Friday, December 23, 2011

Congress Passes Two Month "Doc Fix"

House and Senate this morning passed bill to extend current Medicare payments to doctors through February. So no 27.4 percent cut, for now. But will be back with the same old, same old in 2012. More brinkmanship while holding doctors and patients hostage. So . . . Happy New Year!???! With that, I am signing off from blogging until after January 2 and thinking about anything but Congress! Best wishes for holiday peace and joy to all of you.


Thursday, December 22, 2011

Deal reached to prevent Medicare doc pay cut

A few minutes ago, Speaker Boehner announced that the House and Senate have agreed on a two month extension of current Medicare payment rates, the payroll tax cut, and unemployment benefits.

My understanding is that the agreement has the House accepting the Senate's proposal to extend the payroll tax break, unemployment insurance benefits, and current Medicare payment rates through the end of February, along with an agreement with the Senate to appoint a House-Senate conference committee to begin negotiations on a longer-term extension. It remains unclear exactly when the votes in the House and Senate will take place, and at least in the Senate, it will require unanimous consent by all Senators. If it passes both the House and Senate, the bill is expected to go to President Obama for his signature no later than December 30. Once signed into law, the legislation would prevent the 27.4% cut in Medicare paymentsto physicians resulting from Medicare's Sustainable Growth Rate (SGR) formula.

While ACP has strongly urged Congress to block the cut, stating that it would be unacceptable for Congress to recess and allow the cut to go into effect, this short-term extension does not represent the permanent solution that ACP believes is necessary. Accordingly, ACP will continue to urge Congress to enact a permanent solutionthat stabilizes payments for at least five years and allows for the transitionto better payment models.

Keep in mind that until the legislation actually passes the House and Senate, no one can guarantee with absolute certainty that the 27.4% SGR cut won't go into effect. However,the official announcement of the deal makes it very likely that the cut won't go into effect--at least for the next two months. After that, who knows?

A Very Boehner Christmas

In keeping with a tradition that I started with my first late December blog in 2008, I have taken the liberty of penning a tongue-in-cheek parody of a beloved Christmas story. It seemed fitting this year to imagine Speaker John Boehner’s Night Before Christmas, ruminating about the flak he is getting for not being able to reach a deal with Harry Reid and the Senate. (This is all intended as purely non-partisan fun, so please, please, take it in the spirit of holiday cheer and don’t take offense). Here it goes:

A Very Boehner Christmas

Twas the night before Christmas, when all through the House
Speaker Boehner was fuming, “Harry Reid is a louse.”
“I’ve sent him our bills to cut ObamaCare,
Yet the Senate acts like we’re not even there!

While Reid and McConnell lay all snug in their beds,

The Tea Party Caucus keeps demanding my head!
To show them I am not Obama’s sap
I even went along with their debt ceiling crap,

But if you listen to Washington’s talking heads chatter,
Nothing I do, really does matter.
As long as the Senate sends our bills to the trash,
It is MY leadership that they continue to bash!

Meanwhile, Gingrich is campaigning in the New Hampshire snow
But who can tell how this election will go?
To my wondering eyes its appears,
Gingrich as President, many doth fear,
But Romney comes across as bit too slick,
Who will the GOP decide is their pick
to rid us off Obama and his big government fix?”

And Boehner whistled, and shouted, and called them by name;
"Now, Bachmann, now Romney, now Huntsman and Perry!
On, Newt! on Mitt! Help make Christmas Merry!
Take us to the top of the polls! Don’t let us stall!
We must win the White House and Senate, we must have it all!"

As dry leaves that before the wild hurricane fly,

When they meet with an obstacle, mount to the sky,
So Boehner checked in first class and flew,
Back to Ohio, to the people he knew.

But the people at home were strangely aloof
They wouldn’t let him under their Country Club roof.
“A doctor,” they said, “is nowhere to be found,
Because you let their fees go way, way down,”
“Congress,” they said, “doesn’t give a hoot,
So in November, maybe, we’ll give you the boot!”

But Boehner stood his ground against the unhappy pack,
Oh, his frown -- how it wrinkled! His face wasn’t merry!
He looked like he’d eaten a too-sour cherry!
His tight little mouth was drawn up like a bow,
And he told them all something they needed to know,
“It’s Obama’s fault, you know, he’s the one who must go!

(While smoke encircled his head like a wreath
From a cigarette he had clenched in his teeth),
And then, well, Boehner became his happy old self
In the end, he knew, they’d thank him, for protecting their wealth.

With a wink of his eye and a twist of his head,
He said that Republicans had nothing to dread;
As long as millions remain out of work,
They’ll vote out the Democrats, every last jerk,

And laying his finger aside of his nose,
And giving a nod, and after one last pose;
He sprang to his car, to his driver gave a whistle,
And away they drove off, like the down of a thistle.
But they heard him exclaim, 'ere he drove out of sight,
"Happy Christmas to all (of the top 1 percent), and to all a good-night."

With that, I will be taking the next week or so off from blogging to spend time with my family, unless something really, really happens (like a Christmas miracle to stop the SGR cut) that demands commentary. I wish all of you a joyful holiday and New Year, and especially thank those of you who spend your time reading this blog and sharing your own opinions.

Today’s question: No question, just Happy Holidays!

Wednesday, December 21, 2011

“Least Popular Congress in History” Leaves Patients Holding the Bag

With the U.S. Senate and most House members having left Washington for the holidays, the 27.4% cut in Medicare payments to doctors will almost certainly go into effect on January 1. Although it remains theoretically possible that Congress could return next week to reach a deal, the House and Senate are so dug into their sides that I don’t expect that to happen.

More likely, the SGR will be dealt with when Congress returns in January, at which point it is likely to enact a “fix” retroactive to January 1. Problem is, the Senate isn’t scheduled to return to Washington until January 23, the day when Medicare will have to start processing claims with the 27.4% cut. (Medicare by law can only hold them for 14 business days from the date of service.) Congress could decide to return earlier and find some other way to take action before the cuts have to be processed, but in the meantime physicians should prepare themselves for the possibility that the 27.4% cut will happen, at least for services provided during the first week of January.

It isn’t just physicians who are being left in the lurch, of course. The impasse means that payroll taxes will go up for just about everybody, and unemployment benefits will be cut off for many. And this isn’t the first time that this Congress has failed to do its job.

Roll Call reports that “the level of dysfunction that has characterized the 112th Congress may be unparalleled. Aside from passage of trade agreements in September and a handful of minor policy bills, virtually the only bills that have made it to President Barack Obama’s desk have either been appropriations measures, the most basic function of Congress, or emergency stopgap bills to avert government shutdowns or credit downgrades. And even those have come only after Congress took itself and the nation to the brink of collapse. The reasons for the dysfunction are varied, from gridlock in the closely divided Senate to Boehner’s increasing difficulty in managing the expectations and actions of his unruly conference. But regardless of the reason why, lawmakers acknowledge they have reached a new low.”

Is it any wonder that Gallup reports that this Congress is the least popular in history?

I know that the SGR cut will lead some ACP members to question the effectiveness of ACP’s advocacy, and I am always open to ideas on what we might do differently.

But here is how I see it. ACP has cajoled, lobbied, pressured, proposed and used every argument and ethical tactic we could think of to get Congress to do the right thing and eliminate the SGR. (The one tactic we will not use is to support a physician boycott or strike, a violation of ACP’s code of ethics.)

We offered specific ideas to end the SGR, stabilize payments, and transition to new models that recognize the value of internists' care. We even told Congress how to pay for it. We have built coalitions with other medical organizations, AARP, and other stakeholders. And this time, we decided we would not be pulled into helping Republicans or Democrats, House or Senate, get votes for another short term fix paid for by deeper cuts next time. That tired script hasn't worked before and won't work now.

What we can't do, that no one organization can do, is fix a broken Washington where compromise is considered a deadly sin, where partisanship and ideology trump common sense, where brinkmanship and gridlock is the norm. Only voters can do that by electing people committed to making the system work again.

Today’s question: How would you fix a broken Washington?

Monday, December 19, 2011

An Unwelcome Holiday Tradition

Waiting until the last moment for Congress to stop the next Medicare SGR cut has become an established holiday tradition, right along with trimming a Christmas tree or lighting a Menorah. This December tradition, though, is anything but welcome. During this supposed season of joy, why must doctors and patients be left waiting to know whether Congress will enact legislation in time to prevent a January 1 cut of more than 27 percent?

Last week, I blogged that “the odds still favor an agreement to stop the 27.4% SGR cut, although the issue may not be decided until after Christmas—just days before it is scheduled to go into effect.” Now, I am not optimistic at all. Over the weekend, Congress navigated itself into another partisan dead end, making it much more likely—with each passing day—that no agreement will be reached in time to avert the 27.4% New Year cut.

