Monday, May 26, 2014

Can a Veterans Administration Scandal occur in a Non-VA Facility near You?

Posted by Stephen Weinberg, MD FACC FACP

Yes, but. . .

In order to answer that question we need to know the details of the VA problem and apply them to non-VA healthcare. To briefly summarize the VA issues, it was discovered that secret waiting lists for care were present at several VA hospitals. The waiting times were several months for routine outpatient care for things like colonoscopy, heart failure therapy, gangrene of a leg and many other illnesses. It is alleged that some veterans have died as a result of the excessive delays.

The real issue is why are there such delays. Investigations are ongoing, but several issues have been brought to light.

 The VA is funded by a capped budget so there is only so much money to go around. When the funding is exhausted, the care decreases or stops. As a result, waiting lists are created and care is rationed to fit the annual budget. This is also what happens in Canada and the United Kingdom under their national health systems as reported annually by the Fraser Institute. Once you get to the the last quarter of the year in Canada, the money runs out and care essentially ceases. The average wait time in Canada for an elective treatment is about 18 weeks! This is not the case in a free market system as we have in Medicare and private insurance coverage. The budgets are not capped and spending can occur as needed.

In the VA system, physicians and staff are salaried and are not rewarded for productivity. They get paid regardless of how many patients they see. A news report indicated that at the Albuquerque VA hospital there were 3 cardiologists working in the outpatient clinic seeing fewer total patients on a weekly basis than 1 cardiologist would ordinarily see working in private practice. The VA has been asked by the Inspector General for many years (going back to 1981) to provide productivity measurements at its facilities to determine the necessary/optimal level of staffing. The system has yet to comply. In a free market system, if the demand for services is present, the business or healthcare provider would expand services to accommodate the needs in an effort to make more money and to provide the care necessary. A system without these incentives will not work harder and will only do what is within their budget, like Canada and the UK.

So how can these issues be translated into poor care under the Obamacare? One of the provisions of the law is to allow for Accountable Care Organizations (ACO's) to contract with Medicare and  private insurers for a fixed price per person under care. This then becomes a capped budget and rationing of care will then occur. It could even be worse if the physician is incentivized in a negative manner with salary reductions if the ACO loses money. These provisions are all included in the Obamacare legislation. Furthermore, as a result of more and more practices being purchased by hospitals (often because of financial hardship resulting from decreased reimbursements from Medicare and private insurers) physicians are becoming employees just like those in the VA system. They are no longer working completely on behalf of the patient, but rather they now have dual loyalties to the hospital that pays their salaries. Productivity could once again  become an issue (as it did 20 years ago) as well as rationing of care to meet the organizations' budgetary requirements.

The underlying similarities between the VA scandal and the development of the new healthcare delivery system under Obamacare are fixed capped budgets and salaried/employed physicians who might not have your best interests at the top of their priority list. Obamacare has numerous excellent attributes such as no lifetime expenditure limits, no exclusions for preexisting diseases, inability of insurers to drop you if you develop an expensive illness, insurance for children under 26 years of age on a parent's policy, and others. Unfortunately many of the other provisions of the law present significant risks that, once adopted, will take many years to undo after harm to individuals has occurred.

The more you know. . .

Wednesday, May 7, 2014

Fee for Service Medicine is going to disappear

Posted by Stephen Weinberg, MD FACC FACP

Fee for service medicine may be a thing of the past, relatively soon.

The President and Congress have stated on multiple occasions that they believe fee for service medicine is the principle cause of the high cost of medical care. The theory is that physicians often order tests that are sometimes unnecessary in order to increase their income. Unfortunately, it is difficult if not impossible to be certain that these tests are, in fact, inappropriate. Studies that have tried to determine the usefulness tests ordered by physicians look at tests that were performed relative to the final diagnosis. However, the tests were performed in order to make the diagnosis. It is not surprising that some of the tests were not directly related to the final diagnosis, since the final diagnosis was unknown at the outset. Admittedly, a small percentage of physicians probably churn testing to enhance their incomes. On the other hand, the vast majority of physicians practice appropriate medicine and order tests they believe are necessary and follow appropriate guidelines.

