There is a trend among physicians and hosptials that has become more and more prevalent since the 1990′s.  Physician groups are selling their practices to hospital systems more now than ever before.  According to the MGMA’s annual Physician Compensation and Production Survey, hospital-owned group practices grew from 25.6% in 2005 to 49.5% in 2008. In 2008, the number of hospital-owned practices exceeded physician-owned group practices for the first time ever.  This integration brings financial and management benefits to the physicians looking to join a larger system.  Hospitals and large health systems also benefit in an increase in capital along with the ability to offer more services to their communities.  Neither physicians nor hospitals can achieve optimization of patient care, capital, and consistency without one another.

Specialists are quietly under fire in the new proposed health care bill. In it, the most highly paid doctors are asked to take a 5% pay cut, which is even more formidable than it sounds since Medicare dollars are worth 83 cents on the private dollar. When these figures are collated, it amounts to a pay cut of roughly 20% for specialists under the new health care bill.

The devil is in the details. According to a recent article in the Wall Street Journal:

    “Beginning in 2015, Medicare would rank doctors against their peers based on how much they cost the program—and then automatically cut all payments by 5% to anyone who falls into the 90th percentile or above.”  The War on Specialists, WSJ October 6th, 2009

This formula automatically penalizes specialists, as it is they that will invariably fall into the 90th percentile of that formula. Specialists become specialists for a variety of reasons, not least of which is the potential for a higher income. If their wages are stripped towards parity with general practitioners, will specialists still want to be specialists?

The common theory running through the health care bill is that the high costs of specialists will be defrayed if patients have better and more frequent access to general practitioners. However, the above formula simply penalizes specialists for doing what they do disregarding any other measures that have been put in place.

In addition, the health care plan goes after diagnostic tests. Echocardiograms and catheterizations have been reduced by 42% and 24% respectively. These diagnostic tests are vital to understanding what is going on with patients and their discouragement through the health care bill is a misplaced effort to trim costs. Cancer doctors are hit especially hard through slices to the CT and MRI pie, both of which are vital tools in cancer diagnosis and treatment. Payments for antitumor radiation therapy will fall off by up to 44%.

While the cuts referenced don’t actually cut any spending, they definitely shift the money from one area to another. In its quest to make the specialist less of a driving force to the patient than the general practitioner, the health care bill is cutting too close to the bone where specialists and their diagnostic equipment are concerned.

Americans understand that insurance doesn’t actually pay for everything, according to a study by the Sacramento Center for Health Care Decisions. This shows that Americans are quite able to set priorities for health care on their own without leaders trying to tell them what to do. The study put health care issues into three categories; what matters most, what matters a little, and what matters least. As healthcare organizations, we can use this information to do a bit of triage on what patients deem important in their own care.

What Matters Most:

• Problems that will lead to serious medical consequences or death if left untreated
• Problems that interfere with daily life
• Problems that result in higher societal costs if left untreated

What Matters A Little:

• Problems that bring personal distress
• Problems that result in physical discomfort
• Nonmedical services that prevent disease through getting healthy and fit

What Matters Least:

• Problems that are unsightly but not harmful (i.e. varicose veins)
• Problems that delay or prevent recreation
• Treatments that are required by patients to feel reassured
• Problems that resolve without treatment
   

There are a few takeaways from this list. One of the more interesting items is that prevention, which many would have thought mattered the least, actually matters a little to most Californians who took the survey. Since California has a reputation as a healthier state than most, it would be interesting to see the same study done on a national scale to see if this still held true. Perhaps it is better to have it done at the state level in order to more accurately gauge the wishes of people in each individual state.

One of the most interesting aspects of the study is that people tended to put the welfare of their family and friends ahead of their own, and even the welfare of society. You certainly wouldn’t have expected to see “problems that have a higher societal cost” at the top of the list if you were to guess the results in advance.

All in all, a very interesting study and one that bears repeating as we forge ahead with health care reform.  More at recordnet.com.