Here is what happened.

Last week the House passed a bill, as part of a broader “extenders” package, to prevent the Medicare cuts for two years, replacing them with a small positive update. The House bill, though, included budget offsets and policy riders that were unacceptable to the Senate and White House. On Saturday, the Senate passed a short-term patch, as part of its extenders bill, which would have extended current Medicare payment rates for only two months. Today, the leadership of the House of Representatives stated that the Senate bill is unacceptable, and that it instead would seek an agreement on a year-long extension of Medicare payment rates and other expiring provisions. Yet the House has not presented a plan or process to resolve its differences with the Senate.

If the Senate bill is voted down tonight by the House, as is now expected, there is no clear path forward that would allow Congress to act before the 27.4% cut goes into effect on January 1. The Senate has already recessed for the year, and Majority Leader Reid has vowed not to bring it back to negotiate with the House unless the House agrees to the Senate’s two-month extension. If he doesn’t yield, and Speaker John Boehner doesn’t yield on the House’s insistence that the House and Senate agree to a new plan, there is no viable way to prevent the 27.4% cut before it goes into effect on January 1.

As it has done in past years, Congress could return in January and try to enact a “fix” that is retroactive to January 1, with CMS holding claims (as it is required to do for 14 business days anyway) in the meantime. But with the Senate not scheduled to return to Washington until January 23, this allows no time for Congress to enact a retroactive fix before CMS would have to instruct its carriers to begin paying at the reduced rate, on or around the same day that the Senate returns. Beyond that date, CMS would have to begin paying interest on any delayed claims.

Sure, Congress could return sooner in January, or better yet, there may be some way for it to find a solution prior to January 1. But I wouldn’t bet on it.

ACP, for its part, released a statement today blasting Congress for the disarray and dysfunction that is jeopardizing care for millions.

Congress’ failing to stop the SGR cut is the equivalent of the proverbial coal in your stocking, or the Grinch who stopped Christmas from coming. Only unlike the Grinch, there seems little chance that Congress’ “small heart will grow three sizes larger” so that it brings back what the SGR has taken from doctors and their patients.

Today’s questions: What will you say to your Representative or Senators if Congress allows the 27.4% SGR cut go into effect? What will you say to your patients?

Wednesday, December 14, 2011

The Medicare SGR and Charlie Brown’s Football

An iconic symbol of hopeful—or hopeless—futility is Charlie Brown lining up, year after year, to kick the football placed by his devious friend Lucy—only to have her pull it away at the last minute. Physicians know how Charlie Brown feels. Each year, Congress offers doctors a football called SGR repeal, only to pull it away from them in the end.

This year, it was the House Energy and Commerce Committee, Republicans and Democrats alike, who told medicine on March 28 that this year would be different, that Congress—really, really, promise, promise—was going to repeal the Medicare SGR formula and replace it with a better system. Here is what chairman Fred Upton (R-MI) and ranking member Henry Waxman (D-CA) wrote to the doctors:

“Unless we begin the process of developing a long-term solution, we will once again be faced with the unwanted choice of extending a fundamentally broken payment system or jeopardizing access to care for Medicare beneficiaries. We cannot let either happen.”

Medicine answered the call by offering Congress concrete ideas for stabilizing payments for the next five years and transitioning to a better payment system for patients and their physicians.

Well, we now know how all that turned out. Here we are, just 17 days before Medicare payments to physicians will be cut by 27.4%, and Congress still hasn’t figured out how to stop the cut, never mind enact a long-term solution.

Last night, the House of Representatives passed a bill that would replace the SGR cuts with one percent annual increases in 2012 and 2013, but it does not repeal the SGR or result in a long-term solution. It is paid for by controversial Medicaid and Medicare payment cuts to hospitals for indigent care and outpatient facilities, increased Medicare premiums to higher income beneficiaries, reductions in funding for prevention and wellness programs, and money that is set aside to pay for health insurance subsidies created by the Affordable Care Act—cuts that are being fiercely contested by hospitals, AARP, and the American Cancer Society-Cancer Action Network, among others. The SGR provision is just one part of a broader package that would extend unemployment benefits and the expiring Social Security payroll tax cut, but it includes other policies that are so strongly opposed by the White House and Senate Democrats that it is considered to be “dead on arrival” in the Senate.

What happens when the GOP bill fails in the Senate, as expected? Negotiations likely will take place over the weekend between Senate Democrats and House Republicans on a compromise package, but no one knows if they will be able to reach a deal that can pass both chambers before the SGR cut goes into effect and the payroll tax cut and unemployment benefits expire on January 1. The odds still favor an agreement to stop the 27.4% SGR cut, although the issue may not be decided until after Christmas—just days before it is scheduled to go into effect.

It’s enough to make you want to shout “Good Grief!”

Of course, it isn’t fair to put all of the blame on the current Congress. Remember, the Democratically-controlled 111th Congress failed on multiple occasions to pass more than short term (sometimes just weeks or months) patches to prevent scheduled SGR cuts, and in June 2010, it actually allowed the cut to go into effect for several weeks, during which CMS held Medicare claims until Congress got around to passing another temporary reprieve.

Much of the same can be said about the 110th Congress, and the 109th, and the 108th, and the 107th . . . all of whom enacted short-term reprieves to prevent scheduled SGR cuts but could not come up with a permanent solution. As much as physicians wanted a permanent solution, their professional associations usually ended up helping Congress get the votes for a temporary patch because the consequences for patients of allowing the SGR cut were too dire.

Not this time, though: ACP (and most other physician organizations) are telling Congress that although it is imperative that they act, before recessing for the year, to reach agreement on a viable bipartisan approach to prevent the SGR cuts, we cannot endorse a bill that just results in another temporary reprieve from the SGR cuts resulting in even deeper cuts in future years. Instead, Congress must enact comprehensive and long-term payment reform that eliminates the SGR, provides stable payments for all physician services for at least five years, and establishes a transition to better payment models.

Sure, Congress isn’t likely to reach agreement on a long-term SGR solution before it recesses for the year—although a Christmas miracle to that effect would nice! Another short-term fix is much more likely. But if Congress once again chooses “. . . the unwanted choice of extending a fundamentally broken payment system or jeopardizing access to care for Medicare beneficiaries” it is doing it without the help of organized medicine. Medicine is willing to line up (again) to kick a football called SGR repeal, but only if it really has a chance of getting over the goal post.

Today’s question: Do you agree that physicians should withhold support from any SGR bill that provides a temporary reprieve from the 27.4% cut if it results in deeper cuts in subsequent years, and doesn’t move toward a permanent solution?

Thursday, December 8, 2011

Liberal doctors’ wrong-headed critique of the IOM

If conservatives can be faulted for believing that the “free market” alone is capable of making health care more affordable and available —all evidence to the contrary— then liberals must be faulted for believing that the government is capable of offering “free” health care for all, without regard to cost. Case in point: liberal doctors’ broadside against the Institute of Medicine (IOM) for having the audacity to propose that cost be considered in determining health insurance benefits.

The IOM, at the request of the Department of Health and Human Services, convened a panel of experts to advise the department on the benefits to be offered through state health exchanges created by the Affordable Care Act (ACA). The IOM committee proposed a framework that would consider the population’s health needs as a whole; encourage better care by ensuring good science is used to inform practice decisions; emphasize judicious use of resources; and carefully use economic tools to improve value and performance. It recommended that “the initial EHB package be equivalent in scope to what could be purchased by the average premium that a small business would pay on behalf of an employee” writes John Iglehart in the New England Journal of Medicine, because if “a more expansive package” is offered, “many currently uninsured individuals and small businesses would find it unaffordable, which would undermine the overriding goal of the reform law — to make coverage both meaningful and nearly universal.”

This seemingly common sense thinking was enough to make the Physicians for a National Health Program (PNHP) turn apoplectic. In a letter circulated by the PNHP, some 2400 doctors claimed that the IOM’s report would result in “skimpy” and “bare-bones” policies that would “saddle enrollees with unaffordable co-payments and deductibles.” The letter went on to attack the integrity of the IOM’s expert panel, accusing its members of being “riddled with conflicts of interest . . [and] . . .having amassed personal wealth through their involvement with health insurers and other for-profit health care firms.”

(Regrettably, this type of ad hominem accusation has become a staple of what passes for political debate these days, from all across the political spectrum. It is not enough to disagree with someone, you have to say that they are motivated by greed, avarice, or some other reprehensible motive.)

Unlike the PNHP, the American College of Physicians believes that IOM has found the right balance between expanding coverage and keeping it affordable. ACP believes, as does the IOM, that there must be a transparent and publicly acceptable process for making health resource allocation decisions with a focus on medical efficacy, clinical effectiveness, and need, with consideration of cost based on the best available medical evidence. (Click here to read a side-by-side comparison between the IOM’s recommendations and ACP policy.)

