• Medicare, in its attempt to save money, under-funds regular hospital bed care causing hospitals to emphasize expensive intensive care units and procedures which results in spending even more dollars.
• Medical societies have been reluctant or unable to enter national dialogues about important medical issues (like the Terry Schiavo case) or help set up a support system for practitioners who wish to practice high quality appropriate medicine but are afraid of lawsuits.
So here we are. Our healthcare system consumes over 17% of the gross domestic product, we spend more per person on healthcare than any other country in the world, but with worse health outcomes, and still have more than 47 million people uninsured.
What will the government do if these runaway costs are not controlled and bring our national economy to the breaking point? Enter talk of rationing. Make no mistake. It's a very real possibility.
How can we avoid rationing and maintain the ability to individualize every case?
Appropriate Care Committees - system of committees on the national, state and local levels, created by Congress with the power of law behind them. These independently funded committees of physicians, nurses, and clergy would function to review various cases in hospitals and nursing homes to insure appropriate care and would have the power to withhold funding for inappropriate 76
care. It wouldn't take long for the word to get out that inappropriate care is no longer a cash cow and the tangled billion-dollar web of who-does-what-and-why would quickly unravel and healthcare costs would plummet.
This system would also give the patient the benefit of an impartial opinion regarding appropriateness without any conflicts of interest since they would have no monetary or loyalty connections to a hospital, nursing home or physician. For the same reasons, they would provide support to physicians who want to provide appropriate care, but the patient or the families are demanding something else.
The cost saving of this system, along with changes in administrative structure, could well head off the looming financial crisis that could lead to healthcare rationing.
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Is it Insurance Reform or Health Care Reform that should be the Focus in Washington?
Certainly insurance companies are not saints, but are they the root of the problem? Is it the insurance companies that spend $7,000 on every American for health care every year? Or rather is the underlying problem the various factors that have driven our practice towards an overly technological, less personal, less coordinated, specialty-oriented style of Medicine?
Review of The Dartmouth Atlas of Health Care sadly demonstrates that even our great teaching centers are practicing a wasteful and, in many cases, a non-beneficial style of care. No wonder that our trainees now do the same.
We must adequately reimburse primary care, practice and teach excellent history taking and physical exam skills, conceptual thinking, and most importantly, physicians must unite behind a system of peer review to ensure beneficial care and support each other to beat back the lawyers.
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The Mayo Clinic: A Model for Appropriate Care But Can It Survive As Such?
I believe that a recent Time Magazine article (June 29, 2009) written by Michael Grunwald about health care conveys some truths about our health care system.
Mr. Grunwald cites the Mayo Clinic as an example of how very high quality medicine can be delivered at a fraction of the costs compared to other referral centers. I agree with his assessment. Quoting from the article, “Last year, Mayo lost $840 million on $1.7 billion in Medicare work”. It compensated by charging private insurers a premium for the Mayo name, but they’re starting to balk. “The system pays more money for worse care,” says Mayo CEO Denis Cortese. “If it doesn’t start paying for value instead of volume, it will destroy the culture of the organizations with the best care. We might have to start doing more procedures just to stay in business”.
There are some real insights conveyed in these few sentences. One, medicine is primarily the art of using available knowledge and science applied individually to each patient. Every patient is unique with individual characteristics and needs. A thoughtful physician must take into consideration many factors in suggesting the proper therapy for each patient. This kind of medicine is presently practiced at the Mayo Clinic without the additional billions of dollars touted as the cure-all by our political leaders and various pundits. If a physician cannot think conceptually about patients taking into consideration the entire clinical picture all the billions spent on comparative research will not be of value and will not help. Obviously at this time The Mayo Clinic does not need this additional research.
The second point, just imagine losing $840 million on $1.7 billion in Medicare activity and feeling the need to become another procedure mill to stay afloat.
