Doctors and Nurses
Should the Public Plan Option Use Medicare Rates?
Published April 15, 2009 @ 09:41PM PT
“You have to sort of get on the same page of what a pubic plan is when you’re talking about it. It’s been interesting to talk to people who say, ‘Oh, I don’t like the idea of a public plan’ —when you actually start talking to them about what it might look like, you realize you’re talking about two different things.” And if anyone would be familiar with this experience, it would be White House Office of Health Reform chief Nancy-Ann DeParle, who said these words at a roundtable this morning. For example, there’s much consternation from opponents of the public plan that it would have an unfair advantage by using the government-set rates for Medicare. But Jacob Hacker, the originator of the idea, never said it should use Medicare rates. Nor did President Obama. Nor did Sen. Baucus. Nor did Ms. DeParle. Know why? Because it’s not a great idea to begin with.
You hear this objection to the public plan all the time – that because the government sets prices for Medicare and can change them at any time unilaterally and private insurance cannot, insurers won’t be able to compete, and physicians, health care providers and hospitals will be stuck with lower reimbursement rates, causing them financial grief. We also hear that because Medicare and Medicaid reimburse lower than what a hospital or doctor really needs for the service, there’s a hidden “cost shift” in which they charge private insurance more to make up for what they're not being compensated by the government. The flip side of this poverty argument is that since private insurance is trying to market itself as having a robust network of providers, it drives their rates of compensation up in order to get more providers to sign up – which all works out because the larger their network, the more marketable plans are to customers. Nevertheless, there’s much snide commentary from the Wall Street Journal editorial board about how government always gets the price wrong compared to the private industry, and how government will cut sky-rocketing costs by arbitrarily cutting reimbursement and rationing care (even if they promise they won't), and the seas will fill with blood, and fire will rain down from the heavens, and Glen Beck will cry again, etc. etc.
Except this is has nothing to do with the public plan option as it’s been discussed by those in a position to make it happen. Jacob Hacker’s conception of the public plan is that it would negotiate rates with providers, like any other plan and unlike Medicare, creating dynamic competitive tension in which the public option and private insurance are checks against each other and keep each other honest. During the campaign, Obama said not one word about how the public option would set rates – just that people without insurance should have the choice of a public plan or a choice of affordable, comprehensive private plans. Sen. Baucus’ description of the public plan reimbursement rates reads like stereo instructions: “Rates paid to health care providers by this option would be determined by balancing the goals of increasing competition and ensuring access for patients to high-quality health care.” Buh? Ms. DeParle this morning went out of her way to suggest there are many options available: “So [these objections have] to do with how you price the providers if there’s a public plan. Well if that’s an issue, there are various ways of doing that. You don’t have to use Medicare prices, you can use something else.”
There are actually several progressive reasons not to use Medicare reimbursement rates. First of all, as we’ve discussed here at length, the fee-for-service payment model that Medicare and most U.S. medicine operates on is itself in need of reform, particularly to better compensate primary and preventative care. To improve quality, we’ll need flexibility to incorporate better payment systems including coordinated care, chronic disease management, the medical home and possibly even some type of extra payment based on outcomes – all programs that can be implemented through negotiations with various provider groups, but aren’t already part of Medicare pricing. To improve quality as well as save costs long-term, we need to correct the long-term Medicare bias towards hospitalization, institutionalization and long-term care, and against primary care, preventative care and long-term home care. These are reforms that need to happen in Medicare to help improve its already solid delivery of care. It’s going to be hard enough with 45 million people in Medicare (good luck, Gov. Sebelius!) It’s going to be nearly impossible if you add on top of that 100 million Americans in the public plan. And let’s not forget that some of the payment biases in Medicare is based on its patient population – older Americans who are more likely to use care, significantly more likely to already have one or more chronic diseases, and much less likely to be able to take full advantage of wellness programs, screenings and prevention. That won’t be the patient base for the public plan, which will instead include Americans of all ages. What we value by means of payment will necessarily be different between the two systems.