I trust that the liberal doctors who signed onto the PNHP letter really want what is best for patients and sincerely worry that the benefits that would be offered under the IOM’s framework would be inadequate for many. Fair enough—although I think the unfair and unwarranted attack on the IOM’s credibility undermines the letter-writers’ credibility more than it does the IOM’s. But I also believe that it is fanciful to pretend that the government can guarantee that everyone will have access to health insurance benefits, to be paid for by taxpayers, employers, and employees, without explicitly taking into account the cost of those benefits and making a determination on what we, as a society, can realistically afford. Guaranteed coverage that does not pay attention to cost will be coverage that no one can afford—not the vision of accessible, affordable health care for all that the PNHP says is its goal.

Today’s questions: Do you agree with the IOM that costs should be considered in determining essential benefits? Or with the PNHP’s view that this will result in “skimpy” and “bare-bones” coverage?

Wednesday, November 30, 2011

Why is health care so costly? Hint: it’s not (mostly) how much care we get.

Conventional wisdom is that the high cost of health care in the United States is principally caused by overutilization—that is, excessive volume of tests, procedures, and treatments, much of which may have marginal clinical effectiveness.

But if higher spending is the result of higher volume, then it would stand to reason that Americans get more health care services than other countries with lower costs, right? Not so, writes Washington Post columnist Robert Samuelson, citing data from the Organization of Economic Cooperation and Development (OECD):

“Indeed, by some indicators, Americans get less medical care than do people in other advanced countries. The number of practicing U.S. doctors (2.4 per 1,000 population) is less than the OECD average (3.1 per 1,000), as is the number of annual doctor consultations (3.9 per capita in the United States versus 6.5 for the OECD average).”

If we aren’t getting more health care, then why do we spend more on it? The answer, Samuelson argues, is higher prices:

“What propels U.S. health spending upward? The . . .answer comes in two parts: steep prices and abundant provision of some expensive services. In 2007, an appendectomy cost $7,962 in the United States, $5,004 in Canada and $2,943 in Germany. A coronary angioplasty cost $14,378 in the United States, compared with $9,296 in Sweden and $7,027 in France. A knee replacement was $14,946 in the United States, $12,424 in France and $9,910 in Canada. Knee replacements in the United States were almost twice as common per 100,000 population as in the rest of the OECD. So were MRI exams and angioplasties.”

In other words, the higher the price, the more services we get, and the greater the cost. Throw in the lack of price transparency and competition, low patient cost-sharing, and a whole lot of lawsuits, and it is not hard to understand why the United States spends more on health care than just about anyone else.

Samuelson offers two options to drive down prices: “a voucher system that, through tax credits and fixed Medicare premium subsidies, would allow patients to shop for the best health plan. Competition, the theory goes, would force hospitals and doctors to restructure the delivery system; health plans would compete on the basis of price and quality. The other way is a government-run, single-payer system that would — somehow — include strict budget limits on doctors, hospitals and other providers.”

But both of these options have their own problems, practical and political. Vouchers shift more costs onto the individual, making them responsible for the costs of care that exceed the voucher amount, yet they don't really give patients the levers to control the cost of the care they receive. And where is the evidence that insurance company competition will lower costs? Plus, voters don’t want vouchers—look at the intense public opposition to Rep. Paul Ryan’s proposal to replace Medicare with a voucher program. A single payer, government run health care system runs against the grain of American individualism and distrust of government (now at an all-time high), and likely would carry with it price and capacity controls that would limit individuals’ access to care (rationing, anyone?).

There are other alternatives that might be considered. Instead of competition among insurance companies, how about we eliminate price controls, get insurance company middleman out of the equation except for catastrophic care, enroll people in high deductible health savings accounts, and allow doctors and hospitals to compete based on price and quality? Sounds good—in theory—but the reality is that patients are not likely to shop around to find the cheapest care at a time when they are seriously ill and have the greatest need for it. Also, knowing the price charged for an office visit or procedure tells little about the actual cost. (See my October blog about why buying health care isn’t like shopping for a can of soup).

Another approach would be to give health plans and government the tools to drive down prices. Allow Medicare to negotiate drug prices with pharmaceutical companies. Pay physicians based on the value to the patient of the care being provided, instead of their relative costs (RBRVS). Allow Medicare to use “dynamic pricing” so that it could pay more for therapies with "superior" clinical results and less for therapies with poorer results. These options could potentially lower the price of care—and overall costs—but would be difficult to fairly administer (how can value to the patient be measured?) and would face intense opposition from providers who benefit from higher prices.

There you have it: high health care spending in the United States has more to do with higher prices than higher volume, yet the policy tools to lower prices all carry with them significant political and practical challenges. But as Samuelson concludes, “One way or another, if we don’t act, we’re surrendering our future to runaway health spending.”

Today’s questions: Do you agree that the price of health care is the biggest reason why the United States spends more than other countries? If so, what should be done about it?

Tuesday, November 22, 2011

“Can’t anybody here play this game?”

In a moment of justifiable exasperation, Manager Casey Stengel blurted this out to a reporter about his hapless 1962 New York Mets—the team that ended up with the worst single season record in baseball history. The same might be asked of the 112th Congress, says Michael Hirsh of The Atlantic. He wonders “whether any Congress has ever been more dysfunctional, with less cause, than this one?”

Yesterday’s spectacular failure by the “Super Committee” to produce a bipartisan deficit reduction package certainly hits new heights—or depths, if you prefer—of being dysfunctional. (As bad as it was, though, it doesn’t come close to matching Congress’s lowest points during the decade leading to the Civil War. In 1856, Senator Charles Sumner of Massachusetts barely survived a brutal caning at the hands of Rep. Preston Brooks of South Carolina. It is a small comfort that Congress today wages its fights via talk shows, blogs, and Twitter, not in hand-to-hand combat!)

But by modern standards, Hirsch is right on the mark: this Congress is the most dysfunctional of any I’ve seen in my 32-plus years of advocacy in Washington. It is singularly incapable of finding the compromises needed to move essential legislation forward.

(Incidentally, comparing the 112th Congress to the '62 Mets isn’t fair—to the Mets. By playing poorly, the Mets disappointed millions of fans—yours truly included—who gave them our misguided support, but no one really got hurt. And for all of their 120 losses, the Mets at least were entertaining to watch because of the unsurpassed level of incompetence. Marvelous Marv Throneberry, the Met’s first baseman, made fans both laugh and cry because of his stupendously dumb base-running mistakes and poor fielding.)

But I am not entertained by the antics of Congress, because the stakes are so much higher.

It is no laughing matter that Congress’ failure to reach an agreement on the deficit puts the health of millions of seniors, military families, and disabled patients in great peril, as ACP pointed out in a blistering statement released yesterday on the wreckage left after the failure of the “Super Committee” process.

Because the Super Committee process failed, doctors face a scheduled Medicare payment cut of more than 27 percent on January 1, 2012. Congress is likely to take up legislation soon to avert the January 1 cut, but organized medicine’s efforts to get permanent repeal bundled into the deficit reduction package itself has been dashed by the Super Committee’s failure.

Because the Super Committee process failed, another $1.2 trillion in cuts in federal spending will automatically go into effect, through a process called sequestration, starting on January 1, 2013. Kaiser Health News reports that under the automatic sequestration cuts, funding for non-defense discretionary programs will be cut by 7.8 percent next year, dropping each year to 5.5 percent in 2021—with the CDC, NIH, and prevention and wellness programs being particularly vulnerable.

Already, there is talk of Congress passing a law next year to prevent the sequestration cuts from going into effect, but President Obama has promised to veto such an effort. Obama held out the possibility of signing into law a replacement measure that restores at least some of the cuts if it offers a “balanced” package of tax increases and spending cuts.

For all of the uncertainty, several things are clear.

First, Congress must act before January 1 to prevent the 27.4 percent Medicare physician payment cut.

Second, there will be a big debate in the 2012 election year about how best to reduce the federal deficit, with the huge 2013 cuts mandated by sequestration looming in the background.

Third, there is no reason to believe that the current Congress will finally figure out how to play the game right.

More likely, they will continue to show a singular inability to put their partisan interests aside and do what is best for the American people. There’s a reason that Congress’ 9 percent approval rating is lower than Nixon’s during Watergate, or BP’s during the oil spill, or the number of people who approve of the United States going communist, or polygamy or pornography, for that matter. And this is based on polling that took place even before the public has digested the Super Committee debacle!

Today’s question: What do you think of the “Super Committee” debacle? And do you agree that this Congress is the worst in modern times?

