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How To Fix Healthcare

Thanks to Andrew Sullivan who cited my post on the uninsured, I’ve gotten a lot of new comments on that subject.  While my post was just a gripe about the problem, the comments were mainly focused on solutions.  How do you fix the problem?  I even got an e-mail specifically asking me what I would do to deal with the problem of the uninsured.

You have to realize that I’m basically chicken (as are most doctors).  I like to point the finger and avoid the fingers of others.  It’s much easier to gripe than to fix things.  It’s much easier to criticize than it is to say things that can be criticized.  But I will break from the safe position of critic and give some thoughts on what I think needs doing on the problem of the uninsured/underinsured.  Those who doubt the reality of this problem have only to spend a few days in primary care physician’s office to realize that it a huge problem that is getting worse.

So here are my suggestions:

1.  The government has to take on tasks that are in the best interest of the public.

Preventive healthcare should be paid for.  This could be done via public health clinics, but having having some sort of preventive health insurance for the uninsured would not have much overall cost (compared to the whole of healthcare) and would potentially save money.

There certainly is debate as to what prevention is really worth it (the PSA test debate is a good example), but some prevention is clearly beneficial (immunizations, Pap Smears).  Simply building a relationship between people and primary care physicians also has benefits by itself.

The overall goal is to improve the overall health of the American public.  Promote behavior that deals with problems when they are still small or before they happen at all.  Just visiting a PCP isn’t the solution by itself, but it is probably a necessary component to achieve a healthier public.

2.  Promote proper utilization

One of the main costs to any system, public or private, is overutilization of services.  Any solution that does not somehow look at utilization will automatically fail.  More care costs more.

Here are areas of increased utilization:

  • Emergency room visits for non-emergencies.
  • Visits to specialty physicians for primary care problems.
  • Unnecessary tests ordered – more likely in a setting where the patient is not known.
  • Patient perception that “more care is better.”
  • Nonexistent communication – ER doesn’t know what PCP is doing, PCP doesn’t know what happened at specialist or in the hospital.  This causes duplication of tests.

Solutions to these problems include:

  • Better access to primary care or other less costly care centers
  • Increase the ratio of primary care to specialists
  • Care management for high utilizing patients
  • Public education (not through the press but through better public health).
  • Promoting connections between information systems – better IT adoption would help, but that IT must communicate.
  • Make the malpractice environment less frightening to doctors.  A large amount of questionable care is given to protect physicians from lawsuits.  (A good example is PSA Testing.  Even though recent studies question the benefit, many doctors fear that not ordering them will expose them to risk should the patient develop prostate cancer).

How does this help the problem of the uninsured?  It reduces the overall cost of non-catastrophic care, which makes either public or private insurance focused on this more feesable.

3.  Fix problems with Pharma

Medication costs are a huge problem to my uninsured and insured populations.  There are many reasons for this, but some of them are simply due to a bad system.  For example:

  • Medication discount programs cannot include Medicare patients.  Why should I be able to give a discount card to my patients with private insurance, even my uninsured, but not Medicare patients?
  • High cost of generic drugs.  When a drug goes generic, there is usually only a slight drip in the price.  The system allows only limited competition for price, so the cash price remains high.  Encourage cost competition.
  • Drug Rebates.  This raises the overall cost of drugs to everyone.  Rebates are sent to insurance companies by drug companies for inclusion on the formulary.  It pretty much looks like extortion.  The cost of these rebates is not absorbed by Pharma, it is passed on to those who aren’t covered by insurance companies getting the rebate.  These need to be eliminated.
  • Get rid of direct to consumer marketing of drugs.  This is pure capitalism that encourages over-utilization.

All of these programs would allow reduced overall cost of medications, which would make either drug coverage more possible or make the cash price of drugs more affordable.

4.  Address Conflicts of Interest

Insurance companies are largely publicly-traded companies.  This means that their main business goal is to maximize profits by either cutting their costs or increasing revenue.  Having them the ones managing care is like putting the kid in charge of the cookie jar.  Insurance companies should get back to the business of insuring.  Care management is certainly important to control overutilization, but that should not be done by those who could profit from it (insurance companies, hospitals, physicians).

Insurance companies promote themselves as healthcare companies.  They don’t provide care, and they shouldn’t.  Perhaps there needs to be a third-party that does care management – I am not certain – but it is clear that good care management would greatly reduce overall utilization and profiteering.

How does this help the uninsured?  It reduces the footprint of the insurance industry on healthcare as a whole, which should bring down the cost if insurance.  It should let insurance companies compete solely on cost, not on provider pannels or other services they shouldn’t be giving in the first place.  If insurance costs less, there are less uninsured.

