Monday, December 22, 2008

Say it ain't so ... CBO

Last month, I blogged about the important role the Congressional Budget Office (CBO) will likely play in determining the fate of health care reform.

I am reprising this topic because the CBO just released a 200 plus page report, on options to fund health care reform. But as Robert Pear writes in The New York Times, "many of the health care proposals championed by President-elect Barack Obama and other Democrats would carry a high price tag and would generate only modest savings."

By and large, the CBO projects savings from proposals to cut payments to physicians and other "providers" or impose new mandates on them. Approaches that rely more on carrots than sticks to create positive incentives for change are assumed to increase spending.

For instance, CBO says that paying for a medical home for chronically ill beneficiaries will increase Medicare expenditures by $2.1 billion over five years. It acknowledges that "the medical home concept has the potential to improve the health and health care of chronically ill Medicare beneficiaries" but "cannot estimate whether the net result ... would be to increase or decrease spending."

Giving primary care physicians a 5% Medicare payment bonus for adopting health information technology will increase Medicare spending by $370 million, says CBO. But imposing a 5% pay cut (penalty) on all physicians who do not adopt health information technology (HIT) would save $65 million. Mandating that "providers" use HIT as a condition of participation in Medicare would save over $2 billion.

When it comes to price cuts, CBO has no trouble projecting savings. Reduce fees to physicians in areas with unusually high spending? $4.9 billion saved. Cut Medicare pay rates for primary care physicians who do not meet benchmarks for vaccination? $530 million saved. These are just a few of the dozens of pay cuts CBO says will save money.

The CBO does not make policy, and its new report is just a set of options, not recommendations. Still, my fear is that CBO report may make it easier for Congress to pay for health care reform through payment cuts and mandates on physicians and hospitals because the agency will "score" them as saving money.

At the same time, the Patient-Centered Medical Home and other innovative delivery system reforms may not get the funding needed because CBO "cannot estimate whether the net result would be to increase or decrease spending."

Today's question: How do you think ACP should respond to the CBO report?


Jay Larson MD said...

The ACP white paper says it all. It will be hard for the CBO, but they have to think outside the box when it comes to cost savings in healthcare with good chronic disease management. If an internist does a good job, they have nothing to show for hospitalizations, no ER visits, no amputations, no blindness from diabetes, or no ESRD from diabetes.

I am not too sure primary care docs can tolerate any more sticks. Penalizing primary care docs would only acelerate the extinction process.

Arvind said...

It was naiive on the part of the ACP's policy making group to expect anything different than what the CBO's recommendations are. At a time when government is looking to give the public something for nothing, it should not come as a surprise that "something" will come at the cost of physician reimbursement.

If one had not noticed, even use of the word "physician" was so very difficult for HHS Secretary-designate, Daschle. He has already begun to create barriers between various health professionals, i.e. PCP vs NP, PCP vs PA, etc. Their answer would be to replace PCPs with NPs and PAs, thereby showing the public that providing primary care can be done cheaply. Why do we need these expensive Primary Care DOcs when there "highly trained" NPs and PAs can do a super job, possibly at your local Walmart, even providing weekend and evening services.

Its time for everybody to wake up and take notice, ACP included.The pie is not big enough to accomodate physicians. People value their SUVs or their 401K more than their doctors, when it comes to cruch time. Of course the argument becomes easy when (as Mr. Obama said) health care is a "right" and the government guarantees it.

The Happy Hospitalist said...

I recommend the ACP recommend that all their members unilaterally opt out of Medicare.

That would bring clarity very quickly to the halls of Congress.

furrydoc said...

There are really two parts to health care reform, affordability and favorable outcomes. The Budget Office looked at numbers but the public officials who are accountable to the voters have to replace the idea of affordability with value for what is spent. We've already had a vote in which our elected officials widely rejected pay cuts to those of us who lay the healing hands on their constituents' body parts.

Some things will be expendable, maybe even the Medical Home. But I think that our elected officials and their staffs are sufficiently astute to realize that they cannot reform a health care system on the backs of the physicians who provide the care or there will ultimately be an attrition of those physicians.

rich the furrydoc

PCP said...

Whether piece meal or all at once, it seems to me that should these cuts be implemented, we are going to face an acceleration of the collapse of primary care. Fewer Doctors will enter rpimary care, those over the age of 50 will accelerate retirement and the Gov't will move full force ahead trying to water down health care at the fastest clip they possibly can. Instead of facing up to the fact that we have to start limiting and prioritizing benefits, they are taking the wrong headed approach here. One that has not worked over the last 10 yrs ie freezing or cutting physician fees.
Only when this collapse happens will the CBO see the savings they project, ie when Medicare patients have limited access and therefore limited care and therefore more savings. Of course the consequences of that would be other things, but hey who is checking, and early death may even accrue to overall savings right!
We must educate our patients. Today as I was coming to the end of my time as a PCP, I was sharing with one of my long standing patients that I was leaving this practice to work in Industry. She said she understood and then inquired why? I explained to her the challenges facing a Primary Care Internist today. She admonished me and our profession for not educating the public individually at a one on one level about such major developments in healthcare today. She inquired whether there was not a way that PCPs could have a one page information sharing pamplet that briefly explains the issues facing primary care medicine and suggesting to the public what they could do to help change the current trends, then giving that to patients in the waiting rooms.
It may very well have to come to that, we may have to take the message to our patients, or opt out en mass from Medicare if we want any tangible changes, perhaps the latter should be preceded by the former so that the public understands.