Health Reform and Loss of Physician Freedoms: Consequences, Trends, and Alternatives*

*Presentation before Physicians Insurance Association of America, Leadership Camp,  May 9, 2012, J.W, Marriot Center, Washington, D.C.

May 10, 2012 – What follows is a presentation I gave yesterday before physician leaders of the leadership camp of the Physician Insurance Association of America.  I have edited the talk   to accommodate changes I made while on the podium and to fit this print version.

Members of PIAA leadership camp.   Given the unsettled state of tort reform and the looming uncertainties of health reform law,  I am assuming you are not all happy campers.

I would like to thank  Dr. Donald Palmisano,  one of your distinguished leaders and former president of the American Medical Association(2003-2004) for that generous introduction, which I so richly deserve but so seldom get.   Before you know it, I will be a legend in my own mind.   Not to worry.   As my  wife of 50 years explained to me, “Be humble.  You have a lot to be humble about.”

My theme today is preservation of physician and patient liberties and your future.  I deeply care about these liberties and what lies ahead.    Otherwise I would not have written 2300 blogs, 1300 tweets, and 11 books on the subject. 

Everything I say today will revolve around  the freedom theme,  preserving individual liberties,  improving the system, and lowering costs through innovation.

WSJ Journal Editorial

Let me begin with a quote from a  Wall Street Journal editorial,  “Liberty and Obamacare,” dated March 23, 2012, Obamacare's second birthday.

“The stakes are much larger than one law or one president.  It is not an exaggeration to say that the Supreme Court’s answers may constitute a hinge in the history of American liberty and limited and enumerated government.  The Justices must decide if those principles still mean something.”

My Bias

When he invited me to give this presentation,  Dr. Palmisano instructed, “Give an unbiased picture of the  future of physicians  during and after reform and leave plenty of time for questions.”

I will leave time for questions,  but I can’t  give an unbiased  view.  I am  biased in favor of physicians.   I want clinicians to retain freedom to make decisions independently of bureaucrats and managers. 

In any event, here we are in Washington, D.C.   Among critics of Obamacare,  “D.C.” stands for “Darkness and Confusion.”  Among advocates,  “D.C” is known as “Destination - Control.”  My job today is to describe the darkness,  clear up the confusion, and warn of excessive control.

Marching Orders

My marching orders from your meeting planner are to speak for 45 minutes, leave 15 minutes for questions, and use less than 36 slides,  It is now 1:55 PM.  That gives my 35 minutes to make my case.   I shall  wrap up by 2:30 P.M.. As a pediatrician friend of mine once remarked, “You may now circumsize your watches.”’

Blunt Message – Raw Deal

I shall be blunt.    Your future stinks under current reform law.  You are getting a raw deal   If Obamacare goes forward as planned, you will  lose clinical freedoms and income.

This is a watershed period for your future.  Either we go the way the U.S. or the way of Europe.   Your future depends on the Supreme Court decision in late June or the election in early November.   

I am not here to curse the darkness or to  confound the confusion.  I am here to say we must offer alternatives.   We must lead, and we must light candles of innovation to find our way out of the bureaucratic swamp.

Currently, you are feeling hemmed in by a law that promises to decrease your income;   regulate your decisions  through protocols on evidence-based practices as dictated by “clinical effectiveness research”; trap you into  a coding straight jacket ; stifle your innovative spirit; and  reduce  our choices and options.

To compound matters,  you are feeling loss or lack of leadership.   The AMA endorsed Medicare, and partly as a result of physician discontent with that decision, it lost members.  Today  only 15% to 17% of physicians  belong to the AMA.    In a speech  before the AMA in Chicago on June 15, 2009,  President Obama declared, “  If you like your physician, you can keep your physician.  Period.  If you like your health plan, you can keep your health plan. Period.  Nobody can take that away from you. No matter what.”
"No Matter What"  Has Arrived

Well, “no matter what”  has arrived.    Employers are in the process of dropping as many 20 million employees from health plans, and the doctors who go with those plans

And the other Obama promises  -  lower premiums costs by $2500 by 2016 for a family of four,  greater access to doctors, and higher quality – are looking more and more like a fantasy.  Period.   

Speaking of punctuation marks, I am reminded of the story of the grammarian who developed colon cancer.  He thought his life was coming to a period. But a surgeon resected his cancer, and it came only to a semi-colon.  President Obama’s dream is now a semi-colon.   We have yet to see if  it will end in a period, and it may,  come June or November.

Back to Darkness and Raw Deal

As I see it, there will be:

·         No permanent SGR fix, barring a GOP sweep.  Politicians simply don’t have the guts to fix it because it would add $300 billion to the current $16 trillion national deficit.

·         No physician income rise.  Instead Obamacare proposes systematic cuts in Medicare fees for specialists over the next 10 years, with token increases for primary care,  with Medicare fees less than Medicaid fees by 2019 for all physicians.

