By Maggie Mahar
Today, I posted something on TPM
Cafe that readers may find of interest.
I reprised some of what I
said about events in the Senate last week, but then went on to consider what this
means for Medicare reform. Perhaps reform requires a degree of “bi-partisan
statesmanship” that a highly polarized Congress doesn’t have.
Secretary Mike Leavitt has made a startling proposal. I think it’s worth
talking about it. If you’d like to comment, post on TPM, or come back here.
I think what on in the Senate last week was shameful political hackery at its worst.
I read Ezra Klein’s interview with Senator Daschle where he mentioned the idea of delegating the job of healthcare reform to a special bipartisan commission, but I’m not sure that it’s either necessary or desirable. The fact is that throughout our history we have just not been very good at dealing with issues like entitlements where there is a clear LONG TERM problem looming but no crisis NOW OR SOON.
The base closing commission was a somewhat different situation. There, the problem was surplus facilities as our military force structure was downsized by close to 50% form the late 1980’s peak to the end of the Clinton Administration. Everyone wanted to close someone else’s base but not the one in their district even if they knew intellectually that the military no longer needed it. So, Congress delegated the job to the Base Realignment and Closure Commission (BRAC). The NY legislature recently used the same model to close some surplus hospitals and downsize others.
The Greenspan Commission that was created in 1982 to shore up Social Security was responding to a more immediate crisis. At the time, it looked like there might not be enough money in the trust fund to cover Social Security checks in the near future. The Commission was supposed to make the tough choices that would provide Congress with political cover. Benefits were adjusted somewhat, the retirement age was increased starting in 2003 (20 years after the legislation passed) and continuing until 2027 before it’s fully phased in, and there were numerous increases in the FICA tax, always scheduled to increase in the January following a Congressional election year.
The history of the Medicare Hospital Insurance (HI) trust fund going back to the early 1980’s shows that it was on course to run out of money in as few as five years to as many as more than 20 years. In 1982, it looked like the fund would go broke around 1987 or 1988. Given this history, a projection of running out of money in 2019 does not exactly instill a sense of urgency to act now. Congrress needs more of a crisis atmosphere.
Finally, all the hand wringing over Medicare Advantage strikes me as a bit of a joke. Medicare spends over $400 billion per year of which about 30% goes for physician fees. That’s $120 billion per year. So, if this bill passes, we book savings of $14 billion over five years to pay for a one year fee fix for doctors. What do we do next year? As I commented on Bob’s blog, if doctors didn’t keep driving utilization higher and higher each year, we wouldn’t need a physician fee cut because the sustainable growth rate (SGR) formula wouldn’t call for it. We need evidence based medicine, P4P, comparative effectiveness research, cost-effectiveness research, price and quality transparency, and bundled pricing from hospitals. Primary care can be supplemented by the rapid expansion of retail clinics, but doctors oppose those, and they’re not very keen on EBM, P4P, cost-effectiveness or price and quality transparency either. What doctors want is to be left alone and their fees paid promptly without question. With a decades long history of trying to stifle competition at every turn, I’m sorry to say that the docs are a huge part of the problem. It would be enormously helpful if they eventually decide to become part of the solution.
Barry, I sure like your posts.
For five years now, Medicare has been paying private Medicare Advantage plans much more per enrollee compared with what the same enrollees would have cost in the traditional Medicare fee-for-service program.
It’s time for the Congress to examine whether the extra payments to Medicare Advantage plans are the best use of tax-payers dollars for the beneficiaries the program is designed to serve.
These payments could be used to provide better benefits, like filling in the doughnut hole and reduce out-of-pocket costs for seniors and the disabled, as well as to create a viable alternative to the ineffective sustainable growth rate mechanism currently used to determine the physician payment update.
Traditional Medicare needs to be able to compete on a level playing field with private plans, which requires the elimination of these extra payments.
1. automatic triggers generally don’t work as this case proves. the physician payment cut, which Congress is trying to postpone (not reverse) is caused by such an autopilot. when they cause pain to large constituencies, Congress stops the clock.
2. the current debate is really distorted in playing Medicare Advantage (hiss,boo) against doctors (friends of the people). In fact, a pro-physician response merely buys time and makes the problem even bigger the next time Congress is forced to confront it.
3. triggers and autopilot devices are fundamentally anti-democratic and displace messy public debates into jargon-driven private ones where the internists slog it out with the midwives far from any public review.
Jim
Jim– You make a good point–which reminded me of the sentence that I left out of Leavitt’s proposal:
” It would be critical that the law enabling this special process also include one other provision. If either the Congress or the President fails to act, a series of default provisions must be triggered which solve the problem. Without A default trigger, Congress will not act. Senators Judd Gregg (R-NH) and Kent Conrad (D-SD) have offered bi-partisan legislation creating a special legislative process.”
You know more about the legislative process than I do–do you think this would work?
I agree that we need to cut waste in Medicare. But taking an axe to all doctors’ fees isn’t the way to do it.
Gregory–
You’re absolutely right. The money used to pay Advantage insurers is coming out of traditional Medicare.
And as I’ve written, when MedPAC examines Medicare Advantage, they find that we’re not getting good value for the dollar.
Lisa– I also appreciate Barry’s thoughtful, fact-filled posts.
Barry– I agree with most of what you’re saying.
But I think many in Congress do realize that Medicare is in crisis.
Eleven years is not such a long time, and co-pays and deductibles have begun to become unaffordable for some Medicare patients.
I also agree with almost everything you say in your final paragraph about whatt needs to be done.
But I don’t agree that “Primary care can be supplemented by the rapid expansion of retail clinics”
These clinics offer hit-or-miss, hit-and-run care. No continuity of care. They exist to sell products in the retail location. There’s no medical oversight.
If we want primary care to provide co-ordination and on-going preventive care, patients need a medical home. Their primary care doctor may well work with a nurse-practioner who sees most of the patients most of the time so that the doctor can spend more time with the sickest patieints. But they’ll see the same nurse-practioner every time, and hopefully, before long, she and the doctor will be working with electronic medical records.
Finally, I don’t agree that most doctors just want to be paid and left alone. When I began writing my book I was impressed by how many doctors are terribly concerned about the state of health care in the U.S.
They are genuinely concerned about their patients. This is why so many (the majority, now, according to the polls) that they want the government involved in running health care.
The don’t like the way for-profit companies are running the system, setting priorities, etc.
I am very critical of the small percentage of doctors who seem primarily concerned about “getting paid and being left alone.”
But I think that many doctors want to be–and should be–on the cutting edge of the solution. Younger doctors, in particular, didn’t go into medicine to make money. (By the 1990s, it was becoming clear that there are many easier ways to make far more money than most doctors will make in medicine.) And these younger doctors understand the need for “evidence-based medicine.”
They understand that medicine is a team sport–that doctors must collaborate. They understand the need for medical records, pallliative care, etc.
As they take over, and the dinosaurs retire, things should improve. (Of course not all older doctors are dinosaurs. Many are terrific–especially those who went into medicine in the 1960s and very early 1970s.
And as the “dinosaurs” retire there will be far fewer people willing to sacrifice their personal lives for medicine. No one will take call, but hey they have a great attitude. I fail to see how early retirement is a good thing when you want to add 40 million to a system, you are turning out the same number of docs you were 15 years ago, it take 10 years to replace one that retires today and they are more likely to consider medicine a job and not a calling and react accordingly.
jenga–
When I referred to the “dinosaurs” I didn’t mean the majority of older doctors–as I tried to make clear by my reference to the many idealistic doctors in the generation that went into medicine in the late 1960s and early 1970s.
I meant those older doctors who are “lone rangers”, don’t want to hear about evidence-based guidelines; are not good about collaborating with other doctors; don’t know what palliative care is and dont’ want to know (Dr. Diane Meier, the palliative care specialist at Mt. Sina who is probably in her 50s told me about this)– and refuse to learn how to use electronic medical records.
I hate to sound sexist, but I’m afraid most of these dinosaurs are male.
They have gigantic egos, and are not open to learning.
That said, I agree that many older doctors have a real sense of dedication about being will to sacrifice their personal lives, take call at night, etc.
Younger doctors (and particularly women) are more concerned about having regular hours, spending evenings with their families . .
But I don’t think that this means that most see medicine as a “job” rather than as a calling. It’s just that attitudes about work and family have changed in our culture.
At one time, professionals in many areas prided themselves on being “workaholics.” Now, many people see this as a neuroses–they want more balance in their lives.
Men want to spend more time with their children than their fathers did. Women want to be able to become doctors and have children.
(When I was a graduate student, my dissertation advisor told me I should make a choice. I wouldn’t be considered a “professional” if I started having chldren.
While I was a professor, I had two children. My disseration advisor stopped talking to me.)
I’m also a workaholic (see this blog–length of posts, responses to comments, etc.) And I enjoy working this way. But I do wish that I could go on a vacation without taking work with me. . .
I have met many young doctors who are deeply committed to professionalism. For example, they feel very strongly that doctors should take no gifts or consulting fees from Pharma, device-makers or anyone else.
They are very concerned about inequality in patient care, the uninsured, etc. And they want their med schools to offer more information on health care policy and reform.
