Better Health: Smart Health Commentary

Featured

The Difference Between Short and Long Term Medicare Savings for Health Care Reform

July 22nd, 2009 by SteveSimmonsMD in News, Opinion, Primary Care Wednesdays, Uncategorized

Tags: Primary Care Wednesdays

Robert Blendon, Professor of Health Policy and Political Analysis at the Harvard Kennedy School of Business, speaking on funding for Health Care Reform, July 8, 2009

“Potential sources for this (health care reform) are new taxes on people or businesses, substantial short-term savings from the existing Medicare and Medicaid programs, or increasing the deficit”

After Last week’s passage of Health Care reform plans by committees in the House and Senate, attention has turned to the Senate Finance and House Commerce Committees to see how congress will pay for reform in a deficit neutral way, as mandated by President Obama.  The price tag over ten years–$1.2 Trillion–is paired with the observation that a shortage of $240 billion currently exists.  This assumes that $948 billion already has been found.

The only way to ‘find’ $948 billion without increasing the deficit is to increase taxes on businesses and the wealthy or by reimbursing less for services provided through Medicare and Medicaid.  I will leave the never-ending tax-rate argument for political pundits, and instead focus this post on short and long-term savings from Medicare and Medicaid because I believe paying less for services than it costs to provide them will negatively impact the quality of medical care in this country.

I was surprised to learn of a battle being waged between the executive and legislative branches on the issue of “long-term savings” from Medicare, as it relates to “Medicare Payment Authority”.  White House Chief of Staff, Rahm Emanuel, has called Medicare payment Authority, “the least talked about, most important issue on the table” and clarified its’ importance by stating, “Structures that fundamentally alter the long-term costs are a must for real health-care reform.”   This issue does not follow party lines with a mix of Republicans and Democrats being in opposition or support of the President, irrespective of party affiliation.

Our Congressional Representatives have the power to set Medicare Payments, outside of any pre-set rules or regulations by simply passing legislation.  The Washington Post describes this power as “one of their most valued perks….a powerful tool on the campaign trail”.  President Obama’s administration wants to either transfer payment authority to MedPac (the Medicare payment advisory commission) or create an independent Medicare Advisory Council, reporting to the executive branch so lawmakers can no longer tailor Medicare spending to address local concerns.

Before leaving office, Senator Ted Stevens secured a permanent 35 percent increase in Medicare payments for Alaskan physicians only.  The political benefits to an incumbent running for reelection need not be explained while it is easy to see the inefficiency in such a system.  At a time when politicians are admonishing those working in the Health Care Field to be more efficient, I would urge congress to take a dose of their own efficiency medicine and support the current administration in their efforts to curtail long-term spending by surrendering this power.

According to the White House, $622 of the $948 billion will come from short-term savings squeezed out of existing Medicare and Medicaid programs through one of two ways: by improving efficiency (309 billion) or enacting policy changes (313 billion).  The Medicare Fact Sheet posted on the White House website, states that one policy change will have the added benefit of encouraging efficiency:  “incorporate productivity adjustments into Medicare payment updates”.  This policy change measures the productivity of the entire U.S. economy, as measured by subtracting the hours worked from the amount of product created and extrapolates it to Health Care (a profession which does not produce “products”).  This idea justifies the withholding of 110 billion dollars from “providers” with an unexplained benefit stated in the closing sentence describing this policy, “This adjustment will encourage greater efficiency in health care provisions”.

I found it difficult to believe that anyone could suggest paying less would encourage greater efficiency in caring for the infirm and old until Boston Medical Center, a hospital serving thousands of indigent residents, sued the state of Massachusetts one week ago, charging that the state is now reimbursing only 64 cents for every dollar spent treating those covered under Medicaid or Commonwealth Care (the state subsidized insurance program for low-income residents).  This should be of great concern to us all since the House’s plan adds 11 million people to Medicaid and cuts funding while reformists tout Massachusetts as an example worth following, being the only state with universal coverage today.  Before state wide reform was enacted this hospital had operated for 5 years without a loss.  However, when the hospital showed losses over two years of 138 million dollars, state officials observed the hospital had a 190 million dollar reserve (not for long it appears) and suggested that Boston Medical could reduce costs by operating more efficiently.

