Wednesday, April 7, 2010

Think you know what health reform really will do?

Well you don't. Neither do I, and for that matter, nor does anyone else.

Our health care system is enormously complex, so any law that is designed to reform the system also is enormously complex. The more complex something is, the harder it is to predict its results.

Yet we pretend to know for sure, without one iota of doubt, what the Patient Protection and Affordable Care Act (PPACA) will do. Supporters say that it will provide coverage to everyone, improve outcomes, lower costs, and make just about everyone happier and healthier. Opponents say it will result in rationing, bankrupt the country, and even lead to Armageddon.

Yet the honest, truthful answer is that neither side can really have all that much confidence in their assessments of the law's impact. If they were honest with themselves, and with us, they would acknowledge that there is a tremendous degree of uncertainty about how the PPACA will work in practice. Some elements of the law, like how it will provide access to health insurance coverage, can be assessed with greater confidence than, say, the long-term impact on health care costs and the federal budget deficit.

Today's online edition of the Annals of Internal Medicine, ACP's flagship peer-reviewed journal, has a commentary from me that reflects on the certitudes and uncertainties of health reform. I give my best educated assessments on the potential impact of the PPACA on providing affordable coverage to all Americans, ensuring access to primary care, and reducing health care spending and the federal debt. I also make it clear that it is not possible for me to draw definitive, irrefutable conclusions about how it will work out in the end, even though I believe that the PPACA has the potential to do great good for the country, especially when compared to the status quo. But rather than re-stating my conclusions here, I encourage you to read the article and post your comments, both here and on the Annals website.

Today's question: What is your reaction to my Annals' commentary on the impact of the new law on coverage, primary care access, and health care spending?


Steve Lucas said...

That was a fair recap of the bill as I understand it. I think everyone wants change to our current system and understands we need to both be more inclusive while at the same time bending the cost curve.

Being a business person I tend to look at the practicalities of a situation and attempt to find current systems I may be able to extrapolate a projected scenario.

Looking at the April 7, 2010 Toronto Sun:

Quebec plans $25 doctor's visits


MONTREAL - A potential precedent-setting plan by one province to start charging patients $25 for a doctor's visit is not being blocked by the federal government -- at least not for now.

Health care currently accounts for around 45 per cent of program spending in Quebec, and is projected to jump to more than 65 per cent by 2030.

Thousands protest Quebec budget


MONTREAL - It was a sign of the coming fiscal storm: thousands of people poured into the streets of Montreal to protest Quebec's bad-news provincial budget and prompted a police intervention.
Old Montreal's business district was awash in chanting, placard-waving demonstrators against a budget that will pile new costs on Quebecers, including a sales-tax hike and a historic health fee.

But Finance Minister Raymond Bachand was unapologetic in defending his budget, saying it's time Quebecers accepted that public services aren't free.

"Every adult benefits from the health system, perhaps every adult should pay for the health system," Bachand said Thursday after giving a speech to the Montreal Chamber of Commerce.

"Nothing is free."

Protester Emile Ouellet agrees that Quebec's health and education systems need more funding, but not on the backs of the poor.

"We have to take the money from somewhere, but we're not taking it from the (right) place," said Ouellet, who painted his face like a clown for the march.

"Rich people have more money, so you had better take it from the rich."

Recent M&A activity has hospitals positioning themselves to take advantage of the large number of new Medicaid patients. Many states are facing large deficits of their own, and will be unable to pay for the increase in expenditures.

The NHS is the third largest employer in the world after the Chinese Army and Rail India.

My fear is not the intent of the bill, but the true cost.

Steve Lucas

The Happy Hospitalist said...

I have an irrefutable consequence. Never in the history of government health care programs have the cost projections come in any where near what they were reported to be.

Politics and economics do not mix. Politics will always prevail, but economics will always win. Don't believe me? Guess which government health care program has come in under estimated cost projections.

The answer is none.

It's going to get really ugly, quick.

BDoherty said...

