicine, unrealistic public expectations, adverse legal environment, excessive administrative costs and complexity) acting on the doctor-patient relationship that are causing American medicine to be so expensive.

3. Understand the changes that will be necessary to rectify these pernicious factors. Although the new health care bill makes attempts to control costs, most experts suggest that these attempts will be marginal at best. Seriously addressing the changes needed to bring our health care costs more in line with other nations will cause many powerful entities, (i.e. pharmaceutical and devise companies, intensive care units, some specialists) to have a decrease in income thus requiring greater political will to bring about real cost containment.

4. Adopt a process of doctor-patient agreement on the primacy of beneficial care and physician oversight to insure the practice of evidence-based national standards along with the creation of a health care agency that would be independent of lobbying activity. This agency would create national insurance options, a national electronic medical record, a rational physician payment schedule and many other administrative functions.

There is no doubt that the physicians in this country, if given the right tools, can provide universal coverage costing no more than 15% of GDP.

Monday, April 26, 2010

Answer to Question #2-What Physician Practices Drive Up Health Care Costs?

Various experts using different methods have determined that we Americans presently spend about $700 billion on inappropriate non-beneficial care and that this excess spending is primarily due to physician practices. What do you believe are the factors causing physicians to practice this way and how would you address these issues?
A. There are multiple studies and estimates by experts leading to the conclusion that about $700 billion dollars per year are spent on unnecessary, inappropriate care in the United States.

1) The Dartmouth Atlas of Health Care

Peter Orzag (former head of the Congressional Budget Office, presently Director of The Office of Management and Budget) using this data is quoted by Trapp D., “…estimated that up to $700 billion of the nation’s $2.3 trillion in annual health care spending does not improve outcomes”.(1)

Kenneth I. Shine , former President of the Institute of Medicine of The National Academies of Science in an editorial responded to an earlier version of this map saying, “….as much as 30% of health care costs might be eliminated without adversely affecting health care outcomes.” (2)

Arthur Garson and Carolyn L. Engelhard said in their book, “We do waste a lot of dollars on medical care, but this “one-half” estimate is based on an over-zealous interpretation of the data: the number is more likely one-third.”(3) This one-third estimate exceeds $700 billion per year.

2) McKinsey & Co. December 2008 demonstrated by a different method that compared to other countries the U.S. wastes about $700 billion yearly on health care.

B. Dr. Arnold S. Relman former editor of the New England Journal of Medicine wrote, “Doctors, in consultation with their patients — not insurance companies, legislators, or government officials — make most of the decisions to use medical resources, thereby determining what the United States spends on medical care.”(4)

C. There are several factors causing physicians to practice in this way.
1) Doctors feel compelled to practice defensive medicine – the Massachusetts Medical Society has studied the cost of the yearly amount (2008) spent on defensive medicine in an attempt to minimize lawsuits. The study revealed that in Massachusetts a conservative estimate was $1.4 billion.(5)
2) Unrealistic demands by physicians placed on patients/families, in the name of patient autonomy, to make sophisticated and frequently non-beneficial and expensive medical decisions. These practices are well described by Dr. Atul Gawande in his book Complications.(6)
3) The present structure of advanced directives causes confusion and unrealistic expectations.(7)
4) Congress’s control of Medicare reimbursement rates under the influence of intense lobbying has resulted in the underfunding of primary care and overspending on technology and drugs.
5) Drug and device companies are now allowed to advertise to the public.

D. To address these problems I suggest the following actions:
1) Congress should amend The Patient Self Determination Act and related acts to contain the phrase, “within the bounds of good medical practice”.
2) Congress stipulates the use of a hospital admission form (below) for all Medicare patients. This form would enable patients to clarify their medical preferences with guidance as to medical feasibility along with an appeal mechanism in case of conflict.
3) The scope of peer review expanded to include consistent, uniform, organized oversight by senior physicians and nurses with knowledge and experience in the practice of medicine and patient/family support to ensure that only beneficial care was being delivered.
4) Internal medicine sub-specialists should provide primary care for their patients who do not have a primary care physician.

