The ACP Advocate Blog
by Bob Doherty
Friday, May 25, 2012
Government, private payers bank on primary care
One of the tired refrains from some physician critics of the health reform law is that it did “nothing” to help primary care—when in fact, the law spends tens of billions of dollars to increase payments and improve the lot of primary care doctors.
Writing in the current issue of the New England Journal of Medicine, respected health journalist John Iglehart writes:
“Primary care physicians, long in the doldrums over their incomes and challenging work–life balance, may be heartened by recent steps taken by policymakers and payers signaling the increased recognition of the foundational role they could play in a restructured health care delivery system. Hopeful signs include increased Medicare and Medicaid payments for several years under the Affordable Care Act (ACA), plans by major private insurers to increase primary care fees, and initiatives that medical groups are taking on their own . . . although the ACA’s fate rests with the Supreme Court . . . [its] enactment and the preceding debate built momentum for strengthening primary care. Thus, whatever the Court decides, many of these efforts may well survive, thanks to heightened interest in primary care from policymakers and the private sector. The initiatives include “fee increases of 10% over 5 years (2011–2016) for [designated services by] primary care providers” . . [and] “equalization of Medicaid and Medicare fees for primary care services in 2013 and 2014.” [Emphasis added in italics.]
CMS, in announcing a proposed rule to implement the Medicaid pay equalization provision, reports that the government will provide states with $11 billion to bring Medicaid fees for primary care up to the Medicare rates. CMS also reported that “in 2011, over 150,000 primary care providers nationwide received almost $560 million in higher Medicare payments” because of the 10% primary care bonus program.
Because of the Medicaid pay equalization rule, many physicians will get a huge Medicaid raise next year. The California Medical Association says that the rule will result in a “50 to 60 percent increase in Medi-Cal rates for primary care physicians, including family medicine, pediatrics and internists, plus related subspecialties.” The Kaiser Family Foundation has a nice chart comparing Medicaid fees as a percentage of Medicare in every state, and although it is several years out-of-date (2008), it shows how physicians stand to gain. In eleven states, Medicaid payments for primary care were less than 60% of the Medicare rates (NY, RI, NJ, CA, DC, ME, FL, IL MN, MI; in two states (NY, RI), Medicaid paid less than 40% of the Medicare fee.
Mr. Iglehart points out that there are other initiatives in the work to help primary care:
“The Comprehensive Primary Care Initiative aims to foster collaboration between public and private payers to strengthen primary care. It creates a new value proposition for primary care, offering additional payments for currently unreimbursed services considered essential to a higher-performing delivery system: proactive care management for high-risk patients, improved access to after-hours care, communication with patients between office visits, and shared decision making. The Centers for Medicare and Medicaid Services committed, on behalf of Medicare beneficiaries, to pay a $20 monthly care management fee and offer shared savings to 75 high-performing primary care practices in seven markets—the states of Arkansas, Colorado, New Jersey, and Oregon, plus New York's capital district (Albany and the Hudson Valley), Cincinnati–Dayton (Ohio), and Greater Tulsa (Oklahoma)—where multiple insurers have committed to a similar payment model. The CMMI hosted a recent gathering of 41 payers in these markets to discuss their participation.”
He also notes that several large insurers, covering millions of lives and involving hundreds of thousands of physicians, have announced plans to increase primary care fees.
It may be too early to whistle “Happy Days are Here Again” when it comes to primary care. But for the first time in many years, public and private payers are putting their money into primary care, due in large part to “enactment [of the ACA] and the preceding debate” on the “foundational role [primary care] could play in a restructured health care delivery system.”
Today’s question: What do you think of Mr. Iglehart’s premise that primary care may be seeing a light at the end of the tunnel, due in large part to the ACA?
Thursday, May 17, 2012
Health care spending: “The fierce urgency of . . . whenever”
Health care spending is rising at a pace we can’t afford, right? It’s urgent that something be done to reduce it, right? Health care stakeholders and policymakers are tackling the issue with great urgency, right?
Yes, yes, and (emphatically) no! Yes, no one seriously disputes that health care costs are increasing faster than families, taxpayers, and government can afford. And yes, just about everyone pretends that they understand the urgency. But when it comes to actually doing something about it, urgency is replaced with dithering, much like a teenager, who when asked to clean up her room, mutters she’ll get to it “whenever”—while really hoping that someone else will clean up her mess!
