The debt deal is finally done. But it really isn’t an agreement on what cuts will be made, just the process that will be used to make them.
The real work is left to the Congressional appropriators for the first $917 billion and for a super-committee of Congress for the second $1.2 trillion to $1.5 trillion in ten-year cuts.
That second tranche is where health care will make its contribution. The super-committee has to make its decisions by November 23rd and, as a practical matter, the Congress can only accept what the super-committee decides or face the consequences of the automatic $1.2 trillion fallback cuts.
When it comes to health care and the super-committee, all federal health care spending is on the table—–Medicare, Medicaid, the new law, benefits, and provider payments.
Since the budget window for the deal is ten years, it is not likely that any changes will be made to entitlement eligibility—such as delaying the Medicare eligibility age from 65 to 67. It just wouldn’t be fair to tell a 60-year-old their Medicare eligibility age is being raised. But we could see more means testing of Medicare premiums.
It is possible that the super-committee could deal with real systemic health care reform—–particularly in the way we pay providers. But I doubt it. The committee isn’t going to have a lot of time to take up so complex a matter as systemic health care payment reform given that they will have to deal with hundreds of billions more in cuts from lots of federal programs. I don’t see the committee as having the expertise, will, or the time to tackle real health care reform.
The real potential for cuts will be to provider reimbursement.
So, all of those provider organizations that thought they scored big by limiting their contribution during the health care reform debate are likely be on the defensive in ways they could not have imagined 18 months ago.
Physicians, facing a 29.5% Medicare Sustainable Growth Rate (SGR) fee schedule cut on January 1, 2012, need to be really worried. That 29.5% cut is part of the existing budget baseline from which the super-committee needs to cut hundreds of billions more—much less find tens of billions of dollars to put these doc cuts off again. Hospitals who got off with a $150 billion contribution to the Affordable Care Act have to be in the bull’s eye this time. Drug companies are a particularly juicy target for liberals who don’t like them and conservatives who wish the Part D program had never been passed. Medicare Advantage insurers have recently been reporting record profits—not something you want to be doing when the Congress is looking for lots of cash.
While there is a 2% cap on any cuts that could occur to Medicare in the $1.2 trillion default trigger, there are no limits to what the super-committee can cut. As an order of magnitude, it looks to me like the cuts Medicare will have to eventually sustain from the super-committee will have to approach to the cuts the program saw under the new health care law--largely because of the impact the SGR formula has on the baseline the committee will have to use.
Medigap insurers could also be at risk. A proposal to reduce first dollar Medigap coverage continues to hang-on and would likely at least be on the super-committee’s table. Its $50 billion value is just too big to ignore. But that is offset by how unpopular such direct cuts to millions of Medigap policyholders would be.
I would not be surprised to see the super-committee take a hard look at reducing Medicaid spending by giving the states more flexibility and less money.
The debt ceiling formula the Congress and the President just agreed to is a particular problem for the physicians. They are the ones who agreed to support the new health care law (the AMA anyway) without getting a fix to the Sustainable Growth Rate dilemma. Now, the debt deal seals the physician fee baseline at a level that presumes the 29.5% fee cuts are in effect. It is from this point that the super-committee has to start its work.
Given how reluctant Congress has been to cut the docs in past years, just how the heck are they going to accomplish net Medicare cuts and take care of the docs this time?
And just think of the impact big provider cuts could end up having on health care cost trends as providers attempt to shift the impact of these cuts to the entire health care system--just as health care cost trend has finally been slowing down.
If you thought we had a tense few weeks over the debt ceiling, you had better clear your calendar for the weeks leading up to the November 23rd super-committee deadline. The debt deal was only about process, this next big fight is going to be about real and significant cuts and there will be be some significant blood on the floor when it is over!
Showing posts with label Physician Fees. Show all posts
Showing posts with label Physician Fees. Show all posts
Monday, August 1, 2011
Sunday, March 6, 2011
Fixing America's Health Care Reimbursement System
This post is authored by Brian Klepper and first appeared at Kaiser Health News:
A tempest is brewing in physician circles over how doctors are paid. But calming it will require more than just the action of physicians. It will demand the attention and influence of businesses and patient advocates who, outside the health industrial complex, bear the brunt of the nation's skyrocketing health care costs.
Much responsibility for America's inequitable health care payment system and its cost crisis is embedded in the informal but symbiotic relationship between the Centers for Medicare and Medicaid Services and the American Medical Association's Relative Value System Update Committee -- also known as the RUC. For two decades, the RUC, a specialist-dominated panel, has encouraged national health care reimbursement policy that financially undervalues the challenges associated with primary care's management of complicated patients, while favoring often unnecessarily complex, costly and excessive medical services. For its part, CMS has provided mostly rubber-stamp acceptance of the RUC's recommendations. If America's primary care societies noisily left the RUC, they would de-legitimize the panel's role in driving the American health system's immense waste and pave the way for a more fair and enlightened approach to reimbursement.
As it is, though, unnecessary health care costs are sucking the life out of the American economy. Over the past 11 years, health care premium inflation has risen nearly four times as fast as the rest of the economy. Health care costs nearly double those in other developed nations have put U.S. corporations at a severe competitive disadvantage in the global marketplace.
Many health care experts believe that half or more of all health care expenditures -- the costs of bloated transactional processes as well as inappropriate procedures, service sites and prescription drug levels -- provide no value. For perspective, this year we'll unnecessarily spend nearly $1.5 trillion on health care, an amount equivalent to the budget deficit. Though we continually have given physicians and the health care industry a pass on this issue, its impact can be understood as the difference between our national prosperity and decline.
The current system's under-valuing of primary care is one of three structural flaws -- the other two are fee-for-service reimbursement and a lack of cost, quality and safety transparency -- that produce excess spending and block the health care sector from working as a true market. Overwhelming evidence shows that allowing physicians to serve as patient advocates and guides throughout the entirety of care results in better outcomes at significantly lower cost. Recently, patient-centered medical homes, super-charged primary care practices, have demonstrated measurable cost and quality successes, also proofs of the approach. These facts are indisputable and are, by the way, the reason why America's corporations are stepping up the use of on-site primary care clinics.
Meanwhile, a spate of recent articles about the RUC have produced swift, strong responses within key circles. They have been passed virally among primary care physicians. Discussions have begun with people who might have influence over the process. And sensible changes in this advisory system seem possible.
Seizing that opportunity would first require mobilizing primary care doctors to demand that their professional societies, such as the American Academy of Family Physicians and the American College of Physicians, abandon the RUC. Then these physicians also would call on CMS to replace it with a more independent advisory panel. That effort would also launch a national discussion about how to more fairly value and pay for America's health care.
But one man's waste is another's income. The current reimbursement system handsomely serves most of the health care industry: health plans; hospitals; specialists; and drug, device and technology firms. Threaten that revenue stream, and those organizations would direct their considerable resources to its protection. In 2009, records show that some members of Congress collected $1.2 billion in health care lobbying contributions - more than it had ever received from an industry on an issue - from health care interests. America's 250,000 primary care physicians are simply no match for the combined power and influence of the rest of the health care industry.
