The economics of the health care industry
On Sept. 25, I referred readers to an article I wrote on the health care debate for Front Porch Republic. It was an overview, and as such made no attempt to provide background material supporting or clarifying my views. It sparked a healthy debate, revealing to me how woefully ignorant even intelligent Americans are about the economics of our profession.
Following a recommendation from reader Dan Schmidt, I just read a long article from The Atlantic entitled “How American Health Care Killed My Father.” Don’t be put off by the title; it isn’t a rant. Rather, it is as close to perfection as anything I’ve ever read on the subject of health care economics. Every point and every example rings true to my experience.
If you have any interest in the subject, which will determine the future of our profession and now controls 18 percent of our economy, please – read this article.
When you do, you’ll realize the futility of any attempts to shoulder family medicine to the front of the federal trough. Oh, I know; at the moment, current legislation will give me an 8 percent raise in RVU compensation next year, probably to be snatched away the year after. Instead, our specialty's leaders should be the voice in the wilderness crying for a free market in health care services, where we would quickly demonstrate our indispensability.
Sometimes it takes a famine for people to appreciate farmers.
Fascinating excerpt: “Let’s say you’re a 22-year-old single employee at my company today, starting out at a $30,000 annual salary. Let’s assume you’ll get married in six years, support two children for 20 years, retire at 65, and die at 80. Now let’s make a crazy assumption: insurance premiums, Medicare taxes and premiums, and out-of-pocket costs will grow no faster than your earnings – say, 3 percent a year. By the end of your working days, your annual salary will be up to $107,000. And over your lifetime, you and your employer together will have paid $1.77 million for your family’s health care. $1.77 million! And that’s only after assuming the taming of costs! In recent years, health-care costs have actually grown 2 to 3 percent faster than the economy. If that continues, your 22-year-old self is looking at an additional $2 million or so in expenses over your lifetime — roughly $4 million in total.”
And on the other hand, we have a Wall Street Journal lead editorial that can’t discern its terminal colon from a terrestrial excavation.
The editors are upset that the Senate Finance Committee bill authored by Democrat Max Baucus would increase primary care compensation at the expense of specialists. This is an assault on the free market, they opine, blissfully unaware that it was federal regulators who created the income disparities that Sen. Baucus is attempting to scale back.
Tell you what: Sometimes the ignorance of educated friends makes me want to weep.
However, I’m sure the AAFP leadership has ripped off a stunning riposte to the Journal, which is always willing to print a letter from the loyal opposition. I’ll let you know how it turns out next week.
Posted at 12:30PM Oct 12, 2009 by Doug Iliff | Comments[3]
A little reason to the health care debate
Once upon a time I wrote an article for FPM called "Ten Hard Questions About the Future of the Specialty." It generated a lot of response, but most of the questions still haven't been answered.
So, having failed at a simpler task, I recently cranked out 3,000 words on the subject of "Ten Key Questions Framing the Health Care Debate." It was written at the request of an editor at Front Porch Republic, a blog dedicated to "crunchy conservatism," that form of conservatism that is also environmentalist and localist in its philosophy.
Go there if the subject interests you, and jump into the conversation. The zanies are winning the battle, and we're losing the chance to have a civil debate.
Posted at 03:27PM Sep 25, 2009 by Doug Iliff | Comments[2]
Big Brother will be watching!
As I was driving home from the airport Wednesday morning I heard an enlightening interview on NPR, my default radio station.
Massachusetts, under then-governor and future Republican presidential candidate Mitt Romney, implemented the nation’s first full-court press toward insuring everybody. Now they’re having trouble paying for it. Imagine that! Who woulda thunk? So Congress is watching closely.
“The first thing they decided – unanimously and right off the bat – was that the current way of paying doctors, hospitals and other medical providers has got to go," reports Richard Knox. "… Massachusetts is going to try to kill off fee-for-service.”