So what does Washington propose to take the place of the current system? The programs being put in place are related to the Accountable Care Act (Obamacare). Physicians will be placed into Accountable Care Organizations (ACO's) which will pay them salaries based upon the financial performance of the organization. Simply put, if the ACO makes money, physician income will increase; and if the ACO loses money, physicians will earn less. My fundamental concern with this system is that there is a perverse incentive to do less for patients because of the very real financial "vice" physicians will be put into. I believe it is important that the patient has confidence in the physician doing what is best for the patient and not the physician. This new system will damage the physician-patient relationship and create uncertainty about whose interest the physician is truly serving.

Additionally, there is no good data to suggest that this type of system will be effective. Medicare has done several demonstration projects over the past 20 years in a effort to show that costs will decrease and quality will be enhanced in a non fee for service system where physicians and hospitals are at risk. These studies have not shown any significant benefit as reported by the Congressional Budget Office. Despite this failure, Medicare has now licensed more than 200 ACO's and more will be coming to a region near you. As pointed out in a prior post, the ACO is supposed to provide a letter to each patient indicating that they and their physician are in the ACO, but the letters do not point out the financial implications. It is one thing to be in the ACO with full disclosure and quite another to not know all the intricacies.

What is interesting is that none of the major medical centers that have had this staff model for years (Mayo, Cleveland, Geisinger, and others) has joined the ACO programs. One could argue that some of the motivation of groups to form these ACO's is that the handwriting is on the wall as to the direction of the government programs, there is perhaps money to be made, and the organizers can control large regional resources of physicians, hospitals and money, so why not do it. This does not seem to be an appropriate motivation.

So what is an alternative?
The easiest way to promote appropriate use is to have the physician office computers ramped up with some artificial intelligence to point out what is the best testing for the patient's symptoms and problems. This would not be very difficult with overlay software packages that can provide appropriate use criteria in real time. There would always be the ability to override the recommendations with good reasons. The problem is that by not planning ahead when practice computers were mandated by the government, there are so many platforms now that it would be a more difficult task, but not impossible. This is just another example of poor planning by Washington. They jump from one issue to another without long term thought as to the best approach. Instead of trying things out in a regional laboratory, they move ahead with draconian programs that can destroy the healthcare system. And when they try programs that do not work, as above, they embark on them anyway.

The current programs of healthcare delivery set forth in the Accountable Care Act are like throwing the baby out with the bath water. We will develop a system that few will like or trust with uncertain results.

The easiest way to control costs is to set a fixed annual budget for healthcare nationally and regionally and then you will have certainty as to cost. I do not think any consumer of healthcare wants this alternative; but, believe it or not, this proposition is also part of the ACA with ACO's taking the lead. By doing this you will have Canadian and European healthcare with all the problems associated with it. More about this in a later post.  

It is important that we all have knowledge about what is coming down the road with the ACA and speak out against policies that will be detrimental to our collective health.

Thursday, April 17, 2014

Less Money for your Care!!

Posted by Stephen Weinberg, MD FACC FACP
In October, 2012, Medicare established a program to reduce the frequency of hospital readmissions that occur within 30 days of discharge for 3 illnesses. Hospitals are being financially penalized for readmissions that are more than the predicted by Medicare. 2225 hospitals will be penalized a total of $227M this year. Since this money will  come out of their operating budgets, less money will be available for patient care, your care.
Hospitals caring for the poor were more likely to be penalized than those that did not. 77% of indigent hospitals vs. 36% of non-indigent hospitals are having money withheld. Medicare does not take into account the socioeconomic profile of hospitals. 87% of academic teaching hospitals, which care for a disproportionate number of indigent patients, are being fined. These reductions are in addition to the fact that the hospitals do not get paid for that readmission as well. These institutions typically provide sophisticated  tertiary care services to a large segment of the population and can ill afford reduced reimbursements.
These reductions are in addition to the increased expenditures for social workers, discharge nurses and more intense post hospital care paid for by these hospitals. It should also be noted that the government penalizes hospitals for keeping patients in the hospital longer than predicted. Premature discharge contributes to re-hospitalizations. So if you keep patients too long, you get penalized. If you discharge them prematurely, they have a higher chance of readmission. Seems like perfection is the only answer.
Whose fault is it if the patient cannot afford medications (hospitals often provide drugs for several days at home), appropriate dietary components such as a low salt diet for congestive heart failure, unable to truly understand what it takes to stay well despite extensive written and verbal instructions? Many patients just do not care or cannot comprehend the complexities of their own care.
The % hold back (2% now) will be increasing over the next couple of years and additional diagnoses will be added to the list of readmission penalties.
What is important to know is that the government is withholding significant money from many hospitals. This reduced reimbursement will impact your care!