5.  Focus on the “uninsurable”

5% of Americans account for over 50% of the overall cost of care (reference).  These are the uninsurable people – those who are truley expensive to treat.  There needs to be very close management of these people.  Leaving them uninsured doesn’t reduce cost, it just shifts it to hospitals and local government.  It also leaves them unmanaged.  Of the waste in healthcare, the likelihood is that a very large percent of it is in the high-utilizers (by definition).  These people need management, either in a “medical home” or by some sort of care management.

There you have it.  Follow these rules and everything will be fine.

Yeah, right.  Alright everyone, have at it!  Tell me what you think, but don’t be a chicken: criticism should be accompanied by an alternative solution.

*This blog post was originally published at Musings of a Distractible Mind.*

What’s Big Pharma’s Position On Healthcare Reform?

Today I participated in a conference call with Billy Tauzin, CEO of PhRMA (the Pharmaceutical Research and Manufacturers of America). The goal of the call was to let bloggers know about PhRMA’s position on healthcare reform. I counted at least 12 bloggers on the call, and I was the only physician. It pains me to see how few physicians participate in reform discussions and I’d like to get more of us involved.

The salient points, as I understood them, were:

1.    PhRMA would like all Americans to have health insurance. They believe that Medicare Part D is a model health insurance program. They do not support a single payer system because it would likely attempt to cut costs by rationing care and denying options to patients. They don’t believe that insurance coverage mandates are a good idea unless the insurance is subsidized to the point of being affordable for all. They favor the current public (Medicare and Medicaid for the elderly, poor, or disabled) private blend of insurance, with roughly 50% of the population in each category.
2.    PhRMA would like to support “precision medicine” where treatments are tailored more effectively to the individual. Mr. Tauzin suggested that some FDA-approved drugs are only effective for 30% of the patients in a given disease class. He’d like to see more research devoted to figuring out why that is, and supports comparative clinical effectiveness research insofar as it furthers this agenda.
3.    PhRMA wants to preserve the unique features of the American healthcare system – to maintain our leadership in biomedical research and new drug development, and to protect the sacred shared decision-making between physicians and patients (to shield it from government intervention).
4.    PhRMA wants to support IT infrastructure that would track patient medication compliance and let physicians know when/if they fill their prescriptions.

Now, the business case for all four of these positions is clear – the pharmaceutical industry benefits from having everyone able to afford medications (i.e. universal coverage), personalized medicine would reward the development of new and innovative drugs and establish a consumer base for many different treatments, protecting the doctor-patient relationship allows for off-label use of medications and a broader array of similar drugs, and IT infrastructure would help to increase drug purchase and compliance with treatment regimens, thus increasing overall sales.

However, the truth is that PhRMA’s positions on healthcare reform – beneficial as they are to themselves – also happen to be beneficial to patients. Increasing the number of insured improves access to medical care, personalized medicine could create more effective treatments with fewer failure rates and side effects, shared-decision making empowers patients to make the right decisions for their circumstances (with their physician’s guidance), and IT solutions that facilitate medication adherence, tracking, and reminder systems could improve patient health outcomes and keep them out of the hospital.

So, in a way pharmaceutical companies, advocacy groups, and physicians are fairly well aligned on many aspects of healthcare reform. Now if certain members of Big Pharma would please give up on those “me-too” drugs, stop creating more expensive medicines by simply combining two perfectly good ones into a new pill, stop hiding negative research studies, and refrain from aggressive direct-to-consumer marketing tactics, we might all really be on the same page.


Interesting factoids from call:

  • Medicines only account for 10% of total healthcare costs (unchanged from the 1960s), but they “feel” like a larger cost driver because health insurance doesn’t cover their cost as completely as they do hospital fees.
  • There are about 750 new cancer drugs in the research pipeline.
  • Half of all prescriptions remain unfilled.
  • Physicians provide 30 billion dollars a year in free care.
  • The United States conducts 70% of the world’s research in biomedicines.

Please check out Billy Tauzin’s amazing story of triumph over cancer.

Uncle Sam: Do Your Research First

Anyone working in healthcare has a moral responsibility to do the right thing, for the right reasons, and at a reasonable price; however, this is not happening.   Today’s healthcare system is too expensive and it is broken.  If it wasn’t broken, the current administration would not be focusing so much money and effort on fixing it.  Likewise, 42 million Americans would not be uninsured creating two different standards of care within our country.  Many decisions have already been made: providing government backed insurance coverage for the uninsured, encouraging the use of electronic health records systems (EHRs), and creating comparative effectiveness research boards (CERs). Much of what has been suggested sounds good but was passed by our legislature before seeking the input of those responsible for implementing these new policies and plans.  Fortunately, President Obama’s administration is seeking input now and it is the responsibility of anyone working within the healthcare system to speak up and be heard.