In an influence-driven government like ours, it is the non-health care business sector that has the organization and leverage necessary to drive the health care changes America so desperately needs. The health care industry represents one dollar of every six dollars in the U.S. economy, but industries outside health care represent the other five. If American businesses, led by groups like the National Business Group on Health, the Pacific Business Group on Health, the Business Roundtable, the National Retail Federation, the U.S. Chamber of Commerce and the National Federation of Independent Business were to advocate for the same policies in national health care reimbursement policy that their members are often implementing in their own on-site clinics, it would have a dramatically positive impact on the nation's physical and economic health.
Ironically, health care reform specifically avoided addressing the carnage that has been wrought by the RUC. If America's primary care physicians, backed by the nation's corporations, all working out of enlightened self-interest, were to focus on addressing this one structural defect, the corrective impact on our health system would be greater than all the reform bill's cost-reduction provisions combined.
Brian Klepper is an independent health care analyst, Chief Development Officer for WeCare TLC Onsite Clinics and the editor of Care & Cost. His new site, Replace the RUC, provides extensive background on the issue.
A tempest is brewing in physician circles over how doctors are paid. But calming it will require more than just the action of physicians. It will demand the attention and influence of businesses and patient advocates who, outside the health industrial complex, bear the brunt of the nation's skyrocketing health care costs.
Much responsibility for America's inequitable health care payment system and its cost crisis is embedded in the informal but symbiotic relationship between the Centers for Medicare and Medicaid Services and the American Medical Association's Relative Value System Update Committee -- also known as the RUC. For two decades, the RUC, a specialist-dominated panel, has encouraged national health care reimbursement policy that financially undervalues the challenges associated with primary care's management of complicated patients, while favoring often unnecessarily complex, costly and excessive medical services. For its part, CMS has provided mostly rubber-stamp acceptance of the RUC's recommendations. If America's primary care societies noisily left the RUC, they would de-legitimize the panel's role in driving the American health system's immense waste and pave the way for a more fair and enlightened approach to reimbursement.
As it is, though, unnecessary health care costs are sucking the life out of the American economy. Over the past 11 years, health care premium inflation has risen nearly four times as fast as the rest of the economy. Health care costs nearly double those in other developed nations have put U.S. corporations at a severe competitive disadvantage in the global marketplace.
Many health care experts believe that half or more of all health care expenditures -- the costs of bloated transactional processes as well as inappropriate procedures, service sites and prescription drug levels -- provide no value. For perspective, this year we'll unnecessarily spend nearly $1.5 trillion on health care, an amount equivalent to the budget deficit. Though we continually have given physicians and the health care industry a pass on this issue, its impact can be understood as the difference between our national prosperity and decline.
The current system's under-valuing of primary care is one of three structural flaws -- the other two are fee-for-service reimbursement and a lack of cost, quality and safety transparency -- that produce excess spending and block the health care sector from working as a true market. Overwhelming evidence shows that allowing physicians to serve as patient advocates and guides throughout the entirety of care results in better outcomes at significantly lower cost. Recently, patient-centered medical homes, super-charged primary care practices, have demonstrated measurable cost and quality successes, also proofs of the approach. These facts are indisputable and are, by the way, the reason why America's corporations are stepping up the use of on-site primary care clinics.
Meanwhile, a spate of recent articles about the RUC have produced swift, strong responses within key circles. They have been passed virally among primary care physicians. Discussions have begun with people who might have influence over the process. And sensible changes in this advisory system seem possible.
Seizing that opportunity would first require mobilizing primary care doctors to demand that their professional societies, such as the American Academy of Family Physicians and the American College of Physicians, abandon the RUC. Then these physicians also would call on CMS to replace it with a more independent advisory panel. That effort would also launch a national discussion about how to more fairly value and pay for America's health care.
But one man's waste is another's income. The current reimbursement system handsomely serves most of the health care industry: health plans; hospitals; specialists; and drug, device and technology firms. Threaten that revenue stream, and those organizations would direct their considerable resources to its protection. In 2009, records show that some members of Congress collected $1.2 billion in health care lobbying contributions - more than it had ever received from an industry on an issue - from health care interests. America's 250,000 primary care physicians are simply no match for the combined power and influence of the rest of the health care industry.
In an influence-driven government like ours, it is the non-health care business sector that has the organization and leverage necessary to drive the health care changes America so desperately needs. The health care industry represents one dollar of every six dollars in the U.S. economy, but industries outside health care represent the other five. If American businesses, led by groups like the National Business Group on Health, the Pacific Business Group on Health, the Business Roundtable, the National Retail Federation, the U.S. Chamber of Commerce and the National Federation of Independent Business were to advocate for the same policies in national health care reimbursement policy that their members are often implementing in their own on-site clinics, it would have a dramatically positive impact on the nation's physical and economic health.
Ironically, health care reform specifically avoided addressing the carnage that has been wrought by the RUC. If America's primary care physicians, backed by the nation's corporations, all working out of enlightened self-interest, were to focus on addressing this one structural defect, the corrective impact on our health system would be greater than all the reform bill's cost-reduction provisions combined.
Brian Klepper is an independent health care analyst, Chief Development Officer for WeCare TLC Onsite Clinics and the editor of Care & Cost. His new site, Replace the RUC, provides extensive background on the issue.
Friday, January 21, 2011
"Quit the RUC"
Brian Klepper and David Kibbe have a notable column at Kaiser Health News arguing that the American Medical Association's Relative Value Scale Update Committee (RUC) is specialist dominated and steers health care resources away from primary care:
Not surprisingly, the Committee’s payment recommendations have consistently favored specialists at the expense of primary care physicians. More striking, however, is CMS’ rubber stamping of about 90 percent of their suggestions, even though, in their last three service reviews, the RUC urged payment increases six times more often than decreases.
This arrangement has played out well for specialists, but the health system consequences have been catastrophic. One significant result has been a primary care shortage. Specialists now earn, on average, $135,000 a year and $3.5 million over the course of their careers more than their primary care colleagues. The income disparity has driven all but the most idealistic medical students away from primary care.
You can read the entire column here.
Monday, December 6, 2010
What Would Happen If You Were To Pass a Big Health Care Bill Without Bipartisan Support?
During the recent health care debate I heard many people on both sides of the debate worry out loud about passing a heath care bill that did not enjoy broad support.
I guess this question is no longer a theoretical one.
December will be a big month when it comes to seeing some of the fallout accruing from the very partisan passage of the Patient Protection and Affordable Care Act.
First, the White House is worried big time about a Richmond federal judge who has said he will rule by year-end on a suit brought by the Virginia Attorney General, and a number of others, on the constitutionality of the individual mandate. This Republican appointee has already telegraphed a cynical view of the administration’s constitutional defense of the bill. More problematic, the Senate staff forgot to put a “severability clause” in the new health care law. That means the whole thing (2,800 pages) can get thrown out if a core element of the law is found unconstitutional. And, there are lots of people in this town worried this judge just might do that.
We all know this is going to be finally decided by the Supreme Court—make that by Justice Anthony Kennedy in what could well be a 5-4 decision—but getting the whole thing thrown out in even one of the many pending suits could send shockwaves of uncertainty into the health care industry trying to figure out just what it will finally have to implement, taxes it will have to pay, and which people it will have to cover. A bad decision for the new health law will also present lots of fodder for its conservative critics.