I agree that, as doctors retire, we need far more primary care docs, family doctors, gerontologists, pediatricians, etc.
If we actually begin to cover the uninsured, I, too, wonder who will care for them.
My hope is that the right “dinosaurs” will retire, while the caring doctors who put their patients first soldier on.
And as I keep saying, I really think we need to forgive medical school loans for students willing to go into the less-well-paid areas where we need more docs.
(I do think we have enough specialists in most well-paid specialities–though they are not well-distributed across the country.)
Even then, it will take a long time for students interested in primary care, etc. to go through the pipeline. . .
You are not sounding sexist. It’s the absolute truth. I am all for more equity between the sexes in medicine, but there is a problem that we have to deal with. Women work less hours and fewer years. That’s just a fact born out by statistics and is not a sexist remark. I agree with about all of your post.
Barry,
Would like to hear your thoughts on Happy’s post, probably the most comprehensive and spot on I’ve seen in the blogosphere in some time regarding Medicare.
http://thehappyhospitalist.blogspot.com/2008/07/its-time-to-screw-granny.html
Whether you think it matters or not, doctors’ morale is tanking. I assure you that pi**ed off and angry doctors do not lead to happy and satisfied patients. Your last paragraph is an oversimplified rant and obviously comes from someone far removed from the front lines of care.
Maggie,
If NPs/PAs start doing a lot of primary care, none of your other proposals to increase primary care physicians will matter. If med students rounding through rotations during their training see midlevels doing essentially the same thing as physicians (limited and minimally reimbursed MD “supervision” aside), they will shun the field. If physician services are, in many cases, seen (valued) as equivalent to those given by midlevels with 1/3 the debt, 1/3 the training, and 1/3 the sacrifice, why bother? The flight from primary care will then be complete.
Until we (insurers, govt, individuals) are willing to pay for thorough comprehensive care delivered by a physician, primary care will be the last choice among young doctors.
(and those that remain will be increasingly drawn to the “concierge care” model, where their services are valued appropriately.)
Barry,
Some more on your affinity for P4P and quality measures as white knights in the cost battle:
A quality ER gives antibiotics on time, right?
http://www.the-hospitalist.org/blogs/wachters_world/archive/2008/07/02/door-to-antibiotics-time-in-pneumonia-lessons-from-a-flawed-quality-measure.aspx
A quality doctor has all his patient’s LDLs less than 100 and A1Cs less than 7.0, right?
http://content.nejm.org/cgi/content/full/NEJMp0803740
As any of us treating patients is aware, quality is extremely difficult to measure. Throw unique patient characteristics and preferences into the mix, and it’s near impossible. That doesn’t stop those who hold the purse strings, however, from coming up with counterproductive and simplistic ways of doing it. Whether it actually helps patients or not is beside the point.
Jenga and PCB — thanks for your comments.
PCB :
First, regarding Happy Hospitalist’s post, I’ve written about the RUV, the need to pay primary care physicians more, the reasons why the RBRVS doesn’t work, the fact that Medicare pays doctors more each year due to greater volume of procedures even while fees are held flat, etc.
I’ve written, time and agian, that Primary care docs, pediatricians, family docs, palliative care specilaists, etc. need to be paid more. Some specialsts are over-paid for certain procedures. This encourages doing more of those procedures and can lead to over-treatment.
There is no reason for the volume of procedures that physicians do to be rising the way it has. People are not suddenly aging all at once. And while new technology constantly creates new possibilities, many of the new technologies have not been fully tested, are not effective, and are riskier than the techologies that are replacing. (That’s why outcomes for heart patients haven’t improved in the past eight years or so–we’ve reached a flat point on the curve, a point of diminishing returns– and measnwhile we are over-treating many people with too many angioplasties, etc.)
Where I don’t agree with the Happy Hospitalist (who I like and have quoted in the past ) is that doctors should “screw Granny” by refusing to take Medicare patients.
I seem to remember something about an oath?
And the patients’ interests always coming ahead of the doctors’?
I also very much doubt that Congress will go ahead with the cuts to physicians fees. At worst, they’ll go back to the freeze until 2009, and then a new Congress will slice the bonus to insurers and, one hopes, tell Medicare that it needs a panel that is not composed of specialist rethink Medicare fees.
The next president will approve cutting the MedPac bonus. Even McCain voted against the Medicare bill that gave insurers such an
unwarranted windfall. (Though McCain was one of very few Republicans who voted against the bill.)
Ultimatley, as the Medicare Payment Commission has advised, Medicare has to move toward “bundling” fees and paying all of the doctors who attend to a patient along with the hospital a lump sum (to be divvied up) plus a bonus for outcomes.
The newest MedPac report (June 2008) has a long section on this.
To find it, Google “MedPac” and June 2008.
Regarding P4P– you’re right, P4P is not a good way to evaluate the quality of care. (I have a chapter on this in my book, and have written about it here.) It’s too narrowly focused on a list of things to be done and while everyone is concentrating on the list, other, less easily measured, but more important aspects of care may be ignored.
There is now a general consensus now that we need to figure out how to pay for “outcomes”–i.e. keeping patients healthy.
Also, people are beginning to realize that it’s impossible to measure the quality of an individual doctor’s practice (or even a small group of doctors) based on outcomes because the pool of patients is too small:, a relatively small group of very sick or non-compliant patients can skew the results.
That’s why we need to look at outcomes for a very large group of doctors who cluster around a particular hospital. Most doctors send most of their patients to one hospital. The doctors in that cluster can be seen as a “virtual group practice” and outcomes for the patients that they and the hospital treat can be evaulated as a group. This also encourages collaboration among the doctors and between doctors and hosptial.
It’s complicated, and we’ll have to experiment with how to do it, but the reading I’ve done persuades me that we can measure a large doctor/hospital group against benchmarks (Mayo Clnic, etc.) looking at outcomes and efficiecny for very similiar patients (similiar age,race, co-morbidities, over-all health etc)
–how long was the patient in the hospital? did he develop an infection? did he have to be re-admitted?
how many tests did he undergo before doctors were able to diagnose the problem? how did rehab go? how was he functioning six months after the surgery?
patient satisfaction? physician satisfaction? If he died, did he receive palliative or hospice care?
were relatives satisfied with quality of end-of-life care? This is just a short list of questions that might help us get our arms around “quality of care.”
PCB: You wrote “If NPs/PAs start doing a lot of primary care, none of your other proposals to increase primary care physicians will matter.
If med students rounding through rotations during their training see midlevels doing essentially the same thing as physicians (limited and minimally reimbursed MD “supervision” aside), they will shun the field.”
I’ve been talking to med students and young doctors recently, and thankfully, I believe you are wrong.
Many see collaboration between docs and nurse practioners as an excellent way to provide “medical homes” for patients.
Some med students and younger docs think that, in some areas, future docs and nurses should be trained together. Medicine is now a team sport.
The only problem: we don’t have enough nurse practioners. But as more doctors make room for them in their practices and in medical centers I suspect the field may grow.
Already, at universities like Cornell both students and employees regularly see nurse pratictioners for primary care. When necessary, the nurse practioners refer them to a primary care doc. (Cornell has excellent medical care)
I’m sure you didn’t mean it this way, but I’m afraid that your assumption that med students will “shun” primary care if they see “midlevels” –i.e. nurse practioners –beginning to help primary care docs deliver care is insulting to people you refer to as “midlevels” and is based on a long, sexist tradition in American medicine.
“Men are doctors. Women are nurses”–that’s the tradition. Even today, women doctors tell me about the extraordinary sexism in the profession–male doctors looking down on women colleagues.
As more and more women come into the profession this will change. (50 pecent of med students are now women; my guess is that over the next 20 years, women will outnumber men in the profession.
maggie,
well, time will tell if after 4 years of medical school and 3 years of residency, young physicians are attracted to a field where there is an increasingly blurred line between physician and midlevel, and an ongoing push to reimburse at the midlevel rate.
If there is general agreement that, NPs/PAs deliver fine primary care, (and that’s the level of payment expected for primary care), then doctors will go where they are valued. (intellecutally and financially)
And, btw, it has nothing to do with gender and everything to do with training and experience.
Jenga–
somehow I seemed to have cut off my reply to you (which was at the beginning of my response.)
I just wanted to thank you for your comment, and to say that it seems we’re on tne same page . .
Maggie, I’m ashamed you pulled out the oldest line in the book to back a position that physicians should be slave laborers for the good of society. As you say:
“I seem to remember something about an oath?
And the patients’ interests always coming ahead of the doctors’?”