For decades, the U.S. healthcare system was the envy of the entire world. Not coincidentally, there was far less government involvement in medicine during this time. America had the finest doctors and hospitals, patients enjoyed high quality, affordable medical care, and thousands of private charities provided health services for the poor. Doctors focused on treating patients, without the red tape and threat of lawsuits that plague the profession today. Most Americans paid cash for basic services, and had insurance only for major illnesses and accidents. This meant both doctors and patients had an incentive to keep costs down, as the patient was directly responsible for payment, rather than an HMO or government program.

We should remember that HMOs did not arise because of free-market demand, but rather because of government mandates. The HMO Act of 1973 requires all but the smallest employers to offer their employees HMO coverage, and the tax code allows businesses – but not individuals – to deduct the cost of health insurance premiums. The result is the illogical coupling of employment and health insurance, which often leaves the unemployed without needed catastrophic coverage.

Ron Paul, excerpted from Examiner Article

The first article in this series explored how we compare with other countries, in particular with the Japanese health care system. This portion of the series will look at the “good old days” of American health care, and examine if there are lessons to be learned from the past or if we are better off moving on into the future. Despite Paul’s claims, American health care costs rose almost every year between 1940 and 1990. In the 1990′s, health care costs stopped growing as substantially as they had in the past. The introduction in 1965 of Medicare and Medicaid was responsible for a more significant increase.

In 1990, most were forgoing health care spending for other purchases, as the majority of the “boomer” generation was still quite young and in good shape. Now, those boomers are older and obesity rates are much higher, making for much higher health care costs overall. Problems can no longer be ignored and most boomers go to see the doctor rather than buying a new car, as they may have done in the 1990′s.

There is a call from some quarters for the US to return to the Hill-Burton standard for American healthcare, and an end to the HMO system that so many feel is a drain on our resources. Even though there was an increase in spending, under the Hill-Burton standard this money actually went towards some useful items. The four principles of the standard, enacted under FDR, were:

1. Ensure an infrastructure of necessary facilities and medical personnel, either public or private, to meet certain minimum standards of availability for the public.
2. Provide care to those in need, regardless of their ability to pay, and worry about the costs afterwards.
3. Depend upon the growing wealth of a productive, industrial economy to make sure that sufficient resources, financial and otherwise, are being created to provide for health care needs, and associated public health needs.
4. Carry out special programs to attack and treat leading dangerous diseases, in the interest of the general welfare.
From: http://american_almanac.tripod.com/hillburt.htm

Under the Hill-Burton standard, there were about 4.5 hospital beds per 1000 people, a far cry from the overcrowding of today. It is no wonder, given the principles and the lack of crowding, that most wish for a return to simpler times.

The problem is that times are not that simple anymore. There is a possibility that the new EHR program may streamline our health care system significantly, but the realities that we are dealing with today are much more complex than those that we faced under FDR. New diseases such as AIDS and swine flu, a dated infrastructure that is groaning under the weight of the extra population, and emergency rooms packed with people who need treatment. While a revisit to the Hill-Burton principles can’t hurt, I think we can all agree that a total rehaul is in order.

For decades, the U.S. healthcare system was the envy of the entire world. Not coincidentally, there was far less government involvement in medicine during this time. America had the finest doctors and hospitals, patients enjoyed high quality, affordable medical care, and thousands of private charities provided health services for the poor. Doctors focused on treating patients, without the red tape and threat of lawsuits that plague the profession today. Most Americans paid cash for basic services, and had insurance only for major illnesses and accidents. This meant both doctors and patients had an incentive to keep costs down, as the patient was directly responsible for payment, rather than an HMO or government program.

We should remember that HMOs did not arise because of free-market demand, but rather because of government mandates. The HMO Act of 1973 requires all but the smallest employers to offer their employees HMO coverage, and the tax code allows businesses – but not individuals – to deduct the cost of health insurance premiums. The result is the illogical coupling of employment and health insurance, which often leaves the unemployed without needed catastrophic coverage.