Second, we’ve got the infamous 1099 requirement in the new law that will have every business going crazy sending out tax forms to everyone it does business with beginning in 2011. I keep hearing this will be repealed but no one can tell me where the money is going to come from—$17 billion will be needed over ten years to do it.
Then there is the doc fix. Now the docs are scheduled to get their Medicare fees slashed on January 1, 2011. Again, everyone says the Congress is going to fix this one for the docs but no one knows where the money will come from—about $1 billion for each month they patch the problem and a total of $300 billion over ten years.
The Congress, both Republicans and Democrats, are intent, make that desperate, to find the money for both the small business and physician lobby. It also looks like Republicans are bent on blackmailing the Dems over where to get it by demanding billions come out of the new health care law—from places like preventive health care spending to insurance subsidies—in order to come up with the cash needed to get the small business and doc lobby off everyone’s backs.
I will suggest that while many of those eager to ram this new law through didn't see the need for bipartisan support a year ago they may understand its value now.
I guess this question is no longer a theoretical one.
December will be a big month when it comes to seeing some of the fallout accruing from the very partisan passage of the Patient Protection and Affordable Care Act.
First, the White House is worried big time about a Richmond federal judge who has said he will rule by year-end on a suit brought by the Virginia Attorney General, and a number of others, on the constitutionality of the individual mandate. This Republican appointee has already telegraphed a cynical view of the administration’s constitutional defense of the bill. More problematic, the Senate staff forgot to put a “severability clause” in the new health care law. That means the whole thing (2,800 pages) can get thrown out if a core element of the law is found unconstitutional. And, there are lots of people in this town worried this judge just might do that.
We all know this is going to be finally decided by the Supreme Court—make that by Justice Anthony Kennedy in what could well be a 5-4 decision—but getting the whole thing thrown out in even one of the many pending suits could send shockwaves of uncertainty into the health care industry trying to figure out just what it will finally have to implement, taxes it will have to pay, and which people it will have to cover. A bad decision for the new health law will also present lots of fodder for its conservative critics.
Second, we’ve got the infamous 1099 requirement in the new law that will have every business going crazy sending out tax forms to everyone it does business with beginning in 2011. I keep hearing this will be repealed but no one can tell me where the money is going to come from—$17 billion will be needed over ten years to do it.
Then there is the doc fix. Now the docs are scheduled to get their Medicare fees slashed on January 1, 2011. Again, everyone says the Congress is going to fix this one for the docs but no one knows where the money will come from—about $1 billion for each month they patch the problem and a total of $300 billion over ten years.
The Congress, both Republicans and Democrats, are intent, make that desperate, to find the money for both the small business and physician lobby. It also looks like Republicans are bent on blackmailing the Dems over where to get it by demanding billions come out of the new health care law—from places like preventive health care spending to insurance subsidies—in order to come up with the cash needed to get the small business and doc lobby off everyone’s backs.
I will suggest that while many of those eager to ram this new law through didn't see the need for bipartisan support a year ago they may understand its value now.
Thursday, October 15, 2009
Apparently The "Games" Have Begun--Democrats Move to Fix Physician Fee Problem Off-Budget
Apparently, Democrats are getting ready to pay-off the physicians for their support of the health bills by quickly fixing the Medicare Sustainable Growth Rate (SGR) fee cut problem off-budget and ahead of the pending health care bills.
This in today's Kaiser Health News on a Congress Daily Report:
What are the Democrats about to try?
Peeling out one of the biggest components of health care and quickly spending $245 billion to bolster physician fees over the next ten years, doing it separate from the "deficit neutral" health bill, and just adding the $245 billion cost of this to the deficit!
To do it they will need 60 votes in the Senate and most of the "Blue Dogs" in the House.
We are about to see just how fiscally responsible these moderate Democratic senators are and whether or not the Blue Dogs aren't just "Yellow Dogs."
Unbelievable!
This in today's Kaiser Health News on a Congress Daily Report:
Physician lobbyists met with several key lawmakers and administration officials Wednesday to push for action. "Senate Democratic leaders made a procedural move Tuesday night that allows the chamber to bypass the usual committee process and take the $245 billion fix, proposed by Sen. Debbie Stabenow, D-Mich., straight to the floor. ... Leadership has indicated the merger will be swift. ... The fix faces three tough procedural hurdles that each will require 60 votes: a cloture vote, a budget point of order because the measure is not offset and a motion to proceed to the bill, a lobbyist source said."How many times have you heard the President say that any health care bill must be "deficit neutral?" How many times have you heard conservative and moderate Democrats say they won't vote for a health bill that isn't paid for?
What are the Democrats about to try?
Peeling out one of the biggest components of health care and quickly spending $245 billion to bolster physician fees over the next ten years, doing it separate from the "deficit neutral" health bill, and just adding the $245 billion cost of this to the deficit!
To do it they will need 60 votes in the Senate and most of the "Blue Dogs" in the House.
We are about to see just how fiscally responsible these moderate Democratic senators are and whether or not the Blue Dogs aren't just "Yellow Dogs."
Unbelievable!
Thursday, August 27, 2009
The Health Reform Bills Would Be Great For the Business Of Health Care
Have you noticed how none of the big health care business special interests is running any negative health care reform ads? Why should they when each is poised to gain billions of dollars from it?
As President Barack Obama has said many times, any health care bill that costs about $1 trillion would be paid for, roughly half and half, with savings in the health care system and new revenues (taxes).
All told, health care providers will likely get hit by $500 billion in federal payment reductions over 10 years from what they would have received otherwise. This is their "savings" contribution to help pay for the overhaul effort. It amounts to no more than a couple of percentage points less than they would have received anyway.
But more importantly, the Congress is getting ready to spend $1 trillion over the same 10 years mostly to expand Medicaid and provide subsidies to the uninsured to help them purchase private health insurance and be able to pay their medical bills. The health industry, by giving up $500 billion, gets millions more patients armed with public and private health insurance cards. Not a bad deal—particularly when the other $500 billion needed to finance the bill comes from new levies on taxpayers, not bigger industry cuts.
The details show an even prettier picture for the business of health care.
Read the rest of this column at Kaiser Health News.
As President Barack Obama has said many times, any health care bill that costs about $1 trillion would be paid for, roughly half and half, with savings in the health care system and new revenues (taxes).
All told, health care providers will likely get hit by $500 billion in federal payment reductions over 10 years from what they would have received otherwise. This is their "savings" contribution to help pay for the overhaul effort. It amounts to no more than a couple of percentage points less than they would have received anyway.
But more importantly, the Congress is getting ready to spend $1 trillion over the same 10 years mostly to expand Medicaid and provide subsidies to the uninsured to help them purchase private health insurance and be able to pay their medical bills. The health industry, by giving up $500 billion, gets millions more patients armed with public and private health insurance cards. Not a bad deal—particularly when the other $500 billion needed to finance the bill comes from new levies on taxpayers, not bigger industry cuts.
The details show an even prettier picture for the business of health care.
Read the rest of this column at Kaiser Health News.
Monday, May 18, 2009
Progress on Finding the $2 Trillion--Insurer Association Says Physician and Hospital Payment Changes "Won't All Be Voluntary"
Just how will the health care stakeholders who promised President Obama $2 trillion in savings last week achieve the reduction?