The above example demonstrates the willingness of government bureaucrats, inexperienced in providing actual medical care, to give flippant advice while failing to appreciate how fiscal efficiency, doing more with less, impacts medical efficiency, caring for the ill effectively.  To be sure, something must be done to curtail run-away costs in health care and I agree with the president when he says, “The status quo is unsustainable. Reform is not a luxury, but a necessity”.  However, reform needs to focus on sustainable Short-term and Long-term savings in such a way that prevents hospitals and doctors from having to make a choice between providing sub-standard care or going out of business.  Furthermore, I would hope that Congress take an honest look in the mirror regarding long-term savings before only enacting short-term savings which could negatively impact the care available to us all.

Until next week, I remain yours in primary care,

Steve Simmons, MD

ABC News Covers Better Health’s “Putting Patients First” Event At The National Press Club

July 20th, 2009 by Dr. Val Jones in Opinion, Video

Tags: Bill, Congress, Government-run Healthcare, Healthcare reform, House Bill, Paul Ryan, Putting Patients First

I had the chance to discuss the event with local ABC anchor, Dave Lucas. We talked about the folly of rushing through a healthcare bill without reading it first… among other things.

How Do Doctors & Patients Find Out About Food & Drug Alerts?

July 20th, 2009 by Dr. Val Jones in Expert Interviews, Opinion

Tags: Alerts, Device Recalls, Drug Recalls, FDA, Food Recalls, HHS, Patients, Physicians, Public Health, Recalls, Social Media

I recently created a focus group survey of physician bloggers to determine how they (and their patients) typically receive food and drug alerts. Twenty people responded. The results to 5 key questions are displayed below.

My most interesting take home messages:

1. Most physicians surveyed first receive drug alerts via eNewsletters from companies like MedPage Today and Medscape. (This is consistent with the large number of page views achieved by these sites/month).
2. Most patients find out about recalls via mainstream media – TV and newspapers.
3. EMRs, ePrescribing tools, coaching programs, and social media networks (like Twitter) are perceived to be the most valuable means of disseminating targeted recall information to the right person at the right time.

There’s Not Enough Waste And Inefficiency In Healthcare

July 20th, 2009 by DrRich in Better Health Network, Health Policy, Opinion

Tags: Costs, Finance, Healthcare reform, Healthcare System, Rationing, Waste

In what is quickly becoming a bad habit, DrRich once again provides a misleading title. Obviously, there’s plenty of waste and inefficiency in our healthcare system, enough to suit almost any taste, and DrRich deplores every bit of it.

Indeed, DrRich strongly suspects that at least 20 to 30% of all healthcare spending is completely wasted, and has seen claims (masquerading as proof) that the actual value is as high as 50%.  So again, despite the title of this post, no matter how you look at it there is plenty of waste and inefficiency to go around.

It’s just that there’s not, well, enough.

Before you go away mad, let DrRich quickly explain (quickly, at least, for DrRich) what he means here. Healthcare reform is in the air, and we all know that any effective healthcare reform is going to have to find a way to control healthcare spending.  And a central assumption of any reform plan yet proposed is that we can control spending by eliminating – or at least substantially reducing – the vast amount of waste and inefficiency in the healthcare system. Some propose to do this by incorporating the efficiencies of the marketplace (though these individuals have now been run out of town and won’t be bothering us anymore), some by adopting and enforcing stricter regulations, others by introducing a single payer healthcare system, and still others by mandating new technologies such as electronic medical records. But one way or another, each scheme for reforming healthcare proposes to bring spending under control by reducing waste and inefficiency.

Another way of describing what the reformers are telling us is: There is so much waste in the system that we can avoid healthcare rationing by getting rid of it. Most Americans believe this. Most policy experts believe this. DrRich suspects that even most of his loyal readers believe this, despite what he’s been telling you all this time.

But this is unfortunately false. No matter how much waste and inefficiency you think might be plaguing our healthcare system today, there’s not enough to explain the uncontrolled rise in healthcare spending we have been seeing for decades, and therefore, not enough to allow us to avoid rationing altogether.

And in this sense, there is not “enough” waste and inefficiency in healthcare.

DrRich has tried to explain this before, but he will now try to do it better, because it’s important. He will do it using one of the three universal languages, the language of Math (the other two being the language of Love and the language of Healthcare Rationing, both of which are encumbered by expressions of impassioned pledges, heartfelt exaggerations, and other blandishments, and are thus unsuited to a sober discussion of unpleasant truths).