1. Trapp D. Obama budget sets stage for reform of Health care system, Medicare pay, American Medical News. March 16, 2009 page 4
2. Shine KI. Annals of Internal Medicine. 2003; 138:347-8. PMID: 12585834
3. Garson A, Engelhard CL. Health Care Half Truths: Too many myths, not enough reality. N.Y., N.Y. Rowman & Littlefield Publishers, 2007, Page 17
4. Relman AS. Doctors as the key to health care reform. New England Journal of Medicine 2009:361: 1225-1227 PMID 19776404
5. www.massmed.org/defensivemedicine (accessed April 20, 2010)
6. Gawande A. Complications: A surgeon’s notes on an imperfect science. N.Y., N.Y. Henry Holt & Company, 2002,Page 208
7. Fisher KA, Rockwell LE, Scott M. In Defiance of Death: Exposing the Real Costs of End-of-Life Care. Westport, Connecticut , Praeger 2008, Page 11

Monday, April 5, 2010

Answer to Question #1 - What is medical consumerism and what factors do you believe exacerbate this issue?

One of the factors keeping us from reaching our goal of universal coverage at a price we can afford is medical consumerism, defined here as the public having unrealistic expectations and demands. There are several reasons for medical consumerism in the U.S. and the blurring of the lines of authority between the patient and the medical team.

A) The concept of patient autonomy is problematical as its limits have not been defined.
B) Many Americans believe that a few hours at a web site is sufficient to adequately learn about a medical subject without understanding the complexities involved.
C) Drug and device advertising to the public promotes the newest most expensive drug/device as superior and your doctor is unaware of this marvelous advance. In reality direct advertising is an attempt by these companies to convince the public that their product is the newest and best when usually older and cheaper drugs/devices are just as effective.(1)
D) Hospitals and doctors have adopted a customer oriented business model to maximize revenue.
E) There are unresolved ambiguities caused by the Patient Self Determination Act (1990) which created the legal framework for advanced directives.(2) Many ethicists and physicians have noted that advanced directives have the potential of turning the physician into a technician following instructions no matter how inappropriate.(3) Questions arise about the limits of therapy in the absence of an advanced directive. Although passed in 1990, these concerns are yet to be addressed by Congress.
F) Physicians practice defensive medicine because of the widespread fear of lawsuits. Our legal history is replete with cases that have demonstrated to the physician community that logic and rationality are secondary to patients’/families’ requests and desires. Two examples of this are the cases of Baby K and Helga Wanglie.

1) In the Baby K case an anencephalic baby (no cerebral cortex – no possibility for consciousness or human activity) was born by caesarian section in 1992. Although the physicians, hospital ethics committee, the court appointed guardian and the child’s father recognized the futility of further care, the child’s mother insisted on continuing care along with mechanical ventilation (breathing tube connected to a machine) if needed and pursued legal action. The trial court misinterpreted the Emergency Medical Treatment and Active Labor Act (EMTLA)(4), by not considering the child as an integrated entity, but rather as a respiratory case. Professor Annas, Chair Department of Health Law, Bioethics & Human Rights at Boston University made several cogent statements about this case:
1) Knowing in advance that the fetus was anencephalic ,before delivery the physicians should have discussed with the mother that they would not use mechanical ventilation after birth.
2) The trial judge misinterpreted the intent of Congress in writing the law.
3) Congress mistakenly did not include wording such as, “within the bounds of good medical practice”.
4) We should be treating patients in light of what is best for them and not as objects to meet the needs of others.
5) To avoid medicine becoming a consumer product like toothpaste and in the process becoming unsustainably expensive, physicians will have to set standards for medical practice and follow them;(5) to this date this has not happened.

2) In the Helga Wanglie case, an 86 y/o women was in a persistent vegetative state for a year in an intensive care unit. The physicians concluded that in this case there was no chance of recovery and that hospice would be better for the patient. Her husband objected and sought relief from the courts, which found in favor of the husband; however, Helga died a few days after the verdict. (6)
What is needed to address medical consumerism and resolve the ambiguities between patient and doctor? I suggest:

1) Congress should amend the Patient Self Determination Act, The Americans with Disabilities Act and the EMTLA to contain the phrase, “within the bounds of good medical practice”. This would facilitate physicians developing and adhering to practice standards.
2) An advance directive should be completed at each hospital admission with guidance from physicians as to what is feasible in light of the patients overall condition, with seasoned physicians and a nurse available to adjudicate conflicts.
1. Angell M. The Truth About the Drug Companies: How They Deceive Us and What to Do About It. Random House N.Y. N.Y. 2004 ISBN: 978-0-375-50846-2
2. The Patient Self-Determination Act (PSDA) was passed by the U.S. Congress in 1990 as an amendment to the Omnibus Budget Reconciliation Act of 1990.
3. Perkins HS. Controlling death: the false promise of advance directives. Annals of Internal Medicine 2007; 147: 51-57 (PMID 17606961)
4. 42 U.S.C. 1395 dd (1994) (amended 1997)
5. Annas GJ. Asking the courts to settle standard of emergency care – the case of Baby K. New England Journal of Medicine 1994; 330: 1542-1545 (PMID 8164726)
6. Angell M. The case of Helga Wanglie; a new kind of “right to die” case. New England Journal of Medicine 1991; 325: 511-512 (PMID 1852185)

Saturday, March 20, 2010

The Ten Questions Walter Cronkite Would Have Asked About Health Care

I often yearn for the days when we had news people like Walter Cronkite, Helen Thomas, Peter Jennings, the tenacious reporters from the New York Times and others who could truly think and had a keen eye for the issues at hand. They did their homework and, when conducting interviews or participating in Capitol Hill news conferences, asked pertinent, meaningful questions even if it made the person being questioned squirm. They examined all sides of an issue – good, bad, and everything in between – to bring balanced reporting to important national debates – balance that is decidedly missing now.

Congress is poised to enact a health care plan that simply won't work and will cost taxpayers a small fortune for generations to come. And, so far, no one in the media - either broadcast or print - has asked any of the questions that really need to be answered and addressed in order to bring reform that will work and won't break the bank.

Following are the questions I feel need to be asked by the national media, and should have been asked as this process was getting underway. I will answer all of them in my blog posts over the coming weeks.

1. What is medical consumerism and what factors do you believe exacerbate this issue? Are you familiar with Professor George Annas’s article on the Baby K case in the May 26, 1994 issue of the New England Journal of Medicine (1) regarding the impact it is having on medical care in this country? How do you think we should address this problem?

2. Various experts using different methods have determined that Americans presently spend about $700 billion a year on inappropriate non-beneficial care and that this excess spending is primarily due to physician practices. What do you believe are the factors causing physicians to practice this way and how would you address these issues?

3. The business round table has stated that our present high health care costs as reflected by the percentage of gross domestic product (17%), that is much higher than other countries, is driving manufacturing and its high paying jobs out of this country. How should we address this issue?

4. Why does the cost of care in teaching hospitals vary so dramatically from hospital to hospital, as documented by the Dartmouth Atlas of Health Care, despite the fact that their physicians are salaried and do not charge fee for service?

5. Why do we have so many sub-specialist and so few primary care doctors despite the fact that primary care doctors are the key to providing coordinated care of high quality for less cost? How can we can we remedy this imbalance in the near future?

6. What has been the history of decreases in Medicare payments. Have they been successful and what effect do you believe these policies have had on American medicine?

7. What is the effect on working Americans of private insurance having to subsidize Medicare and Medicaid?

8. What do you think is the effect on state budgets of having to assume about 50% of the costs of Medicaid?

9. When can a patient reasonably utilize choice in care and in what situations are choices reasonably limited and who should determine when those conditions are reached?

10. What do you think is the result of cobbling together various constituencies in trying to pass a health care reform bill?

(1) New England Journal of Medicine, Vol. 330, 1542-1545,May 26, 1994, Number 21.

Friday, February 26, 2010

When is Consumer Health Care Choice Rational and When Does it Become Irrational?

When taking an intercontinental flight a person has many choices – which airline, where and at what time to leave. When boarding the plane she can choose to deplane at any time before the doors are closed. She can choose among many options that are offered by the cabin staff. When technical issues arise however, i.e. when flying through a storm, the pilot is expected to choose the correct option for safely completing the flight. Why in this situation is it the pilot and not the passenger who makes the choice? This is because the complexities involved are quite sophisticated, requiring years of training and experience.