Massachusetts policymakers want to replace it with "global payment" – paying groups of health care providers a flat yearly fee for each patient they cover. "Global means it's for all services," says Dr. Rick Lopez, chief physician executive of Atrius Health, one of Massachusetts' biggest doctor groups. "It includes when the patient comes in to see the physician, hospitalization, pharmacy, skilled nursing facilities, home care services – the whole spectrum."
Gee, that sounds a whole lot like “full capitation,” doesn’t it? That means they’re going back to “gatekeepers,” aren’t they? Remember how much fun that was? The calls in the middle of the night for permission to patronize the ER for belly pain? Patients questioning our integrity and commitment to them, rather than our income?
Ah, but this time it will be different! The problem in the 1990s was that there was no way to track, identify, prosecute and execute the bad apples in the primary care specialties. But now there IS a way! Read this carefully:
"To avoid a repeat of that experience, advocates of global payment say health providers will have to be watched closely. 'You need someone monitoring this,' says Nancy Kane of the Harvard School of Public Health. 'You can't just walk away because you've set the limit.' Kane is a health care finance expert who also served on the recent Massachusetts Payment Reform Commission. She says there are ways these days to prevent stinting on care. 'There's a lot of quality measuring that can go on now that didn't used to be available,' she says. 'We now have electronic medical records. It's easier to monitor what's going on. So I think the whole reporting system and the intention to maintain a monitoring infrastructure is all critical to avoiding the bad days of managed care.'"
Academics and bureaucrats love terms like “monitoring infrastructure.” That’s an Orwellian term for “Big Brother Is Watching You.” It sounds so easy, and so painless. But, of course, the Devil is in the details.
And, of course, there's the problem of the surgeon who examined my nurse for five minutes, sent me a three-page dictation, and charged for a top-dollar consultation physical. The system Massachusetts is heading toward will punish the honest, and reward the liars. Next step: Every encounter will be filmed by a hidden camera, and stored on government servers.
Until I heard the italicized comment above, I thought my friends in the blogosphere – who viewed the EMR as a plot by insurance companies to deny care – might be a bit paranoid. Mea culpa. They were right all along.
Dr. David Kibbe, who is as close as it comes to a guru in FP-IT, penned a great opinion piece in the latest Family Practice Management. He advocates plug-and-play modularity for components of the electronic medical record. Rather than a single vendor providing a comprehensive program at an extortionate price, with the separate elements always lagging the latest innovations in the marketplace, these elements should be disintegrated.
As Paul Nutting wrote in his initital assessment of the National Demonstration Project, “[I]t is possible and sometimes preferable to implement e-prescribing, local hospital system connection, evidence at the point of care, disease registries, and interactive Web portals without an EMR.”
To which I say, “Amen.”
Dr. Kibbe goes on to describe the ugly political state in which the Academy is trapped. (It essentially backed the wrong horse in the Derby, and now there's no winning ticket to cash.) Big vendors are fighting tooth-and-nail to slow the shift to plug-and-play modularity – that is, the same way you can buy separate applications, cheap, for your iPhone. They succeeded in getting the Feds, as part of their incentive program to adopt EMRs, to mandate comprehensive applications from single vendors.
This is an old, and familiar, political game. This is how we continued to subsidize tobacco farmers while we stigmatized tobacco users. This is how we continue to subsidize corn farmers while Americans are fattening on fructose-flavored soft drinks. This is why politicians should be banned from certain activities.
The fundamental problem, of course, is that we are led by politicians. They’re not bad people. They’re just different than those of us who would rather deal with chronic fatigue syndrome than collaborative back-scratching.
I suppose it’s my own fault – me, and tens of thousands like me. I never liked committee meetings. I liked patients. Mea culpa, mea maximal culpa.
Posted at 11:37AM Aug 27, 2009 by Doug Iliff | Comments[0]
Family (physician) values
I know I’m fakin’ it. I’m not really makin’ it. This feeling of fakin’ it – I still haven’t shaken it. – Simon and Garfunkel
Bill James is a world-renowned baseball analyst. After laboring for years in near-obscurity, his views are now near-gospel in many professional circles.