But first, there is an underlying concept we must agree upon, a concept our political leaders are loath to address. To wit: The real fiscal problem with our healthcare system is not simply that we’re spending a lot of money on healthcare, or even that we’re spending a large proportion of our GDP on healthcare. Surely, if we simply had to live with continuing to spend 15% of our GDP on healthcare, we could figure out a way to do that. But that’s not really the problem. The real problem is that healthcare expenditures are growing at a double digit rate of inflation, several multiples faster than the overall inflation rate, such that, over time, an ever larger proportion of our annual GDP is being consumed by healthcare expenditures. Unless this disproportionate rate of growth is stopped, eventually healthcare spending will consume our entire economy. (Rather, what will actually happen is that it will grow to the point of producing societal upheaval, sending us back to a more typical era  for mankind, where healthcare is a little-thought-of luxury, and not a necessity or a right. This will happen well before healthcare consumes 100% of the economy.)

To reiterate, it’s not the amount of spending on healthcare that is creating a fiscal crisis, it’s the rate of growth of that spending.

There are only two things that can possibly account for this excessive inflation in healthcare expenditures.  Either it is caused by unrelenting growth in wasteful spending (as we are assured by our political leaders), or it is caused by unrelenting growth in useful healthcare spending. If it is the latter, then in order to get spending under control we must ration. So therefore (we all fervently pray), the rate of growth must be caused by wasted spending.

This desired conclusion, unfortunately, leads to mathematical absurdities, and therefore (for anyone who eschews magical thinking) turns out to be utterly false.

DrRich is going to show you data from a spreadsheet. It illustrates what would have to happen in order for wasteful spending to account for our current healthcare inflation.  The spreadsheet is based on the following four assumptions:

Assumption 1) The proportion of healthcare spending today that is wasteful is taken as 25%. The actual number, of course, is not possible to discern with any real confidence. It depends, for one thing, on who gets to define “wasteful.” If I’m a 92-year-old man who gets a $12,000 stent procedure to eliminate my angina, I and my doctor might consider it money well-spent, while you might consider it wasteful. DrRich has arbitrarily chosen a number that falls within the range of popular estimates. But it’s a spreadsheet. If you don’t like 25%, substitute your own estimate. You will find that the rate of wasteful spending we assume for Year 1 in this spreadsheet has little effect on the outcome.

Assumption 2) The annual overall rate of growth of healthcare spending (i.e., healthcare inflation) is 10%.

Assumption 3) The annual growth rate of useful (i.e., not wasted) healthcare spending is economically well-behaved. That is, it matches the rate of overall inflation. The spreadsheet therefore assumes a 3% annual inflation rate for useful healthcare spending. (We must make this assumption if we would like to avoid healthcare rationing, because if useful healthcare spending were not economically well-behaved, that is, if the growth rate for useful healthcare expenditures were substantially higher than the overall rate of inflation, then no matter what the rate of growth for wasted healthcare spending, we would still have disproportionate healthcare inflation – and rationing would be unavoidable.)

Assumption 4) The difference between the “well-behaved” growth of useful healthcare spending and the overall rate of healthcare inflation is accounted for by spending on waste and inefficiency. This of course, is the assumption that underlies all proposals for healthcare reform.

(Note: If you would like to play with the actual spreadsheet itself, e-mail DrRich and he’ll send it to you: DrRich at covertrationingblog dot com)

We see from this table several things. First, as expected, the amount of money we’re spending on healthcare, assuming a rate of healthcare inflation of 10%, is doubling roughly every 8-9 years, a growth rate that is ultimately unsupportable.

Second, in order to account for this unsupportable growth in healthcare spending by invoking waste and inefficiency, the proportion of healthcare spending that is caused by waste must increase to ridiculous proportions very rapidly, such that (for instance) by the 10th year we will have more than doubled (59%) the proportion of all healthcare expenditures that are wasteful; and by the 20th year, nearly 80% must be wasteful. Similarly, the proportion of the annual increases in healthcare spending that would have to be due to waste and inefficiency rapidly climbs to equally ridiculous proportions. By year 5, wasteful spending will have to account for 82% of the annual increase in healthcare expenditures, and that proportion continues to climb, eventually approaching 100%.