Monday, April 7, 2014

"I have Medicare" or "I have good private insurance, so what do I care about the upcoming changes with Obamacare" Well, think again . . .

Posted by Stephen Weinberg, MD FACC FACP
The Accountable Care Act, better known as Obamacare, has, as part of the program, the imposition of Accountable Care Organizations. These are relatively large organizations comprised of hospitals, physicians and in some instances insurance companies. The goal is to provide a better coordinated healthcare delivery experience for the patient. The end result is to improve the quality of care and reduce costs. I outlined some of the issues in a prior post.
That's the easy part. The more difficult issues involve who's working for who.

First, when your primary care physician joins an ACO, you will likely receive a letter from the parent organization introducing itself and that your physician is part of it. An example is this letter from Partners Healthcare in Boston.
What is important to note is that you need to "opt-out" if you so desire. You will otherwise be part of the ACO if you do nothing!

Second, the type of ACO matters as to how your care may be provided. Briefly, ACO's are being designed with various levels of financial risk. Some will have upside risk, meaning bonuses will be paid for reducing costs and maintaining certain quality standards. The other large type is both upside and downside risk where the organization may lose money if costs are in excess of revenues. These losses will filter down to physicians as well as the hospitals. So how might this affect you? Savings can occur by reducing costs through standardizing hospital purchases of equipment, drugs and disposables; standardizing protocols of care; better sharing of information; and coordination of the various aspects of care. Other cost saving measures consist of reducing readmissions to the hospital, reducing the use of expensive testing and therapies (MRI, CAT scans, cardiac cath, PET scans, surgeries, pacemakers, defibrillators, etc.). These are all laudable goals except if they produce harm to patients. Quality indicators are being designed to determine if care is substandard. Unfortunately, these measures are very imprecise indicators and on an individual basis, they are not very helpful. As a patient, you may be injured as a result of withholding care. The financial incentives may be too great to allow for protection of individual patients. It may be that the quest for cost savings may lead to harm of some individual patients. I believe this highly likely. When I was writing my book on healthcare financing several years ago, I performed a non-scientific survey of many of my patients to see if they would accept somewhat less care if the cost savings benefited the country as a whole. Not one patent was willing to accept any change in care! They all wanted to know that their physician had their welfare as the only issue. I feel the same way and as a physician, I do not want an incentive program to influence my decisions regarding care. The pressure to withhold testing and therapy could be so great that patients may suffer, individually. Putting in place purchasing and protocols makes sense, but incentives that may withhold care are dangerous.

So what are the messages that you need to understand?
You may be in an ACO and do not know it.
Your care may be influenced by the policies of the ACO and you may not know it.

At the very least, it is important to provide full disclosure to all patients regarding the parameters of the ACO they are enrolled in. The government should mandate this. The Partners letter is incomplete and needs further details about the positive and negative incentives of the program. With this information, you can then have a conversation with your physician decide what you want to do. If you do not think the ACO policies are something you can accept, you have the option of opting out and changing your physicians.

The more you know, the better off you are!