Forget the politics of the public option – on a policy basis, it just doesn’t make much sense to import the Medicare rates. As conceived by Hacker, the public plan doesn’t need Medicare rates to control costs – it’ll do that through having a fraction of the administrative costs of private insurance, a much larger customer base to negotiate solid purchasing power, and smart investments in cost-saving prevention, Health IT, and nimbly experimenting with newer, smarter models of compensating providers. The same Lewin Group analysis that said a public plan with Medicare rates and expanded eligibility would lead to substantial losses of revenue for doctors and hospitals also says that a public plan without those rates would yield a barely-perceptible 1% loss of revenue for physicians and actually slightly increase compensation for hospitals. On so many levels, it makes good policy sense for the public plan to determine its own rates through negotiation.
The fact that it steals the thunder from the main political objection of the forces of the status quo is just the icing on the cake.
(Photo credit: Congressman George Miller on Flickr.)
What Happens When Doctors and Patients Make the Wrong Choice?
Published April 11, 2009 @ 11:03PM PT
On the one hand, the rhetoric of the day regards decisions made by doctors and patients to be sacrosanct and something to be protected or at least insulated from more government involvement in health care. On the other, we know that the decisions made by doctors and patients lead to an estimated $700 billion each year in care that does not translate to better health outcomes. For something so sacrosanct, it sure seems to make a lot of mistakes.
Remember the controversy over comparative effectiveness research that bizarrely erupted at the tail end of the process of passing the Economic Recovery Act? Much was made of the investment in research to determine which treatments were more effective than others as an attempt to “ration care” or impose government will in the name of cutting waste, but it never quite caught on. Supporters of such research realize we don’t do enough of it, and some of the waste in the system – from unnecessary care (a la defensive medicine) to repeating tests because of lack of coordination to using expensive brand name drugs when cheap generics are just as effective – is specifically because of the lack of reliable research that’s free from the monetary sponsorship of drug and surgical device companies. Medicine is at its heart a science, based on experience, tests and data as much as convention, and it seems hard to disagree with any program that would help trim accidental waste.
But what about the prescription of treatments that are knowingly prescribed, but demonstrably ineffective? As Mark Twain famously said, “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” Dr. David Newman’s post on NY Times’ “Well” blog, entitled “Believing in Treatments That Don’t Work,” is a must read. He gives ample evidence of treatments that are used because they’re traditional or psychological placebos, or even expensive procedures that haven’t even been proven to be more effective than cheapers ones – arthoscopic knee surgery vs. physical therapy to relieve osteoarthritis. These are the direct results of patients in pain looking for remedy, following Shakespeare’s observation that, “There never was philosopher that could bear the toothache patiently.” (I particularly remember the vivid story of a cancer patient who, despite some progress made with his course of chemotherapy, brought his doctor a pharmaceutical ad from a glossy magazine and demanded to be prescribed that drug instead. The doctor has to explain the ad was for Novartis – a drug company, but not for a specific drug that he could prescribe.) Or they’re the decisions of doctors who were trained to administer beta-blockers in the early stages of heart attacks automatically, and are skeptical of the evidence from 2005 to the present that doing so may do more harm than good. They’re undeniably the decisions of doctors and patients. They’re also undeniably the wrong decisions.
Dr. Newman brings up the ultimate question: “Can we abide by the evidence when it tells us that antibiotics don’t clear ear infections or help strep throats? Can we stop asking for, and writing, these prescriptions? … Can we handle what the evidence reveals?” Sadly, we’ll never know unless we begin not just funding more and better comparative effectiveness research, but also aggressively pushing that research out to doctors so that the decisions made in the examination room can be better decisions. If the old adage is right and knowledge is power, some of the waste in our system can be trimmed through better information. But if there’s not enough investment in research, all because we’re trying to protect a seemingly infallible doctor-patient process, we’ll never know.
I don't think anyone would disagree that it’s not necessary, nor particularly a good idea, for a non-medical bureaucrat to overrule the desires of a patient or the long-held traditions of a doctor. But it’s imperative that good science should.
(Photo credit: jasra on Flickr.)
Four Wild Cards for Health Care
Published March 17, 2009 @ 09:43PM PT
Universal health care is going to require strong policy, even stronger political acumen, grassroots support and more than a little luck. Hoping to impart the chances of quality, affordable health care for all in 2009 with the luck of the Irish, we’re going to break the scene down, shamrock-style. Here are four wild cards to watch this month.