To DrRich, these numbers seem absurd on their face. But if you still need to be convinced, consider that in real life, runaway healthcare inflation has already been taking place for decades – so our position on such a spreadsheet would not be at year 1, but at year 20 (or higher).  And no matter what value for wasteful spending we might have plugged in at year 1, by year 20 wasteful spending would have to be well above 80%, and more likely approaching 100%.  In order for waste and inefficiency to account for the situation in which the American healthcare system finds itself today, therefore, one would have to believe that virtually all healthcare spending is wasteful.  (And if you believe that, then what does it matter that tens of millions can’t afford healthcare?)

Now let us illustrate the same point in a slightly different way.  This time, let’s assume that as recently as 2006, our healthcare system was 100% efficient. That is, only three years ago there was no waste whatsoever.  Then let’s allow that the remaining three assumptions given above are still operative. The following table results:

We can see from these results that, even if only three years ago we had a completely efficient healthcare system, in order for waste to account for the excess growth in healthcare spending we’ve experienced since that time, then as much as 74% of today’s annual increase in spending has to be due to waste and inefficiency.  Indeed, unless at some point within the second term of George W. Bush we actually had a completely efficient healthcare system (which seems doubtful), this spreadsheet tells us (again)  either that our fervently held belief that waste and inefficiency accounts for healthcare inflation is completely wrong, or that today virtually all of our annual increase in healthcare spending must be due to waste and inefficiency, and none due to useful healthcare.

Play with the spreadsheet yourself. You will quickly see that as long as we insist that wasteful spending must account for the unsustainable growth we’re seeing in healthcare costs, then whatever our assumptions may be regarding the current proportion of wasteful healthcare spending – whether we say it’s 20% or 50% or 0% – we very quickly encounter the same mathematical absurdities.

One can only surmise from this analysis (done, DrRich reminds you, with actual Math) that our desired conclusion is wrong. A substantial proportion of our growing healthcare expenditures must necessarily be coming from real, honest-to-goodness, useful healthcare. And if we’re going to substantially curtail that growth, we’re going to have to curtail useful spending. Which means we have to ration.

But, once again, we’re Americans and Americans don’t ration. Which is why we’ve commissioned the big insurers and the government to do the rationing covertly, a task they have accepted with great gusto. DrRich is compelled to point out, once again, that waste and inefficiency is the sine qua non of covert rationing. Disguising all the rationing activity as something other than rationing fundamentally requires opaque procedures, unnecessary complexity, bizarre incentives, Byzantine regulations arbitrarily and variably enforced or ignored, and the diversion of healthcare dollars to non-healthcare ends (such as corporate profits, expanding layers of government bureaucracies, and other massive bureaucracies within the healthcare system created to defend against government bureaucracies). Covert rationing multiplies waste and inefficiency, and does so systematically. To reduce the necessary rationing to the smallest amount possible, we will have to figure out a way to do the rationing openly, and not covertly.

In the meantime, DrRich does not kid himself that exposing the mathematical absurdity of the chief assumption espoused by our political leaders, in their brave efforts to reform healthcare, will change hearts and minds.  American political partisans, not to mention the American media, eat mathematical absurdities for lunch.  And magical thinking amongst the populace, at least when it comes to the exuberant accumulation of household (and national) debt and the application of medical science, far from being discouraged, is actively promoted.

*This blog post was originally published at The Covert Rationing Blog*

KevinMD Addresses Crowd At National Press Club About Primary Care Crisis

July 19th, 2009 by KevinMD in Better Health Network, Health Policy, Opinion

Tags: Crisis, Family Medicine, Internal Medicine, Kevin Pho, KevinMD, National Press Club, Primary Care, Universal Coverage

The following are my prepared remarks at Health Care Reform: Putting Patients First, held at the National Press Club in Washington, DC, on July 17th, 2009.

President Obama recently declared that, “We are not a nation that accepts nearly 46 million uninsured men, women, and children.” And indeed, finding a way to provide universal health coverage to every American is one of the focal points in today’s health care debate. There are a variety of ways we can achieve this, ranging from a Medicare for all, single payer system to requiring everyone to purchase health insurance. But no solution can work unless we first deal with the shortage of primary care doctors.

After all, what good is having health insurance if you can’t find a doctor to see you?