Why is it that the Medicare payment system, a government program, financially punishes the good players and rewards the bad? And would not the number one business of government in the Medicare program be to develop a system of care delivery that emphasizes patient by patient decision making (see appropriate care committees) to replicate the present Mayo model? The answer I believe is that our leaders in Washington look at problems globally and not as the accumulation 79
of millions of individual events. Governments need to count widgets to justify payment and do not know how to account for the intangibles like thinking, individuality and human trust. The result is an overabundance of quantifiable widgets at great excess costs and a diminution of value in thinking, communication and personnel satisfaction.
Although during the present discussion about health care reform one hears about paying for outcomes, we hear more about Medicare cuts in reimbursement to hospitals and physicians. But, these proposed cuts are global and not based on the individual needs of each patient. This is especially unfortunate because if we could inject the wisdom displayed by the Mayo Clinic into all of our health care there would be more than enough resources to provide universal coverage. And this would be accomplished at a decreased percentage of gross domestic product devoted to health care rather than the increases intrinsic to the present proposals.
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Is Fee-For-Service the Reason for Our Excessive Health Care Spending?
The evidence is overwhelming that we, as a nation, do not practice efficient medicine. We spend about twice as much per person as any other country yet have many millions without adequate health care. It is becoming obvious that physician practices are a major component of this excess spending. Many experts refer to the non fee-for-service centers such as The Mayo Clinic, The Cleveland Clinic, The Geisinger Clinic and others as examples of efficiency and state that fee-for-service medicine is the major driving force for our excessively expensive medical care.
I do not doubt that fee-for-service is a component of this problem, but are there other factors that are equally if not more important? After all, The Dartmouth Atlas of Health Care has demonstrated that many areas with large university medical centers with medical staffs on salary spend much larger amounts for the same conditions than the most efficient centers. And where are the big physician profits in medicine, in professional fees, i.e. Medicare part B or in facility fees, i.e.
Medicare part A? There is no doubt that the big profits come from ownership and not professional fees. Thus many question the propriety of physicians profiting from facilities to which they refer patients. This has nothing to do with fee-for-service. Other factors include:
1. The mistaken belief by many that limiting non-beneficial care is rationing.
2. A fascination for glitzy buildings and fancy machines, leading to real excess.
3. Public demand heightened by drug and device advertising via the mass media.
4. A Medicare payment system that emphasizes expensive machinery at the expense of person to person patient-physician time.
5. Organized medicine’s inability to articulate to the public: 81
a) what is rational health care?
b) the importance of history and physical diagnostic skills of physicians, skills that are now being de-emphasized in favor of various expensive tests.
c) lack of a concerted effort to promote a more equitable and realistic tort system.
Thus, although fee-for-service may entice some, if not many, physicians to do something extra, it is only part of a much more complex problem. The culture of intensive peer review at The Mayo Clinic and the other efficient medical centers may indeed be the secret of their success, rather than the lack of fee-for-service.
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Medicare - America’s Single Payer Healthcare System Medicare is the single payer system for the approximately 44 million eligible citizens who are 65 years and older. Passed by Congress and signed into law by President Lyndon Johnson in July 1965, it is now in deep financial trouble. This is despite its low administrative overhead which is the proposed great advantage of a single payer system. The lesson to be learned by this experience is that low overhead alone does not guarantee adequate funding if the fundamental flaws in the health care system are not addressed.
There are two fundamental flaws perpetuated by Medicare that have so far escaped correction - the under funding of primary care and the lack of a system to prevent inappropriate care.
1. Since its inception Medicare has under-funded primary care, which has led to the continuous and progressive decline of this specialty. Starting in 1965
Medicare paid what were then the usual and customary fees for physician services. This payment formula emphasized technology and procedures while underpaying primary care. An attempt was made to correct this imbalance by instituting the Resource Based Value System in 1992. This process has also failed to adequately reimburse primary care. The result has been the continued declines of the number of physicians practicing this specialty along with shortened visits and decreased in-hospital follow up.
