Moving from “No” to “Yes” on Health Reform

Until now, Democrats have successfully labeled Republicans as the party of “No” on health reform. Republicans, on their part, have succeeded in convincing the public the health reform law is bad, with 56% opposing and 40% “strongly opposed.”

The case against the reform law is clear enough:

“The law will spend a trillion dollars over the next decade and increase taxes by half a trillion; create a massive new entitlement on top of those that are already threatening to bankrupt the government; impose a vast array of new rules and mandates on providers, insurers, employers, and consumers; insert the government in countless new ways between doctors and patients; increase the burden of Medicaid costs for the states; and cause millions of middle class families to lose the employer-based insurance they have today and pay even higher premiums.”(“Repeal – Now More Than Ever,” The Weekly Standard, October 30, 2010).

So is the case for reform- extending care to 34 million uninsured, reining in health insurance abuses, protecting those with pre-existing illness, covering young people up to 26 under their parents plans, making health care affordable, saving Medicare, guaranteeing quality, and forth.

What Now?

With the mid-terms now 2 days away, it is all over but the shouting. Barring a Halloween surprise, Republicans will retake the House and narrowly Miss Senate control.

Is this the beginning of the end of Obama care, or is it the end of the beginning? Can we go from “No, you can’t” to “Yes? We can”? The battle between the can’ts and cans. will be bitterly fought over the next ten years and where it ends nobody knows.

The Beginning of the Middle

To me, the battle is the beginning of the middle. It is the end of overreaching federal spending, taxing, and regulating. But it is the middle of the health reform debate. We cannot repeal the law and start all over. Too many bureaucratic forces are already in motion. And President Obama will veto any move to repeal and replace.

But we can slow its momentum. We can step back. We can decide where we to go from here. We can begin to go from “No” on both sides of the aisle, to “Yes,” this is what we can do. Everyone agrees, after all, that reforms are necessary to rein in costs and to expand coverage.

Adopt the Good, Examine the Bad

We can adopt changes in the law – coverage for pre-existing illness, young adults up to 26 under their parents’ plan, rescission of life-time pay limits, closure of donut hole, coverage of 34 million uninsured – we agree upon.
We can agree that some the law’s consequences - bankruptcy of state budgets because of the new Medicaid costs, the effect of state health exchanges effectively eliminating health care brokers and agents, new health plan regulations and restrictions increasing premium costs, increased expenses on businesses and insurers causing them to drop coverage, and public fears of rationing - were not carefully thought through in the rush of passage.

Acknowledging the Doctor Shortage, Moving to Correct It

And we can agree a doctor shortage of accelerating magnitude – 50,000 now, 70,000 by 2015 exists. What good is increased coverage without doctors to care for them? Yes, there are stopgap measures – more nurse practitioners, more physician assistants, more nurse “doctors,” more foreign-trained physicians, more government-subsidized community clinics, more “efficiencies” through accountable care organizations – but these measures are not likely to satisfy mainstream Americans who seek access to individual doctors.

We can agree that doctors ought to be paid a reasonable wage based on their skills, prolonged educational process, long workweeks, and unreasonable malpractice premium expenses. We can take seriously a Medical Group Management survey indicating 67% of practices will limit or stop accepting new Medicare patients if scheduled cuts – 23.6% on Dec. 1 and another 6.5% on Jan. 1—go through. Correcting the archaic SGR (Sustainable Growth Rate) formula is a must if seniors are to have access to care.

Accepting Political Reality

Finally, based on the coming electoral results on Tuesday, we have to accept the notion that American is basically a conservative nation that resists sweeping change. It is not realistic to try to govern America, which is based on limited government, individualism, and free enterprise, from the left. America, above all, is a center-right nation.

Our health system, the so-called medical industrial complex, consumes 17% of GDP and employs 14 million. It is a massive enterprise, is central to our economy, and is subject to powerful market forces. Despite its patchy and costly features, it has produced the most sophisticated medical technology in the world. Americans do not want it to be rationed.

We can, therefore, conclude in a capitalistic free enterprise nation, the health system will always be a mix of government and the market, protecting the uninsured and underinsured but offering choice and access.

Giving the Market a Chance

It is time, I believe, to give market forces or reasonable try at incremental reforms, which the current health bill denies or ignores. These reforms might include shopping for health plans across state lines; adoption of a model like the Federal Employment Benefits Plan which relies on competition and choice across the nation; tax parity between individuals, small, large employers; the expansion of health savings accounts; variable and practical health plans designed for age, sex, and need rather than comprehensive federal plans where one-size-supposedly-fits all; the removal of hundreds of mandates for optional and alternative care; and sensible malpractice reform that avoids the current casino environment inviting high rolling malpractice attorneys.

Heath Care Waves

The winds and waves are always on the side of the ablest navigators.

Edward Gibbon, 1737-1794, The History of the Fall and Rise of the Roman Empire


ObamaCare is already driving a wave of health-care consolidation—and higher costs.

“Big Insurance, Big Medicine, “ Wall Street Journal, October 27, 2010

Generators of Wave

First came the Obama wave. It came out of anti-Bush sentiment. It was a powerful wave, generated by the young, the have-nots, the uninsured, women, the all-knowing, all-seeing elite, and the forces for the common good, who envisioned a redistribution of wealth and benefits and a government-led utopia, with one-for-all and all-for-one.

Those behind the wave saw health reform as their manifest destiny, as an unprecedented historical achievement that exemplified all that was good.

Navigators of Wave

Many of those navigating the health care wave saw it differently. They saw it as unwanted and unneeded government intervention into individual freedoms and business practices cultivated and developed over decades dating back to World War II and involving every American in the non-federal sectors of the economy.

Secondary Waves

What resulted, unexpectedly and unbeknownst to many observers, was a series of secondary health care waves. These waves created a powerful undertow that undermined the intent of the Obama wave – to make health care less costly and more accessible to all Americans.

The navigators of the medical industrial complex were not going to be swept away by the federal tide. They would defend themselves, and they would defend what they saw as the American way – individual choice, enterprise, and innovation.

Consolidation Waves

They would consolidate. A wave of consolidation began to wash over the health care markets. Consolidation, unfortunately, portended higher costs, less choice, and less access – the converse of what the Obama wave intended. If the government was going to get bigger, they would get bigger too.

The health insurance companies grew bigger to manage the new political risks and uncertainties of reform. So did hospital systems and medical groups. The companies, hospitals, and physicians decided they needed to gain market share, even dominate their markets.

That way they could negotiate better contracts and make themselves indispensible to the government who had promised care in those markets.

The new government mandates and regulations created higher overheads and the need for more sophisticated administrative skills, the stuff of bigger organizations.

Hospitals and Physicians Consolidate

Hospitals saw the reform handwriting on the wall. They went into a frenzy of mergers, they acquired physician groups, spread their tentacles into the countryside, acquiring laboratories, surgery centers, rehab facilities, anything that smacked of health care. They sought to minimize competition to fortify their position.

Hospitals knew Obamacare promised to cut $575 billion out of Medicare, their financial lifeblood. Physicians, meanwhile, knew health reform was projected to cut their fees below those of Medicare and Medicaid.

Both hospitals and doctors knew that in low-margin businesses, size, capital, and political clout were paramount.

Government Promote Consolidation

The government knew it too why they promoted “accountable care organizations.” ACOs would be easier for the government to handle and to bundle as organizations providing Medicare services. The models for ACOs were Mayo, Geisinger, the Cleveland Clinic, and other large integrated systems.

The result? In the words of a WSJ editorial,

“Hospitals are now on a buying spree of private physician practices in the rush to build something that will qualify as an ACO. Some 65% of doctors who changed jobs in 2009 moved into a hospital-owned practice, while 49% of doctors out of residency were hired by hospitals, according to the Medical Group Management Association. In its 2010 census, the American College of Cardiology reports that nearly 40% of private cardiology groups are currently integrating with hospitals or merging with other practices.”

“Doctors are selling because complying with the ever-growing list of mandates has become more cumbersome; and while staff physicians on salary do gain predictability, they also lose the autonomy of independent practice. The other problem is price controls in Medicare, which are about 20% below private payments for doctors and 30% lower for hospitals. Hospitals are also scooping up practices to lock in referral sources and make up for ObamaCare's Medicare cuts. As it is, two-thirds of hospitals lose money today on Medicare inpatient services, according to Medicare.”

And so, as Dr. Suess, observed in this tale of the Lorax,

Business is business!

And business must grow

I meant no harm. I most truly did not.

But I had to grow bigger. So bigger I got.

I biggered my factory. I biggered my roads.

I biggered my wagons. I biggered the loads.

And I’m figuring

On biggering,

And biggering.

Health Reform as a "Killer Issue"

I have never been comfortable with use of the word “killer” as a health reform issue. I may be in the minority. In political ads this year, character assassination as a weapon to kill your opponent is the norm.

Thirty-second TV negative sound-bites work. You can “kill” your opponent through negative ads questioning his-or-her integrity, character, and past actions.

You do this by casting issues in moralistic terms. As Robert Samuelson says in today’s Washington Post,”Opponents are not just mistaken. They’re immoral. They’re cast as evil, ignorant, dangerous, or all three.”

Democrats portray health reform as a moral crusade; anybody who opposes it has no heart. Republicans as a “government takeover;” anybody who bucks it has no brains.

Jeffrey Anderson, of the conservative Pacific Institute, says health reform is a “Democratic Killer.” He cites this data to back his point of view.

