The Senate decided to close debate on the “doc fix”, setting the stage for the death spiral of Medicare.  Already paying below market rates, expect that a substantial number of physicians walk away, as they face a river of red ink from practices being asked to work for free (or less).

June 17, 2010 — In a last-minute shock to physicians, the Senate voted today against postponing a scheduled 21% reduction in Medicare reimbursement to physicians and other health providers.

A compromise proposed by Sen. Max Baucus (D-MT) was defeated largely along party lines, with no Republican support. The compromise was put forward after the Senate had rejected a $140 billion finance package yesterday that would have delayed the cut in Medicare payments to physicians until 2012, along with measures to extend unemployment benefits and provide $24 billion to states to cope with their Medicaid programs.

The lower-spending compromise bill, dropping the total cost to $118 billion and the overall deficit impact from $79 billion to $55 billion, would have delayed the planned Medicare cuts and provided a 2.2% raise for physicians through November 30, rather than for the 19 months mandated by the earlier bill.

The implications are pretty big…as we head into time where boomers will be hitting Medicare, we won’t have many docs left to serve them.  From the revenue side, this adds years to “Medicare coverage” while gutting the access to actual physician services.  Why?  Physicians have already stopped accepting money from government programs in Medicaid…and now Medicare payments move into this realm of providing services at a lower price than it costs to deliver them.

I expect a number of physicians to either drop Medicare or retire.  This is one way to limit dollars spent, but by cutting off the program at the knees.

The American Medical Association (AMA) warned that unless Congress restores the cuts, physicians will limit the number of Medicare patients they treat. A survey of 9000 members revealed that 17% of physicians — and 31% of those in primary care — would take such action because Medicare rates are too low.

I’m all for cutting the total cost of Medicare and know there are a number of incentives we can change to do this.  But I’ve always favored disruptive change that rewards better performance over legislative change bringing force without necessarily allowing for workable solutions or caring about the collateral damage.

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Congratulations to new Massachusetts Senator Scott Brown.  We saw health care concerns drive the election of a Republican in the bluest of states.

Yet, most people want health care to be reformed…its not that we don’t want change…its that the current approach to ObamaCare looks to lock out change and lock in an insurance model that people can neither comprehend nor afford nor trust.  As Albert Einstein once remarked, “Insanity is doing the same thing over and over again and expecting different results.”

So what is the right model for health reform?  My humble suggestion is that our nation yearns for Health Assurance, not just Health Insurance.  What does that mean?

A system designed around Health Assurance is designed to minimize the disruption and pain of illness through a strong focus on prevention while also improving wellness through a drive to improve everyday abilities and function. The specific priorities for a Health Assurance System are to, over a person’s lifetime optimize their Vitality.  The objectives of such a system would be:

1) Care for you when Seriously Ill

• Provide best practice care
• Provide financial support
• Return you to full physical and mental function where possible

2) Manage Chronic Illness

• Provide comprehensive program to address disease across medical and non-medical concerns
• Reverse disease where possible. If not possible, slow progression.
• Actively work to achieve best outcomes in affordable way with minimal inconvenience/ easiest approach to engage
• Monitor disease progression and intervene where outcomes impacted

3) Prevent Illness

• Understand your risk profile and priorities
• Create an action plan to reduce the most addressable risks in a cost effective manner
• Educate and Engage you in risk reduction

4) Enhance Wellness

• Understand your functional health and priorities
• Create an action plan to improve the highest priority functions
• Engage you in Wellness activities
• Introduce you to interesting Wellness resources and communities

My definition of health reform would be the move to a Health Assurance system as defined above.  What do you think?  I’ll follow up shortly with thoughts on what the specific elements of that system would be…and how this would look different from the insurance model centered in sick care and procedures that we utilize today.

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Doctor Availability Declining with Cuts (via Health Care BS)

Are Primary Care Physicians (PCPs) finally willing to say no to the Fee for Service Medicare approach that has destroyed their practices and profession?