But in this case, we can’t count on anyone else to clean up the mess, because it will take all of us. And what a fiscal and economic mess it is:
- Median family incomes increased by only 30% from 1999-2009—just keeping pace with inflation—while the after-tax cost of health insurance increased by a whopping 129%, out-of-pocket expenses increased by 78%, and federal health care spending increased by 140%!
- Mandatory federal health care spending is expected to double over the next decade and increase much faster than the revenue required to support it (one of biggest reasons why our budget deficit and public debt will grow). Higher health care spending is creating a huge and growing income transfer from young to old: a two-earner couple today with average wages over their working years will contribute $119,000 in Medicare payroll taxes while receiving an average of $357,000 in benefits. The difference comes from everyone else who pays into the program.
Where’s the money going? Doctors and hospitals, mostly. In 2010, 34% of private health insurance premiums went to hospitals, 28% to care provided by physicians and other clinicians, 14% to prescription drugs and durable medical equipment, 9% to dental and other professional services, 3% to home health and long-term care, and the remaining 12% was the net cost of insurance (administrative, profits, etc.). Combined, the hospital and physician sectors accounted for 70% of private premium growth over the past five years.
And most of the money is going to pay for health care for a very small group of people. The top one percent of the U.S. population, ranked by spending on health care, accounted for 20 percent of all spending and the top 5 percent accounted for almost half.
Why is spending going up? Rising prices per unit of service, population growth (more users), higher volume of services per user, and a shift to a mix of more expensive services and providers—and, of these, higher prices is the biggest factor.
(My thanks to the National Institute for Health Care Management Foundation, which has put together a superb set of charts that illustrate the above data, and from which I borrowed liberally for this post.)
So if we really understood the urgency, we would give the government and private insurers more authority to drive down prices—such as through negotiation, rate review, competitive bidding, price controls, and/or price transparency and competition.
If we really understood the urgency, we would attack the drivers behind increased intensity/volume: such as by requiring that diagnostic tests demonstrate greater clinical efficacy and lower costs (compared to existing ones) before they’d be covered, educating and training doctors to provide high-value, cost-conscious care, reforming payment models so that clinicians are rewarded for achieving better outcomes and lower costs, reducing duplication in care caused by fragmentation of care, reforming the medical liability system, and making patients more responsible for their own health care and their own costs.
If we really understood the urgency, we would stop screaming at each other about rationing, death panels, and granny being turned out on the street. We would stop blaming everyone else for the problem (you know, it’s always the greedy trial lawyers . . . or greedy doctors . . . or greedy drug companies . . . or greedy insurance companies . . . or wasteful government bureaucrats . . . or demanding patients who don’t take care of themselves. . . surely they’re the ones to blame, not me, not my doctor).
If we really understood the urgency, we would begin to have the difficult but essential public conversation about how much health care we can afford as a country, and how to allocate limited resources more rationally on the health care that society decides matters most based on the best scientific evidence—something that ACP called for a year and a half ago.
In the meantime, as we hide and dither and yell at each other, health spending will grow until it places a stranglehold on our economy, at which point we will have no choice but to address the problem with the fierce urgency it deserves.
Today’s questions: Do you agree that physicians, politicians and the public are dithering about the health care cost problem, rather than treating it with the urgency required? What will it take to get them engaged?
Wednesday, May 9, 2012
A health reform wish list
Remember as a kid tossing a coin into a fountain, closing your eyes, and silently mouthing your deepest wish (a puppy, a bike, a BB gun?). Didn't work, of course, unless your parents or Santa (coincidentally?) had the same wish for you.
Nowadays, I wish there was a magical Wishing Well that would deliver on my wish for a more civil, more informed, less ideological, more evidence-based, more compassionate, and less polarizing debate over health care reform and the Affordable Care Act. More specifically, I wish:
--That fiscal conservatives who say we can't afford the ACA because it doesn't do enough to control costs would not in the next breath label as "rationing" the programs it creates to reduce costs and even improve patient outcomes. Advance care planning, Accountable Care Organizations, evidence-based benefit packages, medical homes, Comparative Effectiveness Research, regulation of insurance companies' underwriting and administrative expenses, preventive care, and even the beleaguered Independent Payment Advisory Board may save money, or maybe they won't, and maybe there is a better way (let's hear it!), but they won't ration care, period. And while we are at it, how about acknowledging that no society can spend unlimited resources on health care alone, so decisions have to be made on what we can afford, and what we can't? It is just a question of how, and by whom.