Many hard-to-answer questions should have been asked before solutions were posed.  Why is healthcare so expensive?  How can the intervention of government lead us to better and more affordable healthcare?  Although integrated EHR systems may prevent the duplication of tests and procedures, how can medical practitioners best use these systems to prevent mistakes?  How will future decisions be made – between doctor and patient, or will the new CER Boards grow to do more than merely advise?  How would the American people react to more controversial ideas, such as health care rationing to control exorbitant costs incurred at the end of life?

 In my last post, I closed with a promise to share some ideas regarding healthcare reform.  First, we should try to reach a consensus as to what is broken before implementing solutions. In Maggie Mahar’s book, Money-Driven Medicine (2006), her concluding chapter is titled, “Where We Are Now: Everybody Out of the Pool.” This title screams for change as she makes a convincing argument that all parties involved in healthcare need to rethink how we can work together to fix a broken healthcare system which seems focused, not on healthcare, but on money.   Today, Uncle Sam has jumped into the pool feet first, creating quite the splash, and he is spending large sums of money to lead healthcare reform without first reaching a consensus as to what is broken in this system.

 The American Recovery and Reinvestment Act of 2009 will direct $150 billion dollars to healthcare in new funds, with most of it being spent within two years.  Health information technology will receive $19.2 billion of these dollars, with the lion’s share ($17.2 billion) going towards incentives to physicians and hospitals to use EHR systems and other health information technologies.  According to the New England Journal of Medicine, the average physician will be eligible for financial incentives totaling between $40,000 and $65,000; this money will be paid out to physicians for using EHRs to submit reimbursement claims to Medicare and Medicaid, or for demonstrating an ability to ‘eprescribe’.  This money will help offset the cost of implementing a new EHR, which can cost between $20,000 and $50,000 per year per physician. However, after midnight, December 31, 2014, this “carrot” will turn into something akin to Cinderella’s pumpkin, becoming a “stick” that will financially penalize those physicians and hospitals not using EHRs in a “meaningful” way.

At our office, doctokr Family Medicine, we use an EHR, but consider it a tool, much like a stethoscope or thermometer, used to facilitate the doctor-patient relationship, not a tool to track our reimbursement activities. I would not argue against EHRs, but there is no evidence they will make healthcare more affordable and improve the quality of care delivered – unless you believe the $80 billion dollar a year savings “found” in the 2005 RAND study (paid for by companies including Hewlett-Packard and Xerox- incidentally, companies developing EHRs). I believe it will take far more than EHRs, financial incentives, and good data to fix our broken healthcare system.
Difficult decisions await those willing to ask the hard questions but don’t expect any easy answers to present themselves on the journey towards effective healthcare reform.  My partner and I believe we have found answers to some questions and are moving forward, in our own practice, now.  Asking why healthcare is so expensive and feeling frustrated with the high cost of medical software, we have written our own EHR, containing costs for our patients by keeping down our overhead expenses.  Our financial model is based on time spent with the patient, not codes and procedures, which helps us to avoid ‘gaming’ the system and wasting time. 

A familiar adage states that there are no problems, only solutions.  I suggest, though, that there can be no solutions without problems.  Find the right questions and opportunities abound.  Earlier in this post, I asked how government intervention can lead us to better and more affordable healthcare.  It can’t, at least not without the help and guidance of doctors, patients, industry, insurance companies, hospitals, and anyone who understands what is at stake with health care reform.  We all share in the responsibility to try.

Until next week, I remain yours in primary care,

Steve Simmons, MD

Trial Lawyers Fight For Status Quo In Healthcare

In a surprise, President Obama has signaled a willingness to discuss medical liability as part of the health reform process.

Good for him for standing up to the trial lawyers, a core constituency of the left.

That’s a good sign, as the costs of defensive medicine brought on by the broken malpractice system, should be addressed if there is any hope of reducing health care spending.

Trial lawyers like to say that medical malpractice represents “less than one percent of the cost of health care,” but that fails to account for the substantial sum attributed to defensive medicine doctors practice to avoid the threat of malpractice, estimated to be $210 billion annually.

Furthermore, the argument that malpractice reform will harm patients “by limiting their ability to seek compensation through the courts” doesn’t hold water either.

That’s because the current system does a miserable job of compensating patients for medical errors, where more than 50 cents on every compensated dollar goes to pay lawyers and the courts. Not to mention that a typical malpractice trial may last years before an injured patient receives a single penny.

So, don’t believe the arguments of the trial lawyers, who prefer the financial security of the status quo.

Any alternative system, such as no-fault malpractice, mediation, or health courts, will go a long way both to reduce the cost of medical care, and fairly compensate more patients for medical errors at a significantly more expedient rate.

Lawyers are aware of these facts, and to their credit, are going on a preemptive offensive to head off tort reform. If I were the AMA, I would start pro-actively circulating some of the above talking points, rather than reacting to the trial lawyers.