For four years we were contemporaries at the University of Kansas. He was the last Kansan drafted for the Vietnam War; my lottery number was 313, so I was safe. He went on to fame as a statistical genius; I passed on that internship at Sports Illustrated to attend med school.
C’est la vie. Look who gets to blog for Family Practice Management, Bill! Can you hear me now?
Bill once wrote, and no truer words have ever been writ: “One of the unwritten rules of economics is that it is impossible, truly impossible, to prevent the values of society from manifesting themselves in dollars and cents. This is, ultimately, the reasons why athletes are paid so much money.”
Allen Barra, writing in the Wall Street Journal, adds this: “It isn’t some vague indefinable ‘they’ who pays the players. It really isn’t even the owners. It’s you, or rather, it’s us. If we put our money where our mouths are and support cancer, AIDs or Down syndrome research and then buy our tickets with what’s left over, athletes and rock stars will actually be paid what we pretend they should be paid.
“The fault lies not in our All-Stars, but in ourselves.”
Barra is quoting the Bard, as I was on June 1. It all comes back to Shakespeare, and ourselves, in the end. Society gets what it deserves; doctors get what we deserve.
Since I’ve fallen into a rut of quotations, let's make it a little deeper by paraphrasing Lincoln: "Now we are engaged in a great civil war, testing whether that profession, or any profession so conceived and so dedicated, can long endure."
Week by week, we’re watching it play out in Washington. Will family medicine survive? We are met on a great battlefield of that war. It’s an ugly process. It’s unbelievably messy, and contentious. Winston Churchill said: "Democracy is the worst form of government, except for all those others."
For all its inconsistencies, sham, pretense, inefficiency and corruption, democracy always beats tyranny or oligarchy, just as free markets always beat central planning. Sometimes it takes a long time.
In the end, all you can control is what is under your own thumb. Society is going to get the health care it wants and deserves, and you are going to get the medical career you want and deserve.
Make no mistake: You are not a helpless pawn in an inscrutable system. Our situations are all different, but we have this in common: We are free moral agents, and our actions (but not our passions) will always have an effect.
Are you fakin’ it? Are you murmuring and complaining about the System, or the Man? Get off your keister, and make something happen!
Posted at 09:50AM Aug 18, 2009 by Doug Iliff | Comments[0]
Surveys and other time-wasters
In case you don’t read the papers or listen to the news, good for you! And here’s an executive summary of the last two weeks.
Health care “stakeholders” pack congressional hearing rooms; embarrassing picture taken, reminding ordinary people that no one is lobbying for them. President Obama promises a nice raise for primary care physicians, and cuts for everyone else. Procedurists scream like stuck pigs. Congressional Budget Office scores health care proposals; looks like no raises for anybody. Rep. Charlie Rangel solves scoring dilemma: tax surcharge on everyone making over $350,000. Procedurists scream like stuck pigs.
That’s the news for the last fortnight, and good luck to you if you’re counting on the politicians to save us. So, in the meantime, lets talk about something practical. Like surveys.
Surveys are big right now. If you want to be a “medical home,” you’re going to need to survey your patients. You’re going to ask them to respond (on a scale of one to five, with five being “strongly agree”) to items like “I can get an appointment with Dr. Iliff quickly,” or “Dr. Iliff spends enough time with me at our office visits.”
You know the drill. And if you’re in a big group, you’ll have to grin and bear it. Even solo physicians like myself are periodically exposed to patient surveys by insurers, although I don’t have to waste any personal time participating.
Then will come the results. You’ll find that when it comes to waiting for appointments, you rate a 4.1 against the group average of 4.3. But hey! Once you get them into the room, you’re a 4.2 against the group’s 3.9!
So what are you going to do with that information? Quicken your visits by 0.2 in hopes of shortening the wait by 0.4? And does a delta of 0.2 mean anything, anyway?
