Mayo clinic - Physician shortage, doctor shortage - Addressing The Gnawing Issue of Primary Care Shortages

I notice the Obama budget addresses the issue of dwindling numbers of primary care physicians by offering up to $330 million to expand repayment of education loans to to doctors, nurses, and dentists who agree to practice in medically underserved areas.

To which, I say,

Get real. Medical students will not enter primary care in greater numbers until they perceive they will receive the same pay, prestige, work hours, and choice of desirable practice locations as their classmates who choose to go into specialties. Loan repayments to primary care for serving in doctor-short areas will simply not cut it. The time has come, as the Walrus might have said in Alice in Wonderland, to talk of other things.

Medicare, health plans - WSJ Health Blog, HMO Stocks Take A Dive

Posted by Sarah Rubenstein

Company Medicare Advantage Share of Revenue
Aetna 18%
Cigna 3%
Coventry 31%
Humana 51%
UnitedHealth 23%
WellPoint 6%

HMO stocks took a beating today as investors digest the Obama budget proposal’s push to cut federal payments to insurers that run private Medicare Advantage plans.

Here’s the damage as of mid afternoon.

Humana: down 20%

UnitedHealth Group: down 14%.

Coventry Health Care: down 14%.

Aetna: down 13%.

WellPoint: down 10%.

Cigna: down 9%.

The market may be shocked, but the writing’s been on the wall for a while. Back in December, Obama said Medicare Advantage isn’t “necessarily giving good bang for the buck.”

Humana, United and Coventry are among the biggest players in Medicare Advantage, which helps explain why their stocks are taking the biggest hits. See the chart at right for Goldman Sachs analyst Matthew Borsch’s breakdown on how much of each company’s total revenue comes from Medicare Advantage. (His count of Aetna’s and Cigna’s total revenue doesn’t include certain relatively small non-health businesses such as life insurance.)

America’s Health Insurance Plans, insurance trade group, put out a statement that praised Obama’s push toward broad health reform. But the group also worked to defend Medicare Advantage, saying that cuts the size Obama is proposing would “jeopardize the health security of more than ten million seniors enrolled in Medicare Advantage and would turn back the clock on innovative payment incentives to improve the quality of care that patients receive.”

AHIP said the plans provide programs such as disease management and care coordination. Democrats, meanwhile, tend to see them as tax-subsidized profit centers for insurers.

Comment

By cutting out Medicare Advantage HMOs, Obama no doubt felt he was doing good.

Indeed, he may have thought of himself as a modern senior health care Robin Hood,

But taken as a whole, HMOs are a huge national employer,

And slashing HMO revenues is a potent profit and job destroyer.

This is something Wall Street understood.

Comment by Richard L. Reece, MD, medinnovationblog.blogspot.com

Regional variations - When Will They Ever Learn?

Where have all the flowers gone?
Long time passing
Where have all the flowers gone?
Long time ago
Where have all the flowers gone?
Girls have picked them every one.
When will they ever learn?
When will they ever learn?

Where Have All The Flowers Gone? Music and Lyrics, Pete Seegar

To slow spending growth, we need policies that encourage high-growth (or high-cost) regions to behave more like low-growth, low-cost regions — and that encourage low-cost, slow-growth regions to sustain their current trends. Our ongoing research program (funded in part by the National Institute on Aging) suggests that there are two broad and closely linked strategies for accomplishing these aims: fostering the growth of more organized systems of care and implementing fundamental payment reform.

Elliot Fisher, MD, Julie Byrun, MD, and Jonathan Skinner, PhD, “ Slowing the Growth of Health Care Costs – Lessons from Regional Variation,” New England Journal of Medicine, February 26, 2009

The Dartmouth Group’s latest work, as laid out in the February 26 New England Journal, on reducing regional variation, as the principle means of culling 30% waste out the system, will fail and will continue to fail.

Why? Stamping out variation violates the tenets of American culture – freedom to develop one’s own local and regional systems based on their culture and responding to the demands of that culture.

When will Dartmouth and other federal policy makers who want to wring variation out of the system ever learn? Ever since Wennberg’s original paper in 1973 on small area variations, Dartmouth’s has been proposing to homogenize and standardize Medicare payments across the U.S. These proposals, rational and scholarly though they may be, have had zero impact on regional cost variations.

Maybe there are lesions to to be learned from 36 years of futility.