Monday, November 14, 2011

Doctors’ Rx for America: More government regulation*

*of everybody but physicians, that is

I blog today from the American Medical Association’s House of Delegates meeting in New Orleans, where the organization’s House of Delegates—its policy-making body—will soon take up dozens of reports and resolutions. Reading through the delegates’ handbook, I am struck by the seemingly counterintuitive fact that much of it calls for more government regulation of health care, even as the organization pledges fealty to free market principles. Plus, many of the demands for more government regulation are coming from some of the most conservative factions in the AMA—state medical societies from areas of the country shaded red.

To illustrate, the delegates will be considering policies to:

· Give the federal government the authority to negotiate drug and medical device prices.
· Require physician supervision of nurse practitioners.
· Prohibit investors from investing in medical malpractice lawsuits.
· Require automated external defibrillators in all nursing homes.
· Require states to appoint physicians to the governing boards of health exchanges.
· Mandate that all insurance companies pay for all current CPT codes billed by physicians beginning on January 1 of each year.
· Require insurance companies to pay no less than the Medicare rates for covered preventive services.
· Mandate that insurance companies raise payments for vaccinations.
· Prohibit health insurers from dropping physicians from their panels “without cause” during an enrollment year.
· Promote model state legislation to mandate that insurers use a “transparent and accountable” process in developing and implementing coverage decisions.
· Establish uniform prior authorization requirements for drug benefits.
· Require pharmaceutical manufacturers to report on drug shortages.
· Require hospital drug pharmacies to report outpatient controlled substance prescriptions to an appropriate regulatory tracking program.
· Require veterinarians’ prescriptions of controlled substances to be reported to regulatory authorities.
· Require FDA regulation of “potentially hazardous” energy drinks like Red Bull.
· Mandate nutrition labeling in school cafeterias.

Now, not all of these proposals will be approved by the House of Delegates, and to be sure, the delegates also will be considering numerous proposals to decrease regulation—of physicians, that is. And some of the calls for increased regulation are surely right on the mark.

But physicians, like the rest of us, are hardly internally consistent when it comes to their views on government regulation. No one really wants to be subjected to rules and mandates, so we fiercely object when someone tries to impose them on us. Yet, at the same time, we can usually find plenty of grounds to justify imposing regulations on someone else! We are against government, except when we are for it. Just ask the good doctors at the AMA.

Today’s question: Do you agree that physicians—and just about everyone else, for that matter—are internally inconsistent in being against government regulations that apply to themselves, but in favor of more government regulation when it comes to others?

Wednesday, November 9, 2011

Magical Thinking

When it comes to deficit reduction and controlling health care spending, liberals and conservatives alike are guilty of magical thinking, holding certain beliefs that are not supported by science or evidence.

Take the issue of deficit reduction. Washington Post columnist Robert Samuelson (who is no fan of the Affordable Care Act, by the way) writes that it is time to “banish the budget fictions of left and right.” First, he takes on conservatives:

“. . . plausible savings don’t match conservative rhetoric. All the suspect 'discretionary' programs come to tens of billions, not hundreds of billions. Culture subsidies total about $1 billion annually; community block grants in 2010 were $4 billion. Meanwhile, total federal spending was $3.5 trillion. Do conservatives really want to eliminate the national parks? The FBI? Highways? Food inspections? Social Security and Medicare savings could be greater. In 2010, these programs cost $1.2 trillion. But there’s a catch. Savings from lower individual benefits will be offset by more beneficiaries: retiring baby boomers. By 2025, Medicare and Social Security enrollment will rise 50 percent from 2010.”

Then he challenges liberals:

“Next, the liberal fiction. Contrary to liberal dogma, the rich already pay plenty of taxes. . . For most millionaires, federal tax rates — the share of income taxed — exceed 30 percent. Some rich have lower rates. Raising these rates is justified but wouldn’t balance the budget. . . As for the Pentagon, the military was cut sharply after the Cold War. Combat forces are half to two-thirds of 1990 levels. Defense spending as a share of national income is headed toward its lowest level since 1940. What liberals don’t say is this: Unless Social Security and Medicare benefits — the bulk of the budget — are reduced, we face three dismal choices. Huge, unsustainable deficits. Massive tax increases on the middle class, as high as 50 percent over 10 to 15 years. Or draconian cuts in the discretionary programs that liberals accuse conservatives of wanting to gut.”

The same kind of magical thinking can be found on cutting health care spending. Writing for the Freakonomics blog, Jeff Mosenkis writes about former White House staffer Dr. Zeke Emanuel’s efforts to debunk liberals’ myth that you can control costs by going after insurance companies and big pharma and conservatives’ myth that tort reform is the solution.

“Turns out that the combined profits of the country’s five largest for-profit health insurance companies — United, WellPoint, Aetna, Humana and Cigna — were $11.7 billion, only 0.5 percent of total health care spending,” Emanuel writes.

How about drug company profits?

“Between 2004 and 2009, generic drug use rose from 57 to nearly 75 percent of all prescriptions. Paradoxically, over those same years, the total amount Americans spent on drugs actually increased by 31 percent — the same rate as overall health care expenditures. Even the best estimates suggest that savings from expanding generics’ use even further are, according to the Department of Health and Human Services, ‘likely to be small relative to total spending on drugs' . . . Pharmaceutical costs account for roughly 10 percent of total health care spending, some $260 billion in 2010. Importing brand name drugs from abroad would cut about 2 percent from that — $5 billion per year.”

What about conservatives’ favorite whipping boy: the trial lawyers?

“Right now, doctors’ costs are driven up by malpractice insurance, and they’re incentivized to practice ‘defensive medicine,’ ordering extra scans and tests. Emanuel cites a CBO report finding that aggressively capping lawsuit non-economic and punitive damages would save a good chunk of money, but not enough on its own. A package that included a $250,000 cap on noneconomic damages, a $500,000 cap on punitive damages and a one-year statute of limitations for claims by adults would save about $11 billion a year — 40 percent from reduced malpractice premiums and the rest in the form of fewer defensive procedures like M.R.I.’s.”

So there you have it: neither the right nor the left is being honest about what is driving the federal budget deficit and health care spending, and the solutions they offer are not up to the challenge. But who can blame them? It is, after all, the American people that punish politicians who tell the truth and reward those who offer painless, magic bullets instead of honest answers.

But the country’s economic health depends on all of us abandoning our magical thinking. As Samuelson concludes, liberals and conservatives “need to come clean with reality. For years, they’ve exuded self-serving platitudes. Conservatives should acknowledge that Big Government is a permanent part of the social fabric and that much of what it does is popular. It needs to be financed. Liberals should concede that Big Government can become so big that its crushing taxes weaken the middle class and economic growth. Government then promotes conflict and degrades social justice.”

Today’s question: What do you think about the “magical thinking” of conservatives and liberals alike on reducing the deficit and controlling health care spending?

Monday, October 31, 2011

What if eliminating the mandate doesn’t drive a stake in “ObamaCare”?

A new study upends the argument that the Affordable Care Act (ACA) can’t work without an individual insurance mandate—which, strangely enough, could end up being the ACA’s salvation.

The study examined the potential impact on the affordability of health insurance premiums should the Supreme Court declare that the insurance mandate is unconstitutional without overturning the rest of the ACA. The study didn’t address the constitutional issues, only the pragmatic argument that without a requirement that people buy coverage, the young and healthy will choose to go without health insurance until they are sick, knowing that the ACA prohibits insurers from turning them down or charging them more for pre-existing conditions. This could drive up premiums for everyone else—forcing more people to drop coverage until the whole insurance market collapses.

But this study found that removing the mandate will have a far more modest impact, assuming that “all other features of the act—including the Medicaid expansion, premium subsidies, employer tax credits, and employer penalty provisions—were unchanged”:

“Neither our simulations nor the available research demonstrates that the mandate is necessarily a ‘linchpin’ of the Affordable Care Act, as one federal judge concluded. Our study suggests that although the mandate has important effects on premiums and coverage, it might not be essential to the act’s successful implementation. The premium increase and the loss of coverage might be judged acceptable if that meant preserving the remainder of the act. We believe that there is good reason to expect that the act would still cover 21–24 million of those who would have been uninsured otherwise, even if the mandate is removed.”

The “primary reason” why removing the mandate would have less of an impact than others have predicted is that the ACA’s tax credit subsidies would insulate most people from the costs associated with premium increases, making it unlikely that people would drop coverage in droves. Other features of the law, like open enrollment periods, would also mitigate the impact on premiums and loss of coverage associated with removing the mandate, the authors concluded.

Now, I have to say that there is a lot of uncertainty here, because the Congressional Budget Office and many other independent analysts predict that removing the mandate would have a much bigger impact on premium increases, dramatically reducing the number of people who would get coverage. Even this study found that some 8 million fewer people would have health insurance if the mandate is eliminated.