“Politico reported last month that candidates were spending seven times as much on ads attacking Obamacare on ads defending it – and even Democratic ads were 3-to-4 times against. On the first half of this month, the overall ration has swung to 20-to-1. The issue the voters most strongly demanded the candidates get right was health-care reform.”

But what is “right”? In the voters’ mind, and mine, is a health system that,

• gives voters choice of health plans, physicians, and hospitals – all acceptable to government;

• doesn’t bankrupt patients;

• has health plans with catastrophic lids;

• has appropriate premiums based on age and state of health;

• rewards patients promptly for malpractice injuries based on decisions by an impartial, independent body;

• fits the culture of a given geographic region and its levels of illness created by socio-economic conditions;

• gives patients access to preferred hospitals, doctors, and technologies;

• allows patients to pay more out-of-pocket in private contracts with doctors;

• relies on informed decision-making between patients and doctors without outside arbitrary bureaucratic intervention;

• strikes a reasonable balance between government regulations protecting against excesses and market incentives for excellence;

• Avoids government regulations that stifle innovation;

• preserves private practice traditions in America.

Is asking a civil discourse with middle-of-the-road compromises too much?

Quote and Note: The Democratic Party and The Elites

Quote

“But, broadly speaking, the Democratic Party is the party to which elites belong. It is the party of Harvard (and most of the Ivy League), of Microsoft and Apple (and most of Silicon Valley), of Hollywood and Manhattan (and most of the media) and, although there is some evidence that numbers are evening out in this election cycle, of Goldman Sachs (and most of the investment banking profession). But the Democrats have the support of more, and more active, billionaires. Of the 20 richest ZIP codes in America, according to the Center for Responsive Politics, 19 gave the bulk of their money to Democrats in the last election, in most cases the vast bulk — 86 percent in 10024 on the Upper West Side. Meanwhile, only 22 percent of non-high-school educated white males are happy with the direction the country is going in.”

Charles Caldwell, “The State of Convervatism,” New York Times, October 24, 2010

Note

I found this quote fascinating for three reasons,

One, I think it is largely true that more billionaires and bi-coastal elites support Democrats than Republicans. I do not know whether this stems from guilt , from Democrats holding the reins of government , or Democrats having more money, or a combination of these factors.

Two, I believe it is largely true that elites in government think they have superior expertise, knowledge, and specialization required to run the government while Republicans do not possess these skills. This may be one reason a disproportionate number of those advocating, engineering, and administering health reform in Obama’s administration hail from Harvard.

Three, I am not surprised that most billionaires from Microsoft, Apple, Google, and Silicon Valley support Democrats. In its stimulus and reform plans, the Obama administration devotes some $27 billion to information technologies designed to transform, monitor, and control the health system. This is smart. The Internet will be a major driver of health reform.

Denial and Health Reform

De Nile isn’t just a river in Egypt.

Pun

I apologize for the pun. But after reading today’s New York Times editorial “Health Care and The Campaign,” I couldn’t resist. With regard to health reform. The Times may just be in an advanced massive state of denial about health reform.

What The Times Says

The editorial, in essence, says,

Republicans and their backers “deep-pocketed special interests” are either lying or distorting the facts about health reform.

For examples, the Times says the GOP is falsely claiming the new health reform law is limiting choices of health plans, causing overall costs to rise, driving up health premiums, propelling employers to drop coverage, introducing EHRs to track doctors’ performances, limiting competition, issuing waivers to employers like McDonalds to cover up the law’s faults, scaring Medicare recipients, and expanding the Medicaid population and bankrupting State budgets.

Just Wait Until 2014

These may be half-truths now, says the Times, but just wait until 2014. That’s when reform will really go into effect. Yes, costs and premiums are (still) rising and employers are (still) dropping coverage. But don’t blame the Obama administration. Blame the long-standing health care crisis and the bad economy, both the fault of Republicans.

“The major benefits start in 2014, when tens of millions of the uninsured will gain coverage through Medicaid or by buying private coverage — with government help for low- and middle-income Americans — on the new competitive exchanges. If you lose your job, you will no longer lose access to insurance. And with government help the coverage should be affordable."

"Far too few Democrats are explaining this on the campaign trail. The barrage of attack ads are hard to push back against. But the voters need to know that health care reform will give all Americans real security.”

Denying the Undeniable

There is, no doubt, delayed logic to this argument. But it denies some undeniable facts,

• The American middle class, as exemplified by the Tea Party movement and the upcoming wave election, is in open revolt against “liberal” policies, and 54% of American consider themselves “conservatives” while only 18% dub themselves “liberals.”

• Americans are an inpatient people, and they are not about to wait 4 years, while costs are rising, they are losing coverage, and they have no job, for the bulk of the reform law to take effect to decide if the reform law gives “all Americans real security.”


• For Americans, the route from doubting the effectiveness of a political party to denying it power is but one short step, at least until the next election.

The Health Reform Debate

What will be the reform law's final fate?
Where goes this transforming reform debate?
Will health reform be replaced or repealed?
Will it end in far left or far right field?

Let not those on the far left deride.
Let not those on the far right divide.
Let voters in the center decide,
aided by good sense on the side.

Health Reform as Seen from Non-DC and OB (Outside Beltway) America

As the final countdown for the November 2 mid-terms begins, people are asking: What triggered this potential GOP wave election and why do people favor repeal of the health reform law?

Multiple reasons exist,of course. The leading ones are slow economic growth, high joblessness, and unsustainable debts at the personal, state, and national levels. On health reform the fears are runaway costs and fear of losing coverage for those with existing plans.

For physicians, chief complaints are – failure to address malpractice reform, Congressional SGR uncertainties , and the feeling that the profession, who deliver the care, has been ignored and has had zero input into the reform process. Who will take care of 34 millions of newly insured patients, with more to surely follow, at reimbursement rates at which they cannot sustain their practices?

For me, reactions to the health reform bill reflects ideological differences. A Gallup poll indicated this ideological split among Americans: conservative 42%, moderate 35%, liberal 20%. Eighty percent, in other words, are non-liberal. Another 35% say they favor the Tea Party, which favors repeal of health reform, and 46% say reform is a bad idea while 36% say it is a good idea.

Should it be any surprise, then, that Americans are skeptical of the reform law, passed under questionable circumstances, that opens entitlement floodgates for millions of Americans while raising costs and causing millions more to lose existing policies? Should it be a surprise, given the following, that the health reform law is threatening to unravel?

The following list giving the reasons for the troubles of Obamacare is based on an article published by Grace Marie Turner in the Galen Institute newsletter.

1. Revolt among the States: At least 10 states have said they will unite to oppose the law’s mandates. And more will follow. Up to 25 new governors will be elected, and 30 will be Republicans. Many of those elected campaigned against reform, and given huge budget deficits, are likely to resist reform mandates.

2. Voter rejection: Three states -- Oklahoma, Arizona, and Colorado -- have ballot initiatives before the voters in November, repudiating the health law. Proponents of repeal, following the 71% vote against the law in Missouri in August, are likely to be emboldened.

3. Lawsuits: There are at least 15 lawsuits against the law. The two largest moved forward last week. The issue of the constitutionality of the individual mandate may be decided by the Supreme Court at the end of the year.

4. Rising costs: Health insurance costs already are rising as a result of the law, and the pressures will intensify. Boeing is the latest company to tell its 90,000 employees that it will increase the price of employee health insurance in response to rapidly rising insurance costs due to the health law.

5. Towering deficits: Gov. Philip Bredesen, Democrat of Tennessee, warned in a Wall Street Journal Op-Ed on October 21 that the health overhaul law creates strong incentives for employers to drop health coverage.

6. Seniors hit hard: Medicare Actuary Rick Foster has said the health overhaul law will gut the popular Medicare Advantage program and that the coverage will cost seniors more. Foster estimates seniors' costs will go up by $346 in 2011 and as much as $923 by 2017.

7. Millions losing coverage: The Principal Group announced it plans to drop health coverage for 840,000 policyholders; 11 million seniors will lose Medicare Advantage plans; child-only policies already are vanishing from the market ; retirees are losing supplemental coverage; and major employers are considering dropping health benefits.

8. Job-killing mandates: The U.S. Chamber of Commerce said that nearly eight in 10 small business leaders expect their costs to increase as a result of the new law. The majority say they will be less likely to hire new employees and more likely to reduce current benefits.

9. Searching for the exits: The McDonald's waiver shows that companies have to be protected against the law to avoid its damage; dozens more waivers have been granted so a million people didn't lose their mini-med coverage just before the election.

10. Lower Quality, higher costs: A Wall Street Journal poll last week found most voters believe the new law will cause them to get lower quality care, pay more in insurance premiums or taxes, or both.

The Biggest Health Reform Elephant in the Room

These days everybody’s favorite health care metaphor is the elephant in the room. An elephant in the room is something so big and so obvious that nobody wants to talk about it. Or it may be what some people call a “dirty little secret” that people choose to ignore because it is too big to ponder or too awful to contemplate.

Massive Medical Industrial Complex

For me the biggest health reform elephant in the room is the massive medical industrial complex. I do not deplore the size of the elephant. I think of it as part and parcel the American capitalism. I accept it as reality. Hospitals, surgicenters, health plans, employers, drug firms, medical device manufacturers, Internet high tech ventures, clinical laboratories, malpractice companies, home health firms, nursing homes, physical therapy units, the government and all its agencies, and others - make up the elephant.