·         No national tort reform, which is unlikely as long a the Trial Lawyers remain heavy political contributors.

·         No market-driven incentives  - shopping across state lines, HSAs, HRAs, and variants with high deductibles,  individual plan ownership,   tax credits for all,  individual plan ownership.

·         More dependency on government – with 110 million on Medicare and Medicaid- now 1/3 of population, growing to ½ by 2020 – with more of GDP going to government.    In France,  54% of spending is by government. The French, by voting in a socialist government, want even more government spending, whether or not government has the money.

·         More mandates  - for individuals,   physicians, hospitals, employers, and states.

·         An expanding bureaucratic alphabet soup – CMS,  HHS, IRS, PCORI, CER. PHM, EBN, IPAB, ACOs, EHRs,  HIT, and, of course, with 159 new agencies, commissions, boards, and of course, POTUS (President of the U.S.)

·         D. C. directed and dominated health exchanges at state level.

·         Continued coding straight-jacket, which will not allow physicains to innovate or reprice and repackage their services.

·         Zero-sum health care income  game – If doctors go up, hospitals go down, and vice-versa.

Rhyme and Reason Summary

Now, if I may, I will sum up what I have just said, in rhyme,  I do so in honor of my son, Spencer, who is an internationally acclaimed poet and because using prose is simply  too painful

There will be no SGR fix, at least not with the current political mix.

Medicare fees will fall over the next decade, bundled, capitated, or prepaid.

Market-based incentives, like HSAs will not occur, those on the left concur.

Don’t count on national tort reform, barring a perfect political storm

Swing states could swing the right way, but as of now, the polls don’t look that way.

Let us hope the Justices will do ther right thing, and voters will remember, come November.

Seeking Brevity

In this talk, I shall:

Seek brevity,

with a touch of levity.

In short, I shall be terse,

for nothing is worse,

than verbal longevity.

A friend of mine once told me,  “Dick,  I always knew you were full of pith.” Which gives me a title for my next book,  which will be  mercifully brief,   Obamacare: Pith and Vinegar.

My Background

So that you will now who is telling you this, here is my background

·         Pathologist (A specialist who knows everything but it is too llate), editor, blogger, tweeter, author

·         Practice experience (Connecticut, Minneosta, North Carolina, Oklahoma)

·         Longest practice time n Minnesota (25 years, 1967-1990)

·         Editor,  Minnesota Medicine (1975-1990)

·         11 books, 2300 blogs, 1300 tweets

·         Latest book – Health Reform Maze (Greenbranch Publishings, 2011)

·         Blog and Tweets now internationally syndicated by Newstex, com

Bureaucratic Box on  Cover of My New Book – The Health Reform Maze

There's  a picture of the bureaucratic box on the cover on my book,   It'a  condensed version of  the 2801 page health reform law.  The law stretches for  2801 pages,  longer than War and Peace, and  of its length,  then House-Speaker Nancy Pelosi famously said,  “We’ll have to pass it to see what’s in it.”  

Depending on your point of view, you could call this box a progresscive blast-off platform.   a conservative bureaucratic  burial ground, a consultant's bonanza,  or physician's burden to bear.

Whatever you call it, what's  in the box  is a massive new bureaucracy, with 159 new boards, agencies, commissions,  at parade ground for at least 5000 new bureaucrats and technocrats,  and 16,500 new IRS agents to enforce mandates and to collect new taxes. 
 The bureacratic box  has an entry but no exit.   This law, in one way another,  will be with us through eternity even  if the Supreme Court or the Election rules most of it null and void, or Republicans repeal it.  

Whatever happens, the law's effects will linger, and  health plans and other buyers will adopt some of its provisions.  Your practice will never be the same again. In one fashion or another, by a public or private entity,   your performance will be digitized,  audited, and measured.

Disentangling

How, as physicians,  do you disentangle yourself from this byzantine bureaucracy or even understand it?  My advice is for you to follow the lead and read the works of the Physicians Foundation.   This non-profit organization, which was founded in 2003 as the result of legal settlement with major managed care companies ,  represents 17 state and 3 county medical  societies, and the majority of U.S. physicians.  It has issued over $25 million in grants to physician organizations to improve quaIity and has done groundbreaking surveys to see what doctors think and how they are likely to react to health reform. I commend for your reading its 2010 survey Health Reform and Decline of Private Practices,  and I recommend you look out for the results of its 2012  e-survey of 650,000 doctors, now being conducted, which will be released before the November elections.  Its website is physiciansfoundation.org

Before I get into the consequences,  trends, and alternatives to Obamacare,  Its important that you understand where I am coming from.