The Mayo Clinic in Arrowhead, Arizona fires a shot across the bow, by informing patients that they will no longer accept Medicare for their primary care doctor visits as of Jan 1 (via Dr. Wes and AZcentral.com)

The discrepancy between what Medicare pays and our cost of providing care acutely impacts the sustainability of our primary care practice. Medicare reimbursements do not cover our actual costs of providing care, and therefore we have recently had to make some difficult decisions that will impact the Arrowhead Family Medicine practice.

Existing Medicare reimbursement (even prior to the cuts required without the “doc fix” considered savings under the health reform bills) doesn’t pay for actual care.  Primary care docs have essentially been volunteering their services to Medicare patients.  Perhaps explaining why, as the Baby Boom approaches, the number of gerontologists continues to fall relative to demand (what do we expect when reimbursement is poor and elderly patients are complex?).

your physician at Mayo Clinic Family Medicine – Arrowhead will no longer accept Medicare as reimbursement for your care. This change will not impact any other services provided at Arrowhead or any other Mayo facilities. Medicare will still be accepted for laboratory, X-rays, Anticoagulation Clinic and specialty care (such as Cardiology or Neurology) at Mayo Clinic

IE, it is family practice and primary care that is being reimbursed at an unprofitable level (even if subsidized by the specialty care departments for referrals).  Specialty care itself remains lucrative…so let’s jump straight to more expensive specialist-based medicine and tests.

Primary care costs estimated at $1500/yr are to come out of pocket…whereas Medicare will happily pay for all the bad things that happen if and when primary care doesn’t work:

An annual administrative fee of $250 which will be collected each year. (This will cover the administrative expense of providing you with appropriate prescription refills and phone inquiries for minor needs as they arise throughout the year.)

Normal fee rates for office visits. (Depending on the type of exam, fees may range from $175 to $400 per visit.)

Patients will be expected to come into the office for the number of visits appropriate to their medical conditions, which include a complete physical exam at appropriate intervals. If you pay the administrative fee, have a physical, and come in three other times per year, your annual costs are estimated to be approximately $1,500

I’m glad physicians are rebelling now…I left primary care due to that system having been destroyed by an inane reimbursement model.  Is cash the answer?  Perhaps…but hopefully the politicians won’t block our ability to choose to put our own money where it will pay doctors (and other care providers) for the everyday services people want and benefit from most.

Whole letter below:

Dear Patient,

Changes are occurring at Mayo Clinic Family Medicine – Arrowhead that could affect your access to primary care. Please review the following information carefully:

The discrepancy between what Medicare pays and our cost of providing care acutely impacts the sustainability of our primary care practice. Medicare reimbursements do not cover our actual costs of providing care, and therefore we have recently had to make some difficult decisions that will impact the Arrowhead Family Medicine practice. Effective January 1, 2010, the physicians at Mayo Clinic Family Medicine – Arrowhead will opt out of participating in Medicare, meaning that Medicare will no longer reimburse for the services they provide.

Therefore, beginning January 1, 2010, your physician at Mayo Clinic Family Medicine – Arrowhead will no longer accept Medicare as reimbursement for your care. This change will not impact any other services provided at Arrowhead or any other Mayo facilities. Medicare will still be accepted for laboratory, X-rays, Anticoagulation Clinic and specialty care (such as Cardiology or Neurology) at Mayo Clinic.

Because of this change, as a currentMedicare patient, should you choose to continue receiving your primary care at Mayo Clinic Family Medicine – Arrowhead, you will be required to pay for your care out-of-pocket. Neither your physician nor you will be permitted to seek reimbursement from Medicare for care you receive. We will not be able to bill Medicare for the physician office visit services you receive at Arrowhead, nor will you be able to submit the bill to Medicare for later reimbursement. Again, laboratory, X-ray, and specialty services will remain covered. Only the office visit will change to an out of pocket expense.