**This post was originally published at KevinMD**

The Unturned Stone of Healthcare Reform: Primary Care Practices That Compete on Price & Quality

The U.S. government finally has announced intentions to become involved in our $2.2 trillion healthcare system. Now everyone wants to say something.   Most longtime players in healthcare indignantly rebut any new input and opinions with “How dare you! … You stay away from my holy cow of entitlements (insured patients), or salary (doctors), or bonuses (insurance companies), or profits (pharmaceutical companies), or the ability to sue (lawyers.)”

I join my voice to President Obama’s statement that the single most important problem to solve in our healthcare systems is cost. The tidal wave of catastrophe rushing towards America is the expenditure of healthcare dollars doubling every 7-10 years.

Few will argue against the ideal of universal health coverage, yet this noble ideal comes with an enormous price tag and many less than honorable behaviors by all players in the system.  The wasted and misallocated money lost every year in healthcare makes Madoff’s Ponzi scheme look like child’s play, and yet it continues.  We finally have awoken the dormant giant of politicians to do what no one else says they will do, and the government’s intervention in the form of healthcare reform seems imminent.

Doctors were captains of the healthcare system until 1980s. They were dethroned because health care costs had doubled every seven years since 1945. Then insurance companies gladly took the helm.  Guess what? After 20 year of their leadership, the price of healthcare has continued to double on average of every 10 years. Now the government is positioned to step in and fix it.

Big Brother might “force” each of us healthcare players to be held accountable including all of us as patients.  This fear of change leads  to finger pointing, name calling, blaming, grandstanding, and claiming, “Oh the ridiculous price healthcare …  it’s not my fault and I shouldn’t have to change or fix it.” Nothing could be further from the truth. We all have to fix healthcare, and never forget, it’s about the price.

How do we create a health care system that provides the widest access, the best bang for the buck, the fairest distribution of money, and inflates at the same speed as the rest of the economy?

For primary care, two pathways are clear: the career path or the professional practitioner path. With the career model, doctors can work for someone else (like Kaiser, Medicare, an insurance company, or a hospital), and can expect a salary and benefits. In return, these employers oversee and influence how career doctors do their jobs, their hours, their interactions with patients, how they communicate with patients, and often what medications should be prescribed.  We have 20 years of experience with the “career pathway.”  We allowed others to interfere in the doctor patient relationship, help us ”manage” our patients, and decide what’s “reimbursable.”  The soul of our work and the trust of our patients evaporated. Many believe this pathway will spell the extinction of the primary care “specialist.”

The other pathway is the primary care doctor as a professional, with a mission that focuses on the patient not just for quality, but for trust and price, and following these key objectives:

  • Restoring the soul and viability of the doctor patient relationship,
  • Delivering the highest quality care, and
  • Restoring a pricing integrity which reduces cost.

This professional primary care doctor will restore the patient-doctor relationship with a modern office that is mobile, can be reached anywhere and anytime, has virtually no staff, minimal overhead costs, transparent pricing,  and is powered through a customized software that finds the patient chart, instantly looks up any pharmacy or radiology center, can contact any specialist, can instantly look at differentials, drug interactions, gets notifications when patients have something “due,” has a large number of patient education resources that can be emailed to the patient including articles from the medical literature and refereed internet sites that can educate patients, and does all the billing from the same platform the moment that the note is closed.

An individual’s day-to-day health is not “best managed” under third-party payers. We need insurance or government to manage expensive problems or catastrophe, like cancer, serious injuries or ongoing health problems. Yet sixty years of conditioning has left most unable to see the obvious: extract the day-to-day care cost  from the insurance model and return these funds to all Americans (about $700 billion/year), stop holding the consumer hostage, make doctors compete again for the consumer on price, quality, knowledge, access, convenience, relationship — just like every other service industry. Finally, bring an end the  $20 co-pay mentality for the patient and “the funnel” for the doctor.

This is possible, and is being done today with the practice I founded, doctokr Family Medicine, ( Our patients pay out-of-pocket for all the primary and urgent care healthcare services they receive. We charge on a transparent time-based fee basis, where five minutes of the doctor’s time costs around $25. Our patients can contact or see us anytime, day or night, and consult with us via phone, email, in our offices or by house calls, with over 50% of all of our patients’ healthcare issues being resolved by phone or email.  About 75% of our patients pay less than $300 per year for all of their primary and urgent care needs. We’ve built a relationship with each patient and spend as much time as they want with us.

In the weeks ahead I invite all readers and colleagues to consider the road less traveled. Consider primary care doctors standing-up, reclaiming their profession, embracing and being embraced by the American population. And imagine happier patients and doctors, healthier patients and that the delivery of that care costs 50% less than now.

Until next week, I remain yours in primary care,

Alan Dappen, MD

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