Wednesday, November 5, 2008

What does the Election of Barack Obama Really Mean for Health Care


We have chosen Barack Obama as our next President! This means that his proposal for how to reform health care will certainly set the tone for our discussion about how to improve quality, cut rising costs and extend medical coverage to about 45 million additional Americans.

Since any proposal must be submited to Congress, it is reasonable to assume that elements of Obama's proposal may well be modified, but at the core of his proposal are principles that would change health care delivery and coverage in the U.S.

The cornerstones of Obama's plan are:
  • Expand Medicaid eligibility to include greater numbers of the uninsured
  • Mandate coverage for children
  • Create a national exchange where uninsured folks can purchase a public or private policy;
  • Provide subsidies to lower-income individuals and small businesses to help defray the cost of purchasing insurance; and,
  • Tax medium and large-size employers that decline to provide their employees with health insurance.
Of crucial importance in all of this is the need for us to remember that quality of care, and value for the money we spend, must be improved dramatically for any plan to be truly successful. Obama has chosen great advisers who understand this, but there is great danger that economic concerns could drive attention into only cost cutting steps, without insuring that we adequately pay for improved access and provision of primary care services. We could do the most to improve access and quality, while simultaneously lowering costs, by supporting legislation requiring all plans to provide payment for the personal medical home. Simply expanding programs like Medicaid, without this type of reform, will fail, since they do not pay primary care physician adequately for providing the care!

We have discussed the specific benfits of the personal medical home previously
, and it is important to remember in a time of scarce resources, that by supporting the provision of primary care first, we are supporting the only thing that has ever been shown to be associated with both improved quality and decreased cost of medical care! Although well intentioned, throwing more money at our current health care mess will be bound to dissapoint us, by making more people eligable for the dysfunctional, and unorganized type of care that is currently bankrupting us.

Monday, September 22, 2008

McCain and Obama Health Plan Proposals, a Family Doctors View

How likely is it that the presidential election of 2008 will help provide clarity about our US national health policy? American health care continues to careen along like an ongoing train wreck, with very high prices, access problems, and inconsistent quality of service. In spite of this fact, however, there has been very little media attention to proposed plans for its reform by the two leading presidential candidates. At present, American health care costs amount to 15 percent of our national GDP, and we yet we have one sixth of our population that is left uncovered at any given time. Most of the developed countries that we like to compare ourselves to have an organized approach to delivering care, spend less than half of the GDP percentage we do, and they still manage to cover all of their populations and show far better national health outcomes than we have in the United States.

It may surprise some to know that payment in American health care is not driven not by health issues but rather by lobbyists. Physician incomes derive from how much they use procedures and high technology which benefit large firms that effectively lobby Washington. This distorts the supply of physician types, and means that primary care physicians, the bedrock of care everywhere else in the world, are paid the least. Consequently, their numbers are plummeting. Preventive care to keep people well and screen for disease is not a priority for most insurance companies, because they often see their paying clients shift between companies year by year, and most costs of chronic disease are born by the federal Medicare program, and not the private companies. Thirty percent of our American costs go to administer thousands of separate insurance schemes whose rules seem to change by the day, while most developed countries spend only 5 to 8 percent on administration. We are getting a raw deal, even if we have insurance coverage.

Much like the high price of oil, the extreme costs of American health care act as a general tax on the economy. We can’t afford the wasteful health care we have now, and with an aging population, we won’t be able to in the future. Where’s the money going to come from? I believe that as we try to answer that question, we need to also ask ourselves what we believe health care is really for? Should we continue to provide the vast majority of big pharmaceutical company profits, and pay 30 percent of our budget to insurance companies to administratively deny health care, or should we be focused on expanding coverage, providing access and improving quality?

The issue can seem completed. Understanding the difference between employer- mandated private and public plans versus tax exclusion of employer health insurance by refundable tax credits do not seem inspire the citizenry. In the media, sound bites all to often replace informed debate, when health care is mentioned at all.