This from a May 18th Bloomberg story:
This from a May 18th Bloomberg story:
Standardized billing and forms would cut administrative expenses, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a Washington-based trade group, in an interview today. Some likely measures, such as changing how government programs pay hospitals and doctors, will need legislation, said Jay M. Gellert, chief executive officer at Health Net Inc., an insurer in Woodland Hills, California...
The health-insurance industry will probably recommend paying physicians on the basis of how well their patients fare rather than the number of doctor’s visits, Gellert said.
“It won’t all be voluntary,” Gellert said in an interview last week. “A lot of it will be law.”
Oh, so the insurance industry plans to have the docs and hospitals incur changes to their compensation aimed at developing some of the $2 trillion in payment reductions that "won't all be voluntary?" I presume the reference to "mandatory" changes is there so that they'll be "scoreable" under the Congressional budget rules.
I wonder, did the insurance trade association make that clear to the AHA and the AMA before they took them into the West Wing?
This is just getting to be more and more fun to watch!
Related posts:
"Health Care Leaders Say Obama Overstated Their Promise to Control Costs"
The $2 Trillion Offer to Reduce Health Care Costs—Now They've Done It!
Monday, May 4, 2009
A Side Deal on the Medicare Physician Fee Cuts? What Does That Say About the Chances for Health Care Reform?
John Reichard has dug deeper than anyone else into the Medicare physician payment problem in an important article in today's CQ HealthBeat.
He reports that the Blue Dog Dems (about 50 House moderate and conservative deficit hawks) may be willing to give the docs a pass by not requiring offsets for a two-year patch for their upcoming fee cuts--including the 21% fee cut due on January 1st. They are also reportedly willing to give the same pass for a three year alternative minimum tax (AMT) fix that would otherwise hit the middle-class hard.
A two-year "patch" for the Medicare physicians would cost $38 billion.
Reichard reports that the Blue Dogs' price is a statutory pay-go requirement--legislation that would require spending cuts or new revenue on any other legislation that would add to federal spending. He also reports that, "House Democratic leaders insist they'll back up the Blue Dogs on statutory pay-go and that if it isn't passed will demand offsets for the doctor fix..."
Which all begs a question: If these same Democratic leaders are so confident we will get health care reform this year, why are they doing a deal for a two-year doctor patch?
As I have been reporting here for months, health care reform is stuck in the mud over how to find the money to pay for it.
That Democratic leaders in the House are willing to find a two-year patch for the Medicare docs just reenforces the notion health care reform--and physician payment reform for that matter--is floundering for a lack of a clear course to do either.
He reports that the Blue Dog Dems (about 50 House moderate and conservative deficit hawks) may be willing to give the docs a pass by not requiring offsets for a two-year patch for their upcoming fee cuts--including the 21% fee cut due on January 1st. They are also reportedly willing to give the same pass for a three year alternative minimum tax (AMT) fix that would otherwise hit the middle-class hard.
A two-year "patch" for the Medicare physicians would cost $38 billion.
Reichard reports that the Blue Dogs' price is a statutory pay-go requirement--legislation that would require spending cuts or new revenue on any other legislation that would add to federal spending. He also reports that, "House Democratic leaders insist they'll back up the Blue Dogs on statutory pay-go and that if it isn't passed will demand offsets for the doctor fix..."
Which all begs a question: If these same Democratic leaders are so confident we will get health care reform this year, why are they doing a deal for a two-year doctor patch?
As I have been reporting here for months, health care reform is stuck in the mud over how to find the money to pay for it.
That Democratic leaders in the House are willing to find a two-year patch for the Medicare docs just reenforces the notion health care reform--and physician payment reform for that matter--is floundering for a lack of a clear course to do either.
Thursday, April 30, 2009
Will Arlen Specter Vote for Health Care Reform? Wrong Question.
The last couple of days have been filled with speculation about Arlen Specter’s party switch and the Democrat’s apparent success in getting to 60 seats in the Senate.
Will the Specter switch, and filibuster-proof majorities at hand once Al Franken arrives, mean the Democrats can now ram through a partisan health care reform bill?
The real question is just what will a health care reform bill cost and who is going to pay for it?
Until that question is answered, the Democrats might have 60 seats but they don’t have 60 votes.
Five committees in Congress—two in the Senate and three in the House—are hard at work putting a health care reform proposal together. All have promised to mark-up bills and have them approved in their chamber by the 4th of July.
All of these Democratic committee chairmen point to strong consensus in the Congress that our health care system must be reformed, its long-term costs brought under control, that everyone be covered, and that all the stakeholders have to give up their fair share to make it happen.
OK.
The other bit of consensus around town is that an Obama-campaign style health care plan will cost at least $1.2 trillion over ten years. (The mid-point estimate is $1.5 trillion and there are estimates as high as $1.7 trillion.)
But wait, the Congressional budget blueprints that just passed both houses have no money in them to fix the Medicare physician fee problem—starting with the 21% cut the docs are facing on January 1st.
In the CBOs December report on health care options, they said fixing the cuts by freezing physician payments where they are and then increasing them by inflation each subsequent year would cost $556 billion over ten years. It would likely cost about $250 billion to just freeze the Medicare doc fee schedule at current levels for ten years. [The recent House and Senate budget resolution has only $38 billion in it for a two-year doctor patch that would freeze payments at current levels.]
So, a universal access health bill would cost at least $1.2 trillion and unless the Medicare docs are going to get a series of fee cuts—starting with a 21% cut soon—we need to add the cost of a doc fix. That’s another $556 billion to keep them even with inflation—for a total of at least $1.75 trillion.
The other big excitement in town this week is that Senators Baucus and Grassley have reached agreement on how to begin to control these costs and perhaps find some of this money.
Well sort of.
Their 48-page document just repeats a number of proposals already part of the Obama budget like the Medicare HMO cuts ($175 billion in savings over ten years) and the bundling of hospital and post-acute care payments ($18 billion in savings over ten years).
Beyond the things already in President Obama’s budget the Senators are proposing vague programs that lack teeth and therefore won’t likely score any significant savings. For example, they call for efforts to, “foster innovation by allowing broad-scale Medicare pilot programs of patient-centered care.” Now there’s one that ought to raise a trillion or two.
The document also says the Congress might increase Medicare physician payments by 1% then freezes them until 2012. That would cost far less than the $566 billion that would give physicians an inflationary increase each year for ten years. It would also just sweep a whopping health care problem under the rug for two more years. Hardly reform that would blunt those long-term Medicare entitlement costs—unless you think the docs are going to accept a seven-year pay freeze.
Most of the rest of the proposals are the kinds of things the CBO is on record as saying would have only minor impact on reducing costs—more health information technology and comparative effectiveness research, for example.
I see no reason to believe the Baucus/Grassley payment reform document will develop any meaningful savings beyond the provider cuts the President has already proposed in his budget—which he estimated to be worth $316 billion over ten years.
Will Arlen Specter’s party switch give the Democrats the votes they need to easily move their health care reform bill through the Congress?
If the Democrats come up with a health care reform plan and a Medicare physician payment fix that costs $1.75 trillion, they have only $300 billion in offsetting savings and revenue, and Arlen Specter votes for it, his might be the only vote.