If you doubt the elephant’s size and complexity. Go to any medical convention. Visit the vendor exposition. Vendors support these conventions, and as part of the Medical Industrial Complex, they are there in full force on full display to market to physicians, who they regard as the elephant’s main drivers. Elephants are smart. They pay attention to their drivers, even if the head of the herd does not.

Read the brochures, scan the online the promotional materials, or attend the proceedings of the World Health Congress, held annually, where else, in Washington, D.C. ( D.C. stands for “Darkness and Confusion”).

Here is some of the promotional material for the 8th Annual World Health Congress.

“The 8th Annual World Health Care Congress (WHCC) is World Congress' flagship event in which over 1,800 health care, government and corporate leaders formulate solutions to the challenges of health care cost, quality and delivery. In response to demands from the nation’s largest providers, payers and employers, the 8th Annual WHCC convenes the major sectors in health care to determine actionable goals and implementation strategies to demonstrate quality, consumer choice, cost-effectiveness and transparency. Thought leaders engage in debates, present case studies and share best practices from all industry sectors including leading employers, CMS officials, insurers/payers, health system and hospital providers, pharmaceutical and biotech executives, academics, analysts and government officials.”

I do not believe the federal government, no matter how “progressive,” will be able to unravel, restructure, consolidate, or to simplify America’s health system. Government cannot deliver on its promises.

The Medical Industrial Complex is so sophisticated, so ingrained, and so necessary to carry out government programs, that it will drive any post-reform innovation and collaborative effort to achieve quality, cost-effective health care.

Only the Big Elephant has the administrative, marketing, and innovative skills to make the system work.

Back in 1980, Arnold Relman, MD, editor of the New England Journal of Medicine, warned us the “New Medical Industrial Complex” would undo us all. Here is an abstract of that original article.

The New Medical-Industrial Complex

Abstract

“The most important health-care development of the day is the recent, relatively unheralded rise of a huge new industry that supplies health-care services for profit. Proprietary hospitals and nursing homes, diagnostic laboratories, home-care and emergency-room services, hemodialysis, and a wide variety of other services produced a gross income to this industry last year of about $35 billion to $40 billion. This new "medical-industrial complex" may be more efficient than its nonprofit competition, but it creates the problems of overuse and fragmentation of services, overemphasis on technology, and "cream-skimming," and it may also exercise undue influence on national health policy. In this medical market, physicians must act as discerning purchasing agents for their patients and therefore should have no conflicting financial interests. Closer attention from the public and the profession, and careful study, are necessary to ensure that the "medical-industrial complex" puts the interests of the public before those of its stockholders. (N Engl J Med. 1980; 303: 963–70.)”

Perhaps that’s how it ought to be in an ideal world, perhaps physicians ought to be saints, perhaps the health system ought to be oblivious to money and "special interests," interests other than mine, but that is not the way it is in the real world.

In the real world, physicians have had little input into national health policy. They do not regard themselves as purchasing agents, and some have conflicts of interest in that they believe their knowledge entitles them to some margin of profit. Maybe that will change when the public realizes government has little control over the big elephant, and when they see costs rise sharply under the health reform law and access to doctors , particularly for Medicare and Medicaid patients, dwindle and reaches crisis proportionsn.

Maybe the medical industrial elephant occasionally puts profits before people. On the other hand, I cannot help but notice premium costs are the highest in the land and health care waits are longest in Massachusetts, the prototype of the nation’s future health system, where the not-for-profit elephant reigns supreme and where the presumed elephant trainers were educated.

Besides, the federal bureaucracies can be a white elephant – large, lumbering, bungling, wandering and wasteful – with costs out of proportion to its worth.

Scuttlebutt from a Grassroots Medical Society Meeting

Last night I attended a medical society meeting bringing together three Connecticut county medical societies. The meeting featured a debate between a Republican and a Democratic candidate for Congress. I will not comment on the candidate’s respective positions on the health reform law. Instead I will share with you my reading of the 250-person audience.

Unrest among Physicians

Practicing independent doctors are restless. With malpractice reform and the Sustainable Growth Rate (SGR) formula unresolved, physicians fear for their future. Nobody is being fooled here. Doctors know delegating malpractice reform to a demonstration project just kicks the can down the road. And everybody knows on November 3 Congress will temporarily fix the SGR by keeping it the same or raising it slightly. Doctors want the SGR junked. The candidates agreed, but no one spelled out a concrete alternative. How to pay doctors remains a political conundrum. One physician said that the AMA had failed to represent doctors effectively, and no national organization had stepped forward to fill the void.

Uneasiness about Accountable Care Organizations

The sentiment on the push for accountable care organizations (ACOs) was that these organizations are a formula for hospital and government control. One observer snidely commented, “They ought to be called Accountable Control Organizations.” He said to me ACOs are just another name for PHOs (Physician Hospital Organizations) and for capitated payments. Both concepts, he said, had failed in the past and would not gain traction this time around. There were doubts hospitals and doctors could effectively “collaborate,” without hospitals seizing control because of their superior administrative, capital, and marketing skills.

Decline of Private Practice

Among those to whom I chatted, there was a sense that private practice is in freefall because of lowered reimbursements, rising expenses, and political and economic forces stacked against private practice. These forces include rampant hospital employment of physicians, increased regulation and scrutiny of performance, demands for installation of expensive electronic medical record surveillance systems, and a tendency among government reformers to either dismiss the role of private physicians or to portray independent practitioners as scapegoats responsible for rising health costs. Physicians feel the call for patient-centered care, as exemplified by care centered in “medical homes,” had been ignored. This seemingly was affirmed by the fact neither candidate for Congress was aware of the medical home concept.

Medical Care Now Strictly a Business

There was a feeling of despair that medical care had become a business rather than a profession managed by outsiders who had no sense of what transpires in the exam room or at the bedside. As one physician noted, “This reform bill is about insurance reform not health reform. It has nothing to do with the patient-doctor relationship.” Another commented,” The reform bill reinforces the status quo. It skips over the fact that we are an over-specialized nation with a doctor shortage.” The reform bill, many felt, focused too much on the special business interests, rather than on the health interests of physicians and patients and the fundamental reasons behind high and rising costs.

Summary

This was a glass half-empty meeting.

Disgruntled Physicians and Unhappy Hospitals

Preface: The following appeared as an Op-Ed piece in the New London Day, the leading newspaper in Southeastern Connecticut. Its purpose was not to criticize but to explain what is at stake for hospitals and doctors.

In her October 8 piece in The New London Day, “Disgruntled Physicians, L&M to Discuss ‘Adversarial Relationship’, Judy Benson does an excellent job describing the tensions between L&M hospital and its medical staff.

As someone who has written a book on this subject, Sailing The Seven “Cs” of Hospital –Physician Relationships; Competence, Convenience, Clarity, Continuity, Competition, Control, and Cash (Practice Support Resources, 2006), I would like to point out these tensions are inevitable and are not unique to New London.
Why inevitable?

• Hospitals and their medical staff compete for business, sometimes referred to as “lines of service.”

• Over the last decade or more, much of this business has shifted outside hospital walls into the outpatient arena, where outpatient diagnostic and surgical centers now proliferate, some owned by hospitals, some owned by physician investors.

• Improved technologies and less-invasive techniques make it possible to perform these procedures quickly during the day without a hospital stay with short recovery times.

• Lower reimbursements, increased regulations , and higher expenses threaten the economic survival of both hospitals and doctors, who find themselves fighting over a smaller economic pie in a zero-sum game, meaning when one side wins, the other loses.

• Hospitals and doctors have vastly different organizational structures and cultures. Hospitals are hierarchical corporate organizations, with one person and an executive team at the top. Physicians are more democratic structures, with each doctor having a potential veto vote. These differences make for awkward, time-consuming decision making.

• The Affordable Care Act, often referred to as Obamacare, passed on March 23, 2010, at its core, will systematically decrease payments to hospitals and doctors over the next ten years, with Medicare payments projected to be less than Medicaid payments by 2019.

Medicare and Medicaid now cover 110 million Americans and are the financial lifeblood of hospitals and some physician practices. Most hospitals and most physicians cannot simply “opt-out” of seeing government-subsidized patients. Hospitals and physicians must adjust.

One of these “adjustments” is hospitals hiring more physicians and forming their own physician networks. This threatens the remaining “independent physicians,” who own their own practices and who do not have the marketing power or capital of hospitals.

Another “adjustment ,” favored by the Obama administration, is the formation of “accountable care organizations.” In these organizations, hospitals and doctors theoretically collaborate to provide more “efficient care” with cost savings for Medicare patients. Hospitals and doctors share the savings. These organizations are in their infancy, and many obstacles – bureaucratic, anti-trust, legal, and power-struggles – lie in their path.

Whatever happens as the result of new health reform law, it will change the landscape of medical and hospital practice forever, as I explain in my book Obama, Doctors, and Health Reform (2009).

Accountable Care Organizations as Private Practice Killers

Writing in the New York Post today, Scott Gottlieb, MD, a physician and American Enterprise Institute resident fellow, says Accountable Care Organizations may kill private practice. Doctor Gottlieb is a partner in a firm that invests in health-care companies.

Gottlieb's reasoning is that the new reform law encourages doctors to leave their private offices to become salaried hospital employees. This makes it easier for government to regulate and manage doctors. The idea is to encourage doctors and hospitals to share financial savings to better coordinate care and reduce their use of costly medical services by giving them a lump sum to manage a group of patients.

In many ways, the ACO concept builds on the 1990s approach to "capitation," which the public and doctors roundly rejected, and in which health-maintenance organizations gave doctors a lump sum to care for a defined group of patients.