In spite of all this, the upcoming election offers those of us in the US electorate us a chance to weigh in on the direction of our national health care policy, since there are major differences between the McCain and Obama plans that have implications for almost every American. Yet the political will for change, in the teeth of opposition from a gigantic medical industrial complex, is simply not yet there. A nation, which spends twice as much money per person as anywhere else in the world, but can only produce health statistics equal to Cuba and Lithuania, requires reform. But sadly, the plans of each presidential candidate are unlikely to survive lobbyist opposition, if the population remains uninformed and uninvolved. Let’s look at the plans!

The McCain plan addresses a current major inequality in present day health insurance, which is that we have tax deductions only for employer paid insurance. If you are a business, you can create health care insurance to cover all your health care costs, which the government will then take off your income in order to reduce your taxes. McCain’s plan would replace employer insurance with a tax credit of $2,500 for individuals, $5,000 for families. The uninsured would get tax credits to buy health insurance, and market competition would lead to better, more substantial coverage. In addition, McCain proposes that Medicare shift from fee for service to “bundled” services paid at a fixed fee. The candidate and his advisors tout this plan as one that will let market forces fix health care, as plan compete. Unfortunately, market solutions have not recently worked very well in other arenas! Consider the current meltdown of our unregulated mortgage market, with the failure of Fannie Mae, Freddy Mac, Bear Stearns, Lehman Brothers and Indy Mac Bank, which has resulted in the drying up of needed credit for worthy businesses.

Under the McCain plan, what can you expect your $2,500 tax deduction to buy? If you are a young and healthy person, you will likely be able to get coverage with a large deductible. If you have a chronic condition, however, you will not be an attractive person for a company to take on. The medical insurance companies will still be unregulated, and we can expect that they will try to cherry pick their customers in order to “insure” only those without existing medical problems. Unlike real insurance, where you insure everybody so that the healthy help cover the unlucky and unhealthy; the McCain plan would create coverage for the uninsured only in theory. If you become injured or chronically ill, you’ll likely be stuck.

Senator Obama’s health care plan builds on the existing employer paid, private system that is now in existence. Employers will be required to offer private insurance or pay a federal tax that will be used to fund care for those who do not have access to insurance through their employer. Obama also envisions a new government health plan, “similar to what members of Congress give themselves”, and a new “insurance exchange” where those who can’t buy group health insurance will have access to affordable plans. The “cherry picking” to avoid sick patients with preexisting conditions would be outlawed. There is no “mandate” in the Obama plan that forces everyone to get insurance, except that children must have coverage. The Obama campaign believes that so many people are uninsured mainly due to the fact that insurance is unaffordable, and that people will buy reasonably priced plans if they are offered them. He and his advisors advocate that we focus intently on improving the quality of our care, and not just on reducing the cost.

Let’s hope that these issues get discussed honestly in the upcoming debates.

Friday, August 1, 2008

Patient Centered Medical Home Purchaser Guide is Now Available

The Patient-Centered Primary Care Collaborative, or PCPCC, has unveiled a purchaser guide to encourage large buyers of health care to adopt the patient-centered medical home as part of their health care plans. The guide explains how health care purchasers can readily make the patient-centered medical home a cornerstone of their health care plans. The guide represents the first time health care professionals, health care plans and consumers have all collaborated on a purchasing document, and this gives the booklet a multisided perspective that other guides lack. It correlates well with the joint principles of the patient-centered medical home adopted by the AAFP, the American Academy of Pediatrics, the American College of Physicians and the American Osteopathic Association.

The guide can be downloaded free of charge and used by any group interested. It can even be "private labeled" as part of a groups existing effort! Use this tool!

Wednesday, July 23, 2008

Senator Obama proposes "The Quality Cure"

Potential voters in November are starting to pay more attention to what the leading presidential candidates have to say about how to reform our health care system. In a new article from the New York Times magazine, David Cutler responds to the principles underlying Senator Barack Obama's proposals. Cutler basically says that the US should focus on improving the quality of care rather than on reducing our consumption of it. Rather than pay less, they want to pay more wisely, and encourage health-care providers to do more of what they should and less of what is wasteful by building proper incentives into the system. Chief among these ideas is to support the personal medical home, which we have been writing about in this blog, and to continue the role of our private health care insurers, but with oversight and regulation that promotes these aims. In my opinion, this is the right direction, and voters have a clear choice in November.