But consider this oh-so-sweet irony: if the Obama administration loses the argument in the Supreme Court that the individual insurance mandate is constitutional, and it is removed by the justices without overturning the rest of the law, it could end up being the ACA’s political salvation. Polls have consistently shown that the mandate is the least popular part of the ACA, dragging down support for the overall law. But most of the rest of it—including the subsidies and the prohibition against turning people down or charging them more because they are sick—is supported by an overwhelming majority of Americans. It will be much, much harder to repeal the ACA if the unpopular mandate goes and the popular stuff remains, in which case conservative critics may lose by winning, and the ACA’s supporters may win by losing. Instead of driving a stake in the heart of “ObamaCare,” as the critics had hoped, it could help keep the law alive. How is that for a neat trick or treat on this Halloween night?

Today’s question: Do you think the Affordable Care Act will be more or less likely to work and survive if the individual insurance mandate is eliminated?

Thursday, October 27, 2011

What Washington Might Learn from Dr. Seuss

With reports that the debt reduction “Super Committee” may deadlock, it’s time to bring in the spirit of Dr. Seuss to administer some emergency medicine! All 12 Super Committee members should be required to read the tale of the North-going and South-going Zax, from Dr. Seuss’s 1961 “Sneetches and Other Stories,” a modern day parable story for children about what happens when two stubborn individuals refuse to compromise. Excerpts:

"I say! You are blocking my path. You are right in my way. I’m a North-Going Zax and I always go north. Get out of my way, now, and let me go forth!"

"Who’s in whose way?" snapped the South-Going Zax. "I always go south, making south-going tracks. So you’re in MY way! And I ask you to move and let me go south in my south-going groove."

Then the North-Going Zax puffed his chest up with pride. "I never," he said, "take a step to one side. And I’ll prove to you that I won’t change my ways if I have to keep standing here fifty-nine days!"

"And I’ll prove to YOU," yelled the South-Going Zax, "That I can stand here in the prairie of Prax for fifty-nine years! For I live by a rule that I learned as a boy back in South-Going School. Never budge! That’s my rule. Never budge in the least! Not an inch to the west! Not an inch to the east! I’ll stay here, not budging! I can and I will if it makes you and me and the whole world stand still!"

But the World Didn’t Stand Still . . .

(Now, just replace the North-going and South-going Zax with John Boehner, or Mitch McConnell, or Barack Obama, or Harry Reid, and you’ve got today’s Washington described to a T!)

But it’s not just the politicians who need a counseling session with Dr. Seuss, it’s all of us.

It is we who in 2008 elected a president who pledged to reform health care, which he did, and it is we who in 2010 elected a House of Representatives that pledged to overturn it, which they are trying to do, and it is we who also voted last year to keep Democrats in charge of the Senate, which they are, virtually ensuring deadlock, which is what we have gotten.

It is we, the public, who “have become more doctrinaire at both ends of the ideological spectrum, a polarization that reflects the current atmosphere in Washington” reports the well-respected Pew Research Center for the People and the Press. Pew also found that “Core GOP groups largely prefer elected officials who stick to their positions rather than those who compromise. Solid Liberals overwhelmingly prefer officials who compromise, but the other two Democratic groups do not.”

The dangerous reality is that we don’t have 59 days or 59 years to make progress on the deficit, on health care reform, on jobs, on so much more. But how can we expect politicians to make the necessary compromises if we, the voters, insist that they act like the Zax, refusing to budge, not an inch to the west, not an inch to the east, even if it causes the whole country to stand still?

Today’s question: What do you think Congress, and all of us, can learn from the Zax?

Thursday, October 20, 2011

American Exceptionalism and Health Care

Most Americans accept the concept of American exceptionalism, described as “the belief that the United States is an extraordinary nation with a special role to play in human history; a nation that is not only unique but also superior.”

Being exceptional, though, can have a less positive meaning, as in “The Boston Red Sox had an exceptionally bad September!”

So how exceptional is American health care? Exceptionally good in some respects, but exceptionally bad (and getting worse) in many others.

On Tuesday, the Commonwealth Fund released the results from its 2011 scorecard on the performance of the U.S. health care system, and for the most part it isn't good.

My colleague, Anna Stoto, was present when the report was released by the Commonwealth Fund, and this is her account:

“Unfortunately, the results of the latest scorecard were grim – though the US demonstrated some improvement in quality indicators, the health care system fell short of achievable goals overall. While the US continues to lead in per-capita spending, overall performance failed to improve between 2006 and 2011. The scorecard examined five dimensions of health system performance, measured across 42 indicators: Healthy Lives, Quality, Access, Efficiency and Equity. Scores are simple ratios of the US average to benchmarks, which are levels achieved by other countries or top US states, regions, health plans, or providers.

Several troubling findings emerged from the report:
· There were steep declines in access and affordability between 2006 and 2011, particularly as health care costs have risen higher in relation to incomes. The 2011 report demonstrated that the United States is losing states where premiums were relatively more affordable – employer premiums now represent 18% or more of median household income in half of the country.
· The system demonstrated a lack of equity overall – there is considerable variation in care across the US, and there are now 15 states where 1 in 4 adults do not have insurance.
· Many costs are going toward inefficient care, resulting in numerous preventable deaths and a constant churning of patients in and out of hospitals. Incentives must be aligned so that it makes good business sense to improve hospital readmissions.

Access proved to be the keystone of the report’s findings, as it is related to quality, costs, and efficiency. The Commission on a High Performance Health System, which produced the report, focused on better primary care and primary care coordination as the tools to improve and identified the need to work across teams that span the health care system. Reforms created by the Affordable Care Act are also expected to help improve access, reduce variations, emphasize primary care, and create greater accountability for health and cost outcomes. Notably, the 2011 report was based on 2009 data” (so it does not reflect changes made by the Affordable Care Act, which became law in March, 2010, and has only been partially implemented).

The Commonwealth Fund has prepared a sobering set of slides that show how the United States did on key indicators.

Some of the areas where the United States doesn’t do so well may reflect cultural and socioeconomic characteristics that may be at least partially outside the control of the health care system itself—like infant mortality, for instance—or that have been exacerbated by the prolonged economic downturn (like increases in the percentage of insured persons).

But these explanations don’t change the fact that the United States is “exceptional”—not in a good way—on many dimensions that are largely due to the health care system itself.

We spend far more than any other industrialized country, but we are second to last in visits to emergency rooms that could have been treated by a regular doctor, dead last on test results and medical records being available at the time of an appointment, worst on duplicate testing, worst on access problems relating to cost, third to last out of eight countries on getting access to care after hours, second to last on getting same day doctor appointments, worst on medical errors—and we spend the most on insurance administration!

The report card doesn’t just compare us to other countries, but presents benchmarks on variations in care within the United States compared to generally accepted measures of best outcomes—and for the most part we don’t measure up well here either.

I expect that some readers of this blog will respond by saying that they provide excellent care to their patients—and I have no doubt about that. They will point out that rich people in other countries sometimes come to the United States for care because we have the best to offer—and I have no doubt about that either.

But the evidence shows that although the United States provides the best of all possible care to some of the people, some of the time, for many of the people, much of the time, the care falls far short of what is needed. This isn’t the fault of American physicians, who struggle to provide their patients with the best care possible, but with a system that costs too much and yet too often fails to deliver.

It doesn’t do any good for us to sweep these problems under the rug. Saying that we have the best health care system in the world doesn’t make it true. And if you believe, as I do, in American Exceptionalism, wouldn’t you want our health care system to be exceptionally superior to everywhere else in the world, and to fight for reforms to make it so?

Today’s question: What is your reaction to the evidence that the American health care system is exceptional—but often not in a good way?

Monday, October 17, 2011

Is paying for seniors’ long-term care more important than their medical care?

“HERE is the dirty little secret of health care in America for the elderly, the one group we all assume has universal coverage thanks to the 1965 Medicare law: what Medicare paid for then is no longer what recipients need or want today.”

So argues New York Times reporter Jane Gross in a provocative op-ed in yesterday’s New York Times. She makes the case that too much of Medicare is going to medical treatments and drugs of little value to the elderly, and nearly nothing on long-term care, citing the case of her own family’s experience:

“In the case of my mother, who died at 88 in 2003, room and board in various assisted living communities, at $2,000 to $3,500 a month for seven years, was not paid for by Medicare. Yet neurosurgery, I later learned was not expected to be effective in her case, was fully reimbursed, along with two weeks of in-patient care. Her stay of two years at a nursing home, at $14,000 a month (yes, $14,000) was also not paid for by Medicare. Nor were the additional home health aides she needed because of staffing issues. Or the electric wheelchair after strokes had paralyzed all but the finger that operated the joy stick. Or the gizmo with voice commands so she could tell the staff what she needed after her speech was gone.”