1.) Sen. Orrin Hatch
The conservative bona fides of the senator from Utah can’t be denied, and he’s burnished them all the more by voting against the expansion of SCHIP, denouncing the stimulus bill’s health care provisions as a Trojan horse for socialism, and similarly blasting Obama’s budget. In 1993, Hatch was a stalwart against Bill Clinton’s health care plan.
And yet, to read Suzy Khimm’s article “Teddy’s Bear” in The New Republic (sorry, no link yet), Orrin Hatch is more than willing to work with Ted Kennedy to get health care reform done this year. The friendship between the two goes back decades and has already yielded some tremendous bipartisan accomplishments including, not for nothing, the original SCHIP bill in 1997. But more particularly, the influence of Hatch cannot be overstated. For one thing, he’s on both relevant committees – Finance, and Health, Education, Labor and Pensions – and wields influence with both. For another, he’s been in on Kennedy’s health care plans from the beginning and was recently named as one of the senators involved in the legislation’s markup.
But even more importantly, Hatch does not come by himself. When it’s legislation that he has had a hand in crating, Hatch has been tremendously persuasive to his fellow Republicans. If the bill is to bipartisan, it’s hard to imagine it succeeding without Orrin Hatch.
2.) The American Medical Association
The sudden flurry of news stories about the chances of tort reform being part of this year’s push on health care reform has the AMA’s fingerprints all over it, down to the frequently cited anecdote of OMB advisor on health policy Dr. Ezekiel “Brother of Rahm” Emmanuel at the AMA conference saying, “I just can tell you I've been thinking long and hard about that. It has not gone unnoticed.” Why’s it coming up now?
The AMA has actually been outspoken in its support for urgent health care reform, even launching the site Voice of the Uninsured to advocate for their solution (which bears a striking resemblance to the Wyden-Bennett plan). Still, it’s hard to forget that for nearly every major health care push of the past century, the AMA was first to the ramparts to fight against it. If reform requires strong cost controls or an emphasis of primary care compensation to the detriment of specialist care, will they stick with their current level of cooperation? Or is their injection of tort reform in the discussion a sign of things to come?
3.) Minnesota
Not to put too fine a point on it, but how the heck does the Senate race there get resolved? It’s much easier to figure out how to get to 60 votes in the Senate to cut off debate when you actually know who all 100 Senators are!
4.) San Francisco
We’ve talked a little about the Healthy San Francisco Plan. It’s like watching a real-time experiment of Obama plan’s public competitor – a plan based on Medicare that competes with private insurance – and the pay or play provision for employers needed to help finance generous subsidies for those who can’t afford insurance. Indeed, the Healthy San Francisco Plan has subsidies beyond reformer’s dreams – up to 500% of the Federal Poverty Line for individuals and families, and very reasonable co-pays.
Today, we learn that not only has San Francisco managed to dramatically extend coverage, the Healthy San Francisco Plan has even more dramatically trimmed costs. The current average per person cost in the U.S. is a little over $8,000. For Anthem Blue Cross in California, it’s a little over $7,400. For Kaiser Permanente, it’s about $4,700. But for the publically operated and financed San Francisco plan, it’s a stunning $3,360 per person! You can believe others will be poring over the data from the San Francisco Department of Health. If so many of the ideas for cost and coverage in the Obama plan are getting their test drive in the City by the Bay and found to be successful, you can bet that will change the political calculus for the efforts of Congress and the White House.
What can I say, but stay tuned!
(Photo credit: musicFIRSTcoalition on Flickr.)
Doctor vs. Patient: Nobody Wins
Published March 04, 2009 @ 02:35PM PT
During the campaign, John McCain would often say that the key to controlling health care decisions was to empower patients to be consumers, to shop around for their own individual plan and to question the treatments recommended by their doctors. When patients are the decision-makers, he said, "they are more capable of making their own decisions, less likely to choose the most expensive and often unnecessary options, and are more satisfied with their choices." This line makes sense politically - some voters are doctors, but all voters are patients, so it's flattery well-spent. But what this "silver bullet" of consumerism sets up is a confrontational situation that's no more likely to produce better results. When doctors are arguing with patients over the money, no one wins.