No where in that oath does it say I am doomed to a life of poverty and servitude. If a doctor closes their practice to Medicaid because they lose money on payment, or don’t make enough to maintain their business model, that is no different from excusing all your Medicare patients from your practice and closing your doors to an insurance company to goes against your financial stability and viability. You should be ashamed of yourself for even suggesting that my oath I took entitles the Medicare public to receive my services, or any docs fees for anything less than what the doc determines is acceptable to their business model. If I as a doctor chose to close my practice to Medicare for purely financially viable reasons, that is my God given right as an American. To dump my oath on me and tell me I don’t have a right to do that, is the equivalent of telling a black man he must go work the fields, telling a woman she needs to stay home barefoot and pregnant, telling a Mexican he needs to go slaughter a cattle. Slavery was abolished long ago. My oath does not condemn me to be anyone’s slave, Medicare patient or not. There is no association between my oath to do no harm and my financial decision to close my practice to Medicare. In my area you can’t find a single unsubsidized(with federal money) practice accepting Medicaid. Does that mean every primary care physician in my area are a bunch of money grubbing, selfish, oath breaking bastards for making sure their business is financially stable? Of course not. Medicare is no different. Medicare is an insurance, not a person. I have every right to drop Medicare, the insurance. And it has nothing to do with the person who has that insurance. That’s not my problem. That’s the government’s problem, the government running the insurance. You make financial decisions everyday in your life. It’s called living. To tell a physician they don’t have a right to cancel Medicare for financial reasons, because they took an oath is bullshit, and I’m calling you on it. It’s a completely irrational position in our capitalistic society. By your reasoning that doctors should not cancel Medicare, I would assume you also believe that the landscapers, the utilities, the medical building owners, all the nurses, the secretaries, the billing clerk, every component of expense in the physicians office should accept a 10.6% cut in payment because they are providing a service that allows the doctor to uphold his oath. They should accept a 0.3% rise in fees every year for the last 10 years because that’s what Medicare has allowed. By using your reasoning, they should all suffer the socialistic price fixing policies of Medicare and exit the system called capitalism so the doctor can uphold his oath to be a financial slave.
The assertion that my oath precludes me from “screwing granny” simply doesn’t hold any truth or value and warrants no rational discussion.
PCB,
Thanks for the link to the Happy Hospitalist post about the RBRVS payment system. I also appreciate the complexities surrounding P4P, though I still think the idea has conceptual appeal. The posts by the doctors (and Maggie’s on this blog) are my favorites because I learn the most from those.
Regarding RBRVS, if I project myself into CMS’ position, I come out as follows: The approach has conceptual appeal because it attempts to differentiate payments primarily by the time and skill required to perform each procedure. I recognize that the system is biased in favor of specialists and the secrecy issue could be resolved through transparency initiatives like publishing the minutes or transcripts of the meetings or even filming them for later viewing by any interested party. Even if I think that primary care is underpaid relative to specialists, I’m not convinced that paying more for primary care will reduce overall utilization without other more fundamental changes to the payment model.
CMS needs to get away from its historical approach of rewarding resource utilization and replace it with one that rewards value as defined by outcomes, keeping patients healthy and satisfied, etc. For that, we need some way to measure performance fairly though probably imperfectly. Sophisticated risk scoring at the individual level might also need to be part of the equation. We also need to move to bundled pricing for a complete episode of care connected with expensive surgical procedures.
I know the UK took a shot at this a few years back when primary care doctors were measured on no fewer than 146 separate metrics with points assigned to each adding up to a total maximum possible score of 1,050 points. While there were still opportunities to game the system to some extent, one of the impressive aspects of it to me was that there were a number of specific criteria that would allow doctors to remove specific patients from the panel to be evaluated. Criteria included clear non-compliance, inability to tolerate the proposed medication, not giving a late stage cancer patient a statin drug even though he also had high cholesterol, etc. Doctors were awarded bonuses based on their scores, and the government wound up paying out considerably more money than it expected. At the same time, this approach would not have even been possible without widespread use of electronic medical records which they have in the UK but we don’t have (yet).
It is also clear, I think, that practice patterns vary widely on both a regional basis and even within a community. Some doctors (in the same specialty) practice more defensive medicine than others. Doctors who own their own equipment (especially imaging equipment) order more tests than those who refer out to independent imaging centers. Insurers can distinguish between the high utilizers and the average and low utilizers. If outcomes are no different, why shouldn’t high utilizers be penalized or low utilizers be rewarded via a ranking system that offers patients a lower co-pay for using the more cost-effective doctors?
Finally, I think it would be helpful if doctors offered more constructive suggestions on how to make the healthcare system work better and be more cost-effective. On another thread, Chris Johnson suggested that there be a form that could be checked indicating that certain x-rays don’t need to be read by a radiologist. I thought that was an excellent idea. We need more of that and less just pay me more and pay the other guy less. I have yet to hear a radiologist or any other specialist comment that his specialty is overpaid and should be scaled back. I won’t hold my breath waiting either.
On primary care, I have no doubt that good primary care extends lives. I have a lot of doubt that it saves money for the system over the long term. For example, if I get poor care or no care and my heart disease is never caught until I have a heart attack and die, that’s obviously bad news for me but the system would save money because when I die, my costs cease too. If the disease is caught early and is treated with medication, stent, bypass or whatever (and I’ve had them all), maybe I’ll live another 20 or 30 years, consume several thousand dollars worth of drugs each year and get Alzheimer’s in my 70’s or 80’s.
Happy Hospitalist,
I agree with your point that doctors have no obligation to see patients if reimbursement rates are inadequate to sustain their business model. I want to ask, however, what you (and other doctors) think about the concept of primary care doctors gradually moving to work on a salaried basis for medium size and larger group practices that would be owned by hospitals. Hospitals would pay the malpractice premiums and take care of all the costs and associated details of running the business. The hospital could also more easily afford to implement electronic medical records. Perhaps they could even work out different payment arrangements with insurers that would basically pay them based on time spent plus the cost of outside lab and imaging tests. If the hospital could at least break even, it could work. It would also, presumably, have more bargaining power with payers to achieve satisfactory reimbursement rates. The risk is that the hospital would pressure doctors to drive revenue (utilization) for the “mother ship.” It’s a lot easier for lawyers to work within medium size and larger firms than to work alone. Shouldn’t that be the case for doctors as well?
U.S. for-profit health care fundamentalism has the most de facto rationing, higher rates of uninsured, exclusions for pre-existing conditions, excessive deductibles and copayments, and shorter hospital stays and physician visits. It also has the most waste on administration, billing, marketing, profit, executive compensation, and risk selection.
The U.S. for-profit health care system is good at creating new drugs and technologies and marketing them to hospitals, physicians and patients. But our health care system is not so good at simple medicine like preventive care. Our pharmaceutical-based health care system is very good at creating new health care products that will make a lot of money, and where our health care system isn’t profitable, it is a total failure.
It doesn’t take a rocket scientist to figure out that the United States does a good job of developing and delivering new and expensive drugs to patients, because tht is the only thing we’re good at. But it’ll take a rocket scientist to figure out how this makes for a better health care system.
I am old enough to remember all the bullshit that came down the pike at the time that Managed Care was touted as our savior. We were told that Managed Care would ensure that doctors only used the most cost effective procedures and treatments. We were told that Managed Care organizations would “credential” docs to guarantee quality. We were told that Medicare Managed Care was the solution to our problems. We were told that we needed to learn to capitate, etc.
Of course that all turned out to be bullshit. For the most part managed care has no greater ability to keep its patients healthy than standard fee for service. (And of course the most important person in keeping a patient healthy is the patient, not the doctor. How many overweight smokers don’t know they should loose weight and stop smoking.)
Managed care/Insurance “credentialling” amounted to trying to delay credentialling new doctors as long as possible so the company wouldn’t have to pay the bills.
Managed care/Insurance companies have no way to measure physician quality and have used as their SOLE criteria the physician fee schedule. The lowest bidder gets it.
So when I hear people like Barry Carol talking about “evidence based medicine”, “P4P”, and “price and quality transparency” my bullshit meter starts sending off signals.
I am 100% in favor of the best, most cost effective medicine. Try practicing it with the lawyers, consumer advocates, and other “experts” chasing after you. Try to fire an incompetent doc and spend your time in depositions (personal experience). Try to not do unnecessary tests and risk getting sued.
“We have met the enemy and he is us”
“Try practicing it with the lawyers, consumer advocates, and other “experts” chasing after you.”
That is why the entire healthcare reform effort must be a system effort guided by real enlightened social consensus and resultant law.
It seems to me from over 40 years of observations and involvement in the US healthcare system that the providers under the previous (and maybe current for many) guise of professional autonomy have really said “”leave me alone to do what I want and pay me what I ask for doing it.”” Now the resultant problems from that holier than thou attitude has come home to roost, showing you just cannot have it both ways!
Barry, “moving toward salaried positions” owned by hospitals. That is a current trend, but you have to remember hospitals are in the business of making money. Comprehensive care does not make money for hospitals. Hospitals would absolutely use their comprehensive care docs to drive business towards procedurally oriented services available in the hospital. That is the comprehensive care docs “value” to a hospital. It also drives the total knees, the bypass surgeries and the heart caths to the hospital where they collect billions in facility fees to house that state of the art cath lab.
I might add that if all of comprehensive care physicians suddenly went into salaried hospital positions overnight, you would have to double, overnight, the number of comprehensive care docs just to maintain the access to service. You see, when you are salaried, you have no motivation to do more. You become “lazy”. I saw that in the VA system where I practiced for 3 years as a resident. Some of the most inefficient, punting attitudes I have seen anywhere in any health care system. In fact, I even saw dead patients being schedules to “keep an open slot”. It was ridiculous.
From the national hospitalist compensation survey released several months ago by the society of hospitalist medicine, what you saw was an average encounter per year by fully salaried academic physicians of 1700 encounters per year. In the fully 100% production based private practice programs, you had over 3500 encounters a year. The mixed salary/production programs averaged about 2500/year.