The situation is similar in health care; the patient has many choices in many situations. The patient can choose a physician, primary care or specialist, who appears knowledgeable and caring and has a personality in tune with that of the patient. Patients can choose to be compliant and learn as much as possible about their medical situation. The patient can always choose to refuse any or all treatments. The reality is when accepting treatment for a complex situation like the airline passenger flying through a storm, the expert, in this case the physician, is in the best position to chart the course.

One of the major problems in today’s medicine is that frequently even in very technical situations the patient/family is given the responsibility to determine the appropriate action. Sometimes patients are given options which they are not trained to understand and sometimes the choices contain options that are inappropriate in light of the patient’s overall condition. In other instances patients/families wish to receive treatments that are also inappropriate because of the patient’s medical condition. These too should not be offered. The problem is an unrealistic sense of patient autonomy which is among the major reasons why our health care is so outrageously expensive. To deal with this problem and avoid irrational care I have suggested a team of other professionals to assist the physician and patient to choose among beneficial treatment/s.

During the current health care debate many noted experts have suggested several reasonable reforms. They have mainly focused on changes in the payment system and some have suggested reforming medical malpractice laws; however, missing from the present discussion is the much needed change in the way we practice medicine. Until we as a society are willing to create a mechanism to clarify the role of patient choice and physician responsibility, successful health care reform will elude us.

Thursday, February 18, 2010

United States (U.S.) Health Care Costs versus The United Kingdom (U.K.): What We Can Do About It

The Organization for Economic Cooperation and Development (OECD) is the body that generates comparative national data regarding health care spending. This involves the compilation of massive amounts of data, thus the comparisons are about three years behind the present date. The latest data I could find is for the year 2007. In that year the U.S. devoted 16% of gross domestic product (GDP) to health care while the U.K. devoted 8.4%. In equivalent dollars per person spending was $7290 in the U.S. and $2992 in the U.K., quite a difference. Disease adjusted mortality was then and is now superior in the U.K. than in the U.S. If I had compared the U.S. to another industrialized nation, the exact figures would be different, but the lesson is the same: the U.S. spends much more than any other nation on health care without having superior results.

These differences have been the focus of many investigations and publications. Noted experts Uwe E. Reinhardt, Gerald F. Anderson and at that time Ph.D. candidate Peter Hussey published a paper in Health Affairs 2004 examining differences in cost from an economic prospective. They focused on a number of factors, some of which cannot be changed (1-2) and others that could be addressed (3-5).

1) As nations’ GDP increases, the fraction of spending on health care also increases.
2) Because of the many opportunities in our large economy we have an increased cost of recruiting and keeping talented people in medicine.
3) In our present system there is greater market power in the supply side versus the demand side for health care. This is because we have a greatly fragmented payment system.
4) Because of the greater complexity of our medical system we have significantly greater administrative costs. These two factors, 3 & 4 could be addressed by creating a series of standardized insurance plans across the country (see link to policy paper on right hand margin- look under health care bank).
5) We have a practice of medicine that lacks discipline when weighing benefit to risk ratios, leading to much non-beneficial care along with the excessive use of technology. To address this need for a cultural change in the way we practice medicine I have suggested a timely physician and nurse support system and a dialogue between patient and physician as to what constitutes beneficial care (see policy paper (link in navigation bar on the right hand side, appropriate care committees and a new style of hospital admission form).

Additionally, superiority in physical diagnostic skills helps explain why physicians in the U.K. rely less on expensive diagnostic testing than their colleagues in the U.S. American medical students now have to demonstrate physician diagnostic skills before graduation. This is certainly progress in the right direction, but is it enough? I think not. Presently there is not an oral exam focusing on physical diagnosis after three years of an Internal Medicine residency; hence this expertise has disappeared. Dr. Abraham Verghese, Professor of the Theory and Practice of Medicine at Stanford University, comparing the physical diagnosis training of medical students in the U.S. versus that in the U.K., stated in The American Medical Association Journal of Ethics, 2009:
I have no doubt that if we attempted to put in place a standardized test using standardized and real patients, with examiners watching for technique as well as understanding of the methods of bedside examination, our students and residents would (much as they do in Canada and Britain) spend a lot more time mastering these skills…..I have great confidence in the clinical knowledge and patient management skills of our students and residents, but the area of bedside skills is in need of improvement, particularly if we are to practice cost-effective medicine and minimize a patient’s exposure to radiation. Imaging tests are valuable and often necessary, but if simple bedside skills make them unnecessary, then lack of such skills is not just costly, but dangerous.