Thursday, March 27, 2014

The Myth about Life Expectancy

Posted by Stephen Weinberg, MD FACC FACP
Much has been made of the fact that the life expectancy in the US is lower than other industrialized nations. This fact has been touted over and over again as proof that the healthcare system in the US is inferior to other countries. But merely saying this, does not make it true. It is important to explore the issues a bit more to understand the data.
It is true that we, as a society, have a lower life expectancy. Information from the OECD ( Organization for Economic Co-operation and Development) indicates that for 2011 (the last year compiled) the best life expectancy was in Switzerland at 82.8 yrs. The average of the 34 reporting countries in the OECD was 80.0 and we were 78.7. We were 26th out of the 34. Not a particularly good showing.
Anyway, let's look at these numbers. Why are we so low? Research has shown that patients on Medicaid (the health program for the poor) have a life expectancy 10 years less than people with standard insurance. Furthermore, people who are uninsured also have a decreased life expectancy which is about the same as the Medicaid population. There are 50M people on Medicaid and 50M uninsured in the country. Let's assume that the people with standard insurance have the same life expectancy as Switzerland (82.8 years) and the others have 72.8 years (10 years less). The people with the lower expectancy make up 33% of the population of 300M. Taking a simple weighted average of both populations yields a predicted average life expectancy in the US of 78.6 years which is almost precisely what was found in the OECD data. So, this indicates that those of us who have had a lifetime of standard health coverage have the same life expectancy as the best country in the world. Unfortunately, the other 33% of us have a value lower than Slovenia (80.1 years).
So why do we have this huge disparity despite spending all this money?
The answer is complex and that is where the pundits and legislators fail to truly address the situation.
We have one of the highest rates of traumatic deaths in the world, including vehicular, murder, suicide, accidents. Our death rates from HIV/AIDS, mental illness, Alzheimers are also one of the highest in the industrialized world.These illnesses do not lend themselves well to preventive medical care. On the other hand, cancer and hardening of the arteries, (ischemic diseases) have death rates much below average. These illnesses are cared for and prevented by good medical programs.
We don't have the benefit of a relatively homogeneous genetic pool, like most countries, where certain diseases are much less common. An example is Japan where ischemic heart disease is fairly uncommon.
We have great societal differences as it relates to obesity, which leads to diabetes, compared to other countries.
Additionally, we have a significant population in the US (100M people or 1/3 of our population) that has not had comprehensive health insurance coverage and access to care so they are, in general, less compliant with taking medication, obtaining timely medical care, eating properly, and having checkups, and taking care of themselves. As a result, they develop serious illnesses at a young age that then require emergency care at great expense and die prematurely.
"So what", you say. "All of this is just a bunch of numbers that really don't have any meaning for me". Well, not so fast. One of the major arguments set forth to justify radical changes in our healthcare delivery system is that our life expectancy is lower than it should be compared to other industrialized countries. (The other issue is cost which will be addressed in a future post.) That is true for the 1/3 of our population without private health insurance, but it is not true for the 2/3 of us that have such coverage. With changes designed to affect everyone, without good scientific evidence that they will be effective, it may mean that the vast majority of us living full lives may suffer as a result. Money may be diverted, physicians and hospitals may be incentivized to ration care. We certainly need to develop programs that will improve the health of those disadvantaged, but not harm others.
It is vital that all of these discussions and issues are transparent and that major changes to our system are not made in the absence of convincing evidence they will work and not cause unanticipated problems.