Thursday, July 17, 2008

2008 Health System Scorecard Shows No Improvement












Alas! The Commonwealth Fund Commission on a High Performance Health System released its first health system scorecard two years ago, and found that the United States fell far short of benchmarks for access, quality, efficiency, and other key measures of health system performance. Now, two years have gone by, and the 2008 edition of the scorecard paints an even bleaker picture. Instead of organizing around change for improvement, supporting the ability of primary care to provide a personal medical home and holding insurance companies accountable to help improve care, congress has gone through their annual dithering about how much to lower doctor rates, insurance plans have continued to cherry pick low risk subscribers, and the number of primary care doctors has continued to dwindle. It is no surprise that we have gone from bad to worse! Our system is perfectly designed to get these results.

The United States scored an average of 65 out of a possible 100 across 37 indicators— below the overall score in the 2006 report, which was already abysmal! The U.S. health system is on the road to a train wreck. Of greatest concern, access to health care has significantly declined. As of 2007, more than 75 million adults—42 percent of all adults ages 19 to 64—were either uninsured during the year or poorly insured, up from 35 percent in 2003. At the same time, the U.S. did not keep pace with gains in health outcomes achieved by the leading countries. The U.S. now ranks last out of 19 countries on a measure of mortality amenable to medical care, falling from 15th as other countries raised the bar on performance. Up to 101,000 fewer people would die prematurely if the U.S. could achieve leading, benchmark country rates.

The U.S. spends twice per person what other major industrialized countries spend on health care, and our costs continue to rise faster than income, while our quality results continue to plummet. We will soon have $1 of every $5 of national income going toward health care. We should expect a better return on this investment. We should be outraged.

Thursday, March 27, 2008

Who really pays for health care?

The best article I have ever seen to explain this complicated subject!

By Ezekiel J. Emanuel and Victor R. Fuchs
March 27, 2008
For The Chicago Tribune

Who really pays for health care in the United States?

Americans believe employers pay the bulk of workers' premiums, government pays for Medicare, Medicaid and the State Children's Health Insurance Program and individuals pay some premiums as well as deductibles and co-pays. This is wrong. Business, government and individuals do not share the financial responsibility for health coverage. Individuals bear the full cost of health care through lower wages and taxes.

Employers like to say—and often believe—that they pay for health care. They complain that the huge increases in health-care costs are coming out of their bottom lines—as if costs come out of profits. Union leaders also like to have their members think that health benefits are a bonus on top of wages and that the leadership is negotiating hard to get them the free benefit.

Employers sponsor health insurance for the majority of Americans, but that is not the same as employers bearing the cost for workers' health insurance. Wages and fringe benefits, such as health insurance, are simply components of overall worker compensation. When employers provide health insurance to workers, they may define the benefits, select the health plan to manage the benefits and collect the funds to pay the health plan, but they do not bear the ultimate cost. What is labeled as employers' contribution to the health-insurance premium is really paid for by employees through lower wages and take-home pay.


Looking at the facts

This cost-wage trade-off is usually well hidden from employers and workers, but many studies show that it is a painful reality for average Americans. For instance, over the last 30 years, health-insurance premiums have increased by 300 percent after adjustment for inflation. During that time, after-tax corporate profits per employee have increased 200 percent, while workers' average hourly earnings, adjusted for inflation, decreased by 4 percent. Rather than coming out of corporate profits, the increasing cost of health care has resulted in relatively flat wages for 30 years.

To illustrate, consider Wal-Mart Stores Inc. and Safeway Inc. Wal-Mart, a non-unionized retail giant, is notorious for skimpy health benefits. From 2004 through 2006, its after-tax profits averaged 1.9 percent of sales. Safeway, a highly unionized supermarket chain, offers generous health benefits that cost more than 2 percent of sales. But in 2004 through 2006, its after-tax profits averaged 1.8 percent of sales, virtually the same as Wal-Mart. The difference between Wal-Mart and Safeway in the provision of health benefits is not found in the companies' profits.