This “vertical integration” will force doctors to become employees of hospitals and health plans. These changes are underway. According to a recent survey of health executives, 74 percent said their hospitals or health systems plan to employ more physicians over the next 3 years, and 61 percent plan to acquire medical groups.

The doctor-recruitment firm Merritt Hawkins said that 45 percent of physician job searches last year were for direct employment of a doctor by a hospital, up from 23 percent in 2005.

In 2005, two-thirds of medical practices were doctor-owned. By next year, the share of practices owned by physicians will drop below 40 percent, according to data from the Medical Group Management Association. Hospitals or health plans will own the balance of doctor practices.

One can argue whether hospital or health plan employment of doctors is a good or bad thing.

I am dubious because it stripes doctors of the ability to make “independent decisions,” based on what is good for the patient versus what is good for the hospital.

Secondly, ACOs are really capitation re-visited, a return to rigid managed care, a concept the American public roundly rejected in the 1990s.

Also it is well known that hospital fees are much higher than those charged by independent doctors in outpatient settings and in their offices. I do not think ACOs will lower costs.

Furthermore, accountable care organizations, by definition, will be large organizations, and can negotiate higher fees because of their market leverage.

Finally, accountable care organizations are bureaucratic centralized entities, while most market trends and disruptive innovations favor decentralization.

The Top Ten Disruptive Health Care Innovators

The term “disruptive innovation” has been around 7 years, since Harvard Business School professor Clayton Christensen introduced it in his book The Innovator’s Dilemma in 2003. A disruptive innovation is cheaper, more convenient, and easier to use than existing approaches and changes the world for the better.

Here, according to Fiercehealthcare.com, are the top ten health care innovators.

1) Asif Ahmad - Duke University Health System- - VP of diagnostic services and CIO, who designed and implemented a Computerized Physician Order Entry System for entire Duke System, reducing potential harmful events by 45%.

2) Donald Berwick, M.D., Centers for Medicare and Medicaid Services- Administrator, who in 2004 as CEO of Institute of Healthcare Improvement launched a safety campaign that was said to have saved 122,300 lives in hospitals. He is now engaged in promoting “meaningful use” of EHRs, which , he believes, will save millions of more lives.

3) Jonathan Bush - athenahealth- Chairman and CEO. He and his team have developed a web-based model based on health plan rules that that helps physicians understand how to collect more money faster from insurance companies.

4) Ryan Howard - Practice Fusion - He founded EHR company in 2006 that produces a “free” EHR to physicians who agree to have advertising appear on EHR screen. The EHR is designed for small practices and claims 40,000 users.

5) Don Jones - Qualcomm – VP of business development. Jones has pioneered wireless health care. He has commented that 50% of primary care doesn’t need to be delivered face-to-face and asks,”Why leave home? Why leave your desk when you don’t have to?”

6) Edward Marx - Texas Health Resources – Marx has embraced social media – Facebook, Twitter, and YouTube – as vehicles for health information exchange. He believes the social media will be the saviors of independent practices.

7) Deborah C. Peel, M.D - Patient Privacy Rights Foundation – Doctor Peel is nation’s best known advocate of privacy of health information, even if it holds back national push for EMRs. She is fixture at Congressional hearings and on Health IT speaking circuit.

8) Patricia Skarulis - Memorial Sloan-Kettering Cancer Center – VP and CIO. She has helped develop the largest single data warehouse of any organization. It contains 1 million cancer patient records. She has also implemented wireless speech enabled communication network throughout organization.

9) Evan Steele - SRSsoft- CEO. He has developed and marketed his main product, SRS Hybrid EMR, to “high performance” specialties like cardiology, orthopedics, and ophthalmology. He believes most current EMRs are too skewed to primary care and have reduced physicians to entry clerks.

10) Allen Wenner, MD. - Primetime Medical Software. A family physician who created Instant Medical History, which allows patients to enter medical histories online, saving physicians time, enhancing productivity through greater patient throughput, permitting more accurate coding, protecting against malpractice, and leading to more accurate diagnosis.

Summary

What do these innovators share in common? All focus on Internet applications, All think outside the box, but work inside the box. All either promote. note shortcomings, and suggest improvement of electronic health records. And all show one person can make a difference by aiming high.

Problems of Preaching Patience in the Impatient Age of Health Reform

Obama is preaching patience in an impatient age.

Peter Baker, “The Education of a President,” New York Times Magazine, October 17, 2010

When I started this blog three years ago, I named it Medinnovation. I had just published Innovation-Driven Health Care (Jones and Bartlett, 2007), and I thought of the blog as a sequel. Then politics intervened, namely the 2008 presidential campaign and first two years of the Obama presidency. I have been speculating ever since what health reform means for grassroots Americans.

President Obama advocates long-term thinking. He seeks to lay down foundations for the future so American can compete in a global economy. His code language goes like this: We must pull ourselves out of the “economic ditch”dug my Republicans. We must “move forward” by embracing “progressive" policies. Above all, we must "Stay the course." Be patient. Good times for you and me will come.

The problem with this policy is that Americans are an impatient people. We’re in a hurry. We like quick results. And we’re always unconsciously asking, “What have you done for me lately?” As the November 2 election nears, the answer to the majority of Americans seems to be, “Not much.”

We are growing impatient as the economy stalls, unemployment persists, national and personal debts grow, and health costs escalate. Despite the Obama administration's reassurances and projections health costs will level off over the next ten years, this year costs will go up an average of 10% for most, and 20% or more for many in individual and small group markets.

Four years is a long time to wait. Not until 2014 will 32 million more of the uninsured be insured and will other benefits become manifest.

It is an especially long time to wait for,

• small and large businesses, who must plan annual budgets, who need to know how high taxes and health reform penalties and fines will be next year, what a bite health reform mandates will take out of their bottom lines, and whether or not they can afford to offer health benefits for their employees.

• health consumers and patients, who must plan their household budgets, who must decide whether to visit their doctor or have that procedure done, who want to know how much more health costs their employers will shift to them, what their next health plan might be, whether they will even have a plan, and how high their premiums, co-payments, and deductible will be.

• physicians, who still await the decision of Congress whether to cut 21% out their Medicare pay this year and 26% next year, whether they can afford to accept new Medicare and Medicaid patients, whether they can remain in practice with lower reimbursements, more regulations, and higher expenses, whether they should seek employment by hospitals or larger groups, or whether they should retire or seek a career outside of medicine.

Patient waiting for hope and change are said to be virtues. But how long to wait is another matter altogether. Dashed hopes, delayed results, and dwindling patience are inseparable and more often than not lead to explosive impatience.

Health Reform Holes You Can Drive a Truck Through

Huge holes exist in the health reform law you can drive an 18-Wheeler through. These holes are not “devils in the details.” They are so obvious nobody talks about them. They are the proverbial elephants in the room. I suppose this makes sense. It takes an 18-wheeler to transport an elephant.

Here are my six candidates of the biggest health reform holes.

One, the government’s lack of leverage over health insurers. President Obama and Kathleen Sibelius can talk all they want about the evil health plans and how they are outrageously raising premiums, on average by 10% to 20%. But other than jawboning and demonizing, the Obama administration have little control over the rates. It is fine to say the health plans must cover those with pre-existing coverage, young people up to age 26 under their parents’ plans, and to remove caps on lifetime expenses, but the plans can ignore the government and set the rates to cover the increased expenses engendered by government mandates.

Two, the government’s lack of appreciation that the U.S. is center-right not a center-left nation. At its core, America is a middle-class country that believes in limited government, limited taxes, and limited intervention in private affairs and private behavior. Two particularly sore points are; one, the individual mandate, which requires everyone to pay at least $700 , or 2.5% of income, and two, the provision that every business must submit a 1099 for every $600 spent for supplies or deserves, whether or not related to health care. In both case, the IRS may crack down and pursue non-compliance. These two things strike Americans as government meddling. These government actions, in my opinion, accounts for much of the lack of approval of the Obama agenda and for the rise of conservatism, the Tea Party movement, and the embrace of the GOP over Democrats. The public wants Washington to swing to the center.

Three, the government’s lack of price controls. Everybody but Washington seems to know you cannot expand coverage for the uninsured by 32 million(and Medicaid by 16 million) and save money while cutting Medicare by $575 billion. And you cannot save money when 58 million baby boomers, starting in 2011, will start becoming eligible for Medicare. Saving money under these circumstances is simply counter-intuitive. Congress lacks the political will, and no combination of taxation, fines, penalties, and punitive savings imposed on the health industry will make up for the deficit.

Four, the government’s incompetence in containing fraud and abuse. Fraud and abuse costs Medicare an $60 billion a year, over 11% of its budget, and that may be an underestimate. Someone has calculated that Medicare fraud and abuse consumes 7 times more money than the combined profits of the 14 largest health insurers, who are largely free of rampant fraud and abuse characteristic of Medicare. Medicare is too tempting a target for criminals who can use stolen Medicare IDs, and who know that Medicare is obligated to pay claims in 30 days.

Five, the inability of the States to pay for millions of Medicaid recipients scheduled to join the state rolls in 2014. Millions more may enroll before then when patients with current plans learn their new plans must meet government mandates that require comprehensive coverage and higher premiums they cannot afford. About 70 million will be required to change plans, and many of them will switch to Medicaid. Few Americans appreciate the Medicaid burdens States must shoulder. In California, Medi-Cal, its Medicaid program, cover 1/3 of children and 1/10 of adults under 65, 2/3 Of nursing home residents, and 2/3 of expenses of public hospitals, while costing the State of California. $46 billion.