The shortage of primary care physicians has also led to inadequate preventative care for our population. Many authors have stated that if universal coverage would somehow appear tomorrow, with the deplorable state of primary care which is the infrastructure of any nation’s medical system, the health of the nation would not improve. We must correct the inadequate reimbursement for primary care.
2. There is no oversight to prevent non-beneficial care. Such unnecessary care consumes approximately one third of Medicare’s budget which translated to our entire medical system equals six hundred billion dollars yearly! See my previous posting on why we need Appropriate Care Committees.
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Nothing New Under the Sun: Massachusetts All Over Again A law signed in April 2006 in Massachusetts created state funded health care for all of its citizens. There was a deliberate decision to first insure the entire population and then once this was established deal with the cost issue. The idea was to offend no one, keep every constituency happy. Then sometime in the future face the music when costs become unbearable.
False arguments were made such as, universal coverage should in of itself lower costs by preventing chronic disease. This is of course absurd; chronic disease is frequently a product of medical care, keeping people alive who years ago would have died because of their illness. As average life span increases, the chronic disease burden increases and so does the cost. Another false argument was that with insurance for all emergency room visits with their large expense would be drastically reduced. But, that has not happened because of the severe shortage in Massachusetts of primary care physicians. Thus when people become ill their only alternative is the emergency room. There was no provision in the Massachusetts law regarding inappropriate non-beneficial care. However, one only has to look at the Dartmouth Atlas of Health Care to see that a large proportion of care in the state is inappropriate and extremely expensive.
So now Massachusetts has a financial crisis that must be addressed and unlike the federal government cannot print money to cover its costs. Will universal coverage in the state survive? Only time will tell.
The news from Washington is:
1. Medicare is facing insolvency in 2017, if changes are not made.
2. Many working families and our industries are now in financial distress because of the escalating costs of health insurance.
3. There is great variation in the Medicare cost of hospitalization throughout the country without commensurate benefits.
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But what of the solutions offered – pabulum disguised as reform that does not address the causes of our excessively expensive health care – Massachusetts revisited!
1. A White House conference including representatives of the health industry that makes vague promises to decrease the increase in administrative costs over the long term. No mention of tackling the problem causing excessive administrative costs at this time.
2. Electronic medical records, a good idea for patient care but not a cost saver.
3. A Comparative Effectiveness Institute, a bad idea that also is not a cost saver.
4. Enhanced wellness – a vague idea involving dramatic changes in life style of most of our citizens – probably not to be seen in our life time.
5. A change in incentives so that doctors will be encouraged to deliver high quality care. A vague concept that sounds good, but says little.
David Brooks in an op-ed piece in the Wall Street Journal (May 15), titled his piece, Fiscal Suicide Ahead, in essence saying the proposed health care cost savings so far considered by the Administration and Congress maybe good ideas, but will not decrease costs. Thus the funds for the entire Obama agenda will not be available with the result being gross overspending and excessive debt.
By not addressing the fundamental problems within our health care system at this time, and maintaining these very excessive costs, the federal government will find itself in a predicament that makes Massachusetts look reasonable.
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Questionable Funding of Universal Coverage
Our political leaders tell us that, in the past, there have been no decreases in services after cuts in Medicare funding. Therefore, it is reasonable to fund a portion of the costs of universal coverage with further cuts in Medicare reimbursement rates.
It is true that most Medicare beneficiaries are pleased with the program despite the decreases in payment rates over the years (for an excellent short review of Medicare’s payment history (http://www.hlc.org/medicare_history_memo.pdf).
Despite these decreases in payment for each service, total Medicare expenditures and share of the federal budget are increasing. But in reality, how is Medicare actually funded and have these decreases caused a dramatic change in the practice of medicine in this country?