The problems associated with surveying are legion. Just ask someone doing meaningful research – that is, something other than devising the 1,232nd question to detect the closet alcoholics in your practice. If you’re relying on a survey, your research is crap. That’s why I always file them in the wastebasket.
If you’ve read this blog more than once, you sense that I’m impatient. I don’t like wasting time. If it’s not actionable intelligence, bother somebody else.
But I know I’m in the minority. If I were still in academic family medicine, it would be an infinitesimally small minority. The world is full of talkers. Cogitation and blophilating* pass for action. But they are not action. They are vapor, like carbon monoxide.
If you are a young family physician, and you like to spend time with your family while earning a good living, you’ve got to develop strategies to avoid the time wasters in your professional life. President Obama can’t do it for you. The AAFP can’t do it for you.
On rare occasions I read something heartening in my local paper. The city council voted to spend $20,000 for a study of bike trails. They were “incentivized” by the Feds, who would toss in another $80,000. That’s the way the Feds add value.
Our elderly mayor, a man of distinguished character and long experience, is fighting pneumonia. He rose from his hospital bed long enough to veto the expenditure, noting that the city planning staff is quite capable of performing that function in the normal course of their duties. In fact, the staffer who designed a wonderful plan of bike trails for our town – which is being implemented, one year at a time – is one of my patients.
The mayor knows that a whole industry has grown up to “facilitate” planning, strategizing, surveying, resolution-writing, brainstorming, consulting, goal-setting, and focus-grouping. If you don’t read Dilbert, do**: that’s where you go to get your head straight after you’ve run into one of these gurus. They want your $100 grand, in time or money.
Just say no. You must develop a bias for action, and a nose for BS. To help get you started, browse at despair.com. I put their posters on the ceiling, for patients suffering indignities in the prone position.
* neologism: "the love of being a blowhard"
** Six hours after I wrote this (no kidding) the Sunday paper arrived on my driveway. The Pointy-Haired Boss tells Dilbert to collect useless information that will be out of date before it is compiled. Dilbert: "The best way to compile inaccurate information that no one wants is to make it up." Pointy-Haired Boss (to Catbert, evil head of HR): "I hope no one ever comes here to learn our best practices."
Posted at 11:03AM Jul 17, 2009 by Doug Iliff | Comments[1]
Dittoheads of the world, unite!
I know I’m running out of things to say about practice management when I read a series of great articles in great publications – and all I can add is “ditto.” I never wanted to be a dittohead, and I don’t listen to Rush Limbaugh. But there are only so many valid points to make, and unless I want to make them again with different examples, or move on to some other subject, I’m reaching the end of my tether.
Dr. Mark Sklar, an endocrinologist and assistant professor of medicine at the hospitals of Georgetown and George Washington University, popped a good opinion piece in the June 23rd Wall Street Journal. Although he is a specialist and I am a generalist, the fact that we have both experienced academic bureaucracies and opted for private practice makes us blood brothers. Like this:
"Contrary to what you may have heard, my experience is that smaller practices provide better patient care than larger practices. There are no economies of scale in medicine. If you hire more physicians, you need to hire more support staff to deal with the increased work demands. Larger practices with less support per physician often end up providing worse service. They also require office managers, and sometimes even managers of managers, all of which just bloat costs."
Like I said before, doctors are really piece workers. There are no efficiencies in numbers. Have I mentioned that I don’t have an office manager, so I don’t have to pay my share of a $50,000 salary? That goes to my kids’ college fund. True, I have to make small day-to-day decisions between patients. Also true, I don’t have to meet with the office manager to go over those decisions, and check on the implementation later. I wouldn’t remember anyway. Short attention spans have their advantage, in the right setting.
"I worked in a university multispecialty practice for seven years before establishing my own private practice. At the university practice, I found that patients' requests often went unfulfilled. Phone messages didn't get to me, and charts and laboratory tests were routinely lost. In my own practice, my fingers are continuously on the pulse of my staff and patients. Because I can overhear how staff interact with patients, I can intervene rapidly if patients are not getting good service. We routinely have patients transferring to us from larger multispecialty practices where they often wait for hours to be seen, aren't called with their test results, and their phone calls are ignored."