Ironically, two days before publication of Ms. Gross’s editorial decrying the lack of coverage for long-term care, the Obama administration announced that it had pulled the plug on the CLASS long-term care insurance program included in Affordable Care Act. This program would have provided small monthly payments to eligible persons to cover some of the costs of long-term care. ACA’s critics were gleeful about what they saw as “unraveling” of a “central” tenet of “ObamaCare.”

But these critics are missing the real lesson: unlike the other coverage expansions that are mandated by ACA, the CLASS program depended solely on voluntary, self-funded contributions by young people, for a small benefit (minimum of $50 a day) decades later. Voluntary, self-funded programs are usually favored by conservatives, but it was the voluntary nature of the CLASS program, and its very modest benefits, which led to the administration to determine that it was not fiscally sustainable. The rest of the ACA relies on a combination of individual insurance mandates, employer penalties, and expansion of government programs to make sure that everyone participates.

The CLASS program then is the exception that proves the rule underlying the rest of the ACA: if you want to expand health insurance coverage, you have to require that everyone participate, or the numbers just won’t add up. Robert Reich, former Secretary of Labor under President Clinton, puts it this way: “The lesson [from cancellation of the CLASS program]: If a public insurance system has minimum benefits and must pay for itself, it can’t be voluntary. Everyone has to sign up.”

The CLASS program’s demise doesn’t change the fact that there is an overwhelming need to find a better way to finance long-term care. Millions of adult children will soon find, if they haven’t already, that the costs of long-term care for their elderly parents is more than they can afford at the same time that they are providing for their own children. Millions of seniors in need of long-term care will find themselves having to dispose of all of their assets in order to qualify for Medicaid nursing home benefits, as Ms. Gross’s mother was forced to do “before winding up what she considered, with shame, ‘a welfare queen.’”

Ms. Gross’s plea for a better way to finance long-term care is right on the mark, but in a time of severe budget constraints, it seems like an impossible task. Ms. Gross suggests taking it out of unnecessary medical care routinely paid for by Medicare, which she says mainly benefits fee-for-service doctors and drug companies. While there is undoubtedly wasteful and inefficient care in the system, I don’t think most seniors (or their adult children, for that matter) view it as a choice between Medicare paying for medical care recommended by their doctor or having help in paying for their long-term care expenses. I don’t know what the answer is to financing long-term care, but at least we know that depending on voluntary premium contributions when people are young, for a very small long-term benefit many decades later in life, is not the solution. But neither is requiring families to bankrupt themselves or for seniors to have to give up everything they have earned over a lifetime to be poor enough to have their nursing home paid by Medicaid.

Today’s questions: Do you agree with Ms. Gross’s premise that Medicare should pay for long-term care by eliminating payments for much of the care provided by doctors and hospitals? And what does the CLASS program’s demise tell us about the effectiveness of programs that rely on voluntary contributions instead of mandated participation?

Tuesday, October 11, 2011

Free market health care is the answer? Then show me.

Critics of the Affordable Care Act argue that it involves too much government, and have vowed to repeal and replace it. For the most part, though, they haven’t gotten much past the part about repeal of “ObamaCare”—the replacement piece usually involves some vague promises to use market-based reforms, not an actual plan that could be contrasted against the ACA. As the country heads into a presidential election year, it will be important for conservative critics of the ACA to more clearly explain how market-based reforms would actually do a better job than the ACA in expanding access to care, controlling costs and improving outcomes. Then let the voters decide.

I understand the philosophical argument for market –based reforms: that given the ability to make free choices among competing health plans, providers, and treatments, patients will make wise and prudent choices, better choices than the government would make on their behalf. That if patients have to pay more out-of-pocket instead of being insulated from the cost of care by low or no deductible plans, they will have an incentive to use care more judiciously. That removing price controls—and allowing patients and their physicians to contract freely for services rendered—will introduce price competition and sensitivity, lowering overall costs. That without price controls, there will be more physicians to take care of patients, because physicians will be able to charge what the market will bear and stay in business, while discounting charges for patients who can’t afford to pay the full freight and charging more to those who can.

I actually agree with much of this line of reasoning. I think patients should have more choices—of physicians, hospitals, and insurance companies. Price controls do distort markets and create shortages. Patients should have more skin in the game.

But . . . and it is a big but . . . I haven’t seen any evidence that such market-based reforms can solve the two biggest challenges facing our health care system: out-of-control costs and almost 50 million Americans without health insurance, without the government being involved to subsidize care to those who can’t afford it and using its purchasing power to drive down spending. In other words, I’d like to see a conservative plan that shows me how and where market-based reforms would work—absent a major role for government:

Show me: Is there any country in the industrialized world where market-based reforms have ensured access to care for all of their residents, without a major role for government? When I co-authored a paper for ACP comparing U.S. health care with 12 other industrialized countries, we didn’t find a single one that had a system that relied on markets without substantial government subsidies and regulation.

Show me: Is there a state within the United States that has a developed a viable plan to ensure access to all of their legal residents, without a major role for government in subsidizing coverage? If states can do it better, then why is it that states that are most hostile to government tend to lead the pack in the percentage of their residents without health insurance? Massachusetts is the one state that has near-universal access to health coverage, and as we all know, it does it by government regulating insurance underwriting practices, spreading risk, subsidizing coverage for people who can’t afford it, and requiring people to buy it.

Show me: how eliminating price controls, moving to high deductible health plans, and offering more choices of insurance companies will by themselves reduce health care spending? For price competition in health care to work, several elements would have to be present. Patients (let’s call them “consumers” for this exercise) would need information to compare the quality and cost of the “providers” and health plans offered to them, just like they do when buying a car or washing machine. Yet we patients know almost nothing about the qualifications of the physicians and hospitals we supposedly can choose from, other than some basic information like whether a physician is board-certified or where he or she went to school. Many of the physicians who argue for free market reforms resist mandates that they “report” to the public on the quality and efficiency of their care.

We patients would also have to know in advance what physicians or hospitals charge for services so we could shop around, but there is no equivalent to Expedia for comparing physicians’ and hospitals’ charges. And even if I as a patient know what a doctor charges for a “typical” office visit or procedure, this tells me almost nothing about the actual cost of my care, because I may not be typical, and my cost of care has as much to do with how many procedures and visits I will need, what specialists I will be referred to (and what they charge), diagnostic tests I will need (and what they will cost me) and hospital trips I’ll have to make. Except maybe for a few elective procedures, much of this will remain unknowable and unpredictable, making true price completion unworkable.

Even the idea that we have a choice is a bit of an illusion. We don’t get any choice when it is an emergency room doctor, or when an anesthesiologist is assigned to us for surgery. And in many markets, there may be only one or two insurance companies to choose from. And even if we had more insurance companies to choose from, how do we patients know which ones offer better service and benefits at a price we can afford?

Finally, the argument that price competition and high deductible plans will substantially lower health care spending overlooks that fact that most health care spending is concentrated in a small percentage of the population, with half of the population spending little or nothing on health care, while 5 percent of the population spends almost half of the total amount. The high spenders tend to be older, sicker, and with multiple chronic diseases—the kind of people who would quickly use up a high deductible HSA account. The same study shows that they already have high out-of-pocket expenses relative to Income (so much for the argument that requiring them to pay even more out-of-pocket will lower spending). Much of health care spending occurs in the last six months of life, a time when seriously ill (dying) people aren’t likely to be shopping around for the least expensive doctor or hospital.

This isn’t to say that markets aren’t important, but markets work best when people have a real choice and the information to go with it to make informed decisions, and when government regulates things that markets don’t do well on their own, like providing public subsidies to people who can’t afford to buy health insurance on their own, requiring insurance companies to compete based on quality instead of cherry-picking the healthiest enrollees, mandating public reporting of quality and outcomes data, and providing patients and their physicians with information on the comparative effectiveness of different treatments. Oh but that is precisely what the Affordable Care Act tries to do, and conservatives say that is too much government and not enough markets. Fine, but I have to then ask: show me how free market health care would work in ensuring access and driving down costs (supported by evidence, not vague statements of philosophy) in the absence of government regulation and subsidies.

Today’s question: Is there any example or evidence, within the U.S. or abroad, that shows that free market health care can work in driving down expenses and ensuring access without government regulation and subsidies?

Tuesday, October 4, 2011

Primary care physicians don’t have to be treated like Rodney Dangerfield

Like Rodney Dangerfield, primary care physicians say that they can’t get no respect.