I’d ask fewer questions about Arlen Specter and a filibuster-proof majority and instead ask the optimistic health care reform committee chairmen these two questions:
1. How much will it cost—health care reform and a doc fix all in?
2. Whose hide are you going to take the money out of to pay for it?
Then ask Arlen Specter—and everyone else—if they will vote for it.
Recent post: Halfway to Paying for Health Care Reform? A Growing Consensus for Taxing Health Insurance Benefits Produces Lots of Money
Will the Specter switch, and filibuster-proof majorities at hand once Al Franken arrives, mean the Democrats can now ram through a partisan health care reform bill?
The real question is just what will a health care reform bill cost and who is going to pay for it?
Until that question is answered, the Democrats might have 60 seats but they don’t have 60 votes.
Five committees in Congress—two in the Senate and three in the House—are hard at work putting a health care reform proposal together. All have promised to mark-up bills and have them approved in their chamber by the 4th of July.
All of these Democratic committee chairmen point to strong consensus in the Congress that our health care system must be reformed, its long-term costs brought under control, that everyone be covered, and that all the stakeholders have to give up their fair share to make it happen.
OK.
The other bit of consensus around town is that an Obama-campaign style health care plan will cost at least $1.2 trillion over ten years. (The mid-point estimate is $1.5 trillion and there are estimates as high as $1.7 trillion.)
But wait, the Congressional budget blueprints that just passed both houses have no money in them to fix the Medicare physician fee problem—starting with the 21% cut the docs are facing on January 1st.
In the CBOs December report on health care options, they said fixing the cuts by freezing physician payments where they are and then increasing them by inflation each subsequent year would cost $556 billion over ten years. It would likely cost about $250 billion to just freeze the Medicare doc fee schedule at current levels for ten years. [The recent House and Senate budget resolution has only $38 billion in it for a two-year doctor patch that would freeze payments at current levels.]
So, a universal access health bill would cost at least $1.2 trillion and unless the Medicare docs are going to get a series of fee cuts—starting with a 21% cut soon—we need to add the cost of a doc fix. That’s another $556 billion to keep them even with inflation—for a total of at least $1.75 trillion.
The other big excitement in town this week is that Senators Baucus and Grassley have reached agreement on how to begin to control these costs and perhaps find some of this money.
Well sort of.
Their 48-page document just repeats a number of proposals already part of the Obama budget like the Medicare HMO cuts ($175 billion in savings over ten years) and the bundling of hospital and post-acute care payments ($18 billion in savings over ten years).
Beyond the things already in President Obama’s budget the Senators are proposing vague programs that lack teeth and therefore won’t likely score any significant savings. For example, they call for efforts to, “foster innovation by allowing broad-scale Medicare pilot programs of patient-centered care.” Now there’s one that ought to raise a trillion or two.
The document also says the Congress might increase Medicare physician payments by 1% then freezes them until 2012. That would cost far less than the $566 billion that would give physicians an inflationary increase each year for ten years. It would also just sweep a whopping health care problem under the rug for two more years. Hardly reform that would blunt those long-term Medicare entitlement costs—unless you think the docs are going to accept a seven-year pay freeze.
Most of the rest of the proposals are the kinds of things the CBO is on record as saying would have only minor impact on reducing costs—more health information technology and comparative effectiveness research, for example.
I see no reason to believe the Baucus/Grassley payment reform document will develop any meaningful savings beyond the provider cuts the President has already proposed in his budget—which he estimated to be worth $316 billion over ten years.
Will Arlen Specter’s party switch give the Democrats the votes they need to easily move their health care reform bill through the Congress?
If the Democrats come up with a health care reform plan and a Medicare physician payment fix that costs $1.75 trillion, they have only $300 billion in offsetting savings and revenue, and Arlen Specter votes for it, his might be the only vote.
I’d ask fewer questions about Arlen Specter and a filibuster-proof majority and instead ask the optimistic health care reform committee chairmen these two questions:
1. How much will it cost—health care reform and a doc fix all in?
2. Whose hide are you going to take the money out of to pay for it?
Then ask Arlen Specter—and everyone else—if they will vote for it.
Recent post: Halfway to Paying for Health Care Reform? A Growing Consensus for Taxing Health Insurance Benefits Produces Lots of Money
Wednesday, March 18, 2009
Physician Payment Reform--Time for Hard Choices
I recently authored a guest editorial in the February 15th edition of Family Practice News--"The Leading Independent Newspaper for Family Physicians."
Many years ago, the Congress established the Sustainable Growth Rate Formula (SGR) to control physician spending in Medicare. The concept is simple, if Medicare physician costs grow at a pace beyond affordability, next year's payments get cut to rebalance spending getting us back on an affordable track.
Of course, we now know that Medicare's physician costs have risen faster than the sustainable level and the Congress has overridden the formula every year. Private payments to doctors often tied to Medicare schedules have risen in tandem.
Now the docs are headed for a 21% fee cut on January 1 driven by the SGR if the Congress again doesn't act. Will they just punt again--likely cutting Medicare HMOs to pay the docs--or will they finally face up to physician payment reform?
Today, everyone says ditch the SGR because it's a disaster and hasn't controlled anything. But wait a minute, isn't the SGR just the parakeet in the mineshaft?
Pay for performance (P4P) seems to be the solution d'jour. But it won't work to control costs unless the overall physician community ends up getting less than it would have. P4P proposals without teeth are just a political sham to pay everyone more.
Here is my editorial:
Many years ago, the Congress established the Sustainable Growth Rate Formula (SGR) to control physician spending in Medicare. The concept is simple, if Medicare physician costs grow at a pace beyond affordability, next year's payments get cut to rebalance spending getting us back on an affordable track.
Of course, we now know that Medicare's physician costs have risen faster than the sustainable level and the Congress has overridden the formula every year. Private payments to doctors often tied to Medicare schedules have risen in tandem.
Now the docs are headed for a 21% fee cut on January 1 driven by the SGR if the Congress again doesn't act. Will they just punt again--likely cutting Medicare HMOs to pay the docs--or will they finally face up to physician payment reform?
Today, everyone says ditch the SGR because it's a disaster and hasn't controlled anything. But wait a minute, isn't the SGR just the parakeet in the mineshaft?
Pay for performance (P4P) seems to be the solution d'jour. But it won't work to control costs unless the overall physician community ends up getting less than it would have. P4P proposals without teeth are just a political sham to pay everyone more.
Here is my editorial:
Time for Hard Choices
When it comes to health care reform, one thing no one argues about is that costs will need to be cut. If President Barack Obama and Congress want to insure more people, the money will have to be spent more efficiently.
Unfortunately, however, cutting costs, especially physician payments, is going to be extremely difficult—if not impossible—to do. I have been watching the political debate among physician groups in Washington, and I've also been out in the rest of the country talking to physicians and physician groups. I have come away with the clear impression that none of them believes he or she can be paid less. All of them believe that their backs are against the wall, and that they just can't stay in business under the current reimbursement system. Where does that leave us? I don't know.
Pay for performance (P4P) is one idea that has been touted as a partial solution to our health care cost problem. It sounds like a great idea; who can argue that we should not be paying for good performance? The problem with it is that there's an elephant in the room: If you in fact pay for performance and pay more for the people who are the most efficient, you will pay less to doctors in general. P4P is a means to pay less. It has to be a means to pay less, because the Medicare program—which is currently experimenting with P4P—is headed toward insolvency in a few years. But in the P4P systems I see, it looks like everyone's a winner. Real P4P isn't going to work that way.
