Is this simply a shift of the crisis from the Federal Budget to our Senior’s Budgets?  I have other concerns too.

The budget proposed by Representative Paul Ryan, chairman of the House Budget Committee, includes a proposal to replace the current Medicare health insurance for the elderly with a voucher given to those newly eligible for Medicare after 2022. Seniors could use that voucher to purchase health insurance on the open market. From the standpoint of budget management this has clear benefits. Congress can decide how much they are willing to spend on these coupons, disburse them to our older Americans, and carry on with trying to balance the budget.  In estimates I have seen this essentially shifts the escalating costs of health care from being a budget dilemma for the federal government to a budget dilemma for many older Americans, who could end up spending a much higher portion of their Social Security check each month on health insurance premiums than they would under the current Medicare plan.  Besides this cost shift, I have other major reservations about this type of plan.

1. How will the issue of getting health insurance when you turn 65 be managed if you have major ongoing health problems. If you have cancer, advanced coronary disease, or any of numerous expensive medical conditions, will you be able to automatically enroll in any participating plan, or will some plans be able to exclude the sickest older Americans, leaving the “sick pool” of patients to buy more expensive plans, or not find insurance at all.
2. How will emergency rooms, hospitals, etc. deal with older Americans who decide not to buy health insurance with their coupons. Will there now be a big new segment of Americans who are uninsured, those elderly who feel they cannot afford the difference between the coupon amount and a health insurance plan? If so will hospitals be required to accept these patients knowing they cannot be paid?
3. What criteria will the government use to decide on the amount of the coupons? Will it bear any relationship to the actual cost of the insurance plans available to seniors, or will it be based on some other predefined schedule? If so I can see our seniors put in a position very similar to the one physicians have been facing with unacceptable premiums leading congress to put in place temporary fixes like the ones we read about every few months.
4. Will insurance plans for seniors be truly free market options, or will there be mandated coverage of various services. I can see great political pressure from various constituencies to get their services covered. Examples might be chiropractic, physical therapy, prescription drugs, or diabetic supplies. Will seniors be able to purchase a plan tailored to their needs, or will everyone be forced to purchase a one-plan-fits-all type plan. For some with a high net worth a catastrophic health care plan with a high deductible might be the best option. For others this would not work at all. If the cost of a catastrophic health care plan is less than the coupon cost, could the senior put the excess in an health savings account?

I’m sure many of you have other issues, but these questions make me very reluctant to be in favor of scrapping the current Medicare plan and simply offer our seniors a voucher to use to buy their own health insurance.

I’d love comments on this post to start a discussion of this topic.

Grand Rounds: The Impact of Health Care Reform

Last year my wife was diagnosed with advanced stage ovarian cancer, and with a major surgery, a few hospitalizations, lots of diagnostic testing, and chemotherapy, we easily reached the maximum out of pocket expenses of our catastrophic plan.  I was thankful for a good income and having been a good saver and investor for many years, so we were able to bear these costs.  At first glance I thought, boy I wish I could change back to the company plan, but with preexisting condition clauses making the cancer treatment not covered for months, I knew this was not an option.  Then I found out as a consequence of  the new health care reform I might be able to switch to a comprehensive plan within the company I have my coverage with now.  Maybe I could even get on the company plan. Then I crunched the numbers.

Looking at the plan most similar to our current plan we would pay the first $4,000 to get to the deductible, and 50% of the rest up to the maximum of $10000 for the family.  This adds up to the $7428 premium plus the $14000 in out of pocket expenses, for a hefty $22428 total.   On the Comprehensive plan offered by our insurer we’d have to pay $18,742 in premiums, the $1000 deductible, and the $5500 out of pocket maximum after the deductible, for a total of $25232. Amazingly even in the worst case scenario having the catastrophic coverage is likely to save us over $2700. (not counting any possible tax savings by spending the pre-tax dollars in the HSA) over having the “better insurance”.  In total costs the HSA plan comes out ahead at every level of health care costs in our case.  This helps me understand how health care expenses lead to over half of personal bankruptcy cases even in insured, working, middle-class families.