Clearly, compensation dynamics is the major determination in how hard people work. How much they do. It is also a reason why so many procedures are done. It is a reason why imaging to self referrals are higher than non self referrals.
It’s all economics. Hospitals are no different. If you want comprehensive care docs to be owned by hospitals, you had better realize that hospitals will expect a return on their money losing investment. And if they don’t, they will demand higher volume and lower salaries of their doctors, and expect referrals for their money making procedure houses called hospitals.
Being salaried by a hospital creates a whole new set of issues. The independence of the independent owned comprehensive care doc who answers to no one but their patient and their business manager will now be answering to the corporate suits of the hospital administration. You can be assured that their goal is profit, not health. They make money on illness, not health. You can be assured that the comprehensive care doc will be expected to drive procedural business in to their hospital to prove their value to their salary. You have just opened up a whole new bag of worms.
A better solution would be regional super groups of doctors which bind together in regional powerhouses to form giant independent organizations that have bargaining power to improve payment rates on insurance. The government however would view this as anti trust. Very large hospital practices have this ability. The little physician does not. But to maintain neutrality and viability as an independent practice, doctors will have to bind together. Somehow joining together.
Large groups definitely have economies of scale when it comes to overhead expenses. The only question is, should they do it as independent groups, or should they do it with a hospital that will expect something in return. The other option, is to leave the insurance pool and set up your own cash office where your patients will pay you a price that has been deemed acceptable by both parties.
Be careful what you wish for. Salaried positions lead to less effort and less volume. Which , if that is what you want for comprehensive care, that is what you’ll get. But you’ll have month’s of waiting lists. I have seen it myself. I think if you took a survey on salaried hospital physicians you would see the dynamics of the relationship they have with the hospital and all the problems that come with that relationship. You are owned by the hospital who pays for the food on your table. Your loyalty is to your hospital, then your patient.
Happy Hospitalist–
Re the Hippocratic Oath–here are the first three lines:
“That you will be loyal to the Profession of Medicine and just and generous to its members.
“. That you will lead your lives and practice your art in uprightness and honor.
“. That into whatsoever house you shall enter, it shall be for the good of the sick to the utmost of your power, your holding yourselves far aloof from wrong, from corruption, from the tempting of others to vice. ”
It seems to call for generosity and putting your patients ahead of yourself.
You write: “No where in that oath does it say I am doomed to a life of poverty and servitude.”
You’re absolutely right.
You continue “If a doctor closes their practice to Medicaid because they lose money on payment, or don’t make enough to maintain their business model”
Here we come to the heart of the matter: income.
I know doctors who take Medicaid patients. They don’t live in poverty. I know docs who have a practice of mainly older Medicare patients. They don’t live in poverty.
So rather than talking abstractly about your “busines model” why not just come out and tell us how much you feel you need to earn, before taxes, each year, in order to maintain your lifestyle
model?
Happy Hospitalist–
You write “Comprehensive care does not make money for hospitals. Hospitals would absolutely use their comprehensive care docs to drive business towards procedurally oriented services available in the hospital.”
This is true of some hospitals, but definitely not true of all hospitals.
If you take a look at the Dartmouth Atlas analysis of what Medicare spends for very similar patients at different hospitals, you will find that some–like UCSF, Dartmouth, Mayo Clinic–perform many fewer procedures, have patients see fewer specialists–and generally practice more conservative Medicine.
Medicare’s bill at these hospitals is about half what it is at some academic medical centers.
So not all hospitals are in the business of generating business.
I hapeen to know the COO of a hospital in the NYC area who is adamant about not selling people services they don’t need.
I just disovered (through another source) that they
have the lowest percent of ceasariains of any hospital in the N.Y. area.
(Ceasarains are significantly more profitable than vaginal births and more convenient for docotors and hospitals.)
Happy Hospitalist–
You write: “I think if you took a survey on salaried hospital physicians you would see the dynamics of the relationship they have with the hospital and all the problems that come with that relationship. ”
Such surveys have been done. See MedPac’s March 2008 report. All of the evidence suggests that outcomes and patient satisfaction is better when doctors work at large, multi-specialty centers, on salary.
As for the VA system– the suggestion that VA docs are “lazy” because they work on salary is absurd.
Take a look at the excellent book “The Best Care Anywhere” by Philip Longman about the VA.
Dozens of articles in medical journals looking at various types of care documented that outcomes were better at VA hosptials in the late 1990s than at other hospitals.
Since 2000, the VA has been squeezed for money while the number of patients (aging Vietnam vets and Vets from the current war) grows.
But it’s still doing pretty well. (Let me note Walter Reed, which is a disgrace, is not part of the VA. Walter REed is run by the army.)
My brother-in-law receives care at the VA. He also goes to private doctors in Manhattan.. It was a family doc at the VA who took the time to figure out how to correct his hearing.
The notion that people don’t work as hard if they’re on salary rather than working fee-for-service reflects a certain work ethic that not everyone shares. You were right not to become a VA doc–it’s a self-selecting group of people who are academic doctors and like helping Vets.
Happy Hospitalist,
Thanks very much for your very informative and comprehensive reply. It is consistent with what I thought the answer was likely to be. The idea of the large independent group practices has considerable appeal as compared to hospital owned practices that will be expected to drive revenue for the hospital in order to justify their salaries.
As you say, so much of this comes down to economics which is why I think we need a new payment model that rewards value and not resource utilization. Such an approach would have to develop new metrics that would reward hospitals for doing less and not more. However, even if we offered hospitals the chance to earn a considerably higher profit margin on a lower volume of services, they would still probably find the proposition unattractive unless we offer to buy out their newly surplus capacity. Unfortunately, I doubt that a radically different payment model could pass anytime soon without strong physician leadership and support, and I don’t see much evidence of that. Do you?
It is intuitively obvious to me that most people will not work as hard if they are salaried as compared to being given the opportunity to earn considerably more by doing more – either seeing more patients or doing more procedures or both. I was particularly fascinated by your story about the VA scheduling dead patients “to keep an open slot.” And the VA is often held up by reformers as a paragon of high quality care complete with salaried doctors and electronic medical records. Go figure.
NG, Gregory and Douglas and Barry–
NG– you wrote “that the providers under the previous (and maybe current for many) guise of professional autonomy have really said “”leave me alone to do what I want and pay me what I ask for doing it.”” Now the resultant problems from that holier than thou attitude has come home to roost, showing you just cannot have it both ways!”
I’m afraid this is true.
Douglas– You write:
“Try to fire an incompetent doc and spend your time in depositions (personal experience.)”
I’m completely sympathetic.
In my book I write about a “whistle-blowing doc” –an anesthesiologist who tried to do something about the head of anesthesiology at his hospital. His boss was a “rain-maker” but he brought in business by doing 3 or 4 operations at once–sometimes in ORs on different floors–leaving only the anesthesia nurse in charge. Over a period of time, some terrible things happened to patients–including at least one death. (As you no doubt know, things can turn sour very quickly, and the nurse may not be able to handle it.)
The whistle-blower was fired and financially ruined. Only later was the hosptial exposed.
We need much better laws protecting doctors against being sued if they blow the whistle on an incompetent doc. And we need boards of specialists from hospitals in another part of the state investigating claims of incompetence. . .
On managed care–I too remember the beginnings of managed care, before the 1990s.
When managed care was first conceived there were still many not-for-profit HMOs. (Before Reagan changed the tax law in 1980, the vast majority of HMOs were not-for-profit and very different from the for-profit HMOs of the 1990s.)
As originally conceived, by Dr. Paul Ellwood and others, HMOs were supposed to compete on the quality of care they provided, not on price. (Ellwood was an extroadinarily good doctor with high, ethical and scientific standards. I can’t say the same for some who promulgated managed care in the years that followed. I wrote about all of this when I was at Barron’s in the late 1980s and early 1990s.)
Originally, The goal of capitated care was to keep people well.
B ut bythe early 1990s, when managed care began to be implemented on a large scale, the vast majority of HMOs were for-profit. By law, a for-profit corporation’s first obligation is to its shareholders, not to its customers.
For-profit HMOs competed on price. In order to try to keep prices down (and draw more business from employers) they “managed care” not with an eye to quality, but with an eye to price.
An HMO would tell a drug-maker that it would put the drugmakers products in its formulary (and exclude products made by his rivals) if he would give them a discount. This had aboslutely nothing to do with which drug was more effective.
Managed care can work if the emphasis is on quality. Kaiser, in Northern California, has
done a decent job of trying to practice evidence-based medicine.
For example, Kaiser, like the Mayo Clnic and the VA stopped prescribing Vioxx for most patients when it realized that it was no more effective for the majority, and might be riskier. This was long before Merck was forced to take Vioxx off the market.
But you are right, “managed care,” as practiced in the 1990s was a farce. That’s why there was such a backlash.
Today, we need to get back to insisting on evidence-based medicine–but we can’t call it managed care.
I like “the right care for the right patient at the right time.”
Barry– Despite the Happy Hospitalist’s cynicism, we do have examples of doctors working on salary for multi-specialty medical centers and hosptials, and it can work.