Another way to see this is to compare the change in workers' wages with the change in health-care costs. Why were the mid-1990s such good economic times for average Americans? Between 1994 and 1999, the growth in health-care costs was low and therefore wages went up. But from 1988 to 1991 and 2001 to 2004, health-care costs went up rapidly, sending wages down.

What about Medicare, Medicaid and SCHIP? The government's funds for health care don't come from governors, senators, representatives or the president. When government pays for increases in health-care costs, it taxes current citizens, borrows—asking future taxpayers to foot the bill—or reduces other state services that benefit citizens. Health-care costs are now the single largest state expenditure, exceeding even education. Recently, as costs for Medicaid and other government health-care programs have increased faster than tax receipts, states have resorted to cutting the funds for education, forcing the substantial recent rise in tuition and fees for state colleges. Middle-class families, falling victim to rising health-care costs, are finding it harder to pay for their children's education.

Time to get serious

So, what does the trade-off mean?

First, Americans need to forget about the myth of a free lunch. Workers are not getting something from employers while paying nothing. They are paying for their health insurance, including the premiums supposedly contributed by their employers.

Second, to help the struggling middle class, we need to get health-care costs under control. There is no way to have a sustained rise in middle-class incomes without restraining the growth in health-care expenditures. Similarly, if we want government to invest in better primary education and more affordable colleges we need to find a way to hold down the cost of health care. We are robbing our children to pay for medicine.

We need to rewrite the social contract in America. We need to get employers out of providing health insurance. It is one of the most inefficient ways to get people covered, and it impedes efforts to keep costs down.

Instead, we need to provide all Americans with a standard benefits package regardless of their income, employment status, health status or age. This will provide Americans invaluable peace of mind, defuse labor-management conflict and get people to focus on value and determining whether more health care is worth the added costs.

Keeping costs sane

How do we get health-care costs under control? We need to eliminate the overuse of medical tests and treatments. For instance, studies have shown that doctors perform more than twice as many Caesarean sections in Miami and Fresno, Calif., as in Minneapolis, even after taking into account the differences among patients—with no improvement in the health of mothers or babies. Similarly, many studies show that more hospitalizations, use of specialists and frequent tests do not lead to improved survival rates or quality of life—just much higher costs. Further we need to use cost-effective medical care when there are options. This is obvious for prescribing generic drugs rather than similar brand-name drugs, but it is also true for tests and treatments. Most important, patients with chronic conditions such as diabetes, heart failure and emphysema account for 70 percent of health-care costs. We need more coordinated care with fewer specialists involved to keep these patients taking their medications, adhering to their diets and other treatments, and staying out of hospitals where costs are high.

Achieving these changes will not be easy, but three policy changes will set the necessary foundation. First, an Institute for Technology and Outcomes Assessment is critical to collecting information comparing the effectiveness and costs of different medical interventions. That data will allow doctors to choose the most effective treatments. Second, we need a crash program to institute electronic medical records. Today, only 15 percent of doctors and 25 percent of hospitals have computerized records. The government has to provide financial incentives and mandate that within five years all doctors and hospitals have interoperable electronic medical records.

Finally, we need to change how we pay doctors and hospitals. Most doctors are paid fee-for-services, that is they get money for doing more tests and procedures and not for coordinating care and ensuring high quality medical care. Doctors need to be paid on the basis of performance and patient outcomes.

Controlling health-care costs is not easy, but for average Americans it is the only way to sustainably increase wages. And if we do it right, it will actually improve the quality of health care.


Dr. Ezekiel J. Emanuel is chair of the department of bioethics at The Clinical Center of the National Institutes of Health. Victor R. Fuchs is a professor of economics (emeritus) at Stanford University.

Thursday, February 21, 2008

Senate Hearing Links Physician Payment Rates to Primary Care Shortage

Several witnesses testified before a Senate committee on Feb. 12th that our nation's health care system continues to undervalue primary care services, and that this is leading to a skewed physician payment structure that is rapidly creating a shortage of primary care physicians throughout the nation.