As evidence, they note that they get paid little or nothing for all of the work they do outside an office visit. They complain that Medicare and other payers dangle a small amount of “token” money in poorly-constructed pay-for-performance schemes, that different payers use different measures to judge their performance, that they are being asked—and sometimes required—to invest in “practice transformation” and expensive health information technologies with little or no financial support from payers. They complain that they can’t afford to spend more time with their patients, because they have to see as many patients as they can per hour just to make ends meet. And many believe that government agencies don’t listen to their ideas to improve payments and delivery systems.

And they desperately want someone to step up and say that what they do has great value-- and to pay them appropriately for it.

As I have blogged many times before, their complaints have merit: primary care physicians are over-worked, under-appreciated, over-managed, and under-paid (at least relative to other specialists).

But why then, when someone offers to do just what asked for—recognize that what they do has great value, and pay them appropriately more for it--the first reaction of some primary care doctors is to say no? Especially if it involves them doing things differently in return for higher pay?

You could see this reaction in some of the comments to last week’s post about Medicare’s Comprehensive Primary Care Initiative. Predictions that it would “fail” or that physicians were being “lied to” or that “if you think that Comprehensive Primary Care Initiative will result in greater pay to the Internist I have a nice bridge in Brooklyn you might like to buy.” I am not picking on those of you who made those comments—as always I am glad that you expressed your opinions, and there is no doubt in my mind that many of your colleagues would agree with your comments. And you deserve a response—the reason for this post.

But in this case, I think the cynics are wrong, and I hope that most primary care physicians keep an open mind about the Comprehensive Primary Initiative. Mainly because it addresses just about every one of the complaints from primary care physicians about lack of respect that I described in the second paragraph.

Pay primary care doctors for the work they do outside the office visit? Yep, it does this, through a risk-adjusted average of $20 per patient per month from Medicare, in addition to their usual Medicare fee-for-service payments. (And their FFS payments will continue to include the Medicare 10% primary care incentive payment that already is law because of the Affordable Care Act.) And no, their FFS payments will not be discounted or lowered to offset the PPPM payments.

Stop paying “token” amounts for poorly-constructed P4P schemes? $20 PPPM is hardly “token” money, and it could be much more if private payers and Medicaid join with Medicare to participate in the Comprehensive Primary Care Initiative. And this isn’t the kind of P4P program that pays practices after the fact for reporting successfully on an a la carte basis for a bunch of process and outcomes measure. Instead, it is a prospective payment program—the practices get the money upfront, on a monthly basis, and can get even more from shared savings.

Different measures from different payers? The program will require that participating payers agree to use standardized and established measures.

Being required to invest in health information technology and practice transformation with no financial support from payers? The Comprehensive Primary Care Initiative is unique in that it is predicated on the idea that all payers have to help pay for practice transformation and information technology systems. This is how CMS describes it:

“Without a significant enough investment across multiple payers, independent health plans-- covering only their own members and offering support only for their segment of the total practice population—cannot provide enough resources to transform entire primary care practices.”

Not having enough time to spend with patients? By providing a substantial revenue stream in addition to fee-for-service, physicians would have the option of spending more time with patients who really need it, rather than just seeing more patients to generate enough volume to keep the doors open.

Government agencies don’t listen to physicians’ ideas to improve payments and delivery systems? Well, in this case, this is not a top-down government program, but one that came up from the physician community. The Patient-Centered Medical Homes concept was designed by physicians, for physicians and their patients. It was ACP, the American Academy of Family Physicians, American Academy of Pediatrics, and American Osteopathic Association that in 2007 developed the guiding joint principles on PCMHs that CMS is now offering to support with real money. The payment model that CMS decided to use is the same as that recommended by ACP: risk-adjusted care coordination plus fee-for-service plus shared savings. ACP, not the government, developed the PCMH-Neighborhood concept that is a key part of the new CMS program.

And as I said earlier, primary care physicians desperately want someone to step up and say that what they do has value and to pay them appropriately for it. My admittedly back-of-the-envelope calculation is that Medicare’s Comprehensive Primary Care Initiative would pay a participating practice with 800 Medicare patients $192,000 more in the first year (800 patients x $20 average PPPM x 12 months), the same in the second year, and $144,000 per year in the third and fourth years, when the average PPPM drops to $15—but they can potentially earn more than that in the third and fourth years when the shared savings component kicks. But they will also get more revenue from non-Medicare payers, because in order for the program to be launched in a particular locality, other payers will have to join with Medicare to pay more for the participating primary care practices. One expert I know who has hands-on knowledge of the Comprehensive Primary Care Initiative estimates that practices could see a 30 to 50% increase in total practice revenue.

Sure, it is not a free ride for practices. To be selected and qualify for the higher payments, they will have to have a plan to manage high risk patients effectively, ensure access to care through such things as open scheduling, deliver preventive care, engage patients and caregivers, coordinate care with other specialists, have a certified EHR, and be able to report on measures on each of these domains. But aren’t these exactly the kinds of things that good primary care physicians and practices should be doing anyway? But instead of doing it for today’s low payment rates, the Comprehensive Primary Care Initiative recognizes that what they do for patients (patient-centered care) has value and will pay them appropriately more for it.

None of this guarantees that the program will succeed, of course. But it has enormous potential to provide very substantial revenue support from multiple payers to the 500 or so primary care practices nationwide serving over 300,000 Medicare patients that will lucky enough to be in one of the 5-7 regions selected by CMS. It could become the way forward for primary care physicians, at least those that are willing to embrace change themselves. And maybe, just maybe, they will stop seeing themselves as the Rodney Dangerfield’s of American medicine.

Today’s question: Will primary care practices seize the opportunity offered to them by the Comprehensive Primary Care Initiative to be paid appropriately more for their services if they can demonstrate that they provide patient-centered care—or cynically reject it?

Wednesday, September 28, 2011

Has Medicare found a way forward for primary care?

Today, Medicare’s Center for Medicare and Medicaid Innovation announced a Comprehensive Primary Care (CPC) Initiative, which asks private payers and state Medicaid programs to join with Medicare to “help doctors work with patients to ensure they:

1. Manage Care for Patients with High Health Care Needs;
2. Ensure Access to Care;
3. Deliver Preventive Care;
4. Engage Patients and Caregivers; and,
5. Coordinate Care Across the Medical Neighborhood,”

according to an email from CMS’s press office. The initiative will provide qualified practices with risk-adjusted, per patient per month care managements payments, in addition to traditional fee-for-service payments, along with the opportunity to share in savings achieved at the community level.

I believe that the Initiative is a potential game-changer in helping to support and sustain primary care in the United States. But not just any primary care: practices will need to demonstrate that they have the above five functional capabilities aligned with Patient-Centered Medical Homes and be accountable for reporting on the results.

What makes this initiative different from so many other PCMH and primary care pilots?

First, it recognizes that primary care physicians can’t be expected to transform themselves into PCMHs without all payers getting behind them to offer substantial and sustained financial support. Instead of Medicare, or one or two payers trying to go it alone, CMS recognizes that everyone must have some skin in the game to help primary care:

"Without a significant enough investment across multiple payers, independent health plans-- covering only their own members and offering support only for their segment of the total practice population-- cannot provide enough resources to transform entire primary care practices and make expanded services available to all patients served by those practices." The CPC initiative offers a way to break through this historical impasse by inviting payers to join with Medicare in investing in primary care in 5-7 selected localities across the country.

Second, the potential revenue for qualified practices could be substantial. CMS would pay risk-adjusted average of $20 per beneficiary per month for a qualified practice (the monthly payment would range from $8 to $40, depending on a patient’s health risk classification). These payments would be in addition to regular Medicare fee-for-service payments.

If state Medicaid programs decide to join in, there would be additional monthly capitated payments for Medicaid enrollees. And, private insurers who wish to participate will have to submit a “plan for enhanced support for comprehensive primary care aligned with the goals of this initiative.” Practices could be able to share in Medicare savings, calculated at a community (not practice) level associated with the initiative.

Third, practices would have “discretion to use this enhanced, non-visit-based compensation to support non-billable practitioner time, augment care teams (e.g. care managers, social workers, health educators, pharmacists, nutritionists, behavioralists) through direct hiring or community health teams, and/or invest in technology or data analysts.”

Fourth, they’d have access to data sharing from Medicare, Medicaid and other participating health plans on cost and utilization associated with their patients.

Fifth, if it is successful, the Affordable Care Act gives CMS has the authority to expand it throughout Medicare, well beyond the 75 practices expected to be selected in five to seven markets for the initial four years of the initiative. It could, in time, show the way to new ways for Medicare and other payers to sustain and support well-functioning comprehensive primary care on a long-term basis.

Most importantly, Medicare’s Comprehensive Primary Care Initiative could improve care for patients, by giving practices the support they need to implement proven best practices to manage care for patients with high health care needs, ensure patient access, deliver preventive care, engage patients and caregivers, and coordinate care across the medical home neighborhood, which CMS correctly defines as “the framework for comprehensive primary care.”