Although Medicare makes up about one sixth of our total national health care spending, it is the largest insurer and has a major impact on the allocation of health care resources. Last year The Mayo Clinic billed Medicare $1.7 billion for medical services; however, they lost $840 million due to Medicare underpayment.
They made up for this loss by overcharging private insurance, i.e. cross-subsidization. The Mayo Clinic is not alone in this practice. Every hospital in the country has to do the same. Thus the working public has been paying more for their health insurance to offset the inadequate payments that Congress has allotted for Medicare - in essence, a hidden tax on workers.
Hospitals and doctors also quickly learned that Medicare is relatively generous in paying for technology rather than primary care, history taking, physical diagnostic skills, cognitive and conceptual thinking. Technologies and organizations with the greatest lobbying budgets have received the lion’s share of reimbursement. As a result we have an undersupply of primary care doctors, an oversupply of procedureists, an emphasis on intensive care units, overuse of cardiac catheritization and stenting, a frenzy of building proton accelerators and the list goes on and on. With further cuts in Medicare reimbursement to help pay for universal coverage without real structural changes on how we practice medicine, 86
cross-subsidization from private insurance and even a greater emphasis on the overuse of procedures and technology will most likely occur.
Instead of delving into these and other reasons as to why we spend much more than any other country on health care, Washington is again trying the already failed economic approach of decreasing payments. Multiple experts using different methods demonstrated that we spend about $700 billion dollars yearly on non-beneficial inappropriate care. Physicians working together as part of intensive peer review could address this overspending at the physician-patient interface, thus ensuring individualized evidence-based beneficial care. I believe the economic approach now being pursued by our political leaders will prove to be more frustrating and in the end more expensive. It is time to put the responsibility for rational beneficial care where it should be - on physicians.
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The Election is Over, the Health Care Crisis Still Looms, So Now What?
As the national election drew near, a spate of Perspective articles in the New England Journal of Medicine discussed the problems and possible solutions to providing universal health care coverage. Most begin with the now familiar litany of problems with our present system: greater percentage of gross domestic product (GDP) spent on health care than any other nation yet millions are under and uninsured, poor results when compared to other nations, and an economic burden that is costing jobs while lowering the standard of living of the middle class.
The first four papers were from each of the presidential campaigns and then a rebuttal. The Obama campaign identified many of the problems in our system.
Although the excessive costs of our present practice of medicine were discussed, the solutions were superficial and vague. While more uninsured would be covered, the anticipated increase in spending would make these reforms unattainable or so expensive as to cause more chaos to our economy.
The McCain campaign, although recognizing many of the American people’s concerns, offered a solution that is primarily a change in payment scheme. Again the fundamental problems existent with our health care system were not addressed; instead the plan relied on patient dollars to create a savvy consumer able to wisely purchase services, although they are extremely complex with consumerism a major problem driving up costs. The Obama campaign countered the McCain plan as completely unrealistic and probably causing more harm than good. The McCain campaign responded to the Obama plan as unrealistic and, if enacted, prohibitively expensive. In my opinion both rebuttals were correct.
Following these exchanges, three health policy experts wrote about their ideas for changing the health care system. They argued for control of the growth of health care spending without which any attempt at universal coverage will fail. They stated that a large reason for the increase in costs is new technology and drugs.
To deal with this problem they support the creation of an independent well-funded organization fashioned after the British National Institute for Health and Clinical Excellence.
I disagree with this idea for several reasons:
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1. We already have a well-funded entity with known scientific excellence –
The National Institutes of Health (NIH).
2. Drug and device companies now fund a great deal of research for use in clinical practice, which we know is frequently biased. Therefore, I suggest that Congress enacts legislation requiring all drug and device clinical research monies spent by the companies go through the NIH for experimental design, execution and reporting. This would ensure more valid data.