Wednesday, March 26, 2014

The Dangers of Profit and Loss

Posted by Stephen Weinberg, MD FACC FACP
Gain-sharing is an incentive program in which physicians are compensated for putting forth extra time and energy in an effort to save the hospital, in which they work, money. This could be by standardizing equipment used in the OR, ER, pacemakers, suture material, and other disposables that will reduce costs. It can also occur by developing and adhering to protocols that will make care more efficient and thereby keep costs low. I have participated in these programs and spent endless hours on committees coming up mechanisms to reduce expenses and then implementing them. The time spent is compensated by physicians sharing in the savings, if any, generated by the hospital. These are all laudable endeavors and should be encouraged in all programs.
I have concerns however when physicians get compensated for reducing or withholding care. Once a physician is in the employment of a hospital or is financially aligned with a hospital  and his salary is dependent upon the profit or loss of the hospital, the pressure on the doctor to admit or not admit a patient to the hospital or discharge a patient too early is greater than I believe it should be. With shrinking physician and hospital reimbursements, both entities are being placed in a situation where the need to wring every last wasted dollar out the system is becoming overwhelming. As a result, people can get hurt.
I believe there needs to be a firewall between physician income and hospital profit and loss to avoid rationing of care. There is nothing wrong with developing care protocols, streamlining flow, reducing waste from duplication of effort, developing purchasing power by decreasing the numbers of vendors in the hospital, using quality control measures in the hospital so that physicians get feedback as to their style of practice in terms of quality and cost, and other mechanisms to improve quality and efficient care.
There needs to be a mechanism by which each new improvement program is evaluated as to whether it crosses the line and whether it can potentially put patients at risk. The melding of physician income and hospital profit as a consequence of withholding "appropriate" care should not be permitted. The problem is that determining where that barrier should be erected is difficult, but I believe we should err on the side of caution. It is likely that our current quality measures will not detect these shortcomings unless they are egregious and therefore, individuals will likely be hurt. An example of this is the existing Medicare rule (since October, 2012 under the Accountable Care Act) that penalizes hospitals where the 30 day readmission rate for certain diagnoses (heart attack, heart failure and pneumonia) is above a level set by Medicare. The penalty is 2% and will rise to 3% next year. If a patient comes to the ER with recurrent symptoms of heart failure and is within the 30 day window, he might be sent home to avoid the penalty even if his best interests would have been served by readmission. Currently over 2000 hospitals in 49 states are being penalized a total of $280M this year. More about this program later.
The push by the ACA (Obamacare) to have physicians employed by hospitals, adopt Accountable Care Organizations, global payment risk models, and other profit and loss sharing programs, the more physicians will be integrated into a global financial model and the more patients should be concerned that this could lead to rationed care.
At the end of the day, patients want their doctor to be their advocate and ultimately do what is in the best interest of the patient and not the hospital, insurance company or other entity.

Monday, March 10, 2014

Where are Obama and Obamacare Headed?

Posted by Stephen E Weinberg, MD FACC FACP
I believe President Obama made his feelings known during the 2008 Presidential campaign. He stated over and over that he felt physicians should be salaried and there should be an end to fee for service medical care. He believed then and now that the fee for service system breeds increased costs by incentivizing physicians to order more tests and procedures. He stated in a July, 2009 press conference: “You come in and you've got a bad sore throat, or your child has a bad sore throat or has repeated sore throats. The doctor may look at the reimbursement system and say to himself, ‘You know what? I make a lot more money if I take this kid’s tonsils out.’”
The implication was that a pediatrician would decide to remove the tonsils of his patient (which could never occur) or that there was some kickback from the surgeon to the pediatrician (which would not occur). Additional references have often been made about the overuse of CAT scans and MRI’s as well as other imaging procedures by general practitioners is as a result of financial gain. They do not own or receive payments from imaging centers. It is clear that the President sees a large part of the medical system as one large conspiracy of kickbacks and self-interest. Many members of Congress have stated similar opinions.
As a result of this conspiracy theory, the President would like to see all physicians in salaried roles similar to the Mayo Clinic and Cleveland Clinic. He believes this would solve our healthcare economic problems by reducing costs. There really is no data to show that this is the case.
In fact, Medicare performed several studies and demonstration projects in the past 10 years to try to prove that incentivizing hospitals and large group practices to create plans to reduce costs would actually be effective.  The CBO, in 2012, evaluated these studies and found that one project involving cardiac bypass surgery did save about 10% over standard care, but the other 3 studies showed no financial benefit, including the 10 group study of about 6,000 salaried physicians. A Feb. 26, 2014 study in JAMA involving 32 practices in Pennsylvania demonstrated no quality improvement or cost savings over 3 years involving the Medical Home concept which has been touted to be the best model for primary care. In an accompanying editorial, the Dean of the University of Nevada School of Medicine pointed out that often things which appear obviously true do not stand up to scientific scrutiny.