Costs you should anticipate paying out-of-pocket include:

An annual administrative fee of $250 which will be collected each year. (This will cover the administrative expense of providing you with appropriate prescription refills and phone inquiries for minor needs as they arise throughout the year.)

Normal fee rates for office visits. (Depending on the type of exam, fees may range from $175 to $400 per visit.)

Patients will be expected to come into the office for the number of visits appropriate to their medical conditions, which include a complete physical exam at appropriate intervals. If you pay the administrative fee, have a physical, and come in three other times per year, your annual costs are estimated to be approximately $1,500.

By maintaining your primary care with Mayo Clinic you will be assured continued care by a physician you know and trust. You will also have guaranteed access into primary care, an important resource that has become more difficult to obtain in recent years. In addition, by continuing your primary care with your Mayo Arrowhead physician, you will have continued coordinated specialty care at Mayo Clinic and be assured that your medical record will remain intact.

To continue seeing your Mayo Clinic Arrowhead physician for your primary care please complete and sign the enclosed letter of agreement and bring it with you to your first appointment in 2010 along with the $250

administrative fee. If you have questions and would like to speak to someone directly about this change, please call Sue Stevens at 623-376-8985 to talk over the phone or to set up an appointment to meet in person.

Unfortunately, you will not be able to transfer your primary care to another Mayo facility. However, you always have the choice of seeking primary care elsewhere in the community. If that is your choice, to assist you with this transition, we will forward a copy of your Mayo medical record to the office of your new physician, free of charge. To do this, a written request is required. Please complete the enclosed release of information form and return it to:

ROI, Medical Records Department

Attn: Theresa Ferrato

Mayo Clinic

13400 East Shea Boulevard

Scottsdale, Arizona, 85259

A partial list of family medicine physicians in the west Valley who are accepting new patients is included. Please contact the Maricopa County Medical Society at 602-252- 2015 or online at www.mcmsonline.com/ for an additional list of physicians.

We are deeply sorry that we have had to make this decision in order to maintain access to primary care at Mayo Clinic in Arizona. While we know that change is difficult and can be disruptive, we hope that you will understand the challenges that have contributed to our need to make this decision. Throughout this and other changes we have made to our practice, we remain committed to being able to provide care to our patients.

If you have questions regarding this transition or primary care at Mayo Clinic, please call Sue Stevens at 623-376-8985. We appreciate your understanding and we hope that you will choose to remain in our practice.

Sincerely,

Richard L. Engle, M.D.

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Sustainable health reform requires a solid foundation…unfortunately the proposals we’re seeing out of Washington create a more elaborate house of cards, as we continue to create an elaborate health care ponzi scheme.  The House that built Medicare has already saddled our country with Trillions in unfunded liabilities.  The proposals we see look to continue to reward a medical-industrial complex that creates and manages diseases rather than focusing on optimizing the health of people.

So what are the criteria of a sustainable health system?