--That liberals would not automatically dismiss the concerns of conservatives about the ACA's cost. The law will cost a ton of money—a trillion dollars over the next decade, according to the CBO. Both sides should admit that even though the CBO says that the law (barely) pays for itself, long-term cost estimating is an imprecise business and it could cost more, it might cost less. One can still argue that the ACA is worth it—my view, and ACP's view—for the good it can do in expanding health insurance and eliminating other barriers to care, while still acknowledging that it is legitimate to worry about the cost of a big new entitlement program.
--Speaking of CBO, I wish that all sides (and yes, I have done this myself, mea culpa!) would stop selectively citing the CBO or the Medicare actuary when it helps their case and then dismiss the same when it doesn't. The CBO and actuaries do the best they can, but as far as know they are not soothsayers and can't see the future. And let's face it, their methodologies are rather opaque. So yes, their forecasts should be considered in context, but we should all be a bit more humble about citing them to "prove'' our own biases.
--That conservatives would stop calling the law socialism. Only in America would subsidizing the purchase of private, often for-profit, health insurance be labeled socialism! (We do have socialized medicine in the U.S—it is called the VA and the health care system for men and women in uniform administered by the Department of Defense—but even Tea Party types aren't calling for their repeal!).
--That liberals would acknowledge that the government isn't the source of all good and business and markets the source of all evil. The government does some important and good things, like regulating the safety of food and drugs, funding medical research and providing programs to help people who are falling behind—like the uninsured who will be helped by the ACA. But the government also often does things inefficiently, bureaucratically, indifferently, and expensively, and at its worst, it can stifle innovation and distort markets. And corporations—yes, even drug companies and health insurers, for heaven's sake—can simultaneously contribute to the public good and generate profits for their shareholders, like producing a new cure (drug companies) and helping millions of people afford health care (insurers).
--That conservatives would acknowledge that the government isn't the source of all evil and business and markets the source of all good. An elected government "of the people, by the people, for the people" (as Lincoln called our American democracy in his Gettysburg address) is the way that Americans make decisions together on how to "promote the public welfare" (per the constitution). Government regulation and funding can help keep us safe, find cures to diseases, and provide economic help to people (see above list) when companies and markets are unable or unwilling to. The ACA was created precisely because business and markets alone have not been able to provide tens of millions of Americans with access to affordable health insurance.
--That liberals would listen to the concerns of conservatives about government getting too involved in their health care, the most personal of personal concerns. It is not irrational or unreasonable for people to worry that if the government can define what services will be covered, how and what their physicians would be paid, what insurance companies can cover, and even require people to buy health insurance, the government will over-reach and limit personal choices and freedom.
--That conservatives would acknowledge that lack of health insurance is a matter of life and death, and that liberals would admit that having health insurance doesn't guarantee access to care. It used to be that Republicans and Democrats alike agreed that the government has a role in ensuring that all Americans have access to health insurance, but disagreed on the means, but now many on the right argue that health insurance really isn't all that important, that the uninsured get care anyway. But an Urban Institute update of a groundbreaking Institute of Medicine report from several years back found that tens of thousands of Americans die each year because of lack of health insurance. But the left needs to understand that many of the uninsured get compassionate care from selfless physicians, and that health insurance won't guarantee access if, say, there aren't enough doctors to take care of them.
In other words, my wish is that all sides of the health reform debate would be more humble, more willing to consider the other sides' views, more informed about what the law actually does and doesn't do, less inclined to use polarizing and absolutist words to make their points, that is, to be more willing to listen to each other and try to find the right balance on how much the government should be involved in health care. But getting that wish fulfilled is about as likely as the BB gun I wanted as a child and that my (rightly) protective parents would never give me.
Today's question: What do you think of my wish list? Do you have your own?
Tuesday, May 1, 2012
Is family medicine the only “pure” primary care specialty?
About the Author
Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog
Email Bob Doherty: TheACPAdvocateblog@acponline.org.Follow @BobDohertyACP
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