Ron Paul, excerpted from Examiner Article

Upon reading this, we thought we should explore both “the old days” of healthcare referred to by Paul and also how other countries handle their health care. We start part one of this series with exploring how other countries handle their health care.

Many second and third world countries operate on a cash basis for any doctor and healthcare related visits. In Venezula, a vacationing family had to have emergency health care for their son after he had a seizure that was caused by an ear infection. After two hospital visits and ambulance rides, with multiple tests at both facilities, the bill came out to only $685.00. While this obviously isn’t comparable to prices in the US due to the lower cost of everything in a second world country, it is interesting to explore their system. Costs are kept down because doctors are required to donate three days a week of their time, something that would be unenforceable in the States but the idea is worth exploring. What if everyone in the medical industry donated an hour a week? How much money could we all save then?

In Canada, instead of paying private health insurance, Canadians pay more taxes to the government than we do. Income tax in Canada ranges from 24% to 46%, depending on your tax bracket. Most Canadians fall into the 24%-32% tax rates. The government, in turn, pays for all health care except for prescriptions and dental. Emergency dental procedures are covered, as are drugs given on an emergency hospital visit. Canadian doctors do not donate any time to the government, although they are less well-paid than their colleagues in the US and as a result there is a marked “brain drain” of doctors from Canada to the US. In contrast, in the US in 2008 companies paid an average of $12,700 per worker for health care premiums. Employees are often asked to kick in for premiums as well, and not all costs are usually covered in all plans. This means that running a company in the US is much more expensive than doing business in Canada or any other country. There have been a number of claims in the US media lately that Canadian healthcare is deplorable, but the only real down side is a wait time of 4 weeks for a specialist and longer for non-emergency surgeries. Most Canadians are happy to wait since the price is right.

In Sweden, the state pays 95% of medical costs, with the patient paying a nominal cost for examination on each visit. In addition, if a patient is declared ill, the patient is paid a percentage of their daily wage from the second day for the first 14 days by the employer, and after that by the state until they are declared fit.

In Nepal, the state subsidizes health care so that each resident pays about 70% of health care costs in cash on each visit.

Japan has an interesting system. Since 1973, all seniors have been covered for their health care. Everyone else is governed through a universal health care insurance system with fees set by a government committee. You must be enrolled in an insurance company if you are a resident of Japan. This is very similar to the two-tier insurance system that President Obama is putting forward, minus of course the free health care for seniors. 

There are lessons to be learned here from all countries. In the case of Nepal, partial subsidy keeps costs down significantly. In Venezuela, payment is still solicited, but doctors donate a good portion of their time to ensure that the system works. Japan has managed to provide free health care for its seniors and runs a state-sponsored health insurance program, all for the low cost of 6% of their GDP, much lower than Canada’s 10% of their GDP for providing free health care for everyone.

It could be argued that the most sensible avenue to health care reform is to examine what works and what doesn’t in each country in order to put together a system that works well for everyone. For companies, health care organizations, and of course patients.

According to a recent article on Modern Healthcare, the President has asked the United States Department of Health and Human Services (HHS) to withdraw a barrier which does not allow children of higher-income families to enroll in the State Children’s Health Insurance Program (SCHIP).  Under the current program, 95% of all children that fall into lower income groups must be registered with the program before other children are enrolled.  President Obama has stated that “As a result, tens of thousands of children have been denied healthcare coverage.”

Many industry watchdogs see this as opening the door for state expansion of the program.  Obama issued the directive in a memorandum to the secretary of the HHS.  Since the position is as of yet unfilled, it is a de facto directive that the policy is no longer in effect.  In May of 2008 the CMS was taken to task over the policy over the fact that they had not reported it to Congress before or after it took effect. 

In addition, Obama has signed a bill into law pledging $32.8 Billion to SCHIP over the next 4 1/2 years which will offer additional medical coverage to 4.1 million more children than the current program.  The bill is being primarily funded by a tax increase on cigarettes and other tobacco products.

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