Six, the failure of government to act to correct the looming access problem to physicians. This access crisis is already being felt in Massachusetts, said to be the model for Obamacare. There patients now have the longest waiting times in the nation to see a doctor or to seen in emergency rooms, and half the primary care physicians in the state no longer accept new patients. This is primarily a supply-demand problem. There are not enough doctors to see the flood of new patients, and the reform law does virtually nothing to increase the supply of doctors.

Texas The Land of Malpractice Reform and Jobs

If I owned Hell and Texas, I’d rent out Texas and live in Hell.

P.H. Sheridan, in a speech at Fort Clark, Texas, 1855

Maybe it’s my imagination, but I have the distinct feeling the Northeast, Washington policy makers, and the national media look down their collective noses at Texas. To them, Texas is the land of cowboy intellect, “All hat and no saddle,” the “incurious “President George W. Bush, the assertive Karl Rove, and conservative insensitivity.

Texas is also the state to which doctors are flocking in record numbers because it passed caps in malpractice rewards in 2003. When I asked Lou Goodman, president of the Physicians Foundation, a national organization representing doctors in state medical societies and president and CEO of the Texas Medical Association of what he was the proudest, he replied.

“ Now being used as a national model, our 2003 tort reform effort falls into the category of a major accomplishment for the state of Texas. That reform put a cap of $250,000 for noneconomic damages for physicians, a $250,000 cap for hospitals, and another $250,000 cap for a second hospital or nursing home. This is referred to as a stacked cap ($250,000 for each party). The total is $750,000, but only $250,000 of that falls on the doctor’s side. “

“This model appeals to legislators, because it’s fair and differentiates among physicians and other providers in the system. The model also helps attract physicians to a state. Before we passed our tort reform, Texas was losing its liability carriers. But now we have 15 or more in the state, all competing for the business.”

“Most important, access to care was shrinking in rural and other underserved areas. But during this past year, the number of physician licenses increased from 2000 to 4000, and physicians—both primary care and specialist--are now settling and practicing in under-served parts of Texas, such at the Rio Grande Valley. The specialists no longer restrict access to high-risk procedures through fear of liability penalties. Patients are getting better care, and highly specialized procedures are being done. This is all attributable to the tort reform legislation.”
Now Texas is known for something else. It is doing better than any other state during the recession in creating jobs. More than half of the net new jobs in the U.S. during the past 12 months were created in the Lone Star State

Here’s how Rich Lowry, editor of the National Review, explains the Texas performance,

“According to the Bureau of Labor Statistics, 214,000 net new jobs were created in the United States from August 2009 to August 2010. Texas created 119,000 jobs during the same period. If every state in the country had performed as well, we'd have created about 1.5 million jobs nationally during the past year, and maybe "stimulus" wouldn't be such a dirty word.”

“What does Austin know that Washington doesn't? At its simplest: Don't overtax and -spend, keep regulations to a minimum, avoid letting unions and trial lawyers run riot, and display an enormous neon sign saying, ‘Open for Business.’ "

Maybe the Obama administration could learn something from the Texas model, if they could only keep their noses out of the air, and their eyes on the ground.

A Physical Exam Tale

I have a physician friend who told me the following tale.

A veteran nurse, well-versed in the art and science of diagnosis, came down with a sharp nagging supraclavicular pain.

Finally, when she could stand the pain no longer, she went to the emergency room, where she saw five specialists, who did a battery of imaging and blood tests to no avail.

Finally, she happened to visit my friend, a neighbor and a physician, and shared her frustrations.

He asked , ‘Where’s the pain?” She pointed to the source of the pain. He palpated the area of the pain, and he said, “There’s a mass here, and it’s about 2 cm by 5 cm. A biopsy needs to be done."

As it turned out, none of the 5 specialists had done a physical.

The moral of the tale is: do a physical before you rely on technology. About 70 % of the time, the history and the physical reveal the diagnosis.

If you want to learn more about the dying art of the physical, read “Physician Revives a Dying Art: The Physical,” NYT, October 11.

Doctor Abraham Vergese, a Stanford Professor of Medicine, tells how he teaches the physical to medical students.

He informs them the most important part of the stethoscope is between the ears.

Some doctors would gladly let the exam go, he says, claiming technology renders it obsolete and that there are better ways to spend their time with patients.

Some students admit they do the exam as a token gesture, because patients expect it.

Doctor Vergese is out to save the physical exam because it seems to be disappearing as an art in an era of CT, ultrasound, M.R.I., and countless lab tests.

As an example of what he teaches, Vergese asks students, “What if the patient says, ‘Whatever you do, Doc, don’t bump the bed?' ”

Vergese answers, “Consider peritonitis.”

In some cases,listening, observing, smelling, touching, and palpating, works better than high tech.

When all else fails, consider the physical and listen to what the patient is saying. You never know what you might hear, find, or feel.

The “We-They” “Do It Our Way, Now” ”We’ll Tell You Later What’s In It ,” “It’ll be Great” Approach to Health Reform

Theirs not to reason why. Theirs but to do and die.

Alfred North Tennyson, Charge of the Light Brigade

Why is Obamacare floundering? Why do Americans oppose it? Why have 20 state attorney generals brought a lawsuit challenging its constitutionality? Why, if they regain control of the House, are Republicans threatening to hold hearings designed to dismantle it one piece at a time, defund it, and even repeal it?

The reasons why may lie in narcissistic attitudes. These attitudes include: It is We against They. It is Our Way or the Highway. Our Way is the better way. Only Our historic legacy counts. Do it now when We have the majority. Pass it now, read it later. We have a mandate. The American people will believe whatever We say. The Devil with the details, the details will take care of themselves.

Overconfidence, when mixed with intellectual arrogance, a feeling of moral superiority, and ignorance of how what you do impacts people on the ground, in this case, doctors and patients, can be a dangerous thing. So can ramming legislation through under questionable circumstances.

Revenge can be a powerful emotion.

Details can be important. So can unexpected adverse consequences, such as soaring costs and millions of people losing their present health plans. Reform is costing more than thought. Insurers are raising premiums and dropping out of the market. Employers are dropping coverage because they regard it as unaffordable. Let the government take the hit.

Insured Americans are screaming foul for fear of losing their present plans , and seeing costs elevate and benefits shrink as they face the mother of all open enrollments seasons (“What’s Happening to Your Health Plan, WSJ, October 9).

The States, who will bear the costs of Medicaid expansion, implementing health-insurance exchange, and reorganizing their insurance markets , are dragging their feet as they contemplate paying for millions more Medicaid recipients and installing health exchanges ( “How to Reform Obamacare Starting Now: States should steer the mandated health-insurance exchanges in a pro-market direction and dare Washington to stop them,” October 14, WSJ).

The lawsuit of States against Obamacare may proceed (“Challenging Health Law, Suit Advances,” NYT, October 14).

Physicians believe they will be negatively affected and are threatening to drop or refuse to accept new Medicare patients (“Obamacare and Its Impact on Doctors, “WSJ, July 19, 2010.

Expected-to-be Republican Majority leader John Boehner announces plans for hearings on Obamacare (“Today's Opinions: Broken Promises, Boehner's Plan B And Implementing Reform”, Kaiser Health News, October 14).

Promises may be hard to keep when you have two years to go and a determined political opposition, maybe soon to be in the majority, and bent on payback.

Seven Ways Medical School Education Has Changed in the Last 50 Years

In a perceptive essay in the October issue of Connecticut Medicine commemorating the 200th year of the Yale Medical School, Robert H. Gifford, MD, Emeritus Professor of Medicine and former Deputy Dean of Education at Yale Medical School, describes changes in medical education over the past half century. Doctor Gifford, who has been educating medical students during those years and who even today serves on the admissions committee, describes these changes and observes that many of them have been profound.

One, competition for admission has increased. In 1957, there were 1000 applicants for 80 slots. In 2010, 4000 students applied for 100 slots. IN 1957, most applicants were white men. IN 2010, almost half were women, 15% were minorities, and 30% described themselves as Asian.

Two, Yale now offers a greater variety of support services to make the process of medical school education more pleasant and personal. The school now has deans and directors of admissions, student affairs, student research, minority affairs, women in medicine, and financial aid.

Three, the knowledge base required of students has expanded exponentially. The school has responded with small group seminars, courses in medical ethics, health-care policy, and legal medicine, and has integrated and centralized teaching. Today, PowerPoint slides dominate lectures, students gather material from the Internet, students come to lectures bearing laptops. Hours spent in the dissection room are down, and time spent on computerized manikins and simulated experiments are up.

Four, the patient mix is different. Hospitalized patients are less available for teaching fundamentals. The patients are sicker, more complex, and are rushed in and out of the hospital. To compensate, the school now uses trained “patients,” or actors, known as “standardized patients,” and medical students practice the physical exam on one another.

Five, there is more formal teaching , with lunchtime conferences, attending rounds, more resident staff supervision. At the same time, there is less “scut” work for medical students – blood drawing, lumbar punctures, bladder catheterizations, parancenteses, examinations of blood smears, urine sediments, Gram stains of sputums, less handwritten write-ups for the medical record, less teaching by outside practitioners.