Nevertheless, the "patients need to take responsibility" meme is starting to take hold. In the NY Times, an article entitled "A Hurdle for Health Reform: Patients and Their Doctors" makes the point that both doctors and patients need to change their behavior to focus on outcomes and not insist on the fanciest drugs and machines when they're not needed. But some doctors, like blogger Dr. Mintz, are taking this discussion as a jumping-on point to rant about patients who ask for antibiotics, MRI scans, and the kitchen sink as the main culprits and needed to change their ways. Duncan Cross clearly believes this line of argument is ridiculous and offensive, equivalent to "let's blame them for being stupid, stupid patients, and demand they give up even more - more money, more control, more privacy, more dignity - to ensure the viability of our medical system."
Asking patients to be sole decision makers rather than team-players is not how you create responsibility. That's how you create antagonism.
Yes, you're going to get some patients who actually aren't capable of making their own decisions, some who are more likely to choose the most expensive options, and some who are unsatisfied no matter what. But let's presume they represent a minority, and that most are men and women of good will who just want to get better.
Yes, you're going to get some doctors who are, when questioned on anything, incorrigible jerks. A column in the WSJ about patients being reluctant to question their doctors gives a humdinger of an anecdote: "As the doctor approached him, I said: 'I have to ask you to wash your hands, according to that sign right there.' The doctor took umbrage, gave me a speech about washing her hands 15 times a day, then gave them a cursory rinse under the faucet. 'You don't use the hand sanitizer gel in that dispenser?' I ventured. 'I don't like that stuff,' was her response." But again, let's presume that most doctors, although rushed, have some interpersonal skills and don't take umbrage to a direct question.
So if two reasonable human beings are in the room, it's on both of them to make sure their treatment is appropriate and will make them better. That means spending more time to discuss options on the part of the doctor and doing comparative research homework, but it also means asking questions on the part of patients. As always, the focus should be on health and side effects first and foremost, but "Which of these will cost more, and what's the difference?" should be as acceptable a question as "Is this covered by my insurance?"
What's driving up the cost of medicine is not that doctors have too much power or that patients are irresponsible - it's that there's too much ignorance, particularly on the effectiveness of drugs and technology. That's something we all need to fix.
(Photo credit: The Doctr on Flick.)
What Else Does the Budget Contain for Health Care?
Published February 26, 2009 @ 04:50PM PT
The $634 billion health care reserve fund and the combination of new taxes and Medicare reforms to finance it has understandably monopolized the discussion of the budget released today by the Obama Administration. There's no underestimating that commitment to health care reform - it's huge. But there are plenty more goodies in the section for the Department of Health and Human Service, and their inclusion gives both the promise of serious reform and the taste of fights still to come.
None of this guarantees the funding - we'll get a crocodile roll deathmatch with Congress before this translates into real programs - but it's a vivid portrait of the Administration's values. Here's what jumped out at me. You can download your own copy of the FY2010 Budget and follow along.
"Expands research comparing the effectiveness of medical treatments to give patients and physicians better information on what works best." At this sentence, hordes of pharmaceutical and medical device lobbyists began sharpening their pencils. Somewhere, far off in the night, Betsy McCaughey dreams of a reinvigorated political career or at least a book deal. But it cannot be stressed enough how essential this is in improving quality and lowering costs. As Atul Gawande points out, "In 1996, Americans underwent some 60 million surgeries. In 2008, that number rose to 100 million. Does that mean that Americans are healthier? No one knows because we never measure how well our healthcare system is performing." This will be a fight, for certain but a fight worth having -- and winning.
"Invests over $6 billion for cancer research at the National Institutes of Health." Combine this with the $10 billion in the stimulus (which, credit it where it's due, Sen. Arlen Specter went to the mattresses for) and you have an unprecedented boost to cancer research.
Millions more for HIV/AIDS prevention and support for individuals, families and communities dealing with Autism. Given the almost criminally poor funding, these are two long-overdue budget priorities.
Now Let's See What Coordinated Care Can Really Do
Published February 13, 2009 @ 01:02PM PT
The results of the Medicare Coordinated Care Demonstration, as reported in the Journal of the American Medical Association, can't easily be characterized. On the one hand, it would seem to be a failure - after all, of the 15 care coordination pilot programs that began in 2002, only 2 of them demonstrated an ability to produce better health outcome with fewer hospitalizations and less money. But on the other, those two are a pretty big accomplishment, with ample lessons that can be applied to the future tests programs being rolled out both through Medicare and the private insurance industry. So although by pure success standards, this is a mixed bag, the learning opportunities are huge.