So where does this leave us? President Obama is creating a situation where he is pushing physicians into salaried positions with his Medicare reimbursement policies (more about that later) based upon his assumption that this will reduce costs and improve quality of care without any evidence that this is so. He is willing to dismantle the entire healthcare system in the absence of knowing what the end result will be. 

Sunday, March 9, 2014

The Bankrupting of Physicians

Posted by Stephen E Weinberg, MD FACC FACP
Physicians have been selling their practices to hospitals at an alarming rate. In 1983, 76% of physicians owned their own practices, but only 53% were owners in the 2012 survey. The pace of this conversion has been dramatically accelerating over the past 2-3 years. Why is this occurring?
 According to government surveys, the cost of running a medical practice from 2000 to 2012, increased by an annual average of 3% for a total of about 40%. On the other hand, the “conversion factor” used to determine the amount of Medicare reimbursement has fallen by 7%. Most of the decreases have occurred since 2009. In addition, Medicare has combined numerous codes thereby eliminating reimbursement for many procedures physicians perform. Private insurers follow Medicare guidelines so these changes become universal. With increasing expenses and markedly decreasing reimbursements, it should be no surprise that practices are losing money and going bankrupt.
I believe the dramatic fall in reimbursements is in large measure the result of the President’s desire to push private practice into bankruptcy and force physicians to sell their practices to hospitals. The reason he wants this is to eliminate fee for service medicine and have all of us salaried since he believes this will reduce the cost of healthcare. As pointed out in another post, there is no evidence that this conversion will actually save money, but let’s not muddy the waters with scientific evidence.
“So what, you say. Let all the physicians be salaried. Who cares?” Let’s look at what happens when physicians become salaried. They develop a corporate mentality. “I am being paid for 9-5 work and that’s what I will do.” So, at 5:01 pm, the day ends and someone else can care for the patient. Don't forget, many of these physicians were in private practice and were forced to sell to the hospital because of extreme financial pressure. Their entire philosophy of practice is different and they are not at all happy. That personal touch is gone as is some continuity of care. Because the outpatient office is now owned by the hospital, they charge a “facility fee” for everything from an office visit to all the testing that is done as an outpatient. The cost of healthcare has just significantly increased. Furthermore, that fee is not covered by Part B of Medicare and therefore it has just become your responsibility. The outpatient fees for hospital owned facilities are uniformly greater than physician owned facilities. Healthcare costs have gone up again. There is a general belief that Medicare will not lower the hospital outpatient fees since the hospital lobby in Washington is too powerful. So you can expect higher outpatient fees for the foreseeable future and as more practices are purchased by hospitals, you will have fewer choices.
Aside from cost, you will have other, more serious problems. Consider this. You see your cardiologist and you are diagnosed with a cardiac valve problem that requires surgery. Your cardiologist is salaried by hospital X. This hospital does good bypass surgery, but hospital Y 3 miles away does much better valve surgery. Your cardiologist is obliged to send you to his hospital, hospital X, since they pay his salary. You will likely never know that you are not receiving the “best” care possible. You think he is looking out for your interests, but actually he is concerned about his job. This issue is the most important problem patients will face as more practices become owned by hospitals. At the very least, there should be disclosure to patients regarding potential conflicts of interest that physicians are involved with. I think all patients need to be aware of these potential conflicts. Physicians not owned by hospitals have the option of sending patients to the best practitioners and hospitals for their patients.
How does the future look for private practice finances and will this trend stop? Frankly no. Congress is in the process of trying to "fix" the reimbursement problems. They are negotiating a deal to replace the Sustainable Growth Rate formula  program that has been a disaster for the past decade. In the absence of a resolution, Medicare reimbursement will fall about 24% this year. The proposal on the table would be a .5% annual increase in Medicare fee schedule rates  for 5 years  tied to a plan to dramatically incentivize physicians to become part of an alternative healthcare delivery system. Once again, there is no good scientific evidence that any of these proposed systems will actually save money. Ultimately, they will put all of these organizations at financial risk so that if the cost of your healthcare is greater than the amount of money paid by the government to the organization, the entity loses money. Enter rationing of healthcare! This is precisely what we had years ago with HMO's which took about 20 years to fix and eliminate. Instead of HMO's, the new system will be ACO's (Accountable Care Organizations). Do we really want physicians making critical decisions about our health concerned that if they ask you to get a CAT scan to look for cancer, the cost may be coming out of their pocket? I don't think anyone, including physicians, wants that type of system.
Consider this. The CEO of the Mayo Clinic (apparently the most cost effective institution in the country) has stated in interviews that they lose money on Medicare patients. They have no plans to participate in alternative models of healthcare delivery. In fact they are spending $6B ($3.5B of their own money. Where did that come from considering they are a not for profit organization?) over 20 years to improve their facilities and expand their reach in order to gain more market share and promote their program of excellence. They want the Mayo Clinic to be a magnet and I am inferring that means that people from all over the world who have the money to spend on healthcare will want the Clinic and be willing to continue to pay whatever the costs may be. This will obviously continue to offset the losses from Medicare and other insurers. If the Mayo Clinic can't make a go of it in today's Medicare environment, how can any of us and still provide high quality care? It's not going to happen. This is a zero sum game and in the absence of other sources of income, rationing will occur, knowingly or unknowingly.
It seems to me we need to have a comprehensive national debate with all the facts on the table and then have a vote as how to proceed. Washington is not providing full disclosure since our leaders realize that, if we know the hard truth, we would likely rebel. It's time for honesty and transparency.
Wake up. Call Congress and call the President.