Six, today’s medical students are more interested in preparing for careers in surgical subspecialties, radiology, and dermatology than in family medicine, internal medicine, or pediatrics. The shift has been dramatic. Graduating students at Yale in 2010 had an average debt of $132,000. Students now select specialties with regular hours, benefits, time-off for family, and higher incomes. The most popular specialty choices are emergency medicine, radiology, orthopedics, neurosurgery, ophthalmology, otolaryngology, and dermatology . Qualifying for these specialties has become competitive, and students virtually disappear for two to three months at the end of their second year to prepare for Part I of the U.S. Medical Licensing Exam.

Seven, legislation limiting resident work hours has created problems . Hospitals must hire more residents. Residents now must “hand off” patients to incoming residents to comply with rules limiting hours. Because of increases in patient turnover and sicker patients , this creates a frenzied environment complicated by the resident’s administrative burdens to admit, discharge, arrange for tests, contact consultants, search for results. Residents find themselves spending more time behind a computer rather than at the bedside.

Summary

Doctor Gifford sums up medical school changes over the last 50 years as follows.

“In summary, there have been significant educational improvements, particularly during the first two years of medical school. Students today are more accomplished, more diverse, and there is now a focus on the highly relevant basic science of medical practice, including medical ethics and public health. The curriculum has been centralized and coordination between various departments has vastly improved as a result. The number of lectures has been reduced, replaced by more effective small-group, problem-solving seminars. Support services for students has made medical school a much more pleasant experience.

On the other hand, the dramatic shift in the nature of hospitalized patients has adversely affected traditional bedside teaching that was such an important part of medical education in the past. Extensive diagnostic evaluations now take place in an ambulatory setting. Hospitals and medical schools have not yet found a satisfactory way to integrate trainees into these venues.

Finally, there has been a marked decrease in the number of graduates seeking careers in primary care, a phenomenon influenced by huge educational debts, the attraction of being able to master a defined discipline, and the desire to combine medical life with a reasonable life-style.

On balance, although the overall education of our future doctors has definitely been improved in the last fifty years, the erosion of fundamental clinical skills has been a disappointment.”

Health Reform Elephant

I sometimes think of health reform as an elephant , sometimes as a group of elephants.

Elephants are big. They are the largest land mammal on the planet. In Angola in 1956, a male weighed in at a record 12 tons. The health system is big. It costs $2.5 trillion a year and employs 14 million Americans. Health care is easily the largest elephant in the U.S. economy.

Elephants are so big nobody can miss them. Everybody is aware of them, especially when they roam outside their native habitat. An elephant that escapes from the circus is called a rogue elephant. Many consider the health system a rogue elephant , because it threatens to ravage the economy.

But because the health system is so important – everybody during their lifetime needs the system, we have tended not to talk openly about it until now. The system is even sacred to some, i.e. everybody likes their doctor, their hospital, their Medicare, and their health plan. But the system is so obvious, so taken for granted, and so personal that it is uncomfortable to discuss.

Hence, the health system has become known as the elephant in the room. This is not accurate. The health system has multiple elephants in the room – each with its own agenda, each with its own view of the system.

One of these elephants is the small medical practice. Seventy percent of doctors practice in groups of ten or less. These doctors resist computerizing their practices, which the Momma elephant, the government, wants them to do, so she can control, track, and rationalize their actions.

But the doctors resist, and for that reason, small practices are deemed “the elephant in the room” because they are so big in the health system they block computerization of the system as a whole.

The public itself is an elephant in the room. Over 60% oppose the health reform law, because of the questionable circumstances under which it was passed and because it threatens loss of their policies and elevates the cost of care.

Elephants are complicated, intelligent, social animals. There are Asian elephants, African elephants, forest elephants, savannah elephants, each with their own habitats, roaming grounds, and social interactions. Similarly, the health system is regional in a heterogeneous nation with different cultural views. Each participant in the system – physician, patient, payer, policy maker, supplier, and caregiver – may be blind to the views of others.

The health system is like the story of the elephant and the blind men:

Once upon a time, there lived six blind men in a village. One day the villagers told them, "Hey, there is an elephant in the village today."

They had no idea what an elephant is. They decided, "Even though we would not be able to see it, let us go and feel it anyway." All of them went where the elephant was. Everyone of them touched the elephant.

"Hey, the elephant is a pillar," said the first man who touched his leg.

"Oh, no! it is like a rope," said the second man who touched the tail.

"Oh, no! it is like a thick branch of a tree," said the third man who touched the trunk of the elephant.

"It is like a big hand fan" said the fourth man who touched the ear of the elephant.

"It is like a huge wall," said the fifth man who touched the belly of the elephant.

"It is like a solid pipe," Said the sixth man who touched the tusk of the elephant.

Elephants move in large herds. So too do the two political parties – Democrats and Republicans. Even though the Democrats travel in elephant herds- minorities, unions,the young, feminists, idealists, collectivists - they call themselves donkeys to show their independence and to distinguish themselves from Republicans, who use the Elephant as the symbol of their party.

The two parties are like two mighty elephants banging away at each other. The battle is carried on at high altitudes. It is accompanied by grunts, guttural noises, and guffaws. And nothing much happens for 22 months, the average gestation time for elephants. In the case of the health reform debate, although both seek some form of reform as the final offspring, the debate is loud and acrimonious, and the gestation period is scheduled to last ten years.

Grassroots Report -Physician Uncertainties and Supply Demand Disequilibriums’ .

It has been more than six months since the Health Reform Law passed, and a cloud of uncertainty hangs over the heads of grassroots physicians.

Who are these grassroots physicians? They are the 700,000 physicians in urban, suburban, and rural America who deliver care to 310 million Americans.
They work singly, in large and small groups, clinics, hospitals, emergency rooms, academic centers, diagnostic and surgical centers. They are primary care physicians and specialists.

Some are employed on salary by large organizations. Some are owners of their own practices. Most think of themselves as independent professionals. Most make adequate incomes, With mounting physician shortages, most are in demand and have no problem finding jobs.

Uncertainties

So why the uncertainties? I could cite many reasons- America’s economic malaise, the growing national debt, concerns about their futures and the future of their children, Congress leaving town without passing a budget, failures to pass malpractice reform or to resolve the SGR, challenges to the constitutionality of health reform mandates, and implications of the outcome of the mid-term elections.

But the main source of the uncertainty, as I see it, is the supply side-demand side disequilibrium, which is my way of saying the health reform law doesn’t make economic sense to grassroots physicians.

Increased Demand

The supply of physicians will be unable to meet the demand for their services from 32 to 34 million newly insured, from 70 million currently insured with expanded benefits, from 58 million baby boomers soon to join the Medicare rolls.

Essentially, the reform law increases the demand for physicians, nurses, and paramedical personnel without increasing the supply. There is nothing in the law to expand the number of medical school graduates or residency slots.

And the reform law purports to expand entitlement programs without increasing costs. The law indicates it will bend the cost curve lower than it might have been without reform. The government says it will bend the curve by cutting $575 billion out of Medicare, lessening fraud and abuse, introducing EHRs, coordinating care, having physicians work in teams, decreasing reimbursements for physicians and hospitals, and increasing physician effectiveness and efficiency through a series of pilot programs.

No Cost Controla

The problem with the law is that it does little to control costs. Indeed, it defies the laws of economic supply and demand. If economic studies are to be believed, it will double the demand for care without increasing the supply of doctors, nurses, and paramedical personnel who deliver the care.

This is where the physician uncertainties kick in. How do you simultaneously increase the demand for physician services while decreasing physician reimbursements? How do you meet the provisions of the law without increasing the supply of physicians? The logic is that physicians by using EHRs, being judged by performance data, and joining large accountable care organizations, will become more effective, efficient, and productive.

Illusions of "Productivity"

But, as economist John Goodman explains in his blog on October 11, “ Once you get past the rhetoric about doctors becoming more ‘productive,’ you will discover that the new law’s mechanism to control Medicare spending is to ratchet down payments to doctors and hospitals.” According to the Office of the Medicare Actuary, Medicare payment rates will steadily decrease and will fall below Medicaid rates by 2019 and drop increasingly below Medicaid in future years.

So how will the reform law work? Normally , when demand exceeds supply, the income of suppliers, in this case, physicians, rise. If supply is prevented from increasing, overall prices rise even more. Which is what is happening, premiums will increase by 10% this year.

What is government to do? It can dither and delay the SGR fix, postponing the inevitable need to pay doctors more because of increased demand for their services. It can squeeze doctors even more by cutting Medicare fees for high ticket specialists, like cardiologists and orthopedic surgeons. It can pay token bonuses to primary care doctors, hoping that may increase their supply at the margins. It can delay solutions to malpractice reform, by conducting demonstration projects.

Meanwhile, at the physician grassroots level, the reform law is likely to exaggerate the physician shortage, drive more physicians out of Medicare and Medicaid markets, create a physician access crisis, and defy the laws of supply and demand by ignoring market forces.

Physician Mindset, 2010 – 2014

The Affordable Care Act will start to roll out between 2010-2014. Given the volatile political scene, no one knows what this portends for physicians and patients. The only certainty in the new term is higher costs for all. But the uncertainty doesn’t dissuade a quasi-futurist like me.Whatever happens, the practice landscape will never be quite the same again.

For a piece of writing to be effective, you should choose a a suitable design and hold to it. For today, my design is 11 mindsets outlined in John Naisbitt’s book Mind Set!

1. While many things change, most things remain constant - I do not expect things to change radically or rapidly for physicians. Medicare and Medicaid will continue to be the big payer. Medicare will still pay 20% less and Medicaid 40% less than private payers. More doctors will stop accepting new Medicare patient/ Government will not come to grips with the Sustainable Growth Rate (SGR) for fear of adding to the bloated deficit. It will make annual fixes to quell any potential voter rebellion triggered by a growing physician shortage.