HSA plans do offer incentive for patients to keep health care costs down.  When spending your own dollars from your own Health Savings Account, it is more likely that as a patient you will question whether some health care spending is really needed.  You are more likely to choose less expensive generic meds, consider delaying an MRI to see if your knee pain improves with time and therapy, etc.  As you see above even in the worst case scenario where the insured reaches the maximum out of pocket expenses, the HSA option looks good if the health care insurance premiums are as high as the best premiums I can find for my family.

Primary care physicians have come under criticism because they have not counseled their patients and encouraged them to execute an advance directive and a medical durable power of attorney.   This is felt to be a factor in the leading to the large percentage of the dollars spent by Medicare in the last year, and especially in the last few days of life.  There is pretty good data that appropriate use of Hospice leads to both a higher patient satisfaction, and lower costs than control groups of patients who do not use hospice in their last months and weeks. So given this why doesn’t every patient come to their physician and demand to discuss end of life issues, and why doesn’t every primary care physician strongly encourage their patients to consider executing an advance directive and a medical durable power of attorney?  It’s really pretty simple.  Our health care reimbursement system gets exactly what it incentivizes.

If a senior patient chooses to make an appointment with their physician at any time other than at their Welcome to Medicare exam (a visit where since 2009 for a modest payment their physician is supposed to do a complete history, physical exam, EKG, discuss end of life issues and give counsel about advance directives and medical durable power of attorney) the patient is faced with paying the copayment and deductible portion of the fee for the visit, and the physician up until the current health care reform has not been able to bill specifically for these services.  This has just been considered a minor detail to lump into a visit for hypertension, diabetes, or whatever else brings the patient to the physician.

It really would be quite simple to vastly increase the number of seniors with completed advance directives and medical DPAs.  Just make it financially advantageous for patients to make this a part of a physician visit periodically, maybe every 5 years or more often if certain new diagnoses are made, and compensate the physician well enough that physicians will bring the subject up during visits.  This could be as simple as making these visits  fully paid for by Medicare (no copay, no deductible) if the visit includes counsel about advance directives and medical DPA, and the patient agrees to executes an advance directive and name someone as their medical DPA within 30 days of the visit.  Also create a billing code to add to these visits such that the physician is paid 25% extra for the visit during which the counseling takes place.  Allow this incentive only for outpatient visits.  Once the patient is at the hospital it’s really too late to effectively accomplish much of the benefit of advance directives and medical DPAs.   If this policy leads to a large majority of Medicare patients maintaining a current advance directive and naming someone as having their medical DPA, it could save big sums of money by avoiding the days in hospital  ICU beds used by families to work through these issues, often without valid input from the patient involved.  It might also increase use of hospice at appropriate times, leading to yet further savings.  In addition it is incentivizing patients and physicians to address these issues before crisis is at hand.  Even if there is no savings, it incentivizes both patients and primary care physicians to tackle this topic early and regularly.

There may be a better way to incentivize patients to execute advance directives and designate a medical DPA, and I’m all for someone thinking of a better way to do this, but most Americans are bright enough and frugal enough to take advantage of financial incentives, and I suspect most primary care physicians are too.

For any interested patients here is a link to a resource for all 50 states for advance directives.

The Original Individual Mandate, Circa 1792

By BRADLEY LATINO

Check out the comments also, and post any thoughts in the comments here.  Enjoy.

This post is really just my first shot at  suggesting a way I think makes sense to address the problem of the large number of uninsured people in America, while at the same time leaving lots of choice and personal responsibility that seems to be needed and a part of the American culture.  I am certain that I have not thought through all of the gritty details, and really don’t profess to have the talent or knowledge to write legislation, but I think this basic tenant might be a starting point.  First my assumptions:

1.  The biggest issue facing Americans who are uninsured is the possibility of personal financial ruin from a major medical condition.
2. Americans want personal choice in choosing a medical plan and providers.
3. American corporations are at a global disadvantage in having to pay for expensive health insurance plans that put their cost of producing goods and services higher than in countries with governmental health insurance.
4. If American’s were more responsible for their health care costs, it is likely that they would take a greater responsibility for how their dollars are spent on healthcare than if they are spending other people’s money.