When will Dartmouth-led policymakers ever learn,

1. That the U.S. is a vast diverse continental nation where health cost variations vary with local economies, socioeconomic differences of local and regional cultures, costs of living, and the competitive health care environments.

Costs are inherently higher in teeming urban centers with major academic centers. Care costs in Boston, for example, are 30% higher than the rest of the country. To ask Boston hospitals and doctors to lower their fees to match those of rural America defies logic and common sense. It will simply never happen, and it is the height of hypocrisy to pretend that it will.

2. That you cannot homogenize and standardize Medicare based payments without understanding what drives hospitals, doctors, and the local citizenry.

I recall the story of Paul Levy, CEO of Boston Israel Deaconess, in Boston. When asked why his hospital had purchased an expensive surgical robot, he said in a health blog labeled “Uncle!”, “Many months ago, I wrote about the da Vinci Robot Surgical System and expressed doubts about whether there was evidence to support the clinical efficacy of this equipment, as opposed to the marketing efficacy of the company selling it.

Well, the time has come to graciously say, "Uncle!"Without making any representations about the relative clinical value of this robotic system versus manual laparoscopic surgery, I am writing to let you know we have decided to buy one for our hospital. Why? Well, in simple terms, because virtually all the academic medical centers and many community hospitals in the Boston area have bought one.
3. That hospital executives and their boards are appointed to make sure their hospitals remain profitable, offer the latest in technologies, and rise to the top of the local or regional heap.

I wonder how a hospital board would react if a big city hospital CEO gathered his board together and announced: Ladies and Gentlemen, I have decided to lower our overall payments to match those of such and such a hospital in rural Alabama and for the nation as a whole for the common good of American society, even it means taking a loss, laying off employees, abandoning our mission to serve the poor, and jettisoning our expansion plans.

3. That health cost variations are very much a function of managed care market penetration and rules and regulations of a given state and metropolitan area.

In their article, Fisher et al note: “ Per capita Medicare spending from 1992 through 2006 varied in five U.S. hospital-referral regions. During this period, overall Medicare spending, adjusted for general price inflation, rose by 3.5% annually. But there was considerable variation among regions. Per capita inflation-adjusted spending in Miami grew at an annual rate of 5.0%, as compared with just 2.3% in Salem, Oregon, and 2.4% in San Francisco.”

Has it dawned on the authors that San Francisco and Salem, Oregon have heavy managed care penentration, that managed care dampens growth, and that its penentration varies greatly from one region to the next?

4. That other factors the Dartmouth folks mention vary profoundly from one region to the next. Here is their pitch.

“Consensus is emerging that integrated delivery systems that provide strong support to clinicians and team-based care management for patients offer great promise for improving quality and lowering costs. Most physicians already practice within local referral networks around one or more hospitals, which could form local integrated delivery systems with little disruption of practice. Policymakers would need to remove legal barriers to collaboration and offer incentives — such as larger payment updates or subsidies for implementing electronic health records — to providers who were willing to establish real or virtual accountable care systems. Our volume-based payment systems could then be changed to incorporate partial capitation, bundled payments, or shared savings, thereby fostering accountability for overall costs and quality of care. Although much remains to be learned about aligning reforms in delivery systems with payment reforms, early results from demonstration projects have been promising and could provide the foundation for national reform.”

This “integration” between hospitals and doctors and appeal for accountability. quality of care, and alignment of reforms, has a nice ring to it. Still, I wonder how man ymore years it will take to apply thse noble principles to all regions of the country, who may choose to continue to exercise their independence and judgments to their own well-being.

Obama strategies - Obama Health Care Budget

Well, details of the Obama “down payment on health care reform are filtering out.

They include.

• $634 billion to help pay for health care reform over the next ten years.

• $318 billion of that—about half—will come from tax increases that include reducing the mortgage and charity deduction for high income Americans.

• Charging wealthier seniors more for the Medicare Part D drug benefit—as is done for Medicare Part B now.

• Cutting Medicare HMO payments by $175 billion over ten years.

• Reducing Medicare hospital payments by $17 billion over ten years by bundling inpatient and outpatient reimbursement to include the 30-days after discharge.

• Cutting Medicare hospital payments by $8.4 billion over ten years for re-admissions resulting from substandard care.

• Requiring drug makers to increase the rebates on drugs sold to Medicare patients from 15% to 21% saving $19.5 billion over ten years.