2. The future is embedded in the present – The best chroniclers of the present are newspapers. I read them every day. If you want to read multiple papers, go to the Internet. A good source is Real Clear Politics. Each day it identifies liberal and conservative articles . It also publishes the average of the big political polls. Right now conservatism is in the ascendancy, and the chances are high the reform bill will change in the early going. So don’t make any radical plans based on the present.


3. Focus on the score of the game - In politics, we keep score by watching daily polls. Today, the poll averages indicate Republicans will take 50 of 100 Seats in the Senate , 245 of 435 House seats, and 31 of 50 governor ships. These Republican gains are iimportant because Democrats advocate government solutions while Republicans favor market-based approaches – health savings accounts, shopping for plans across state lines, and malpractice reforms. Watch the polls. Don’t leap too quickly to embrace Democratic priorities – installing EHRs (electronic health records) and rushing to form AC0s (Accountable Care Organizations). But investigate these options. They may come with either party in control.

4. Understanding how powerful it is not to have to be right – Here I would not worry too much about being politically correct. It is, course, politically correct to be on side of “patient-centered care.” More times than not, patients still listen to physicians as the last resort. And it is politically correct to believe the Internet will correct all ills and mal-performances . Don’t believe it. The Internet can’t track the billions of patient-doctor interactions, and data alone will never be a useful tool for separating good from bad doctors.


5. See the future as a practice puzzle – The health system is the most complex puzzle known to man – a whirling Rubik’s Cube with thousands of moving, interactive, people, institutions, and market and political parts, each with its own agenda. Look for the pieces that fit your part of the puzzle. Don’t forget the Internet as an important part of the puzzle for marketing your practice, pleasing your patients, educating them, and tracking them. The Internet is capable of lifting all clinical boats.

6. Don’t get so far ahead of the parade that people don’t know you’re in it – In an interview, Tom Coburn, MD, the Senator from Oklahoma, told me physicians have nothing to worry about with reform if they treat their patients right. I suspect he is right. All health care is local. Most referrals occur by word of mouth. If you have a good reputation in the community, business will be brisk. As Susan Baker Keane, an expert in doctor-patient relationships, noted in her book Managing Patient Expectations, you will do fine if you heed patient expectations.


7. Resistance to change fails if benefits are real – When you make changes in your practice, make it clear to your staff and your patients why you are doing what you’re doing. If , for example, you are installing a practice web site, tell everybody you are doing it to facilitate patient education, office hours, prescription refills, and understanding of the services you offer. Make the benefits of what you’re doing clear, and people will embrace change. Some reform changes are good , i.e. coveraging the uninsured and those with pre-existing illness. Be balanced in your criticism.

8. Things that we expect to happen always happen more slowly - Almost all change is evolutionary, not revolutionary. Most of the significant reform changes will not occur until 2014. You have time to adjust. But study the changes you seen coming down the pike, and educate your patients, and keep them informed. Study closely your options – ceasing to accept new Medicare patients and going into a concierge practice – before deciding what to do. Some developments – a Supreme Court decision declaring the reform law based on the individual mandate – could change everything.


9. You don’t get results by solving problems but by exploiting opportunities- One problem posed by reform will be additional load of 32 million new Medicaid patients combined the physician shortage. How will you find enough time to see more patients? One way is to have patients create their own patient record by creating their own medical history via the Instantmedicalhistory.com. This software – based on the patient’s age, sex, gender, and chief complaint - creates a narrative history that is available to you before the patient enters the exam room. Experience with this approach at the Mayo Clinic and elsewhere indicates you can save 4-8 minutes per patient and see 5 or 6 more patients each day.

10. Don’t add unless you subtract - For what this means, I recommend reading a book The Successful Physician: A Productivity Handbook for Practitioners. The author suggests these addition-subtraction moves - instruct patient to write top three questions in advance; forbid interruptions; consolidate answering of phone calls and emails; encourage patients to ask questions about minor illnesses by email; have a nurse practitioner or physician assistant handle minor problems; delegate uncomplicated clinical tasks to others; ree-engineer – go into a solo practice with a lean staff, lean IT systems, and a lean space. In other words, add some things,subtract others, anything that makes you more productive.


11. Don’t forget the ecology of technology - Whether you like it or not, information technologies will change everything, and their applications and usefulness and popularities are changing and improving fast. At the very least, get yourself an office computer with broad band access. Consider installing an inexpensive or “free” EHR based on internet-based programs, thus allowing you to have an EHR with expensive in-office installations. Develop an office website. Add visual content, such as pictures of yourself and staff and rudiments of what procedures entail. Think about You-Tube, Twitter, and Facebook. Familiarize yourself with the IPad and e-prescribing. Think about other technologies – a portable ultrasound device for detecting abdominal masses or aneurysms, office dispensing of drugs, a portable cardiopulmonary device for evaluating patient for coronary artery disease and lung function.

Health Reform Dislocations

Dislocations – Putting out of place to put or force something out of its usual place or position.

Dictionary definition

Those of us who understood the economic disincentives that the health overhaul law set up warned of the dislocations it would create..'…The administration is going to be swamped with legitimate pleas for relief from its heavy-handed regulations that are causing massive dislocations throughout the health sector and employer community.

Grace Marie Turner, “The Tip of the Iceberg,“ Health Care Matters, October 8, 2010

I am not yet ready to call the Accountable Care Act a failure , but it does have dislocating consequences.

When Congress passed the health reform law on March 23, 2010, they slapped a number of mandates and regulations on individuals, health plans, and businesses.
The effects of these mandates and regulations are just becoming evident. They are causing “dislocations.”

For the purpose of this blog, I am using “dislocations” to mean forcing various health care stakeholders out of their usual places or positions.

• Among the young and others who chose to spend their money on other things besides health care, the law is forcing them to “dislocate” their money on health care to be spent for the rest of us. This may be a good thing if you consider yourself a progressive, But it is causing angst among those, particularly the young. They not have the money to spend on premiums. They may be healthy and feel they do not need health coverage. Nor do they believe they should bear the burden of paying for the sick.

• Among those firms in fast food industries who hire young generally health workers and cover their health benefits with limited “Mini-med policies,’ which cost far less than comprehensive government-qualified policies, there is outrage and the threat to drop benefits altogether. To prevent millions of more uninsured workers, the government has backed off and given McDonalds and 30 other large employers a waiver allowing them to bypass the law. MacDonalds, in a memo to HHS, recently announced it would be unable to meet requirements to cover 30,000 workers because it has a high employee turnover. It claimed it spent more on signing people up and carrying out other administrative duties than the new rules will allow (85% medical care and 15% administrative).

• Among those businesses in retail business, such as Home Depot, Walgreens, Staples, Disney and Blockbuster, The National Retail Federation announces millions of more policies are at risk for the same reason at Home Depot, Disney, Staples, CVS, Walgreens, Blockbuster, the National Retail Federation announces millions of more employees are at risk of losing health benefits because their employers could not afford to cover them under new government rules.

• Among 11 million senior covered by Medicare enrolled in Medicare Advantage plans, the reform law “dislocates” them back to regular Medicare, forces them out of audiology, vision, and dental coverage, and causes many of them to now pay for Medicare supplement plans, a big source of revenue for AARP, which endorsed the Obama plan.

• Among major international corporations, like John Deere, Verizon, Caterpillar AT&T, and others, have said they may drop drug benefits for retirees. Overall, Fortune 500 companies face losses of $4.5 billion because of Obamacare-induced tax hikes of these magnitudes - AT&T $1 billiom John Deere $150 million, Caterpillar $100 million, and 3M $90 million.

• Among 840,000 people covered by The Principal Financial Group, company, who said it is leaving the medical insurance business because it cannot afford to meet the requirements of the Affordable Care Act. The Act may be “affordable” in the eyes of Congress, but it is not affordable to those pay for coverage.

• Among millions of Americans, variously estimated at between 50 million and 100 million, who will either be “dislocated” because their employers will be forced to drop current coverage because of unaffordability or because they will be forced to switch and enroll in plans approved by government-dictated and run health exchanges. An estimated 16 million will be “dislocated” into Medicaid plans, which are having a hard time finding primary care physicians to deliver care.

These dislocations, of course, are not necessarily a bad thing, especially if you trust government to do the right thing and to select and/or to manage efficient health plans. But for millions of Americans, the reform act will disrupt the status quo and lead to sometimes confusing and often unwelcome changes with new doctors and new health plans.

What’s At Stake in Health Reform

For the last year or so, I’ve been working on a book Health Reform in Perspective. Amidst all the political strafing and posturing, perspectives on what reform is all about and where it is likely to lead have been lost. I have completed 20 chapters. It seems to me a little perspective can go a long way towards clearing the air.

Saving Medicare

Medicare is a financial train wreck headed towards bankruptcy. Saving Medicare will probably require raising the age of entry into the program, means testing of Medicare recipients, rationing of care , and limiting payments to hospitals and doctors. These are politically explosive issues. The Democratic approach is government dominance of the process with more entitlement programs; more focus on purging the system of fraud and abuse, and more electronic monitoring of physician performance. The Republican approach is more market-based, with patients having more “skin in the game,” more health savings accounts, more choice, and more competition. Although never the Twain may meet, at least, they haven’t so far, both sides agree some sort of reform is needed.