Next the basic elements of a solution:

1. The federal government provides every American with a catastrophic coverage medical plan.  This would be a very high deductible plan to cover expenses over a chosen amount, say $5000./ family per year. (this number could be different, depending on actuarial and legislative input)  This would be paid for by a national tax of some sort, maybe a combination of a corporate payroll tax and health coverage value added tax, or other individual tax.
2. Individuals and employers could choose to purchase supplemental coverage for themselves or their employers beyond this catastrophic coverage.  Most Americans would want to at least purchase access to a PPO type of network to access discounted fees negotiated between providers of services and insurance plans, much like PPO fees now.  They could also choose to contribute to a HSA account to save/pay towards the deductible or to a supplemental plan to cover some or most of the deductible expenses. There would be no mandated services to be covered in these supplemental plans.  Individuals could choose what services they want to have insured.  This would allow insurance companies to offer plans tailored to the desires and needs of individuals, not the current every willing provider, cover everything for everyone that the many current mandates dictate.  If we ar ready for really big change, this could be for all Americans, and our less affluent elderly and our poor could have some sort of assistance in purchasing supplemental insurance to replace Medicare and Medicaid. 

That’s pretty much it.  Everyone would have catastrophic national health coverage to prevent most Americans from facing the risk of financial ruin from an accident, injury, or illness.  We could all choose to purchase whatever other coverage meets our needs on a open market, without regulated mandatory coverage of any services we might choose not to purchase.

I’m hoping to have this topic be an ongoing forum for discussion.  Comments, better ideas, suggestions for major problems I’ve neglected to address, and the expected outrage that this idea is a step toward socialism, fascism, or some other ism is welcome.  Make comments and join the dialogue.

Since 1997 the number of US medical students choosing to go into primary care has decreased by more than 50%.    It seems that sources as diverse as the Obama Administration and the Wall Street Journal think that we should find a way to encourage medical students to choose primary care specialties in order to allow Americans to have the best and most cost effective care. This is very problematic when primary care specialists earn considerably less, often 50-70% less than physicians in specialties where most of the revenue is produced by doing procedures. For years when asked about the disparity in physician salaries I’ve said, “I think primary care physicians are fairly compensated. I just think a lot of other physicians are overpaid.”   

If you look at the 2009 AMGA survey of physician income it is clear that the pay you can expect as a physician has little to do with how hard you work, how long you train, or how stressful or difficult your work is, and everything to do with whether you perform procedures that are highly compensated. It is hard to think of specialties less demanding in terms of afterhours call, emergent life-threatening care, and overall lifestyle than dermatology ($350,627), diagnostic non-interventional radiology ($438,115) and Radiation Therapy ($413,518) (median salary in parentheses). Compare these to what I’d consider some of the most difficult, intellectually challenging, and demanding specialties: Pediatric Oncology ($205,999), Infectious Disease ($222,094) and Adult Neurology ($236,500). Family Medicine is one of the very few specialties where the first number in the median salary is a 1.
For the annual earnings of one Orthopedic Joint Replacement surgeon ($580,711)  we could have one General Surgeon ($340,000) who operates on the sickest of patients often emergently at inconvenient times, plus a Family Physician ($197,655) and a first year school teacher thrown in for good measure. There are no emergent joint replacements. When a patient with a fractured hip is admitted to the hospital a primary care physician or hospitalist admits them, works for hours to days to get them well enough for surgery, then the joint surgeon operates for maybe 2 hours, spends maybe 1 hour on rounds the next several days, and sees the patient a couple of times in the office for follow up visits. If the patient has post-operative complications, the primary care physician or hospitalist, or maybe an intensive care specialist is asked to manage these problems. It’s a crazy system.

All efforts to change this have been met with intense lobbying efforts from physician specialty groups. The theme is always that we cannot make sudden changes in compensation; things must be done gradually so that it will be fair and thoughtful. Somehow the changes then just don’t happen. Remember the Harvard Compensation Study recommendations. 