Saturday, March 8, 2014

Accountable Care Organizations (ACO's), Panacea or Myth

Posted by Stephen Weinberg, MD FACC FACP
Accountable Care Organizations (ACO's) are being formed at the behest of the government as a means of saving money and improving quality of care. ACO's are organizations centered around large entities such as hospital systems, insurance companies, large regional physician organizations. In essence, the organizations will ultimately receive an annual lump sum payment from the government/Medicare or private insurance companies to manage the entire medical needs of a large group of patients. This will include office visits, hospital care, testing, rehab, drugs, physician payments, etc. The organization will either contract with, own or employ the physicians, hospitals, home care, rehab centers, etc. and try to obtain the best pricing possible. In many instances, the physicians will be at financial risk on an annual basis. If the ACO makes money, the physician will receive a bonus and if it loses money, they will be subjected to decreased income. Quality measures will also be analysed, but the preponderance of weight will be related to profit and loss. Therefore, the physician will be incentivized to reduce costs through decreased testing, procedures, drugs, hospital days, rehab and everything that has a cost associated with it. Does this sound familiar? It was called HMO's, but now has a new name. ACO's are HMO's on steroids. The physician will be much more incentivized to withhold care since he will potentially have a decrease in salary if the ACO loses money or does not make enough money to meet the financial expectations of the organization. Profit incentives of private insurers added to incentives of the ACO"s will drive down the amount of money spent on healthcare. Washington is pushing hard to make this a reality by using financial payments and penalties to achieve 75% conversion (from fee for service to risk structures) in the next several years.
RATIONING of care is coming as a result.
Do we really want physicians making critical decisions regarding our health with such financial pressure? How do we know they will always have our best interests at heart? Do you really want to be in a situation where you are second-guessing  every decision your physician makes? I am certainly in favor of appropriate expenditures based upon clinical guidelines and limiting of inappropriate expenditures recognizing that not everything is always black and white, thus requiring medical judgement.
I thought the HMO issue was resolved with the overwhelming opinion that this type of healthcare delivery was not acceptable. Do we really want to go back?
This plan is worse!

Friday, March 7, 2014

Affordable Care Act (ACA), are there any benefits?

Posted by Stephen Weinberg, MD FACC FACP
The most frequent question I am asked, aside from medical issues, is what is my opinion of Obamacare. To borrow a cliche, there is the good, the bad, and the ugly.