What does this mean for doctors? I do not know. Some of it, of course, will come form higher taxes on doctors making over $250,000. Some may come from forcing doctors to “bundle bills” with hospitals. Some may come from only paying those doctors who use EMRs. Some of it may be indirect, as HMOs tighten financial screws on doctors to compensate for Medicare HMO losses. Little mention yet of how much is to be saved from prevention, EMR use, and lower Medicare fees for high ticket items that “don’t work” according to comparative effectiveness. Curiously, no mention of single-payers or universal coverage which will impractical unless costs are lowered.

Costs, health care and the economy, Obama strategies - Response to WSJ Blog on Obama Strategy on Containing Health Costs

February 25, 2009
WSJ Health Blog

Obama Addresses Health Reform as a Cost Issue

Posted by Jacob Goldstein

During the campaign, Barack Obama’s health-reform agenda focused mainly on giving Americans access to care. In his first formal address to Congress last night, President Obama brought up health care again — but he framed it largely as an issue central to the economic health of the nation.

He led into the health-care section of his speech with the line, “[W]e must also address the crushing cost of health care.”

Then, after rattling off some numbers about rising health expenses and their impact on individual Americans, he said health-care costs are “one of the major reasons why small businesses close their doors and corporations ship jobs overseas” and “one of the largest and fastest-growing parts of our budget.”

“Given these facts,” he added, “we can no longer afford to put health care reform on hold.”

The speech was a prelude for Obama’s first budget, which will be released later this week. Early reports say there will be a substantial chunk of money in the budget for expanding access to health care.

There does seem to be a pretty strong political will for greater access; delivering the Republican response to Obama’s speech, Louisiana Gov. Bobby Jindal said: “Republicans believe in a simple principle: No American should have to worry about losing their health coverage.”

But, especially in the short term, the costs to the government of expanding access are likely to exceed any savings that come from finding ways to make care more efficient. And, if figuring out how best to expand access will be tough, figuring out how to lower costs — perhaps including reducing reimbursements to highly paid specialists, demanding lower prices on some expensive drugs and restricting the use of unproven treatments — will be even harder.

Comment

I enjoyed immensely Barack Obama’s beautiful, bereft of details, speech,

But simultaneously cutting costs and covering all exceeds mortal reach.

EMRs and comparative research to reduce costs has never been shown to work,

The Brits have tried, wasting five years and $18 billion, without on costs putting a cork,

Sorry, but between cutting costs and providing more care, there’s an unleapable breech.

Comment by Richard L. Reece, MD, medinnovationblog.blogspot.com -

Costs, Government reform - - Can Health Costs Be Controlled from the Top-Down?

“None of this will come without cost, nor will it be easy. But this is America. We don't do what's easy. We do what is necessary to move this country forward.

For that same reason, we must also address the crushing cost of health care.
This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.

And it's one of the largest and fastest-growing parts of our budget.

Given these facts, we can no longer afford to put health care reform on hold.
Already, we have done more to advance the cause of health care reform in the last thirty days than we have in the last decade. When it was days old, this Congress passed a law to provide and protect health insurance for eleven million American children whose parents work full-time. Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives. It will launch a new effort to conquer a disease that has touched the life of nearly every American by seeking a cure for cancer in our time. And it makes the largest investment ever in preventive care, because that is one of the best ways to keep our people healthy and our costs under control.”

President Barack Obama,
Address Before Congress, February 24, 2009

A central tenet of the Obama administration is that you can centrally control health costs from the top-down – by combining data collected by EMRs, using that data to force doctors to comply with “evidence-based medicine,” and creating a Federal Comparative Research Institute that uses data to decide what works and what to pay for.

Before Obama plunges too deeply into the abyss that says information technologies and comparative research are a cure-all for costs, I ask that he and advisors consider IT performance so far in this country and in Britain. That experience vividly illustrates the flaws of health IT and comparative outcomes as means of saving money.

Hayek

The Obama approach runs against the philosophy of Friedrich Hayek (1889-1992), who noted that in a centrally planned economy, a small group decides how to distribute resources. But central planners never have enough information to allocate resources reliably. Efficient use of resources, and control of costs, Hayek argued, reside only in free exchanges of price information at the level of the marketplace , synchronized through spontaneous self-organization of buyers and sellers.