 As primary care physicians we are well paid. It’s just that by dangling the carrot of really high income in front of students, who see that the workload, lifestyle and difficulty of specialty care is not greater and is often less than that of primary care where they can expect to earn millions of dollars less over their career, they have trouble justifying a primary care career choice.
I’ve read lots of articles and posts recently saying changing pay alone will not fix the shortage of primary care physicians. Maybe not, but it is the easiest first step. Increasing primary care compensation a little, and decreasing specialist pay a lot, to bring them close to equal, would go a long ways towards making primary care training more popular. In his post on KevinMD John Horstkamp MD agrees that making pay more equitable is the key to providing incentive to medical students to go into primary care. He suggests we need to pay family physicians 50-70% more. This would suit me nicely. I could live with higher pay. I also know that any proposals that increase the amount spent on health care are likely to be poorly received by legislative decision makers. I suspect a more palatable solution to American society in this era of concern over medical spending may be to pay less for procedures done by specialists.

The rates for payment are set by the federal government. Each year the Center for Medicare and Medicaid Services (CMS) sets what are called Relative Value Units, or RVUs. These determine the compensation for every procedure physicians are paid to perform. Currently the weight on RVUs is heavily weighted towards procedures, and less weighted towards the evaluation and management of health concerns. CMS could choose to change this to make payment for procedures much less. This would functionally bring pay to primary care physicians and specialists closer to parity. Commercial insurers have always quickly followed the CMS determined RVU schedule. Could this happen? Certainly if our legislators have the will to mandate this change by CMS, and the courage to stand up to the lobbyists of the specialty associations it could happen very quickly. The AMA will undoubtedly be opposed to “rapid” change. Primary care associations will take care not to be offensive to anyone. Legislators won’t pick a battle because it is always less than two years until the next election. This makes it unlikely to see this type of change anytime soon.

Legislators will whine that there is nothing they can do to get medical students to go into primary care, because they cannot afford to pay primary care doctors more. Don’t believe them. They just don’t have the courage to make obvious big changes that will be unpopular to some of their supporters.

Now, where can I find a place to hide from my specialist friends.

Now What?

by Atul Gawande April 5, 2010

On July 30, 1965, President Lyndon Johnson signed Medicare into law. In public memory, what ensued was the smooth establishment of a popular program, but in fact Medicare faced a year of nearly crippling rearguard attacks. The American Medical Association had waged war to try to stop the program, and doctors weren’t about to abandon the fight against “socialized medicine” simply because it had passed into law. The Ohio Medical Association, with ten thousand physician members, declared that it would boycott Medicare, and a nationwide movement began. Race proved an even more explosive issue. Many hospitals, especially in the South, were segregated, and the law required them to integrate in order to receive Medicare dollars. Alabama’s Governor George Wallace was among those who encouraged resistance; just two months before coverage was to begin, half the hospitals in a dozen Southern states had still refused to meet Medicare certification.

Either boycott could have destroyed the program.  Read the rest of the article

The cost-conscious physician: an oxymoron?

Several years ago, when my wife directed the third-year Family Medicine clinical clerkship at a highly ranked medical school, she developed a popular workshop on the cost of health care that presented students with scenarios of patients who were either uninsured or underinsured and challenged them to provide cost-conscious health care by selecting medications and tests that were clinically appropriate and financially affordable. Many students remarked that it was the only time during their two years of clinical rotations when they were required to consider costs in decision-making.

Now that the U.S. health reform bill is law, and over 95 percent of Americans (as opposed to today’s 84 percent) are expected to have health insurance by 2014, many physicians may be tempted to think that they can ignore the costs associated with prevention, diagnosis, and management of patients’ health conditions and just focus on doing what’s “right” for the patient, since somebody else is footing the bill. But contrary to popular opinion, that “somebody else” isn’t an insurance company or the government; ultimately, it’s the patient, in the form of higher insurance premiums (or taxes) to pay for an ever-expanding range of tests or treatments of questionable or zero benefit.