My Beliefs

·         I believe, Because of the nature of the bureucratic  beast,  government is poor at innovation.  Because of its special interest constituencies,   its ability to print money to keep  going,  and its reliance on good intentions rather than results, it can never admit failure and shut anything down.

·         I believe in market-driven competition and innovation as the best means of raising quality,  achieving  excellence, and lowering costs.

·         I believe in physician entrepreneurship and innovation.

·         I believe constructive reform is not possible without engaging physicians and health consumers as the driving forces - 90% of factors determining health and longevity - patient behavior, genetic predisposition,  the environment, social deprivation, homicides and accidients - are beyond the physician's control and occur outside the office.  Therefore, patient must be engaged if health reform is to succeed).

·         I believe the future depends, not solely on the Supreme Court and the American electorate, but on external events like the economy, the price of gas,  a possible Israeli  air strike, terrorist attacks,   and you. Without you, there is no health system,

·         I believe in what previous leaders have said: Reagan “The government is the problem, not the solution,”  Churchill "The inheret vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism  the equal sharing of miseries,” and Thatcher “The only problem with socialism is that sooner or later you run out of other peoples’ money.”

·         Finally,  I give two cheers for capitalism and one cheer for government.  An enlightened partnership is necessary to reform care, but, as a practical matter,  one cannot never do away with dependency induced by entitlement programs,  Once this dependency is  established, its tends to grow and metastasize.   

Themes of Book

The main themes of this talk are the loss of clinical and individual freedoms due to an overreaching  government.   The subthemes are the consequences, trends, and alternatives secondary to this overreach.

Consequences

·         What are the consequences?  According to the Congressional Budget Offiice and the Office of Management and Budget,  costs will  run $1.76 trillion by 2022 and $2.5 trillion by 2024,  two to three times more than original 2010 estimate of $940 billion by 2020.

·         Strangling rules, regulations, protocols, mandates, taxes,  and IRS and government electronic surveillance, all of which stifle innovation.

·         Continued political discontent with roughly 15% more favoring repeal than acceptance, and a startling 76% to 19% saying individual mandate is unconstitutional. 

·         A civil war between the majority of states and the federal government, which lead to the necessity of the present Supreme Court deliberations.

·         An evolving consensus that personal,  religious,  and clinical liberties are at stake and that the American people do not like being told what to do.

·         Decreasing physicians acceptance of new  Medicare and Medicaid patients, in the 30% to 60% range, with more to follow if Obamacare continues.

·         Physicians shortages, 50,000 now and up to 150,000 by 2020.

·         Physicians abandonment of 3^rd party arrangement with private and public plans, with the rise of direct cash arrangement in urgicenters,  Simple Care networks,  retail clinics, and  concierge practices.

·         Medicare cutbacks for physicians, especially high tech specialists.

·         Continuation of the SGR formula, which will drive more physicians out of practice.

As a consequence of these consequences, I foresee a nightmarish political crisis of unprecedented magnitude three or four years out,   as 78 million baby boomers enter the Medicare rolls at the rate of 10,000 to 12, 000 a day, as 32 million more Medicare, and more likely 50 million citizens, qualify for Medicaid in 2014, and as the physician shortage escalates.

Trends

·         The strongest trend is hospital employment and health system employment.  Hospitals already own more than half of practices.   Physicians are streaming into hospital employment because an administrative infrastructure is needed to deal with government and health plan payers if one is to negotiate from a position of strength.

·         The second strongest trend, related to the first, is accelerated consolidation at all levels of the system,  followed quickly by waves of decentralization as large organization seek marketing power through greater patient convenience.

·         The third strongest, also related, is brisk care migrations out of hospitals to minimall invasive diagnostic and treatment centers and to the home itself,  in turn accelerated by the information revolution.

·         The fourth strongest is the push for bundled bills, dropping of fee-for-service to rationalize and coordinate care.

·         The fifth strongest  will be the search for some business model that favors evidence-based quality and outcome efficiency. 

In addition to these trends  and intermingled  with them, you will experience profound changes in practice patterns secondary to IT and mobile devices such atIPhone,  IPod, and IPad; accelerated adoption of EHRs by physicians  secondary to newer and cheaper and better business models, computing in "the cloud",  widespread use of speech recognition software, more waviers from Obamacare by organizations seeking refuge from Obamacare expenses.

Alterrnatives

Your alternatives, as I see them, are:

·         Leadership from people like Dr. Palmisano and the Physicians Foundation.

·         Practices innovations, many of which I imention in my blog and in my books

·         New practice models

·         Political activism  and your part and the 19 physicians now serving in Congress.

Practice Models

Now,  just a word and a list of what I see as viable practice models.

·         Specialty centers with decentralized free-standing centers performing cataracts, endoscopies, hernia and other minor surgeries, bariatric procedures, cosmetic procedures, and any minimally invasive procedure.