If we begin using what now know about “comparative effectiveness” and if Medicare begins refusing to pay for unncessary and ineffective procedures, it will be harder and harder for hospitals to push doctors to bring business in to the mother ship.
And hospitals won’t need as much revenue if we begin cracking down on unncessary expansion, wings with hote-like amenities etc. Hospitals should have to show a medical need before expanding.
I’ve been reading about hosptials in Europe recently, and one huge difference is that they are much plainer. No waterfalls. Many fewer private rooms.
But, as my step-son who just had a baby in Germany this week says: “They’re so clean. And they’ve got everything on computers. ”
(electronic medical records.) The rate of errors is much lower. And there just isn’t the chaos you find in U.S. hosptials.
When I was in Germany in the spring I marveled at how clean the train stations are when compared to ours. Floors washed. No litter. No litter on tracks. Walls washed. You wouldn’t mind sitting down on a (clean) bench and having lunch while waiting for a train.
Well you can imagine their hospitals. . .
Our hospitals spend too much on cosmetics that will attract cutomers. They’re always “marketing” themsleves when they should be spending money on reducing infections, Health IT, palliative care, etc. .. If you’re in pain, you really don’t care how nice the carpeting is.
Barry–
On the VA–please do read “The Best Care Anywhere.” Or look up the Veterans’ Administration in the index of my book and look at the footnotes to peer-reviewed articles in medical journals documenting better outcomes at the VA.
I personally know 3 VA docs who work at least as hard as I do.
No doubt, some people don’t work as hard if they are on salary. But my guess is that this is less likely to apply to doctors than to many other jobs.
Just getting through medical school is very hard work. So people who make it tend to be naturally hard workers. It’s really not a place for slackers.
I spent 20 years as a salaried physician at Mayo. There is a strong work ethic there, at least in my experience, largely enforced by peer pressure and social expectations. In general, nobody wanted to be seen as a slacker. So it is possible, but the physician culture needs to expect it. When it is the norm, people follow it, social creatures that we all are.
Maggie,
I would like to make several points.
First, Chris Johnson’s experience at Mayo vs. The Happy Hospitalist’s experience at the VA suggests that culture is important and can vary widely among institutions. Along the same lines, the recent study that compared how aggressively various institutions treat Medicare patients during the last two years of life showed that Bellevue in NYC, with a large number of salaried doctors, scored in the 60th percentile for aggressiveness of treatment. While that was considerably less aggressive than NYU (99th percentile) or Massachusetts General (82nd percentile), it was much more aggressive than Mayo (28th percentile). It suggests that the culture of medical practice in NYC is much more aggressive than it is in Minnesota. Some of that may relate to greater fear of malpractice suits in New York.
I also think it is reasonable, as Happy Hospitalist suggests, expecting that salaried doctors will have fewer patient encounters per year than doctors who work on a fee for service basis. Perhaps each of the salaried doctor’s encounters lasts longer which could be a good thing for those who can get an appointment but not necessarily. At the same time, I wonder how many of the fee for service doctor’s encounters are unnecessary and are just done to fill his appointment calendar and drive revenue. For example, maybe he has a heart patient or a diabetic coming in every two months where every six months or even once a year might be sufficient. There is probably a wide zone of reasonableness as to how often a patient is asked to come in for routine monitoring. The practice pattern can be influenced by both the desire to make money and by community standards that differ regionally, sometimes materially.
Finally, on managed care, at the end of the day, both for profit and not for profit insurers have to please customers. In the system we have, outside of Medicare and Medicaid, the employer is the customer, not the patient (except in the case of the small individual insurance market). You don’t have to look any farther than the recent performance of UnitedHealth Group which lost 350,000 risk based members this year alone, primarily because of service issues stemming from difficulty integrating the acquisition of PacifiCare at the end of 2006. United lost an additional 250,000 risk based members to competitors who won the contracts away based on price. 100,000 more converted from risk based (fully insured) status to self funded fee based (ASO) contracts. Another 100,000 were lost as existing clients laid off employees due to the weak economy. United’s competitors are also struggling for various reasons this year, and stockholders have little to cheer about.
Regarding Kaiser, if its care is so great, why isn’t it gaining market share and why can’t it replicate its success in Northern CA anywhere else in the country? Perhaps its closed network HMO model isn’t very attractive to many potential customers even if it’s a bit less expensive.
Barry–
The Happy Hospitalist’s experience at the VA is unusualb This doesn’t mean he is wrong about what he saw and experienced. There are a great many VA hosptials; no doubt there are some where management is poor and the culture is sour.
But: Read the book: “The BEst CAre Anywhere” andsee the medical reserach cited. Overall, in the late 1990s, the care was excellent–and still is, given budget contraints.
As for Kaiser, it has been very successful in Colorado and Atlanta. Have you ever read the healthcare book written by George Halverson?
I know, I sound like a librarian: read, read, read. But this really is the best way to get solid information.
Maggie, I thank you for quoting my oath to me.
“That you will be loyal to the Profession of Medicine and just and generous to its members.
“. That you will lead your lives and practice your art in uprightness and honor.
“. That into whatsoever house you shall enter, it shall be for the good of the sick to the utmost of your power, your holding yourselves far aloof from wrong, from corruption, from the tempting of others to vice. ”
To bad the oath doesnt’ say I should work for free or less than cost. The fact that comprehensive care doctors are being paid at submarket prices is testament enough to their overwhelming generosity. The fact that doctors see patients everyday without insurance is testament enough to their over whelming generosity. Telling me I’m not generous because I wish to be paid appropriately for my experience, expertise and education is simply grandstanding. I’m generous far beyond any professionals wildest dream. The fact the nurse anesthiologists make more than comprehensive care doctors is testament enough to the generosity of comprehensive care doctors.
Maggie, You will have to define for me what you believe to be a fair amount of money for comprehensive care doctors. What I believe is irrelevant. Once one has basic necessities met, lifestyle is more related to expenses than revenue. But more importantly, the masses of medical students believe that comprehensive care is not “generous” enough for them in the wake of their $200,000 loans and fare inferior compensation of the specialties available for their liking. It’s time to get off the hi horse. The far price for a physician is the price the market will bare. For hospitalists, that number is approaching $200,000 a year, because that’s what the market says it’s worth. For outpatient comprehensive care doctors, who are being royally screwed by our government payment formula, that number is far south of $200,000. But based on the lack of supply coming from our medical schools, it should be rising quickly. But it isn’t, because of the flawed payment systems. So you ask me what is fair. Fair is what puts supply and demand back in balance. And that number is far north of the current $150,000 for comprehensive care.
The assumption that hospitals aren’t there to make money s absurd. Your example, I would bet is a fleeting example and not the norm. Get out of of the academia meccas that generate billions of dollars in research grants and billions more for harboring residents and convince me that the majority of community hospitals aren’t trying to drive revenue. Then you’ve got me hooked.
Also, remember, when you’re salaried and have a guaranteed salary, billing medicare for a level 1 visit is far easier than billing them for a level 3. You don’t care how much money you collect for your employer. Your salary is guaranteed. It’s no wonder the cost to medicare is less. It’s because the docs don’t care what they bill.
As far as outcomes at VA’s being better, I would suggest it’s easier having better outcomes when you are fully salaried, seeing 15 patients a day instead of 25. Lazy is a relative term. It also means not
fitting someone into your schedule”. It means waiting months to get an appointment. That was my personal experience. But the assumption that salaried docs don’t work less and see less patients is living in a fantasy world. Show me the data that salaried docs see just as many patients. I’ve shown you data to the contrary in hospitalist medicine.
You also state:
“No doubt, some people don’t work as hard if they are on salary. But my guess is that this is less likely to apply to doctors than to many other jobs.”
My experience says you are dead wrong on that guess.
I agree completely with culture being important at an institution. That’s why I’m so against government run health care.
Doctors are getting caught up in the race to the bottom that has robbed it patients, American labor, of its share of the growing economic pie over the last 35 years — earners under 25 percentile have actually fallen behind inflation. The minimum wage of 1968 (adjusted) is unbelievably the 25 percentile wage of today: $10/hr) — double the average income later.
The rich don’t grow any more livers or teeth to treat as they get richer.
I will echo Happy. Everyone mentions the VA funny how know one ever mentions the Indian Health Service a Government run Healthcare Mecca that it is right here in the ole US of A. Their stats would be great in subsahara Africa. I can tell you right now if I work for a salary what I’m gonna do. Instead of seeing 60-70 people a day that I currently do and I never say no to another physician or patient. I’m gonna show up 15-30 minutes late, see one patient take a 15 minute coffee break, see another take a 15 minute phone call from an old buddy, see another and talk about sports, wheat whatever, then take off for lunch. After I come back from lunch 30 minutes to 1 hr late, I’ll see another make some more phone calls, see another check my email for an hour or so, see another and talk for 45 minutes on how much rain we’ve had then call it a day. Oh all of those phone calls for patients that wanted to squeeze in sorry it’s 5 and I’m not on call tonight go to the ER. Sure you can replace me, in about 10 years. Our hospital doesn’t have enought to take call as it is, you want to knock one more off the list? Want to see that duplicated thousands of times across the country? And I’m one of those fresh young docs that is so ready to change the world and get rid of the “dinosaurs”. HA
Add 40 million to the system, Encourage Docs into early retirement, Salary them so they could care less about working hard, are you trying to make people wait for a year or is it two before they see their physician?