Another idea being suggested for changing the health care cost structure is revising the Sustainable Growth Rate (SGR) formula that is used by Medicare to calculate physician payments. But here's a question you don't hear in Washington: What's wrong with the SGR? It was created about 10 years ago to automatically pare back physician payments when the aggregate payments were unaffordable. Is it not the parakeet in the mine shaft warning us about spending too much?
I'm not saying that the SGR is perfect. But isn't it the SGR's job to tell us when the system is broken? If so, please don't shoot the messenger.
The SGR is a good example of real cost containment. Maybe Medicare got the formula wrong in terms of payments to primary care physicians vs. specialists, but in the aggregate, what's wrong with the answer it's giving us? Congress says we have to rebase it, which means “Never mind, let's give the doctors what they want.”
The SGR could be tied to a benchmark we could afford, such as the growth of the economy. If that benchmark were sufficient, we would be on track to payment reform. I don't want to defend the SGR in detail, but tying it to a benchmark of sustainability seems like a reasonable thing to do.
All this still leaves open the question of how much waste there is in health care spending. Data from the Dartmouth Institute for Health Policy and Clinical Practice show that 30% of all health care dollars are spent wastefully. We know how to fix that, but we don't want to do what we know needs to be done. Part of the solution is given in the Obama health plan—deciding which procedures and treatments are appropriate in which circumstances. A federal cost board that oversees when certain procedures are used would go a long way toward eliminating the waste. But that would get a lot of opposition from the device industry and other health care lobbying groups.
Health care reform isn't going to be easy; it involves a lot of hard choices. But we need to have the courage to do what must be done.
Tuesday, January 13, 2009
Cuomo Shows the Health Insurance Indusry Who's Boss!!
New York Attorney General Andrew Cuomo today announced a "victory" in his battle with the insurance industry over how out-of-network physician claims are paid. Cuomo had argued that the industry's use of its out-of-network "customary and reasonable" database "defrauded" consumers and he sued the database's manager, United Health's Ingenix, over the controversy.
In a February 2008 post I said, "In a few months, we will hear that Ingenix paid a big fine and agreed to fix something (that no one will understand) and Cuomo will have another notch in his belt."
Well, today it was announced that Ingenix will pay $50 million to set up an independent not-for-profit to operate the customary and reasonable database. The industry gets to continue determining what customary and reasonable physician charges are through this non-profit and just exactly how they do it will continue to be done by systems gurus the way systems gurus do things--pretty much in a "black box." While an undetermined university will operate the system, the industry, who will finance it, will presumably have a great deal of input into it. The industry's use of the database will be more defensible since one of its own is no longer arguably directly controlling the entity.
$50 million is peanuts compared to the out-of-network customary and reasonable savings any one of the big health plans achieves every year and this settlement makes the ability of state medical societies and trial lawyers to attack the system much harder.
What will be better is that consumers, presuming they know about the new "transparency" website, will be able to go on-line to see what their allowable charges will be in advance. So, if Joe MiddleAmerica is on vacation in Orlando and needs to go out-of-network to the emergency room, prior to rushing off for treatment they can go find a computer, find the website, and shop around for emergency rooms that have the lowest out-of-network payments. Gosh, Andy, thanks!!!
The big losers here are the docs. The result is going to be about the same and their medical societies will now have less reason to challenge the customary and reasonable system than they did before.
"In a few months, we will hear that Ingenix paid a big fine and agreed to fix something (that no one will understand) and Cuomo will have another notch in his belt."
Why poor Andy is being passed over for the Senate I just don't know!
Earlier posts:
Give Cuomo and the Physicians What They Say They Want--Show the Patient Just What the Doc Is Accepting From Everyone Else
The Usual and Customary Controversy--Who's Cheating Whom?
No One Ever Did Understand "Customary and Reasonable"
In a February 2008 post I said, "In a few months, we will hear that Ingenix paid a big fine and agreed to fix something (that no one will understand) and Cuomo will have another notch in his belt."
Well, today it was announced that Ingenix will pay $50 million to set up an independent not-for-profit to operate the customary and reasonable database. The industry gets to continue determining what customary and reasonable physician charges are through this non-profit and just exactly how they do it will continue to be done by systems gurus the way systems gurus do things--pretty much in a "black box." While an undetermined university will operate the system, the industry, who will finance it, will presumably have a great deal of input into it. The industry's use of the database will be more defensible since one of its own is no longer arguably directly controlling the entity.
$50 million is peanuts compared to the out-of-network customary and reasonable savings any one of the big health plans achieves every year and this settlement makes the ability of state medical societies and trial lawyers to attack the system much harder.
What will be better is that consumers, presuming they know about the new "transparency" website, will be able to go on-line to see what their allowable charges will be in advance. So, if Joe MiddleAmerica is on vacation in Orlando and needs to go out-of-network to the emergency room, prior to rushing off for treatment they can go find a computer, find the website, and shop around for emergency rooms that have the lowest out-of-network payments. Gosh, Andy, thanks!!!
The big losers here are the docs. The result is going to be about the same and their medical societies will now have less reason to challenge the customary and reasonable system than they did before.
"In a few months, we will hear that Ingenix paid a big fine and agreed to fix something (that no one will understand) and Cuomo will have another notch in his belt."
Why poor Andy is being passed over for the Senate I just don't know!
Earlier posts:
Give Cuomo and the Physicians What They Say They Want--Show the Patient Just What the Doc Is Accepting From Everyone Else
The Usual and Customary Controversy--Who's Cheating Whom?
No One Ever Did Understand "Customary and Reasonable"
Tuesday, December 2, 2008
We Can Save 30% By Getting Rid of the Waste in the U.S. Health Care System—Sounds Like "Groundhog Day" To Me
As we begin the health care reform discussion in earnest, many are pointing out all of the waste in the system and the need to research what works best, provide the incentives to do it, manage the big spenders’ chronic care better, make better use of heath information technology, and encourage wellness and prevention.
One of the disadvantages of being at this for more than 20 years is that I feel like I’ve seen this movie a few times before. You may recall the picture "Groundhog Day" where the guy kept living through the same thing time after time.
I am particularly taken by those that cite the statistics regarding health care waste and efficiency as if this was a new discovery they made in the last few days.
For example, the excellent groundbreaking research from Dartmouth is often cited pointing to the conclusion that as much as 30% of all medical spending does nothing to improve care.
I can’t disagree with many of these conclusions having argued much the same myself.
In an op-ed authored by John Wennberg, director of the same Dartmouth researchers at the Center for the Evaluative Clinical Sciences; former Surgeon General C. Everett Koop, MD; and me; we made many of the same points:
Our op-ed appeared in the Washington Post on February 19th, 1992!
While we can point to many improvements in our health care system, overall after 16 years, we're in a deeper hole.
In 16 years, we've talked a lot about the things we know need fixing but we haven't really confronted any of them.
There is a point when it makes sense to stop suggesting the same stuff over and over again and begin to ask ourselves why we haven’t gotten off square one with these great ideas.
