Wednesday, April 13, 2011

Bureaucracy as a Barrier to Constructive Physician Health Reform Changes

You will never understand bureaucracy until you understand that for bureaucrats procedure is everything and outcomes are nothing.

Thomas Sowell (1930- ), Hoover Institute, economist, social theorist, political philosopher

Many potentially worthwhile health law provisions - electronic health records, accountable care organizations, medical homes, hospital safety programs – may never come to pass. As I point out in my upcoming book, The Health Reform Maze (Greenbranch Publishers, 2011), for physicians bureaucratic procedural demands may get in the way of outcomes. The means may defeat the ends.

Hard-pressed, sometimes overwhelmed, physicians are busy, harassed professionals. They want to spend more time with patients. Taking care of patients is what they are trained to do. It is what they are good at. Patients are their main sources of satisfaction, of improving health, of restoring life-styles, of achieving cures, and of providing income. How physicians react to bureaucratic procedural requirements is important for the future of health care.

In the minds of many physicians, meeting demands of federal regulations distracts from their work, takes an inordinate amount of time, and generates unnecessary direct and indirect expenses. The unfortunate result is that too many physicians choose to either ignore federal regulations, wait and see what develops, or escape from government and other third party oversight.

Consider a few examples.

• Installing EHR systems to qualify for federal bonuses requires meeting “meaningful use” criteria. Under the government HITECH program, eligible health care professionals and hospitals cannot qualify for Medicare and Medicaid incentive payments until they adopt certified EHR . Establishing and implementing a “certified” and “standardized” EHR system takes time, outside consultants, roughly $50,000 in start-up expenses, and meeting government procedural demands. For many, if not most busy practitioners in small practices, these demands are a “turn-off.”

• Becoming part of an accountable care organization - CMS is in the process of issuing procedural rules before the end of the year for becoming part of ACOs and engaging in joint-ventures with hospitals. To engage in these things requires hiring consultants and lawyers to avoid antitrust issues and being labeled as a hospital-physician monopoly. The run-up to an ACO may entail up to $1 million in expenses and countless meetings and hospital-physician negotiations and trade-offs. These are not things physicians are trained to do or feel comfortable doing and may strangle infant ACOs in the cradle.

Physician time, expense, and income barriers posed by federal bureaucratic procedures may lead to physicians opting out of the system with defeat of desired outcomes.

It could even lead to a market-based outcome envisioned by conservative economist John Goodman, founder and president of the National Center for Policy Analysis,

“President Obama’s health care law will bring a major transformation of the nation’s health care over the next decade in the form of a large migration of patients, doctors, facilities, and services out of the third-party payer system.”

“It will cause a major increase in concierge doctors, concierge facilities, and concierge-type services. It will lead to the creation of new markets where providers are free to repackage and reprice their services without third-party payer approval; where transparency of price and quality becomes the norm for patients; and where suppliers of services compete for patients on price, quality and amenities.”

If this were to happen, it would lead to a major political crisis of unprecedented magnitude – lack of access of Medicare and Medicaid patients to physicians.

Tweet: Government bureaucracy in the form of procedural demands upon physicians may cause thousands of doctors to opt out of Medicare and Medicaid.

Richard L. Reece, MD, has posted 1730 blogs at medinnovation blog over the last four years. His main themes concern health reform and innovation and how they impact physicians and American culture as a whole. He works closely with the Physicians Foundation. His opinions are his alone. He has written eleven books. His latest book, The Health Reform Maze, is now at Greenbranch publishing and will be released in June. Doctor Reece’s website,, is now up and running He invites comments and questions on his blog and will respond to each comment or question on his blog or to him directly at 860-395-1501 or

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