Today’s question: What is your reaction to CMS’s Comprehensive Primary Care Initiative?

Tuesday, September 20, 2011

Are doctors treated worse than everyone else?

Many physicians, and especially primary care physicians, aren’t happy campers. Why should they be? They feel disrespected, overworked, over-managed, and underpaid. They tell me they wouldn’t advise their children to go into medicine. Some feel that physicians are singularly beset upon. “Our government acts toward the medical profession in an abusive fashion. No other industry or profession is humiliated in this way,” writes RyanJo, a frequent commentator to this blog.

I can appreciate why many physicians are upset. They’ve had a decade where the Medicare SGR formula repeatedly has threatened to cut their fees, only to have Congress enact last minute reprieves that replace the cut with a small token increase that has not kept pace with their costs. Last year, Congress actually allowed the cut to go into effect and then retroactively restored it, creating havoc in physicians’ offices during the four weeks when they weren’t being paid. Like Charlie Brown and Lucy’s football, they are told each year by their members of Congress that that “this will be the year when the SGR will finally get repealed, really, for sure, we promise, this time will be different”--only to see it pulled away at the last minute.

In the meantime, they are constantly hounded to be more accountable for the care they deliver, to fill out just another form, to document their encounters, to get permission before they order a test, to double-check on whether their patient really needs that motorized wheelchair peddled on late night TV, to report on their performance, to e-prescribe (or else!), to buy an electronic health record and make damn sure that it is complies with “meaningful use” rules (or else!), to spend thousands of dollars to convert to new diagnosis codes (or else!) just because someone in government says they must . . .can we blame them for being unhappy?

Surely not. Health care payers, government and private sector alike, have a responsibility to stop piling on more paperwork and rules. Congress has a responsibility to fix the problem it created with the SGR, and ensure that physicians are paid fairly for their services. Primary care physicians have the right to expect that their services will be valued appropriately and sufficiently. And organized medicine has a responsibility to show its members that it is fighting against such intrusions and for fair payment policies.

But as we make the case that physicians deserve better, we also need to be aware that much of the rest of America has it much worse. Just read Robert Samuelson’s column in Monday’s Washington Post, documenting the economic devastation created by the Great Recession and lost decade of stagnation. He writes that the Census Bureau has found that “Median household income (the income precisely in the middle of the distribution) was $49,445, down 6.4 percent from 2007 ($52,823), the recent peak, and the lowest since 1996 ($49,112).” About 10 million more people have fallen below the official poverty line since 2006. The jobless rate remains stuck at over 9 percent.

But things are actually much worse than these numbers suggest, he argues:

“Even for millions of Americans with jobs, there’s a palpable sense of loss and anxiety. One reason is the devastating housing slump, subtracting huge amounts from people’s wealth. About half of households also own stocks through retirement accounts, mutual funds or ordinary brokerage accounts. The market’s daily gyrations inflict a feeling of endless vulnerability.

Perhaps as powerful are parents’ fears for their children. The jobless rate for young workers (ages 20 to 24) is always high — the young are restless and move between school and jobs — but now it is an astronomical 14.8 percent. Getting started is hard; studies suggest that young workers who experience intermittent work and low wages in a harsh economy may suffer permanently depressed lifetime earnings.”

Physicians have a lot to be unhappy about, but they almost never have to worry about being laid off from work, they are still relatively well-compensated, and they are trusted and respected by the public. Internists on average earned $189,000 in 2009, according to the Bureau of Labor Statistics; surgeons earned a bit more than $225,000. (Yes, I know that some internists make much less than the average, but some also make more—that’s how it works with averages.) For all occupations, the average income was $44,410.

I also know that there is much more to career satisfaction than having a job and a good income, and the country should pay attention to the physicians’ grievances. We should want physicians to be happy in their work. We should want smart young people feel that there is a future in medicine, including primary care. We should want to join with physicians to protest government actions that abuse and humiliate them. We should want to pay doctors fairly for their services and eliminate much of the paperwork that is driving them (and their patients) crazy.

At the same time, the medical profession won’t garner much public sympathy if it acts unaware that it remains a stable and highly compensated profession, at a time when wages for most Americans have been stagnant for a decade, one out of ten of us is out-of-work, millions more have become officially poor, many who have jobs fear losing them or worry that their kids won’t find them, creating what Samuelson calls a “fatalistic sense that the economic slump will never end.” Let’s remember that even as physicians have legitimate complaints about how they are treated, tens of millions of Americans have it far, far worse.

Today’s question: Do you think physicians have it worse than the rest of the country?

Monday, September 12, 2011

Health care spending: It’s enough to make a grown man cry!

Liberal and conservative economists disagree on many things, but not on the need to reduce health care spending in the United States. The United States already has higher per capita health care spending than any other industrialized country, and absent major changes, costs will continue to rise, the federal government will pay more and more for Medicare and Medicaid, and there will be little money left for anything else. Before long, relentless spending on health will lead to deep benefit and reimbursement cuts, crippling tax increases, and bigger budget deficits. It’s enough to make a grown man cry. (My apologies to the Rolling Stones, who had a much different topic in mind than health care spending when they penned this rockin’ line!).

This is the stark reality facing the new congressional Super Committee charged with finding at least $1.2 trillion in ten-year budget savings by Thanksgiving. They really can’t get there without cutting health care spending, but any changes they might make will be met with stiff opposition from politically powerful interests—hospitals, doctors, drug and device manufacturers, and seniors’ advocacy groups. I suspect that much of the health care sector secretly wants the Super Committee to fail to reach an agreement, figuring that they would do better under the maximum 2% cut in 2013 Medicare payments (which automatically goes into effect if the Committee deadlocks or Congress turns its recommendations down) than by a deficit reduction package that gores their own oxen. Physicians, though, stand to lose much more than the 2% required under sequestration, since they already are facing a 30% Medicare SGR cut on 1/1/12, and likely, double-digit cuts in 2013.

It is in this context that the American College of Physicians had to decide what it would say to the Super Committee. It could join with everyone else in just saying no: no to cuts in Graduate Medical Education funding; no to changing the way that care is delivered or paid for; no to anything and everything that is on the table. Or it could offer its own ideas for reducing health care spending in a socially and fiscally responsible way.

The latter is the choice made by ACP. In a letter to the Super Committee, ACP offered a menu of options to reduce health care spending by hundreds of billions, potentially enough to pay for permanent SGR repeal and to preserve funding for GME and other critical programs to ensure access to care.

The cornerstone of ACP’s recommendation is to establish a national, multi-stakeholder initiative to increase the use of high value care and to cut the estimated $700 billion that the U.S. spends on marginal and ineffective care. The initiative would develop a plan to provide patients and their clinicians with information on comparative effectiveness, change incentives for clinicians to reward value rather than volume, redesign insurance benefits so that patients have some financial skin in the game if they ask for ineffective care, and base coverage decisions on evidence of effectiveness with considerations of cost.

ACP also advocated a pathway to eliminate the SGR, stabilize physician pay for a five year period during which new value-based models would be tested, followed by a transition to models shown to be most effective by the end of the decade. On GME, ACP proposed broadening the base of funding by requiring all payers to chip in and spending the available dollars more strategically.

ACP also offered for consideration a menu of additional policy changes that the CBO and other experts say could reduce federal health care spending by hundreds of billions. Included in the options, which generally are supported by ACP policies, are strengthening primary care and care coordination ($83 billion in savings), lower defensive medicine costs (saving up to $62 billion), requiring drug manufacturers to pay a rebate to low income patients and/or allowing the federal government to negotiate drug prices under Medicare Part D (saving $110-$300 billion), enrolling Medicare-Medicaid “dual eligibles” in managed care (saving $12 billion), accelerating an excise tax on high cost health plans or phasing down and capping the tax deductibility of employer-sponsored health plans (saving $113 billion to $309 billion), creating a single cost-sharing structure for Medicare Parts A and B combined ($32 billion saving), and adding a public plan to the health exchanges created by the Affordable Care Act (saving $88 billion). Altogether, such options could save between $500 and $886 billion over the next ten years.

Many of ACP’s options are controversial and not likely to be accepted by the Super Committee or Congress. Even the seemingly non-controversial concept of reducing low value care is going to step on the toes of physicians, hospitals, medical device manufacturers, and drug companies that make money from the same services that may be found to offer little or no benefit. Transition to new “value-based” payment systems will be exceedingly difficult, especially for physicians in smaller practices.

The truth, though, is that there is no easy way to reduce spending on health care. Physicians could sit back and let the politicians, economists, business executives, and others decide who to cut and how, or they can offer their own ideas for achieving savings in a socially and fiscally responsible way, as ACP has tried to do.

Today’s question: What do you think of ACP’s ideas for reducing health care spending?