Could it be because the next steps from concept to action would entail real cost containment and taking on the vested interests in the system?
Maybe just suggesting all of these broad concepts year after year is just pussyfooting around the problems and never really tackling the problems where the rubber meets the road.
Research on which treatments work the best? In 1992, the counter to that was that would be “cookbook medicine” and it “would put bureaucrats in charge where doctors should be.” Is it really any different today?
Today, we hear about "pay for performance." But have we agreed on what acceptable performance is and are the stakeholders ready to see their incomes cut? For "pay for performance" to save money we have to pay less money out. Do we have a consensus on how to separate the winners from the losers? Have we even gotten past the 1992 bullet points and into who is going to lose and on what basis?
I was in a meeting recently where I heard a physician representative suggest that improved physician performance would lead to less hospital costs suggesting that would be a source of offsetting revenue for physicians. Can't wait to see that one on the table.
The reality is that tackling all of these things is not really something those in our health care system—payers and providers—really want to do. That is why they have made only baby steps in 16 years.
I have to question the assertion I am commonly hearing today that there is plenty of consensus over how cost containment and quality improvement can happen.
Define quality for me. Then show me a system where there won’t be as many winners as losers—how else do you save 30%? Then I will show you a real health care policy debate and then we will see how much consensus we have.
Wellness? Wellness programs today look an awful lot like the voluntary education oriented wellness programs we were selling in 1988 and things are far worse. Prevention? Most of the commonsense steps in prevention were available to us years ago.
We have been avoiding the heavy lifting in health care reform for 16 years. For me, all of these new ideas aren't so much new ideas as one more "Groundhog Day" in the long-running health care debate.
We have to get past all of these guys with the “new ideas” and on to the real work for how we will actually implement these things and get a consensus of stakeholders to buy-in.
I am reminded of Paul Ginsburg's conclusion in his recent paper, Demystifying U.S. Health Care Spending, "Overall our understanding of high and rising costs is fairly solid. Our most pressing needs are not as much on the research side as on the development side, that is, all of the technical work needed to pursue many of the reforms..."
That is the discussion we really need to have before we waste our 17th year.
One of the disadvantages of being at this for more than 20 years is that I feel like I’ve seen this movie a few times before. You may recall the picture "Groundhog Day" where the guy kept living through the same thing time after time.
I am particularly taken by those that cite the statistics regarding health care waste and efficiency as if this was a new discovery they made in the last few days.
For example, the excellent groundbreaking research from Dartmouth is often cited pointing to the conclusion that as much as 30% of all medical spending does nothing to improve care.
I can’t disagree with many of these conclusions having argued much the same myself.
In an op-ed authored by John Wennberg, director of the same Dartmouth researchers at the Center for the Evaluative Clinical Sciences; former Surgeon General C. Everett Koop, MD; and me; we made many of the same points:
- "The health care reform plans proposed by the president and the Democrats just tinker with our deeply flawed system. We need to challenge our basic concepts about health care and then move to reform the system.
- "In health care, more is not always better, and more may even be hazardous to your health. The amount of health care consumed by Americans differs remarkably, depending on where they live. Bostonians receive almost twice as much hospital care and at twice the cost per capita as do New Havenites. Yet there is no evidence that the people of Boston need more or that they live longer or are happier because they receive more.
- "Even more puzzling is the pattern of variation in surgery. The rates for cardiac bypass surgery and hysterectomy are higher in New Haven, but the rate of carotid artery surgery is higher in Boston.
- "We need to undertake a systematic, well-funded program of "outcomes research" to enable patients and physicians to know the outcomes of all medical treatments. If we allocated about one-fourth of a cent of each insurance dollar to fund outcomes research, we would achieve lower costs and higher quality health care for everyone.
- "But there is one area in medicine where more is better. All our efforts at health care reform will come to nothing if reform is not undergirded by a widespread ethic of prevention.
- "We should slash administrative costs by replacing the more than 1,100 insurance forms clogging the system with one simple electronic coding system for claim payment and data collection.
- "Insurance companies must stop competing with each other about whom to exclude from coverage. Instead they must compete on how well they bring sick and healthy people together in pools to make affordable health insurance available to every American.
- "Medicare needs not only financial reform but also conceptual reform that includes education about appropriate care at the end of life.
- "We must demand an end to irrational competition between hospitals, which leads to excess technology and beds. Insurance companies and Medicare should establish contracts with "centers of excellence" that will maintain quality care by ensuring decisions based on patient preference, continuous quality improvement and long-term follow-up.
- "We must act quickly because we have a long way to go. It may take a decade, even though we improve year by year."
Our op-ed appeared in the Washington Post on February 19th, 1992!
While we can point to many improvements in our health care system, overall after 16 years, we're in a deeper hole.
In 16 years, we've talked a lot about the things we know need fixing but we haven't really confronted any of them.
There is a point when it makes sense to stop suggesting the same stuff over and over again and begin to ask ourselves why we haven’t gotten off square one with these great ideas.
Could it be because the next steps from concept to action would entail real cost containment and taking on the vested interests in the system?
Maybe just suggesting all of these broad concepts year after year is just pussyfooting around the problems and never really tackling the problems where the rubber meets the road.
Research on which treatments work the best? In 1992, the counter to that was that would be “cookbook medicine” and it “would put bureaucrats in charge where doctors should be.” Is it really any different today?
Today, we hear about "pay for performance." But have we agreed on what acceptable performance is and are the stakeholders ready to see their incomes cut? For "pay for performance" to save money we have to pay less money out. Do we have a consensus on how to separate the winners from the losers? Have we even gotten past the 1992 bullet points and into who is going to lose and on what basis?
I was in a meeting recently where I heard a physician representative suggest that improved physician performance would lead to less hospital costs suggesting that would be a source of offsetting revenue for physicians. Can't wait to see that one on the table.
The reality is that tackling all of these things is not really something those in our health care system—payers and providers—really want to do. That is why they have made only baby steps in 16 years.
I have to question the assertion I am commonly hearing today that there is plenty of consensus over how cost containment and quality improvement can happen.
Define quality for me. Then show me a system where there won’t be as many winners as losers—how else do you save 30%? Then I will show you a real health care policy debate and then we will see how much consensus we have.
Wellness? Wellness programs today look an awful lot like the voluntary education oriented wellness programs we were selling in 1988 and things are far worse. Prevention? Most of the commonsense steps in prevention were available to us years ago.
We have been avoiding the heavy lifting in health care reform for 16 years. For me, all of these new ideas aren't so much new ideas as one more "Groundhog Day" in the long-running health care debate.
We have to get past all of these guys with the “new ideas” and on to the real work for how we will actually implement these things and get a consensus of stakeholders to buy-in.
I am reminded of Paul Ginsburg's conclusion in his recent paper, Demystifying U.S. Health Care Spending, "Overall our understanding of high and rising costs is fairly solid. Our most pressing needs are not as much on the research side as on the development side, that is, all of the technical work needed to pursue many of the reforms..."
That is the discussion we really need to have before we waste our 17th year.
Thursday, July 10, 2008
The Next Medicare Physician Fee Cut--17 Months, 20 Days, and 13 Hours to Go
The "Medical Home"--A real Solution?