The GOOD:  No denial of insurance coverage for pre-existing illnesses, insurance cannot be dropped for developing a costly illness, no lifetime insurance benefit payment cap, children up to 26 years of age are covered by parents insurance, premium subsidies for low income people, promote quality of care, insurance companies must spend at least 85% of premium dollars on actual health care limiting profits.
The BAD: More than 2000 pages of little understood regulation, uncertainty about long term global savings (it may become very expensive), does not complete universal health care.
The UGLY: Complex proposed system reforms of payments that have not been shown to improve quality of care or reduce the costs (recent program studies by Medicare have shown no benefits), programs that put hospitals and physicians at financial risk if costs exceed budgets, complex formulas that promote electronic medical records use and e-prescribing, and "Medical Homes" (defined here) which is an unsubstantiated plan to promote quality of care without really knowing what metrics are important and what are the best ways to measure them.

I think the GOOD and the BAD are fairly self-evident. I would like to amplify the UGLY.

Obamacare has set in motion a series of changes to healthcare delivery in an effort to reduce costs and improve quality. One major change is the advent of Accountable Care Organizations (ACO's). These entities are large hospital systems, physician collaboratives, and insurance companies that agree to accept a lump sum payment for the total care of patients. Could this be a reincarnation of the HMO system that was not felt acceptable to the US population? The groups make money if the expenditures are less than the amounts they receive and they lose money if the costs exceed those amounts. So what? That's how it has always been. Well, the problem is that physicians will also be at financial risk, meaning their incomes will be inversely impacted by the amount of money they spend on your healthcare. My concern with this is that physicians should have as their primary concern the health and well-being of their patients. They should be the ones to fight for the needs of the patients. Once they are salaried by the parent group and their income is dependent upon the bottom line of the insurer or hospital, the need to conform and not advocate for the patient is too overwhelming. As a patient, I do not want my doctors to have that intense conflict. I want to know that my physician will do whatever is necessary to fight for my needs, whether it is a CAT scan, stress test, chemotherapy, surgery, rehab, or any other element of care I may need. I do not want to feel that I must second-guess my doctors decisions as to whether they are made with my best interests as the primary concern or the interests of the ACO or himself. As a physician, multiple times a week I argue with insurance companies on behalf of my patients so they can obtain needed tests or procedures. How confident are we that this will continue under the new system? Do we really want to worry about who is looking out for our welfare? Currently, it is the physician, but likely, no longer. This is the beginning of rationing of healthcare.

Another UGLY is the development of "Medical Homes" (defined here again) which are designed to promote coordination of care, save money, and improve quality. Though the concept of coordinating care with these objectives in mind is laudable and makes sense, there is little or no evidence that it actually works. A recent study demonstrated no benefit of these collaboratives. What seems to make sense does not always stand up to scientific testing. An accompanying editorial by the Dean of the Nevada School of Medicine cautioned against adoption of new healthcare systems until they are proven to be effective. He stated, "It is time to replace enthusiasm and promotion with scientific rigor and prudence ..." In other words, before we scrap a system that is responsible for superb healthcare that is the envy of the world, we should know the changes will create better quality and lower costs. Obamacare is moving ahead with sweeping, drastic changes that have never been proven to be effective.

Of note is a Congressional Budget Office, CBO review of 10 large integrated medical practices that demonstrated no significant cost savings despite monetary incentives in a 5 year demonstration project. Another 6 year project involving 278 hospitals demonstrated no savings either. These studies were designed to determine whether financial incentives could result in overall cost savings. They did not, but that does not seem to have stopped the initiation of these programs by the government.

More about electronic medical records and e-prescribing later.

Bottom line: There are many good things about Obamacare and several things that are not. However, it is the UGLY that concerns me the most. These aspects of the law are going to create significant changes in the manner in which healthcare is delivered without any evidence they are effective. What is more disturbing is the fact that these changes will place your physician at financial risk in terms of the amount of money spent on your behalf. If your care and others cost more than the budget, your physician's salary will be decreased. This conflict of interest is disturbing and dangerous. As a patient, I think this is intolerable.

Call Congress and the President.