It is no mystery why prescription drug costs are vastly lower in Canada and Europe than they are here in the USA. Foreign governments negotiate with the pharmaceutical companies on drug prices. The result is that the pharmaceutical companies still find it profitable to sell drugs outside of the USA at 30% to 50% discounts, compared to U.S. drug prices.
Congress created the Medicare Part D prescription drug benefit. This law did two things: it guaranteed premium pricing for pharmaceuticals, by prohibiting Medicare from negotiating drug prices, and it provided hundreds of billions of dollars in U.S. taxpayer subsidies to pay for these premium drug costs.
Congress raised the specter of rationing, citing the VA experience when this agency was authorized to negotiate drug prices. The VA is a very small segment of the health care market. The drug makers make a calculated decision not to have the public relations nightmare which would occur were it known that they could still make adequate profits by selling drugs at steep discounts within the U.S.
But Medicare is so huge that the pharmaceutical industry would not walk away from this market, any more than it walked away from the Canadian or European markets. There is no problem with drug availability in Canada or Europe, and there would be no problem with drug availability within Medicare.
Even defense contractors and space agency contractors have to negotiate pricing with the government. The only industry which apparently gets to set its own government pricing, outside of the pharmaceutical industry, is the Iraq contracting industry, led by Halliburton. Every other industry has to negotiate.
Simply give Medicare the ability to negotiate drug prices, and drug prices for Americans will go down, while those for the rest of the world will eventually go up, and there will be a more equitable sharing in the global costs of pharmaceutical research and marketing.
Everyone– thanks for your comments:
Dear Not-So-Happy Hospitalist–
I’m sorry to have upset you. I think this all started when I said that I thought the “Screw Granny” (and turn your back on Medicare patients) is not the solution to the threat that Medicare would slash phsycians’ fees, across the board.
You responded with a rant about how the oath you took as a physician does not require you to “live in poverty or be a slave . . ”
The hyperbole, combined with the belligerence (“bullshit–I’m calling you on it). . was startling—especially because I made it clear that a)I don’t think Medicare should slash fees 10 percent across the board and b)I very much doubt that Congres will do so. There’s no need to get so excited.
But Medicare is running out of money. (The trust fund that pays hospital bills started paying out more than it takes in in payroll taxes 4 years ago. In 11 years it will run out of money and not be able to pay those hospital bills.)
I know you feel that this is not your problem. It’s “the government’s problem.” But it is everyone’s problem. When you say “the government” should fund X, Y, or Z, who do you think the government is? The funding comes from taxpayers.
Medicare taxes are already pretty high for median-income ($53,000 jointhousehold ) Americans. Medicare co-pays and deductibles are getting steep–expanding much faster than Social secruity.
Half of all seniors on Medicare have incomes below $20,000 according to MedPac’s 2007 report. Eighteen percent had incomes less than the poverty level (defined then as $9,060 for people living alone and $11,430 for married couples), and 49 percent had incomes at 200 percent of the poverty level or below .” (Income includes every dollar that comes into the household: Soc. Security, dividends interest, capital gains, wages, food stamps, whatever.)
When you say “Screw Granny” I doubt you mean that you would turn your back on an elderly couple earning $11,430 a year and tell them that if they want treatment, they’ll have to pay the bill themselves, because you don’t take Medicare.
There are solutions to Medicare’s fiscal problems–cutting the waste, cutting out unncessary tests and procedures, negotiating lower prices for drugs and devices, etc.
And, some specialists fees should be cut for certain services–particuarly servcies in “grey areas” of medicine where we have no evidence that the procedure provides Any Benefit whatsoever.
You write: ” The fair price for a physician is the price the market will bear. For hospitalists, that number is approaching $200,000 a year, because that’s what the market says it’s worth.”
Actually, if you want to go by what the “market” says a hospitalist is worth, here is the most recent data from Merritt Hawkins a national health care search and consulting firm specializing in the recruitment of physicians in all medical specialties.
According to Merritt Hawkins, in 2007, a hospitailst could expect to earn $145,000 a year at the low end while the average was $180,000.
These are not salaries set by the government. These are the salaries hospitalists fetch in the competitive market.
As it happens, I think that $145,000 is low for someone who graduates from med school with, say, $250,000 in loans, is in
his or her early 30s and may well want to buy a home and start a fmaily.
In other words, I don’t believe that “the market” is a fair aribtrer of what doctors need to be paid. Some are over-paid for certain servcies; others are underpaid.
To say that doctors should be paid “what the market will bear” is to say that doctors treating the most desperate patients should be paid the most.
For insterest, by that logic, a pediatric oncologist whose “market” is comprised of the parents of dying children should be able to earn a million, two million a year. There is no limit to what those “customers” will “bear” to raise whatever you ask to try to save their children: selling their home, bankruptcy, whatever.
The difference between healthcare and most other markets is that the customer has little leverage. He can’t postpone the purchase until the price comes down. When it comes to big-ticket items (and most of our healthcare dollars are spent on big-ticket items for seriously ill patients) he doesn’t want to “bargain-hunt”–even if he has time to comparison shop. If you need heart surgery would you want the guy who charges 30 percent less, because he has relatively little experience–or because he’s getting on in years, has gotten forgetful, and so can no longer “command the big bucks”?
In order to encourage more doctors to become primary care docs, hosptialists, family docs, and palliative care docs I have often said that I would like to see all or part of their med school loans forgiven if they go to regions of the country where there is a shortage in their specialty.
Other developed countires pay for the cost of medical education because they recognize that health care is a public good. Doctors earn about half of what they earn here (after adjusting for differences in cost of living, salaries in other professions, etc.) but they, too, see medicine as a public good, and do not emerge from med school with a crushing burden of debt.
I suspect that it is the debt that makes some young doctors sometimes sound bitter. It’s a very hard way to start a career.
Jenga– Unfortunately Indian Services has always been an embarrassment to the nation. There is really no connection between Indian Services and the VA –completely different administration, rules, etc. But I’m sure Indian Services could use the reforms that helped upgrade the VA so much in the 1990s.
I can imagine that it’s discouraging to work in that setting, but it’s good that young doctors like you are willing to do this work.
Denis–
You’re right, American workers earn less than did
they did years ago. Even in prosperous times, shareholders and the highest paid Americans have taken a larger and larger share of the pie.
This has made economic mobility more and more difficult.
Gregory–
You are absolutely right.
Pharma and contractors in Iraq are the only businesses that don’t have to negotiate prices with the government.
Letting them simply set the price for their products is ridiculous. It is simply “pay-back” for campaign contributions.
Device makers also over-charge and that industry is growing by leaps and bounds.
I’ll be writing about how much we spend on drugs and devices soon–and how little of that money goes into reserach.
Adding up the drugs we buy retail in pharmacies, plus the drugs we pay for when we’re in the hospital, drugs administered in doctors’ offices and all of the devices (artifical knees, stents, etc.), my back-of-the envelope estimate is that drugs and devices acount for as much as 15 percent–maybe more–of our health care bill.
Cut those prices by a third, and you reap a huge savings. (My guess is that if you just look at Medicare spending, drugs and devices may account for more than 15 percent of the total since seniors are more likely to be over-medicated (on 8 or 9 medications) and much more likely to undergo procedures that involve installing devices.)
As you say:
“Actually, if you want to go by what the “market” says a hospitalist is worth, here is the most recent data from Merritt Hawkins a national health care search and consulting firm specializing in the recruitment of physicians in all medical specialties.”
According to Merritt Hawkins, in 2007, a hospitailst could expect to earn $145,000 a year at the low end while the average was $180,000.”
Once again proving that data is in the eye of the beholder. My data, from my society published less than 3 months ago ( you can find it on their website) says the average national hospitalist position is fetching $193,000 for all comers, with some areas and practice types fetching well over $200,000 a year. And speaking from experience and looking at the offers that come to me every day, your $145,000 is laughable. Your $180,000 maybe construed last years numbers, but given average income for hospitalists has risen 13% in the last year, I would suggest the basis for your argument is a old data and therefore inaccurate.
As you say:
“When you say “Screw Granny” I doubt you mean that you would turn your back on an elderly couple earning $11,430 a year and tell them that if they want treatment, they’ll have to pay the bill themselves, because you don’t take Medicare.”
If my business could not sustain itself on the backs of an insurance that paid me less than my acceptable fee, I absolutely would tell that elderly couple that they need to find another doctor. They can use the services of the county health department which is paid for by their tax dollars. They can ask their county medical society for help in finding a federally subsidized health clinic that operates on a sliding scale. They can search out free clinics that doctors provide voluntarily on their own free generous time (if they are still able to do so after working 60-80 hours)
If my business could not be operated on the substandard payment rates of Medicare, I would tell all my patients to go find another doctor willing to put up with it. And I would feel bad for the patient, but not guilty. Their insurance let them down, not me. That means patients earning 1 million a year or 10,000 a year, would both take a hike.