Now that this year's fight over Medicare physician fees is all but over, it is important to turn to real solutions.
The recent Senate and House vote to kill the 10.6% physician fee cut only defers the problem for 18 months.
On January 1, 2010, the Medicare physicians are slated to get an automatic 21% fee cut!
More importantly, the Medicare physician fee structure is grossly out of whack with primary care docs starving under the current fee system.
In a recent post, I asked just what is the solution to this problem? I got a record number of replies from docs all along the lines that they are fed up with being underpaid by Medicare and they aren't going to take it anymore. If they have to go to a cash relationship with patients for the fees they deserve, or balance bill, so be it.
While their frustration is understandable, these aren't solutions. Collecting $350 upfront from a senior, as one doc suggested for a comprehensive visit, isn't progress.
So, we have 18 months to just keep heading toward the next cliff (this one twice as big at 21%), let the system degenerate (cash, balance bill, or a crisis in access as docs stop taking patients), or actually start taking some constructive steps forward.
It strikes me that the growing discussion over the "Medical Home" is a constructive one that we need to continue developing. The "Medical Home" isn't a new fee schedule, it's a new patient relationship structure that could be the foundation for real physician payment reform. Because the current fragmentation in the system is at the heart of the problem, I will suggest that it is structure that is more important than just fees toward the objective of better cost and quality.
In a recent post, I said it was the doctors that have to take the lead in the development in a new payment system for Medicare--and therefore the entire system since private pay is generally based on the Medicare structure. The politicians aren't going to do it until they get permission from the doctor lobby for a specific plan. As the recent House and Senate votes showed, the politicians are afraid of the docs--but not so afraid that they have been forced to come up with a real solution. The private payers aren't going to do it because they aren't going to unilaterally develop something the doctors will accept.
It is notable that the leading primary care physician organizations--Family Physicians, American College, and Osteopaths-- have gotten out front on this idea.
And to the health plans, you need to be encouraging real solutions because, as the recent votes made clear, the next 21% is going to come out of your hides if a real solution isn't found!
This from Wikipedia on the Medical Home:
But here is what I am arguably an expert on: Docs, you have 17 months, 20 days, and 13 hours until you get hit with an automatic 21% fee cut. You can throw all the tantrums you want and you will again almost certainly get the the politicians to put off the next cut. But you will still be stuck in the mud with the same out of whack fee structure.
Recent post: There Won't Be Any Health Care Reform Without Physician Payment Reform and There Won't Be Any Physician Payment Reform Unless the Docs Lead The Way
Now that this year's fight over Medicare physician fees is all but over, it is important to turn to real solutions.
The recent Senate and House vote to kill the 10.6% physician fee cut only defers the problem for 18 months.
On January 1, 2010, the Medicare physicians are slated to get an automatic 21% fee cut!
More importantly, the Medicare physician fee structure is grossly out of whack with primary care docs starving under the current fee system.
In a recent post, I asked just what is the solution to this problem? I got a record number of replies from docs all along the lines that they are fed up with being underpaid by Medicare and they aren't going to take it anymore. If they have to go to a cash relationship with patients for the fees they deserve, or balance bill, so be it.
While their frustration is understandable, these aren't solutions. Collecting $350 upfront from a senior, as one doc suggested for a comprehensive visit, isn't progress.
So, we have 18 months to just keep heading toward the next cliff (this one twice as big at 21%), let the system degenerate (cash, balance bill, or a crisis in access as docs stop taking patients), or actually start taking some constructive steps forward.
It strikes me that the growing discussion over the "Medical Home" is a constructive one that we need to continue developing. The "Medical Home" isn't a new fee schedule, it's a new patient relationship structure that could be the foundation for real physician payment reform. Because the current fragmentation in the system is at the heart of the problem, I will suggest that it is structure that is more important than just fees toward the objective of better cost and quality.
In a recent post, I said it was the doctors that have to take the lead in the development in a new payment system for Medicare--and therefore the entire system since private pay is generally based on the Medicare structure. The politicians aren't going to do it until they get permission from the doctor lobby for a specific plan. As the recent House and Senate votes showed, the politicians are afraid of the docs--but not so afraid that they have been forced to come up with a real solution. The private payers aren't going to do it because they aren't going to unilaterally develop something the doctors will accept.
It is notable that the leading primary care physician organizations--Family Physicians, American College, and Osteopaths-- have gotten out front on this idea.
And to the health plans, you need to be encouraging real solutions because, as the recent votes made clear, the next 21% is going to come out of your hides if a real solution isn't found!
This from Wikipedia on the Medical Home:
Central to the Medical Home approach is the premise that patient-centered care requires a fundamental shift in the relationship between patients and their primary care physicians. There must be a higher degree of personalized care coordination, access beyond the acute care episode, and identification of key medical and community resources to meet the patients’ needs. However, the widespread adoption of information technology for care management and quality improvement along with adequate payment methods are essential. In the long run, the Medical Home is likely to result in savings to patients, employers, and health plans. Increasing the emphasis on primary care could produce large dividends throughout the health care system.I don't pretend to be an expert in this area but Vince Kuraitis over at the e-CareManagement blog, who first pointed me in this direction, is and he has done a large number of posts on the issue. I encourage you to take a look.The concept of the Medical Home has evolved since its introduction by the American Academy of Pediatrics in 1967. It has gone from a specific place to receive care for children with chronic disease, to an entire system of providing care for all Americans. This concept shifts the paradigm from episodic acute care to a continuous comprehensive model.
The basic premise of the medical home concept is care that is managed and coordinated by a personal physician with the right tools will lead to better outcomes.
In 2007, the American Academy of Family Physicians, American Academy of Pediatrics, American College of Physicians, and American Osteopathic Association—the leading primary care physician organizations—released the Joint Principles of the Patient-Centered Medical Home. In this document they state the characteristics of the Patient Centered Medical Home:
- Personal Relationship: Each Patient has an ongoing relationship with a personal physician trained to provide first contact, continuous and comprehensive care.
- Team Approach: The Personal Physician leads a team of individuals at the practice level who collectively take responsibility for the ongoing patient care.
- Comprehensive: The personal physician is responsible for providing for all the patient’s health care needs at all stages of life or taking responsibility for appropriately arranging care with other qualified professionals.
- Coordination: Care is coordinated and integrated across all domains of the health care system, facilitated by registries, information technology, health information exchange and other means to assure that patient get the indicated care when and where they want it.
- Quality and Safety: Quality and Safety are hallmarks of the medical home. This includes using electronic medical records and technology to provide decision-support for evidence-based treatments and patient and physician involvement in continuous quality improvement.
- Expanded Access: Enhanced access to care is available through systems such as open scheduling, expanded hours, and new options for communication between patients, physicians, and practice staff.
- Added Value: Payment that appropriately recognizes the added value provided to patients who have a Patient-Centered Medical Home.
But here is what I am arguably an expert on: Docs, you have 17 months, 20 days, and 13 hours until you get hit with an automatic 21% fee cut. You can throw all the tantrums you want and you will again almost certainly get the the politicians to put off the next cut. But you will still be stuck in the mud with the same out of whack fee structure.
Recent post: There Won't Be Any Health Care Reform Without Physician Payment Reform and There Won't Be Any Physician Payment Reform Unless the Docs Lead The Way
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