Amazingly, although he agrees with and understands the data, the governments spokesman on this issue reaches an illogical conclusion, however. "When I say primary care services are undervalued, that does not mean that just increasing the prices paid to primary care is the solution," said Bruce Steinwald, director of health care for the United States Government Accountability Office, or GAO, during testimony before the Senate Health Education, Labor and Pensions Committee. "As you are well aware, we face unsustainable trends in the Medicare program and in the health care system as a whole. And, just as payment incentives are misaligned in primary care, they are misaligned in specialty medicine as well."

Yes, that is all true, I guess, but retaining primary care physicians will involve paying them more!

Medicare operates under a fee-for-service system, which rewards doctors based on the volume of services they provide. Medicare is the prime example of "how the system undervalues primary care services," and this discourages medical school students from pursuing a career in the primary care field, and causesthose in practice to restrict who they will see and retire early. These payment disparities have been exacerbated by technological improvements that allow subspecialists to provide more procedure type services in a shorter period of time, which leads them to an increase in payments and income, making these specialities more attractive career options for medical school students. In contrast, primary care physicians rely primarily on face to face time during office visits for their income. This means their ony option to be "more efficient" is to reduce time with their patients, which leads to rushed care and compromised quality.

I agree with the director, when he said, "This undervaluing of primary care services appears to be counter productive given the vast literature describing the relationship between health care costs and quality".

Friday, January 25, 2008

Medical Home Accredidation Process Now in Place

The Patient Centered Medical Home is a medical practice that facilitates a partnership between individual patients, their personal physicians, and when appropriate, the patient’s family. Care is facilitated by information technology, health information exchange and other means to assure that patients get the indicated care at the time and in the way that they need and want it, in a culturally appropriate manner.

The concept of the personal Medical Home reflects input from the American College of Physicians (ACP), American Academy of Family Physicians (AAFP), American Academy of Pediatrics (AAP) and the American Osteopathic Association (AOA).

Now the National Committee for Quality Assurance (NCQA) has released standards for patient-centered medical homes. This means that health care providers and purchasers now have a means to recognize these practices and assess the add value added to patient care.

At present, few physician offices in primary care specialties, would likely qualify for recognition as a patient-centered medical home under the new NCQA standards. In spite of this fact, however, there is ample evidence that the availability of primary care is crucial to quality health care outcome, and more efficient care. The irony is that primary care is rapidly disappearing from the health care scene, since it not not nurtured and properly paid for.

There is widespread agreement that primary care is in crisis. Medical students often do not choose to practice primary care medicine. Existing doctors are often overwhelmed and patients aren't satisfied. Insurers say they are disappointed with its cost and quality.

The Patient Centered Medical home provides a way to change the status quo by enabling physicians to provide comprehensive primary care through stronger partnerships with their patients. Those that choose to integrate elements of this new model into their practices now have a mechanism to prove this distinction to patients and insurers. In order for these enhanced services to be sustainable, however, this designation must be recognized and rewarded by payers.

I ask all insurers to quickly develop products that support this effort. The time is now. We do not need another set of expectations for primary care physicians that are unfunded.

Tuesday, January 22, 2008

Why does an organized approach to health care matter ?

In a recently reported study in the journal Health Affairs, supported by The Commonwealth Fund, researchers at the London School of Hygiene and Tropical Medicine determined that the United States ranked last among 19 industrialized countries on a measure of preventable deaths.

The study, "Measuring the Health of Nations: Updating an Earlier Analysis," compared rates of "amenable mortality" before age 75. This means death from causes that are preventable with timely and effective health care. Other nations improved dramatically between the two study periods, 1997-98 and 2002-03, while the U.S. improved only slightly on the measure. Previously, the U.S. had ranked 15th among the 19 countries.

This measure of preventable deaths is a valuable indicator of health system performance, because it measures what we care about most, namely, is our health care effective? The measures include causes such as appendicitis and hypertension, as well as illnesses that can be detected early with effective screenings, such as cervical or colon cancer.

The authors state that if the U.S. had achieved the average rate of the three top-performing countries, there would have been 101,000 fewer deaths annually by the end of the study period. The top performing countries were France, Japan, and Australia, all of which have various forms of organized, universal coverage for their populations.