1. Individuals receive fair value for premiums: Cost-shifting is a major foundation for today’s system.  We take money from the healthy to subsidize the sick.  We negotiate group discounts, undercutting the individual/ small group market.  This creates a phenomenon where insurers cherrypick the young and healthy who overpay and try to avoid the older or sicker who underpay.  THIS IS MADNESS.  Auto insurance has a system where we each pay based on our actuarial risk.  This is the only sustainable approach to health insurance…and may take a multi-year, lump-sum payout type approach.
2. Health Insurance is actual insurance (ie doesn’t insure pre-existing): Insurance, by definition, is a premium paid against a risk.  You can’t insure something that has already happened.  By creating an insurance structure to “insure” what has already happened, we’re looking only to pass cost off to someone else…and the insurance model is the most expensive way to pass along these subsidies.
3. Comprehensive services exist to Actively Manage Chronic Conditions: Chronic conditions (pre-existing) need active management.  We need to have tiers of services that are coordinated and judged against their impact, convenience, and cost.  Those doing the best job at reducing existing risk need to be rewarded…and today are marginalized with a PMPM (per member per month) approach that doesn’t reward the best management of risks.
4. Subsidies occur Transparently: Health care can be expensive and may require government intervention.  However, in an atmosphere where these subsidies are hidden, the subsidized payments tend to be used for many other things than providing the best care for the individual being served.  PCPs should be paid market value for Medicare patients, allowing a thriving primary care landscape (as opposed to starving the PCPs which has resulted in a declining number of gerontologists as we face the baby boom retirement…while numerous specialists will inflate the overall treatment bill).
5. Retail Competition based on Differentiation: Providers are allowed to compete…and price, quality, service approaches, and service levels are all part of the mix.  Is there any reason why we should pay the same amount for an overnight housecall as a 6 minute office visit with an hour’s wait?  There’s a reason why higher levels of convenience and service are not available today.  By the same token, a visit to a nurse practitioner just out of school probably shouldn’t cost the same as the world’s expert on your disease… Until we acknowledge that its ok that innovators are allowed to pursue either higher-priced models for better care or lower priced models for “good enough” high-volume care, we won’t see the innovations that will drive service excellence and efficiency in the same markets.

I’m all for fairness and equality and everyone having access to an affordable health system.  I’ve laid out the principles that I think create a sustainable system that doesn’t take advantage of anyone or just try to play “pass the cost potato”.  For those who disagree, what criteria would create a SUSTAINABLE system that incented efficient care?

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When I was a kid, I hit my head a fair bit, including getting knocked out once at football practice.  Initial care involved an evaluation, but scans weren’t the norm.  Now that they’ve become increasingly common in the evaluation of head injuries in youth, have we gained much?

The  Value of CT Scans in Youths Is Questioned in this study in the Lancet (article in NYTimes).

The study, one of the largest of its kind, enrolled 42,412 children ages 18 and younger who sought emergency care at dozens of medical centers after suffering mild head injuries in bike collisions, car crashes, falls and other accidents. Of the total group, 14,969 of the children, or just over one-third, had CT scans, but only 780 of the scans, or about 5 percent, picked up traumatic brain injuries, the study found.

The paper, published online in the Sept. 15 issue of The Lancet, offered a list of six indicators that could be used to determine whether a child was at risk for a serious brain injury, with a separate list for children under 2. The highest risk factors for children of all ages are an altered mental state and signs of a skull fracture.

Other factors to consider are loss of consciousness and whether the child was involved in a serious incident like a car crash. Vomiting and headaches are predictors in older children, while swelling of the scalp and abnormal behavior are warning signs in younger children.

The surprising stat to me was that after triage, only 5% of those who received a CT scan actually showed an issue (we’ll ignore potential false positives).

42,412 went to the emergency room

14,969 had a CT scan (35%)

780 showed traumatic brain injury (1.8% of ER visitors, 5.2% of those scanned)

It would seem that better triage would get us closer than a 1 out of 20 hit rate.  But in the current environment, why would a medical staff take the time to run through the 6 indications and risk a bad outcome?

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“No one should die because they cannot afford health care, and no one should go broke because they get sick. If you agree, please post this as your status for the rest of the day.”

How about just changing it to “no one should die, and no one should go broke”? I’d be in favor of that, too.

We need to take the discussion about health care past the broad platitudes and really ask ourselves what we want from health care and how we’re going to pay for it.  To date, the debate has largely been about how I can get what I want and have someone else pay for it– and in the end we’re all paying anyway, which puts a crimp into that approach.

So, what do I want…I want a convenient and responsive everyday delivery system (that works like most retail services) and protection against unpredictable catastrophic events.  I’d also like some help getting my weight down and my exercise up in a way that fits a hectic schedule.  I’m willing to pay a few hundred dollars a month for this…  What is it that you want and how much are you willing to pay?