As a primary care physician in Nashua, New Hampshire, a city that borders the state of Massachusetts, I have had the luxury of closely observing that state’s health reform efforts. And to their credit, Massachusetts currently enjoys near-universal health coverage, in part because of the mandate requiring every resident to obtain health insurance. Many policy experts are predicting that a national plan will closely emulate the Massachusetts model, so it’s worth noting any potential consequences.

Since reform began in 2006, the Massachusetts health care system has been inundated with almost half a million new, previously uninsured, patients, and the demand for medical services has rapidly outpaced physician supply. The wait to see a new primary care doctor is almost 2 months, leading patients to use the emergency room more often for routine visits. In fact, since the universal coverage law was passed, Massachusetts emergency rooms have reported a 7 percent increase in volume, which markedly inflates costs when you consider that treating simple conditions in the ER can be exponentially more expensive than an office visit. It’s no wonder that the plan has placed significant fiscal strain on the state’s budget, which is struggling to contain soaring health spending.

This affects hospitals like Boston Medical Center, which primarily serves the city’s poor. The state’s mandatory health insurance law is causing the medical center, according to a front page story in last Sunday’s Boston Globe, to brace “for dramatic financial losses, which some fear will force it to slash programs and jeopardize care for thousands of poverty-stricken families.”

Furthermore, consider the words of family physician Kate Atkinson, who practices in Amherst, Massachusetts. She had decided to temporarily accept new patients, as 18 doctors in her area had recently closed their practices or moved away.

“There were so many people waiting to get in, it was like opening the floodgates,” she says. “Most of these patients hadn’t seen the doctor in a long time so they had a lot of complicated problems. We literally have 10 calls a day from patients crying and begging.”

She closed her practice to new patients 6 weeks later.

I witness this phenomenon myself every day, with patients from Massachusetts routinely crossing the border to New Hampshire looking for a new primary care doctor.  These are people with chronic conditions like heart disease, diabetes, depression, and high blood pressure – all who need a regular physician to follow them.

And keep in mind that Massachusetts has the highest density of doctors per capita in the country. What do you think will happen to states that do not have a comparable supply of physicians?

Moving away from Massachusetts, let’s look at two other examples where universal coverage was promised before ensuring adequate primary care access. One would be our military veterans, who are guaranteed health care through the Department of Veterans Affairs, also known as the VA. Earlier this decade, the wait to see a primary care doctor in the VA routinely exceeded 50 days in various parts of the country. Although that number has improved, a recent report by the Office of the Inspector General concluded that more than a third of veterans still waited a month or more to see a doctor. And with tens of thousands returning home from Iraq and Afghanistan straining an already overburdened VA health system, it’s no wonder that my practice in Nashua, New Hampshire sees a fair amount of veterans who are unable to obtain timely care from their local VA clinic up north in Manchester, or from down in Boston.

Next, consider the care Native Americans receive via the Indian Health Service. Despite having guaranteed health care coverage, President Obama himself cites Indian reservations in South Dakota that have some of the lowest life expectancies in the Western Hemisphere. American Indians are twice as likely to die from diabetes when compared to whites, 60 percent more likely to have a stroke, 30 percent more likely to have high blood pressure and 20 percent more likely to have heart disease. Although each of these conditions can be treated or prevented with timely primary care, according to a 2005 Government Accountability Office report, patient waits within the Indian Health Service for routine women’s care and general physicals lasted anywhere between two and six months.

It is encouraging that the President and members of Congress recognize the threat that the primary care shortage poses to their health reform efforts. But some of the solutions being discussed, such as reducing medical school debt, increasing funding to the National Health Service Corps, and training more mid-level providers like nurse practitioners and physician assistants, fall woefully short. None will have any immediate impact, which will be especially critical if there’s a distinct possibility that already overwhelmed primary care doctors will be responsible for almost 50 million additional, newly insured, patients overnight.

Instead, we need to value primary care, and make it central to our health system. Rather than being encouraged to squeeze in appointments and rush through office visits, doctors need to be incentivized to practice patient-focused primary care, including, managing chronic diseases, providing preventive medicine guidance, and taking the time to counsel patients.

There’s no question that we need to find a way to provide health coverage for every American. But we must do so in a responsible manner, and that starts with ensuring that we have a strong primary care system first.

*This blog post was originally published at KevinMD.com*