By the way, I am quite-so-happy, since I, as a hospitalist, have left the economics of Medicare and am being paid based on market factors (the real ones). My economic experience as a hospitalist is nothing like the out patient comprehensive care docs who are suffering into extinction because of the flawed payment systems of Medicare. When you try and tell me, a physician, that I should accept what ever payment is given to me because I took an oath. I’m calling you to step off your high horse and return to reality. Doctors make a living and earn money just like every other profession in this country. My oath has nothing to do with my paycheck. If you want to call me greedy for screwing granny, granny has no more a right to my services than she does to yours. If I choose to tell granny it’s up to her to find another sucker doctor willing to book another 10 people a day just to maintain revenue neutral, so she can sit in their waiting room for 3 hours, that’s my right. And it’s her right to struggle to go find another doctor still willing to accept financial ruin. Eventually, when comprehensive care docs all exit the system, the change necessary to save the field will occur. Until then, your position that docs should just accept it because we took an oath is the reason we are in the position to begin with. Because the comprehensive care docs have accepted their own financial demise and not stood up for themselves. It’s time they did so. And the only way to do that is to screw granny. Because an angry granny has far more political clout than an angry doctor. An angry screwed over granny is the only way change will happen. Until then, when her doctor fires here from his/her clinic she can get in line for that 3 month waiting list at the federally funded, subsidized clinic (that’s what the wait is in my neck of the woods). Or she can go to the ER like everyone else.
Maggie,
The issue of the government negotiating drug and device prices is not as straightforward as it appears.
First, according to a CMS official who presented at a conference that I recently attended, CMS does not have the expertise in house to negotiate drug prices. He said that CMS would have to higher a pharmacy benefit manager (PBM) to do it for them. Since three large PBM’s – Medco Health Solutions, Express Scripts, and CVS Caremark control most of this business and cumulatively represent far more lives than the number of people receiving Medicare, it’s not clear how Medicare can expect to receive significantly lower prices unless it resorts to a far more limited formulary like the VA does.
A Europe based pharmaceutical executive recently told me that most other countries allow two drugs from a given category on the formulary – one based on price and one based on efficacy with the efficacy based drug generally priced about 10% higher. In theory, I suppose we could have every brand name statin drug submit a bid for how low it would be willing to sell to CMS in order to be included in the formulary. One or two could be chosen and the others would not be covered at all. Or, if CMS opted for a tiered formulary, it could ask for bids to be included in the first tier, second tier or third tier.
The same CMS official that appeared at the conference also made the point that some drugs may work well for 60% or 70% of the patient population that needs them but a different drug in the same category might work better for the others. If you’re in the group that needs the drug that didn’t make it onto the formulary, tough, I guess. You get to pay for it yourself or, at best, you have to pay a much higher percentage of the cost.
With respect to generic drugs, which now account for about 65% of all prescriptions (but less than 20% of the dollars spent on drugs), these are actually already cheaper in the U.S. than they are in other countries, according to McKinsey.
Finally, the ultra expensive new biotech drugs to treat cancer and other diseases are the fastest growing piece of the drug industry. If there are no substitutes, drug companies would price them the same or close to the same throughout the world. The choice each country would then have to make would be to decide whether or not to pay for it based on cost-effectiveness criteria or QALY metrics. That is, if it only extends life by a couple of months but costs $100K for a course of treatment, perhaps we should just say no to payment even though it has FDA approval. Personally, I support this approach but we as a country do not seem prepared to go there, at least not yet.
With respect to devices, you have focused in the past on whether they extend lives or not. In the case of stents, for example, even if they don’t extend lives or reduce the incidence of heart attacks, if they significantly reduce the frequency of angina, that’s no small matter to a heart patient. Angina is not only uncomfortable, it creates anxiety as well. Reducing its frequency is, I think, a significant quality of life improvement even if the research might show that it doesn’t result in a longer life than less expensive medical therapy might. The most popular measures used to compare healthcare system quality across the world are infant mortality (which has significant definitional issues that vary among countries) and life expectancy. Quality of life issues, including pain and anxiety reduction are not addressed because, presumably, they can’t be easily or accurately measured. However, to those of us affected by them, they’re important and worth paying for, at least up to a point.
Barry–
I’m curious–who hosted the conference?
Barry–
Still intersted in who hosted the conference, but I also wanted to respond to a couple of specific points:
On angina: yes, I know it is uncomfortable and creates anxiety. My mother had it.
But we also know that a change of diet and exercise can do as much good–or more good–than angioplasty.
Doctors I have talked to say many patients just want a quick fix– do the angioplasty, get rid of the pain.
They don’t want to do the work of changing diet and lifestyle, even though, in the long term, they would be much better off.
Do I want to pay for someone else’s quick fix?
I guess I’d like him to try the change of diet and exercise for 6 or 9 months first. But I realize that “changing diet and exercising” is a lot, lot harder than it sounds. And I don’t blame people if they try and can’t do it.
And I certainly don’t want them to walk around in pain while suffering great anxiety . . .
On the notion that formularies in other coutnries are “one size fits all” ie. –that they either include the drug for everyone, or exclude it for everyone– this simply isn’t true.
(And this is the sort of thing that makes me wonder who sponsored the conference.
All of these formularies include and exclude drugs for patients who meet a certain profile. A drug that might not benefit someone over 65 who has never had a heart attack might be of great benefit to a 50-year-old who has had a heart attack. And so NICE and other govt agencies approve coverage for the patients who medical evidence shows will benefit.
As for CMS not having the “experts” needed to negotiate discounts–another red herring.
The VA has been very, very successful in negotiating discoutns. Maybe CMS could let the VA negotiators train their negotiators? Why would the VA be better at this than CMS?’
The notion that “govt’ lacks the expertise to negoatie” is simply not true.
AS for Pharmacy Benefit Managers– this is an extremely corrupt industry.
Search the WAll Street Journal and The New York Ties for stories. (Reed Ableson did a couple of very good ones, if memory serves.)
Barry points out that some drugs may work well for 60% or 70% of the patient population that needs them but a different drug in the same category might work better for others. I cannot speak for other medicines, but in cancer medicine, it is more like 30% to 50% of cytotoxic drugs, and 10% to 15% of targeted drugs that work for the patient population that needs them.
In regards to a different drug in the same category working better for others, with the efficacy rates being so much lower with targeted therapies, there has been a headlong rush to develop tests to identify molecular predisposing mechanisms whose presence still does not guarantee that a drug will be effective for an individual. Nor can they, for any patient or even large groups of patients, discriminate the potential for clinical activity among different agents of the same class.
Gene profiling tests, important in order to identify new therapeutic targets and thereby to develop useful drugs, are still years away from working successfully in predicting treatment response for “individual” patients. They will never be as effective as the functional profiling tests, which exists today and is not hampered by the problems associated with gene expression tests.
It amazes me that CMS doesn’t emphatically mandate oncologic in vitro chemoresponse assays as a requirement for obtaining chemotherapy reimbursement against ill-directed treatments. Profit, as we have seen, is a powerful motivating force. Among the private payors, at least, the profit motive is entirely consistent with the goal of these cell-based tests, which is to identify efficacious therapies irrespective of drug mark-up rates.
Happy Hospitalist–
I am glad you’re still happy. (seriously)
And I certainly believe that doctors have a right to stand up to Medicare and protest on the issue of cutting fees.
Where we disagree is to whether grannyies should become the victims.
You say that grannies have more political power than docs. Certainly the ARRP has power. But grannies who have average household income of $20,000 just don’t have much clout.
I’d like to see seniors and doctors get together on these issues.
For an interesting take on the complexities and difficulties of applying the VA drug pricing model and its highly restrictive formulary to Medicare, see: http://www.heritage.org/Research/HealthCare/wm1420.cfm
maggie-
disclosure-in training, i worked at 4 different va’s in 4 different states as a trainee. my wife worked at 2 different va’s in 2 different states as a trainee. i was an attending physician at one va for one year. my wife was an attending physician at a va for 3 years.
honestly, i can’t think of a single physician that we encountered over the years (and neither can my wife, i asked her) who thinks the va provides as good care as private practice on average, despite what the numbers you cite show. our definition of care is much more subjective, however, than whether the cholesterol number is forced into a category. certainly it is colored by how hard it is to obtain an mri immediately. now it is possible the va selects for people who like to be more thoughtful and spend more time per patient, but as noted above the culture of non-urgency that permeates the va system tends to overwhelm most everyone.
you draw comfort from the data sources you cite and your interviews with physicians. i don’t know who these physicians are, but overwhelmingly physicians who actually experience the va are telling you that the measurements are not painting an accurate picture. you might argue about conflict of interest etc, and that might be true, but as you do when no data is available, i draw on my experience and that of those around me. if your sources are va employed physicians, i would ask them their comparison points with private practice–how expert are they in making a comparison?
perhaps you are as expert as can be for someone who does not practice the art of healthcare. i can’t make you experience the professional frustration (i am speaking on the physicians side, although i am sure it is present on both sides)of not being able to diagnose someone who is pleading for an answer. you may consider it a waste to order a test that is rarely positive, but if we cannot predict in whom the test will be positive, should we not consider it? am i treating myself or the patient? who knows, but legislating what can and can’t be done according to guidelines does not seem to foster patient-physician trust to me. it’s good as long as you don’t have an unusual disease or unusual expression of a common disease.
almost lastly, the information you present regarding the mayo clinic is of interest to me. because in my anecdotal experience as a referral source to the mayo clinic- they don’t follow guidelines at all (which imo is fair because they are a super-tertiary referral source for tough cases), and as well, they frequently have the bestest and newest technologies and use them. not a model for cost savings, at least from the specialist side.
at least to me, the tone of your posts reads as one who is refusing to accept honestly provided expert observations, when they do not support your preconceived notions (maybe we all do this?).
imo, the happy hospitalist’s va experience is not unusual at all. be careful what you wish for.
regards
friendly anonymous
Anonyous–
thanks for your input.