By testing coordinated care, the Centers for Medicare and Medicaid were basically testing what many are calling "the medical home." Patients have a single provider or coordinator who is responsible for coordinating all of their care, rather than bouncing on their own from primary care provider to specialist to hospital. Entities like the Mayo Clinic and the V.A. already operate along these lines. Groups like the Sustinet movement in Connecticut and the soon-to-be pilot program in Arizona prompted by IBM favor this approach because of its potential upside in terms of customer satisfaction and cost savings. But the idea is even more important for those with chronic conditions and diseases like diabetes, heart disease, etc. The chronically ill account for a large percentage of the health care dollars spent, particularly in Medicare, and are the unfortunate recipients of much of the inefficiencies and waste built into our system. In a study by the Commonwealth Fund, 1/3 of U.S. patients "encountered poorly coordinated care, including medical records not available during an appointment or duplicated tests." More disturbingly, 1/3 of those surveyed, "experienced medical errors, including delays in learning about abnormal lab test results." Coordinating care, and compensating providers based on how well they coordinate, holds out the hope of reversing these trends.
Medicare gave those participating in the trial wide latitude to come up with their own program, and the JAMA article is clear that some of the programs were bound to fail the way they were set up. For example, the two successful programs included in their mix of patients those whose monthly expenditures were $900 to $1200 - essentially, they went often enough to the hospital before the trial that it was noticeable when they were hospitalized less, but weren't so seriously ill that no new care program could decrease how often they needed to hospitalize. That's a design flaw - easily fixed in future trials.
But the other lessons from the successful two programs are even more intriguing:
- "Relatively frequent in-person contacts maybe necessary to develop the level of trust that patients and their families need to consider the care coordinator..." When you're trying to create a bond of trust so the patient actually follows the non-physician coordinator's advice, you can't phone it in. It's cheaper, but it doesn't work.
- Teaching patients how to treat their medication rather than assuming they'll know how to do it counts for a lot.
- Care coordinators who worked closely with local hospitals and shared information freely and quickly had a big impact on patient care.
- Regular contact with primary care physicians and nurses by both the coordinator and the patient was essential to success. For the patient, it validated the recommendations they got from the coordinator. For the coordinator, working with the same physicians and developing a team relationship clearly helped them do their jobs.
These may seem like "No duh" lessons to learn, but there's an obvious incentive to have coordinators off-site, interacting by the phone and not doing the little things to establish a relationship with the patients - it saves the hospital money. Fostering teamwork and a face-to-face rapport with patients takes time and a personal touch - time that current compensation methods don't take into account, particularly for the primary care provider, whose buy-in is crucial. You can't do coordination on the cheap, or in the call-center model of profitability. Instead, we need to break down the old habits of our fee-for-service system to really establish coordinated care that leads to healthier patients.
So initial overwhelming success, no. But, to riff off Aaron Sorkin, there was a time in the history of everything that worked when it didn't work. We've learned, as the Center for American Progress puts it, "we can't simply apply a band-aid and call it coordination." Now we need to absorb these lessons and really see what the coordinated care model can do.
(Photo credit: Liberal Democrats on Flickr.)
How Should Your Doctor Be Paid? Part 3: Salary
Published January 31, 2009 @ 02:55PM PT
A lot of this is in response to some excellent questions asked by commenters Bob, Stuart, and William in Part 1, so if you haven’t seen it yet, I’d suggest going back and taking a look. The big question is, as William put it, “What's wrong with doctors being paid a salary? It's a system that has long been used in the military, and is used in HMO-owned clinics. For the docs, it means they can really just focus on what most of them love to do--healing the sick, and keeping the well, well. Let others handle the administrivia.”
There are a number of contexts in which doctors are salaried here in the U.S. and yes, it tends to work out extremely well for them. As William mentioned, there are HMOs who provide both the care and the insurance. We’ve talked about an experiment at Group Health where doctors, employed by the HMO, are paid for everything they do for patient care, not just the traditional procedures, as a way of encouraging them to spend 20-30 minutes average per patient. The Mayo Clinic, the world-renowned integrated not-for-profit, hires its doctors and then tells them to forget how they practice medicine at other institutions. Their goal here will be to be part of a team, all of whom are focused on bringing the best care to the patient. Their incentive is not for profit or procedures but for integration and excellence.