The Happy Hospitalist is wrong when he writes that “Never in the history of government health care programs have the cost projections come in anywhere near what they were reported to be”—unless he is including cases where costs have come in lower than projected. To cite just one very recent example, “actual spending for [Medicare Part D] drug benefits was 40 per¬cent less than CBO projected.” See:
Commonwealth Fund report on CBO estimates:
And, these 3 fact sheets from the Congressional Budget Office
Fact Sheet for CBO’s March 2007 Baseline: Medicare:
Fact Sheet for CBO’s March 2008 Baseline: Medicare:
Fact Sheet for CBO’s March 2009 Baseline: Medicare:

My perspectives article in Annals acknowledges that there is uncertainty in long-term budget forecasting. There are well-respected economists who believe that the CBO has under-estimated potential savings from the multiple pilots in the PPACA to align incentives with the value of care provided, while there are others who believe that the CBO under-estimates the impact that the legislation will have on spending. Wariness is in order in accepting the statements of anyone who definitely claims that they “know” what the impact will be.

The only close to irrefutable facts are that if PPACA was not enacted into law and we maintained the status quo, health care spending in the U.S. would double, Medicare and Medicaid spending would create an unprecedented budget crisis, one out of five people in the United States would be without health insurance coverage, and rising health insurance premiums would put care out of reach for many middle class families.

The Happy Hospitalist said...

Ah. Medicare Part D. An excellent example of how government projections can error on the side of benefit.

Considering Medicare Part D is not really government insurance at all, but rather federal subsidized private insurance, it doesn't surprise me that the government expense error was a liberal one.

In fact, what that says to me is that private industry, for which Medicare Part D really is, works. It works because it gives the patient an incentive to control their own cost by the choice they make in their medications. It forces cheaper options upon them.

Also interesting to note that Medicare part D expenditures slowed because people were given a choice between choosing a generic and paying full price for the top brand names.

I suppose as soon as Medicare parts A and B start to offer a generic doctor plan vs a full service doctor plan, we will see costs go down.

So when is that slated to happen?

Robert J. Sobel, M.D. said...

I still think the crux of the issue will be whether a steady-state can exist, where the small practices that historically comprised most of health care, can continue to exist? All the cost-saving that Professor Gruber described as "throwing all the spaghetti at the wall and seeing what sticks" (a recent lecture at the University of Maryland seen on C-Span)involves administrative introductions in the name of savings through standardization. I can't believe such strategies really make sense. They will find a smattering of support in studies, but study design itself influences results and I would proffer that self-fulfilling prophecy drives the pay for quality philosophy.

Bob, you have done well at the difficult task that has befallen you. Moving forward. my main concern is whether we can find any outreach from Medicare to take current small practices and agree on approaches that pay us more without globally altering the budget (i.e., by correcting the current version of reimbursement that has systematically under-valued primary care). What is the mode for physician practice size? How far have the intergrated entities progressed? Are we really alone and about to be swallowed?

That is the advocacy we need now. The technology imperative is to be respected. The need for quality primary care should also be. The absence of a cost system that rectifies the controlled growth in one sector (cognitive, longitudinal, primary and specialty care) versus the perverse cost excesses of new technologies in a system where long-term gains are prematurely abrogated (e.g., the post Hatch-Waxman ANDA process) is the most glaring target for further reform.

We have achieved a lot in bringing some semblance of control over an insurance industry run amuck. It will take ongoing, enlightened insights from CMS, congressional oversight, and organized medicine to make the system meet its potential.

On the latter, it is do or die regarding whether the little guys have any chance. I suspect strongly that our patients would give us a vote, if given the opportunity.

Steve Lucas said...

Continuing on with Dr. Sobel’s thoughts, the biggest challenge I see to cost and practice structure is the hospital. In my community we are at the start of a trial concerning bonuses paid to insurance brokers by a nonprofit health foundation to secure business. Along with this the hospital has acquired a number of medical practices that it uses to drive hospital admissions.

This hospital will cope with the new Medicaid patients and computer requirements by simply creating a clinic. These patients can again be used to drive hospital admissions and testing.

The results of this cat and mouse game will be additional paperwork requirements to secure a test and additional reporting. Reporting that will be difficult for the small practice to comply with, or generate.

It is an open secret that the one hospital will maximize your insurance if you use one of their doctors or are admitted.

This has and will make it very difficult for the stand alone practice to continue to exist let alone flourish.

Steve Lucas