My town is crawling with good doctors, including primary care – we had a family practice residency here for a long time, and lots of them stayed put. Every time I call my primary hospital, I listen to an advertisement for my competitors while I’m on hold; I read their full page ads in the paper; they dominate the evening news and the Yellow Pages. How is a solo FP supposed to compete? Like Dr. Sklar says. Our patients are treated like royalty. I was recently invited to join a large “concierge” organization, but there was a major problem: How was I going to offer VIP patients better service than they’re getting now for nothing?
"Electronic medical records have been praised as a way to save money and avoid duplication of tests. It's true that electronic medical records will save some money, but not as much as you probably are counting on. In my practice, if a patient tells us he had a test performed, we call the physician or medical facility to retrieve the results…. When I refer a patient, I fax or mail over pertinent notes, lab work and radiology results so that the specialist knows the patient's problem and doesn't need to perform additional unnecessary tests. The specialists that I refer to either call me or write comprehensive consultation letters so that I am aware of their treatment plan and can coordinate future care with them."
When I read articles lauding EMRs, I feel like I’m in a parallel universe. You need an EMR to avoid duplication of tests and services? Like Dr. Sklar says, that’s what a fax machine is for. An EMR will save paper? Every time I get a “Practice Partner” five-minute office visit from one consultant, it occupies four pages of trees. An emergency room visit runs to eight single-spaced pages. It’s damn difficult to find the important stuff in all that computer-generated, ass-covering verbiage. If everyone shared a common platform, that would be one matter. But the government refused to mandate that a decade ago, and I’m paying for the results. Some day the Betamax/VHS, Blu-Ray/DVD, 8-track/cassette issue will be settled, and that’s the day I’ll shop for an EMR.
Don’t try telling that to the Patient-Centered Medical Home folks, though.
Posted at 12:22PM Jul 02, 2009 by Doug Iliff | Comments[4]
The health care debate heats up
On occasion I am brutally honest with patients about their differential diagnosis. I tell them of several possibilities, but conclude that the most likely is “God Only Knows.”
This has been an active fortnight for news about reforming our health care non-system, highlighted, I suppose, by President Obama’s frank talk with the AMA and the Congressional Budget Office shooting Sen. Edward Kennedy’s plan out of the water.
As of this writing, and for the near future, God Only Knows is the front-runner.
What I look for is honesty about the real challenges. And, lo and behold, we’re starting to get a little honesty.
It started with Dr. Atul Gawande’s New Yorker article (see my June 1 blog post), which President Obama made required reading for White House staffers. Then he mentioned it in his AMA speech. In his punch line, he referred to “…a system of incentives where the more tests and services are provided, the more money we pay. And a lot of people in this room know what I’m talking about.”
Throughout the speech, the president got a lot of nervous applause, and one standing ovation (“You entered this profession to be healers – and that's what our health care system should let you be"), but the line about incentives got stony silence.
If you want a useful and perceptive commentary, read Dr. Abraham Verghese’s article, “The Myth of Prevention,” in the June 20 Wall Street Journal.
If you don’t have access to these articles, or the time to read them, here’s an executive summary of the debate to date:
The CBO decided that Sen. Kennedy’s bill would cost roughly $1 trillion over 10 years, and still leave 37 million Americans without insurance. That was a big "OOPS!" for congressional Democrats.
Dr. Gawande usefully observed that doctors make a lot more money when they decide to order tests and procedures which make them a lot more money. He did not have a solution to this problem. The solution I favor, Health Savings Accounts, he dismissed by noting that no one shops for price when chest pain strikes in the middle of the night, which is true. He failed to point out that lots of people shop for price in the course of my routine office practice, which, to be fair, is completely outside his limited experience as a surgeon and author.