•Saving the Obama Presidency

The success or failure of health reform over the next two years may well decide whether Obama gets re-elected in 2012. If the Republicans win big in 2010 and succeed in defunding the Accountable Care Act and if health expenses for 270 million currently insured Americans skyrocket, if the these Americans have to switch to government-qualified policies they cannot afford, and if the health bill disapproval rating remains at 60%, President Obama may be in deep trouble.

Paying for the Cost of Expanded Coverage

Much hinges on the cost of expanded coverage. Everybody, including the American public, knows you cannot add "free" entitlements to 32 million more Americans without it costing more. You simply can't cover everybody in America at less cost. You can't extend coverage form 85% to 100% of Americans and save money. You can't graft the current reform bill on the old system of Medicare, Medicaid, and employer coverage without costing a bundle. You can, of course, say you're going to cut $575 billion out of Medicare, end fraud and abuse, and make the system more efficient by spending $27 billion on computerization of medical records, but who will believe you? The government has never cut entitlement costs or shown much of a penchant for efficiency.

Homogenizing and Standardizing Care and Ending Variation

Reform is about a federal effort to homogenize and standardize care, and to eliminate variations in care and its costs across Medicare regions. Why, ask the feds, should Medicare costs more in New York City or Miami than in Jackson, Mississippi or Grand Junction, Colorado. The answer, say critics, lies in socioeconomic differences and culture differences and expectations in different sections of this vast, diverse, continental nation. One size federal health system does not fit all regions, the suburbs and inner cities, urban and rural areas, the young and the old, the sick and the well..

Paying Doctors and Ending Fee-For- Service

The success of reform may depend on how you pay doctors. Critics say costs are too high because doctors abuse fee-for-service. The more they do, the more they make. Fee-for-service, in other words, leads to greed and unnecessary tests and procedures. Nothing is said about defensive medicine, about protecting yourself against the malpractice lawyer who will ask, "Why didn't you order such and such a test, doctor?" The solution, collectivists assert, is to herd doctors into large groups, integrated systems, and virtual organizations, to pay them on salary, to reward them for cooperating with each otther, to bundle hospital and physician bills, and to oay them on a budget.

Paying for the Newly Insured on Government Programs

Who will care and pay for the 32 million more newly insured, the 16 million new Medicaid recipients, the 56 million baby boomers becoming Medicare eligible, and the 50 million to 100 million switching to government-qualified plans or being unable to afford these plans. This is a legitimate question since a growing and looming physician shortage exists and physician surveys indicate 30% to 50% of physicians say they will not accept new Medicare or Medicaid patients given their understanding of government reimbursement rates and regulations required to treat patients in government programs. It is also a legitimate question for the states who budgets are nearly bankrupt from paying for the current load of Medicaid patients.

Lowering Costs by Raising Quality and Improving Outsomes

Reform is said to be about lowering costs by raising quality and improving outcomes. This may be aham. How do you raise quality and lower costs simultaneously? How do you improve outcomes, when these outcomes depend on patient life-style factors and socioeconomic status as well as physician behavior? It depends on how you define "quality." on a personal level, 89% of Americans say they are satisfied with the "quality" of their care. Most say they like their doctors. To say you can elevate quality by monitoring physician performance, weeding out unnecessary tests and procedures, and trusting bureaucrats rather than doctors, makes sense to payers, but it may not sell well to the public,

On Being Politically Incorrect and Realistically Correct about Accountable Care Organizations

I hate to be a spoilsport or to be politically incorrect. But I do like to be realistically correct. That said, I am dubious about the prospects of success for accountable care organizations (ACOs).

ACOs, its proponents claim, through internal payment arrangements between hospitals and doctors, will provide better, more coordinated, higher quality, measured care and will culminate in savings that can be shared by hospitals and doctors.

This concept sounds good, but as I write, ACOs only exist in the minds of reform theorists, and much needs to be done to make them a reality.

From my point of view, ACOs may represent a “pie-in-the sky” approach fraught with political and practical obstacles.

The problem, as I see it, lies in the assumptions about ACOs?

• A first assumption is that high costs stem from fee-for-service payments. These payments encourage doctors and hospitals do more. The underlying assumption here is that health care professionals can’t be trusted. What never seems to be taken into account is that the rest of civilized world works by fee-for-service payments and that the aging population and/or patients of lower economic status may require more intensive and costly interventions. Fee-for-service, in other words, may have little to do with higher costs.

• A second assumption is that costs will be lower with ACOs. I am dubious about this. Indeed, it seems to me, the larger the organization, the more dominant it is likely to be in the market, and the more likely it is to negotiate and charge higher rates.

• A third assumption is that primary care physicians, united in a common cause, will drive lower costs. The odds against this are apparent. Hospitals are hiring more and more primary care doctors on salary, and salaried physicians are likely to be beholden to their employers, who will encourage them to refer business to the hospital, where costs are higher than in the outpatient arena.

• A fourth assumption is that you can use sophisticated databases to control the economic behavior of hospitals and their medical staffs. In a lead article in the October 7 NEJM, “Becoming Accountable – Opportunities and Obstacles for ACOs,” Harold Luft, PhD,of the Palo Alto Medical Foundation, expresses doubts that ACOs will be able to handle or anticipate costs from “outside use “ - patients who vacation in Florida, end of life care, drug formulary use, lack of integrated records linking physicians, health plans, and hospitals outside (and inside ACOs)

• Finally there is the assumption that “experts” believe enough ACOs demonstration projects across the country will succeed to save Medicare significant money. The health care landscape is littered with failed demonstration projects. In a second Oct. 7 NEJM “Creating Accountable Care Organizations,” three experts – Gail Wilensky, PhD. health care economist; Elliott Fisher, MD, professor of medicine at Dartmouth Medical School and coiner of term Accountable Care Organizations; and Larry Casalino, M.D., chair of the division of outcomes and effectiveness research at Cornell, discuss the problems of ACOs. Dr. Fisher expresses great hope for success for five pilots he is engaged in, but says it’s too early to tell. Wilensky is dubious, saying hospitals may be capable of creating ACOs but most physicians are not. She foresees a “bad imbalance” between physician groups and hospitals. Casalino fears that ACOs will not succeed in the face of physician opposition. He believes most ACOs will be dominated by hospitals with physicians are employees. And what is to be done with the specialists, who may not be willing participants in ACOs? A lot of these concerns are unanswerable at present and remind us that the ACO movement remains in its infancy. Changing the cultures of hospitals and doctors to fit the ACO concept will not be easy.

Heath Reform and The American Creed

In 2007 I wrote a book Voices of Health Reform: Interviews with Health Care Stakeholders at Work. The book included 42 interview with leading thought leaders.

I concluded the book with this passage:

“Our health system is a creature of our culture. When asked what Americans believe, Garry Orren, a professor of political science at Brandeis, just outside Boston, who polls for the New York Times and Washington Post, said, ’A good place to start to remember we are pro-democracy and anti-government. It comes down to ideas that are essentially anti-authority and tend toward self-regulation. It there were an American creed, it might begin.

The American Creed

"One, Government is best that governs least.

Two, majority rule.

Three, equality of opportunity.”

Obamacare and the Creed

Think about this creed, and consider what has happened since Obama was elected in 2008. He and his administration have turned two parts of this creed on its head.

One, we have an unprecedented expansion of government over multiple government sectors, including heath care, with the belief that government is best that governs most.

Two, the majority has ruled. Democrats have had majorities in the House and the Senate with a Democrat as President, and they have ruled.

Three, instead of equality of opportunity, the Obama administration has sought to achieve equality of results, namely, redistribution of wealth and equality of health plans for everyone. To do this, they seek an individual mandate, with homogenization of plans for old and young, rich and poor, in all sections of the country.

Back to the Creed – Center-Right Not Center-Left

With the economy stuck in the mud and the Middle-Class fearing for its future, the American people do not seem to like what they see. Polls indicate the majority are calling again for a government that governs least, for a Republican majority in the House of Representatives, and for equality of opportunity for Americans who want to keep existing plans and for choice outside of government mandates.

We are a Center-Right country that has just experienced two years of Center-Left rule, and, and for the most part, we do not seem to like what we see. At the same time, however, the ruling party has changed the health care landscape, as is its prerogative, and it will be messy to undo what has been done.

What disturbs me right now is health plans are reacting to Obamacare by either dropping coverage for the insured or raising premiums to such an extent that health care is becoming unaffordable for the currently insured.

The Center-Left argues this phenomenon is due to capitalistic greed. The young and old, sick and well, healthy and wealthy, in other words,everybody, ought to have equal plans, with redistribution of benefits for all, even if those with existing coverage have to suffer and to be shifted to more expensive government policies or to Medicaid.

The Center Right says: We are a capitalistic nation. You cannot repeal the law of economics. Health plans dropping coverage for most of us” is not callousness. It is fiduciary responsibility. Insurance companies are not charities. ..if patients are no longer able to afford expensive policies, that is how government compassion works (John Stossel, “Congress Can’t Repeal Economics, “ Real Clear Politics, October 6, 2006).

Nonsense, counters the Center Left’s spokespersons, if Germany, the Netherlands, and Switzerland can cover all with private plans, why can’t we? “The health care overhaul that passed Congress is far from ideal, .. But it does represent progress. The fact that it is beginning to disrupt the status quo — that some insurance policies will eventually be eliminated and some inefficient insurers will have to leave the market altogether — is all the proof we need.” (David Leonardt, Health Care ‘s Uneven Road to a New Era,” New York Times, October 5, 2010).

Let the voters decide between the Center Right and Center Left. Let the majority rule, and let there be equal opportunity for all.