·         Specialty centers, common in orthopedic world, offering one-stop shopping,  - minor surgeries,  consultation,  physical therapy, lab work, x-rays, and imaging.

·         Primary care medical homes wurg coordinated, continuous, and integrated case.

·         Virtual group practices uniting doctors in regions.

·         Worksite clinics (already 30% of corporations offer these clinics on site, run by on-site  primary care physicians and wellness consuelors.

·         Clinics in retail settings.

·         Geographic mega-clinics like Mayo, Geisinger, Carillion, and academic centers, which now care for about 10% - 12% of Americans.

·         Practices featuring telehealth, e-visits, and home and work visits.

·         Practices featuring patient-generated histories and other forms of telecommunciations not necessarily requiring face-t-face visits.

·         We have done enough bleeding, now is the time to do some leading.

What I Have Told You

I have told you

·         Your future is bad under the current health reform law

·         Your future depends to a great extent on Supreme Court and the elections in November

·         You can brighten your future through leadership, practice innovatiohn, new practice  models, and political actio

Obamacare Octopus

A friend inquired ,  "What do you really think of Obamacare?  What image does it conjure up in your mind?" 

Here, tongue-in-cheek, is my answer.

I think of Obamacare as an octopus – an amphibious (actually triphibious because it can fly), ambidextrous (actually octodextrous  because it has 8 tentacles),  omnivorous  ( capable of offering  everyone a free lunch and then eating them for lunch),  and omnipotent (at least in its own mind ) – creature .  It is highly mobile and aggressive. It glides across the floor of society,  sucking up everything in sight on the bottom or then rising to the top,  confiscating assets and wealth.

The Obamacare Octopus has a huge head – monstrous and swollen and tilting to the left.   It has a brain with two large lobes - Medicare and Medicaid.  The corpus collosum is the department of Health and Human Services.  The midbrain is Kathleen Sibelius. The hindbrain is Congress.  The spinal cord is the White House.

Obamacare has a blinking, flashing large Cyclops quarely in the middle of its forehead.  The monster's  eye eeriely resembles  a large TV screen.  Instead of esyelids, however, teleprompters ring the eye.  It has an ample mouth, the mainstream media. It has a  four chambered ink sac on its under belly- containing black, red, green, and purple ink.  The black sac is the smallest and is rarely used, except in the name of “savings.” The red sac continually gushes huge gobs of red ink.  The green sac squirts ink at anything that moves – a windmill,   rotating solar panels,  and electric cars.  The purple sac continuously blasts out  purple , sometimes subtle prose, mostly to obscure the other inks.

Tentacles

Obamcare has 8 tentacles with powerful suction cups on the undersurface.  These suctions money and liberties from Americans.  

·         The first tentacle extracts a projected $2.5 trillion from taxpayers over the next 12 years.

·         The second tentacle takes $575 billion out of Medicare for 10 years.

·         The third tentacle pulls $300 billion to $400 billion out of pockets of physicians and hospitals.

·         The fourth tentacle  vacuums $60 billion to $70 billion in taxes out of the drug firms, device makers, health plans, and other members of the medical industrial complex.

·         The fifth tentacle takes $100 billion or so from the young and healthy.

·         The sixth  tentacle  sucks up $400 to $500  billion out of  the coffers and profits  of large and small businesses.

·         The seventh tentacle suctions $400 billion to $500 billion out of State Medicaid budgts, and awy from social services, transportation, and education.

·         The eighth tentacle  is required to hire 5000 new CMS employees, including $16,500 IRS agents to enforce the individual mandate and to collect the new taxes.

So much for my image of Obamacare.   It is a  distortion of reality.  You may think it grotesque.  Still, as  Mike Pence (R-Ind) observed , "Only in Washington, D.C . could you say you’re going to spend a trillion dollars and save the taxpayers money.” And only in D.C. could you say you’re going to add 32 million to Medicaid rolls,   subsidize every family of four up  to $88,000 , save money, make everything more efficient, and elevate quality.  

 If you believe these things,  I have a bridge I would like to sell to you.

Conclusion - Bumpy Road

Hold onto your hats and wallets, fasten your seatbelts, strap on your lifejackets, jock straps, and chastity belts, and pray the Supreme Court and the electorate makes the  right decisions.

Above all, hold onto your freedoms. It’s going to be abumpy road.

To contact me, go to rreece1500@aol.com, or call 1-860-395-1501 in Connecticut.  To read me, procede   to amazon to buy my books, call Greenbranch publishing (1-800-933-3711) to order my latest book The Health Reform Maze, or Google me at Medinnvoation to insert a comment or ask a question.

This has been a gloom-filled talk.  Do notdespair. There’s  always gloom for improvement.

Tweet:   Physicians’  futures depend on Supreme Court , the elections, and what physician do  to defend themselves and to innovate to  improve the system.