Dr. Verghese, an internist and infectious disease specialist, writes:
“Cut, poke, sew, burn, insert, inject, dilate, stent, remove and you get very well paid; if you learn how to do this efficiently, maybe set up your own outpatient center so you can do it to more people in a shorter time (which is what happened when this payment system was put in place in 1989) and you are paid even more. If, however, you are a primary care physician, and if, just like the young doctor who saw my parents yesterday, you spend time getting to know your patients, and are willing to play quarterback when your patient enters the hospital, so that you can herd the consultants and guide the family through a bewildering experience that gets surreal if you are in the intensive care unit, then you may have great personal satisfaction but you will make five to tenfold less than your colleagues in the doing-to disciplines.”
No argument there. But aside from “behavioral things – eat better, lose weight, exercise more, smoke less, wear a seat belt,” he is skeptical about preventive medicine. Primary prevention through the use of statins may not be cost-effective (unless you are careful to use generics when possible); there are lots of technological gimmicks, like CT scans for coronary calcium, which don’t add much except anxiety.
Dr. Verghese is also skeptical about electronic medical records: “…an electronic medical record (EMR) may or may not save money (it won’t be anywhere as much as is projected) but what it will do is ensure that we doctors, nurses, therapists, particularly in hospitals will be spending more and more time focused on the computer, communicating with each other, ordering and getting tests, buffing and caring for our virtual patient – the iPatient is my term for this phenomenon – while the patient in the bed wonders where everybody is. Having worked exclusively for the last seven years or so in hospitals that have electronic medical records (EMR), I have felt for some time that the patient in the bed has become an icon for the real focus of our attention, the iPatient. Yes, electronic medical records help prevent medication errors and are a blessing in so many ways, but they won’t hold the patient’s hand for you, they won’t explain to the family what is going on.”
He asserts “the single most important fact about health care in America that you or I need to know. ... all of us – doctors, hospitals, pharmacists, drug companies, nurses, home health agencies, and so many others – are drinking at the same trough which happens to hold $2.1 trillion, or 16% of our GDP. Every group who feeds at this trough has its lobbyists and has made contributions to Congressional campaigns to try to keep their spot and their share of the grub. Why not? – it’s hog heaven. But reform cannot happen without cutting costs, without turning people away from the trough and having them eat less. If you do that, you have to be prepared for the buzz saw of protest that dissuaded Roosevelt, defeated Truman’s plan and scuttled Hillary Clinton’s proposal."
Our leaders in the AAFP are, at this moment, trying to shoulder their way into this trough. And I wish them well, I really do, because their ideas are better than the proceduralists’ ideas. In a perfect world their proposals would be enacted. This is not a perfect world.
Meanwhile, I know this from personal experience: If I am given complete control of medical dollars through a full-capitation model, I will make a lot of money, because I practice evidence-based, cost-effective medicine. If I am simply scored against my peers based on costs that pass through my fingers, even if there is no monetary incentive, I will rank high for the same reason.
For around $200 per patient per year, you can have all of my services, including office visits, labs, x-rays, and obstetrics. My Job One, except for delivering babies, is to keep patients out of the hospital. I'm good at it, Dr. Verghese. Prevention works for me.
Based on proposals he has entertained thus far, President Obama is suffering from delusions about what it will take to reduce health care costs. I am not.
What we need is a system in which patients trust their family physicians, internists and pediatricians to direct their care in a cost-effective, patient-centered, wise and humane manner. This system should not interpose itself between me and my patient, and it should not raise questions about my motives. The inevitable and necessary rationing decisions must be made by patients and their families with the advice of their personal physicians, not by insurance companies or government commissions.
Aside from a universal system of Health Savings Accounts with refundable credits for the poor, I am waiting for alternative proposals that meet these criteria.
But this is beyond my pay grade. In the meantime, I’m Making It just fine, and you should be too.
Posted at 10:41AM Jun 27, 2009 by Doug Iliff | Comments[3]