I completely agree with Dr. Verghese. I along with most of my colleagues are concerned that presently most our Internal Medicine residents are not skilled in excellent physical diagnostic techniques. Certainly challenging these residents to learn superior physical diagnostic skills will not completely solve our problem of an exorbitantly expensive style of medicine; however, it would be a step forward for making our medical system less technologically dependent, more rational, safer and less expensive.

Saturday, January 30, 2010

Is it Insurance Reform or Health Care Reform that should be the Focus in Washington?

Certainly insurance companies are not saints, but are they the root of the problem? Is it the insurance companies that spend $7,000 on every American for health care every year? Or rather is the underlying problem the various factors that have driven our practice towards an overly technological, less personal, less coordinated, specialty-oriented style of Medicine?

Review of The Dartmouth Atlas of Health Care sadly demonstrates that even our great teaching centers are practicing a wasteful and, in many cases, a non-beneficial style of care. No wonder that our trainees now do the same.

We must adequately reimburse primary care, practice and teach excellent history taking and physical exam skills, conceptual thinking, and most importantly, physicians must unite behind a system of peer review to ensure beneficial care and support each other to beat back the lawyers.

Sunday, January 17, 2010

Questionable Funding of Universal Coverage

Our political leaders tell us that, in the past, there have been no decreases in services after cuts in Medicare funding. Therefore, it is reasonable to fund a portion of the costs of universal coverage with further cuts in Medicare reimbursement rates.

It is true that most Medicare beneficiaries are pleased with the program despite the decreases in payment rates over the years (for an excellent short review of Medicare’s payment history, http://www.hlc.org/medicare_history_memo.pdf). Despite these decreases in payment for each service, total Medicare expenditures and share of the federal budget are increasing. But in reality, how is Medicare actually funded and have these decreases caused a dramatic change in the practice of medicine in this country?

Although Medicare makes up about one sixth of our total national health care spending, it is the largest insurer and has a major impact on the allocation of health care resources. In a recent posting, (The Mayo Clinic: A Model for Appropriate Care But Can it Survive As Such?) I described that last year The Mayo Clinic billed Medicare $1.7 billion for medical services; however, they lost $840 million due to Medicare underpayment. They made up for this loss by overcharging private insurance, i.e. cross-subsidization. The Mayo Clinic is not alone in this practice. Every hospital in the country has to do the same. Thus the working public has been paying more for their health insurance to offset the inadequate payments that Congress has allotted for Medicare - in essence, a hidden tax on workers.

Hospitals and doctors also quickly learned that Medicare is relatively generous in paying for technology rather than primary care, history taking, physical diagnostic skills, cognitive and conceptual thinking. Technologies and organizations with the greatest lobbying budgets have received the lion’s share of reimbursement. As a result we have an undersupply of primary care doctors, an oversupply of procedureists, an emphasis on intensive care units, overuse of cardiac catheritization and stenting, a frenzy of building proton accelerators and the list goes on and on. With further cuts in Medicare reimbursement to help pay for universal coverage without real structural changes on how we practice medicine, cross-subsidization from private insurance and even a greater emphasis on the overuse of procedures and technology will most likely occur.

Instead of delving into these and other reasons as to why we spend much more than any other country on health care, Washington is again trying the already failed economic approach of decreasing payments. Multiple experts using different methods (see posting The Validity of the Dartmouth Atlas for Health Care) have demonstrated that we spend about $700 billion dollars yearly on non-beneficial inappropriate care. Physicians working together as part of intensive peer review (see posting, Appropriate Care Committees) could address this overspending at the physician-patient interface, thus ensuring individualized evidence-based beneficial care. I believe the economic approach now being pursued by our political leaders will prove to be more frustrating and in the end more expensive. It is time to put the responsibility for rational beneficial care where it should be - on physicians.