In response to Dr. Howard Brody’s challenge to the medical profession to identify lists of unnecessary tests and treatments, physicians have suggested antibiotics for colds, coronary calcium scans, PSA and thyroid tests in well patients, drugs for high blood pressure that are more expensive and offer fewer benefits than older drugs, MRIs and spinal fusions for low back pain. If it’s so easy to come up with a list, then why is it so hard to eliminate the waste? According to a recent Newsweek article, the problem is that many of the items on the list are physicians’ financial “bread and butter.” “We doctors are extremely good at rationalizing,” says Brody in the article. “Somehow we manage to figure out how the very best care just happens to be the care that brings us the most money.” Other concerns voiced by physicians are that patients have come to expect (if not demand) much of the aforementioned unnecessary care because it’s been going on for so long.

But if health care reform is to have any hope of slowing the extraordinary growth in the cost of health care in the U.S., doctors can’t keep looking to patients, hospitals, pharmaceutical and medical device companies, and insurers for solutions. In an editorial in the New England Journal of Medicine, Dr. Molly Cooke argues convincingly that cost-consciousness must be systematically incorporated into medical and continuing education:

First, we should be honest about the choices that we make every day and stop hiding behind the myth that every physician should and does apply every resource in unlimited degree to every patient for even minimal potential benefit. Second, we must prepare every physician to assess not only the benefit or effectiveness of diagnostic tests, treatments, and strategies but also their value. Value can be increased through cost-conscious diagnostic and management strategies and by the engineering of better and less wasteful processes of care.

“Value” isn’t about saving money, but means getting the maximum health benefit for our enormous investments in health care. This wake-up call needs to be delivered and reinforced to students, residents, and health professionals at every level starting today.

Also see    Difficult Choices  and Financial Armageddon

Starting Sept 23, 2010, 6 months after the signing of the bill, all new insurance plans, or current plans which make certain changes will be required to cover preventative services recommended by the United States Preventative Services Task Force as category A or B ratings (A = conclusive evidence and B = very strong evidence showing benefit of receiving the services) and beginning Jan. 1, 2011 Medicare will also cover these services with no copay or deductible applicable. 

This is good news for our seniors and should make it much easier for their physicians to convince our seniors, some of whom now have to choose between shelter, food or medicine on their poverty level fixed incomes, to receive preventative care.

See Dr Pullen on Health Care Reform for my initial take on the new law.

The Specter of Financial Armageddon — Health Care and Federal Debt in the United States

Posted by NEJM • March 17th, 2010

Michael E. Chernew, Ph.D., Katherine Baicker, Ph.D., and John Hsu, M.D., M.B.A., M.S.C.E.

The most important force shaping the U.S. health care system over the coming decades may well be the federal debt. The government now pays for approximately half of all health care costs in the United States, and projections of growing federal debt largely reflect anticipated increases in health care spending. Because federal debt and health care policy in the United States are so deeply entwined, it is important to understand the basics of deficits and debt and their implications for health care reform.

The deficit is the gap between expenditures and revenues in any given year ($1.4 trillion in the United States in 2009), whereas debt is defined as accumulated past deficits, or the stock of what we owe ($7.5 trillion at the end of 2009).¹ Economists distinguish between two types of deficit: cyclical and structural.  Read the rest of the article.

Little wonder that what to me looks to be, and itself professes to be a bipartisan group endorses many parts of the bill, and commends the senators for their work.

This originally published in The Medical News an article by previous Senate Majority leaders Baker, Daschle and Dole.

BPC supports passage of health care bill

28. December 2009 01:24

Former U.S. Senate Majority Leaders Howard Baker, Tom Daschle and Bob Dole, members of the Bipartisan Policy Center’s (BPC) Advisory Board and Leaders’ Project on the State of American Health Care, commend their former Senate colleagues for passing the Patient Protection and Affordable Care Act of 2009 today.

Senators Baker, Daschle and Dole released their bipartisan plan for comprehensive health care reform, Crossing Our Lines: Working Together to Reform the U.S. Health System, in June after 14 months of negotiations. Their politically-viable framework addresses the delivery, cost, coverage and financing challenges facing our nation’s health care system

This could almost be a new Genres of Literature.

This could be a new