Yea for Government-Induced Comparative Effectiveness, Says Robert Wachter,M.D, Professor of Medicine

Government can control costs through evidence collected through information technologies used to compare effectiveness. In a February 24 piece in The Health Care Blog, “Are We Mature Enough to Make Use of Comparative Effectiveness Research, “ Dr. Robert Wachter, who coined the word “hospitalist” in 1996 in a New England Journal of Medicine article, and who serves as a professor of medicine in a West Coast Medical school, argues that Comparative Effectiveness Research and its applications mark a mature society.

“Thanks to White House budget director Peter Orszag, a Dartmouth Atlas aficionado, $1.1 billion found its way into the stimulus piñata for “comparative effectiveness” research. Terrific, but – to paraphrase Jack Nicholson – can we handle the truth?
In other words, are we mature enough to use comparative effectiveness data to make tough decisions about what we will and won’t pay for? I worry that we’re not.

Is it worth wasting our time and money on comparative effectiveness research? I’m hoping that this is a new day – the coming implosion of the health care system is now well recognized, as is the quality chasm. We simply must find ways to drive the system to produce the highest quality, safest care at the lowest cost, and we need to drag the self-interested laggards along, kicking and screaming if need be. Comparative effectiveness research is the scientific scaffolding for this revolution, so bring it on. “

Nay for Government-Controlled IT and Comparative Research, retorts Greg Scandlen

Greg Scandlen, Director for Health CARE Choices, in “Research & Commentary: Health Information Technology, argues the opposite, as follows,

“As part of the federal government's economic stimulus package, Congress has authorized spending about $20 billion on health information technology (health IT) and another $1 billion on comparative effectiveness research. These provisions achieved wide bipartisan support in Congress and in the health care industry, based on the hope that the investment will help improve efficiency, cut costs, and result in better care. The reality is likely to be far different.

Proponents of heavy government spending rely heavily on a short RAND Corporation analysis from 2005 that predicted $77 billion in annual savings and improved outcomes. RAND estimated "implementation would cost around $8 billion per year, assuming adoption by 90 percent of hospitals and doctors offices over 15 years." It said, "The benefits can include dramatic efficiency savings, greatly increased safety, and health benefits."

Unfortunately, RAND assumed an error-free system that is quickly and enthusiastically adopted by virtually the entire health care system. That might happen, but it is an absolute best-case scenario. Even then, instead of "dramatic savings," the $77 billion hoped-for savings amounted to a mere 4.5 percent of total costs, placed at $1.7 trillion by RAND.

Far more likely is that every penny of the $20 billion will be wasted on systems that don't work and can never be implemented. That was the outcome of federal attempts to upgrade technology at the IRS, the FBI, and the air traffic control system. And these are all relatively simple enterprises involving single federal agencies. Health IT is vastly more complex and must include hundreds of thousands of private organizations that have invested in legacy systems that work reasonably well and are as varied as there are providers.

This also has been the experience of the United Kingdom, which has been trying to adopt a similar information technology upgrade for its National Health Service (NHS) since 2002. This plan was far less ambitious than the U.S. version, involving merely 30,000 physicians and 300 hospitals, all of whom are already employed by the NHS. Originally estimated to cost 2.3 billion pounds, it is already at 12.7 billion pounds--$18.4 billion, or about as much as provided in the stimulus package for the entire United States. A recent report to Parliament admitted the program is four to five years late and may never be implemented as envisioned. The project has lost two of the four vendors who were working on it, and some of the elements that have been installed are not meeting expectations.

This is not to say health IT is a bad idea or that hopes for it are unwarranted. Quite the opposite. The health care system sorely needs better management tools and better application of technology. There is currently a vast amount of entrepreneurial energy, innovation, and money being invested in developing, refining, and marketing the tools the system needs to come into the twenty-first century.

The danger is that massive federal intrusion will bring all that innovation to a screeching halt. Systems work best when they are developed from the ground up, not imposed from on high. In ground-up development, flaws can be detected and eliminated without much systemwide damage. Poor vendors can be removed without disruption to the whole system.

We do not yet know what the optimal system will be. Imposing federal standards on health IT in 2009 means the entire system will be locked in to those standards for very long time to come and innovation will not be rewarded.

The RAND study said "market forces" are an obstacle to health IT. Just the opposite is true. The market is the best way to test and refine new ideas. The process of repeated testing and refinement may seem slow to people who want instant solutions and shortcuts, but the failure to engage in that process often results in massive mistakes and wasted billions.’

Centralized comparative research to decide where to spend government health money, or reliance free markets to set those prices? Take your pick. Obama has made his choice.