3. My proposal of the health care “Bank" would then enforce the concept that only therapies of benefit would be funded.
4. My appropriate care committee system would insure that these decisions are tailored to each individual’s needs and not applied in an autocratic manner. These changes would be part of the medical system and thus would not require the creation of another expensive bureaucracy. The
“Bank” would adequately fund and also enlist specialists to provide primary care, the backbone of any successful health care system and dramatically lacking in our country.
Unfortunately none of the articles dealt with medical advertising to the public (which should be prohibited), the growth of medical consumerism and the overuse of Cardiopulmonary Resuscitation and the flaws in Advanced Directives that have substantially increased health care costs. It seems that no one wishes to tackle our outrageous end-of-life care, the suffering it causes to patients, and its cost to our society. My hospital admission form and the appropriate care committee system would address these problems. We can provide world class care, universal coverage, decrease the percentage of GDP spent on health care and thus greatly enhance our standard of living by adopting my three major proposals (hospital admission form, appropriate care committees and the
“Bank”).
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The Federal Urge to Spend: The Comparative Effectiveness Institute Washington is thinking of spending tens of billions of dollars on a Comparative Effectiveness Institute, based on a concept borrowed from Great Britain (The National Institute for Health and Clinical Excellence). However Great Britain has adequate primary care. We do not. And Great Britain has put a dollar limit on a newer drug or procedure regardless of its potential for benefit for that particular individual, while the U.S. Congress has rightfully ruled that out for our citizens.
The biggest flaw in the need for the Institute is the assumption that American doctors do not know how to practice medicine that delivers value for the dollar, and that information on this subject does not now exist. This idea is categorically false! Physicians know very well from many existing studies when further critical care will not be beneficial, when cardiac catheritization and stenting is not warranted, when multiple transfers from nursing home to hospitals will not benefit the patient and so on. I am not discussing debatable situations, rather situations that are manifestly obvious.
It is not a lack of knowledge underlying the cause for all this inappropriate care.
The culprits have been previously discussed on my blog, for instance: perverse financial incentives including excessive reimbursement for technology, inadequate primary care, fear of legal consequences, and lack of national medical standards. If you want to read up on it, get a copy of The Dartmouth Atlas of Health Care: Regional Disparity in Medicine.
On my blog I have proposed multiple steps to more effectively deal with these problems:
1. Through the Federal Health Care Clearing House and Bank, prospectively verify the benefit of newer therapies via funding of their confirmatory research through the National Institutes of Health before they are approved for general use. This information would be generated via well-performed excellent studies reported without bias.
2. Use of my new admitting form that clarifies that only beneficial care can be delivered.
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3. Physician review through Appropriate Care Committees to guarantee as much as possible that care will be beneficial and uniform throughout the country.
4. Amendments to the Patient Self Determination Act, the Americans with Disabilities Act and the Emergency Medical and Active Labor Act to include the phrase, “within acceptable medical standards.”
We can provide universal coverage and decrease our percentage of gross domestic product devoted to health care. If other industrial nations throughout the world can it, so can we. And we can do it without spending billions to study this, that, and the other, when the information is already out there. However, the sense from Washington is that we have to spend many billions more before we can reduce spending. I completely disagree!
A congressional budget office 2008 report quoted in the April 7, 2009 Annals of Internal Medicine states that a Comparative Effectiveness Institute in the United States would reduce health care spending by less than one tenth of one percent.
There is no doubt in my mind that my plan is far superior. Do you agree?
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Health Care Reform: Time for American Medical Leadership to Start Thinking Ouside the Box.: Part One
A recent Perspective article in the New England Journal of Medicine raises concern that because the federal Food and Drug Administration (FDA) has approved certain drugs, citizens could not sue drug companies in state courts because of the preemption clause in the U.S. constitution which states that federal laws trump state laws. The article, Why Doctors Should Worry About Preemption, was written by three physicians on the Journal staff. Given their positions, they are among the top leaders in the medical community and exert considerable influence.
FDA approval is based on a four phase process with all information supplied by the drug company at a cost to the company of over eight hundred million dol