But I always wonder why people post anonymously.
This rarely happens on this blog.
You have anecdotal evidence-but little medical evidence.
I think both can be important (see my post on anecotes and stats) but the lack of any refereces to medical juournal articles referring to evidence- based medicine at VA hospitals bothers me.
For evidenced-baed reporting on the VAsystem, try reading “The Best CAre Anywhere,” an excellent, recent book by Philip Longman about the VA.
a
a
a
a
.
The footnoes are filled wiht citations to medical reserach published in JAMA, NEJM on the high quality of care at the VA hospitals.
I agree with anon and happy. My experiences and discussions have led me to believe that working at the VA is akin to working for the city. Ten guys standing around watching one guy dig a ditch. A culture of laziness that you will never find a study on.
I’ve never worked at a VA hospital. However, it does seem to me that any discussion of the VA system should center around outcomes. Also, are there any data about patient satisfaction?
When a VA physician refuses to sign home health care agency orders for THEIR patient after THEIR patient is dishcarged from a private hospital after being seen by a private hospitalist because their VA refused to renew a financial contract with such hospital, it’s impossible to have that show up on a study. When a VA doctor REFUSES to SIGN orders for THEIR patient until THEY see THEIR patient in THEIR office in several weeks (which is unacceptable), and tells the private practice doctor to tell the patient to travel 100 miles out of their way to the neartest VA emergency room to get THEIR patient’s blood work drawn because THEY wont sign the order for the home health care agency, that is a culture of care that can’t be articulated in a nicely packaged study for academia.
When an entire VA department of out patient internal medicine signs off call at 5pm on Friday and diverts ALL their calls to a VA emergency room run 60 miles away being staffed by moonlighting residents and fellows (who could care less), when private practice doctor at private practice hospital can’t get ahold of ANY doctor in the department to discuss care plans, need for follow up labs and further evalation because VA docs only work week days, that is a culture of care that can’t be quantified on an academic study.
Sometimes, choosing not to measure what is painfully broken is the easiest way not to fix it. I would never ever ever ever ever subject myself or my patients to the culture of care that permeates within the government RUN health care. It is a culture that I have been embarrassed time and time again for both my fellow physicians, all the way down to the cleaning staff. When a radiology technologist tells you to take a hike, that they won’t drive in 15 miles to snap a chest xray on your patient dying in the ICU on a ventilaor, because they don’t feel like getting out of bed, and have no expectation of consequences, that is the culture of care that obstructs care. The pass the buck mentality runs rampant in VA care. That was my experience. That is not a local experience. And it is not something that you can quantify in a quality outcomes study.
TO put the VA out as the pillar of quality is so laughable it’s entertaining to watch you argue, because I know of all the intangible, just as important aspects of patient care that get lost oh so often in the culture of mutual disprespect known as Government Hospital
Just another perspective on first hand experience with the VA:
many patients of mine go there “for their physical” or “for their meds.” they won’t go for anything scheduled less than 3 months ahead of time because “you can’t get in.” Emergencies? Are you kidding? they go to the local hospital instead. I don’t know if the VA even has a traditional emergency room or not.
It’s more of a “get your physical and meds yearly” place. Not sure how that model exists without the external support.
This has been a fascinating discussion regarding the quality of VA care. Apparently there are quite a few ways to think about or define the quality of a healthcare system. They include: (1) Outcomes including everything from life expectancy to surgical procedures. There are, of course, many factors that affect life expectancy that have nothing to do with the quality of the healthcare system. (2) Process. I define this mainly as patients getting their routine screenings at appropriate intervals based on age and health status. (3) Patient satisfaction. Patients usually define this in terms of the three “A’s” – affability, availability, and last and LEAST, ability. (4) Culture. This is a provider concept that relates to how hard people work, how good they are, how they are rewarded, collegiality, etc.
Personally, I would define the quality of a doctor in terms of his or her clinical ability and communication skills first. Affability is nice but not required. The lead time to get an appointment should be reasonable as should the wait time in the waiting room prior to the appointment. If the doctor is backed up due to unforeseen circumstances, it shouldn’t be hard for the receptionist to let people know approximately how long the wait is likely to be.
From a healthcare system perspective, the most important aspect of quality to me is how good it is when I have a serious problem. If I need a CABG (which I’ve had), I hope the surgeon is very capable and has performed many such procedures both recently and over the course of his career. I hope the hospital nursing staff is competent and responsive. I hope the hospital has good procedures in place to minimize the probability of contracting an infection during my stay. Also, I hope the wait time to see specialists, get imaging tests and whatever else is required to diagnose my problem in the first place was reasonable. The same thought process would apply to patients with cancer or those who need an organ transplant, brain surgery, suffered a stroke, etc.
The European and Canadian systems have the reputation for being pretty good at primary care. If I have a serious issue and assuming I have decent insurance coverage, I would rather be treated here. If I’m uninsured, I would probably be better off (at least from a financial obligation standpoint) to be in another developed country.
Everyone– I realize that several of you have had bad individual experiences with individual (or 4) VA Hositals. But that really doesn’t give you an overview of what’s going on.
Below, a few individual responses, but first a note
I have visited VA hospitals, where I interviewed very intelligent doctors who liked their work. (I found these docs myself; they were not recommended by the VA. And yes, they had also worked in other places.)
I also have interviewed very satisfied VA patients and relatives of VA patients.
But, FRIENDLY ANONYMOUS, I don’t rely on my own personal opinion–just as I wouldn’t rely on Happy Hospitalist’s personal opinion or yours or your wife’s.
Generally speaking, I turn to expert physicians– doctors who have researched a subject intensively (and who have no axe to grind) for expert opinion.
Here is Dr. Donald Berwick, (regularly voted on of the 10 most important men in American Medicine) and founder of the Institute for Health Care Improvement on the VA:
“The Veterans ADministration is setting the pace in the nation for demonstrating a real, systemic focus on quality. It’s especailly impressive because this is a massive system that works in a fishbowl, is under tremendous scrutiny and has constrained resrouces.”
Berwick bases this in IHI’s extensive reserach as well as medical reserach I cite below.
FRIENDLY ANONYMOUS– Let me suggest that you read some of IHI’s work on over-testing (and the risks for the patient) and docs who don’t follow guidelines (Note, we’re not talking about rules, but guidelines. And Yes, Mayo does follow guidelines, though docs can stray from guidelines in individual cases—usually after consulting with other docs. No Lone Rangers at Mayo.)
Let me add, as I have said repeatedly, since 2000, the Bush administration has failed to give the VA the funding it needs to keep up with the rise in the number of patients going to the VA (in part because of the war, in part because as its reputation rose in the 1990s, more patients started going to the VA).
As a result, there are now long waits for appointments. Google the problem and you will find a lot of Congresional testimony and concern on the part of Republicans
as well as Democrats
BY 2005 THE NUMBER OF PATIENTS THE VA WAS TREATING HAD DOUBLED IN TEN YEARS TO ROUGHLY 7 MILLION. MEANWHILE THE VA, which has been squeezed by niggardly funding HAD MANAGED TO CUT ITS COSTS IN HALF–
Nevertheles, peer-reviewed medical journals have continued to publish stories about the VA’s success: “Creating a Culture of Qaulity: The Remarkable Transforomation of the Department of Veterans Affairs health Care (Annals of Internal Medicine, 1004) “Effect of teh Transformation of the Veterans Health Care System on the Quality of Care” (NEJM, 2003) “VA Hospitals Found Best in Overall Quality, But Not Everyone Measures Up” (Health Care Strategic Management, 2005) “Diabetest Care Quality in the Veterans Affairs Health Care System and Commerical Managed Care” (Annals of INternal Medicine, 2004).
VA Diabetes care was better.)
IN TERMS OF QUALITY: A 2005 RAND CORPORATION STUDY BROADCAT THE RESULTS: COMPARING MEDIXCAL RECORDS OF 600 VA PATIENTS WITH THOSE OF ABOUT 1,000 NON-VA PATIENTS WITH SIMILIAR HEALTH PROBLEM< RESEARHCERS FOUND THAT CHRONICALLY ILL PATIETNS WHO CAME TO THE VA RECEIVED 72 PERCENT OF RECOMMENDED CARE WHILE PATIENTS IN THE CONTROL GROUP RECEIVED ONLY 59 PERCENT OF RECOMMENDED TREATMENT. WHEN IT COMES TO PALLIATIVE CARE THE VA STANDS OUT: "Nowhere is the growth in hospice and palliatve care as rapid as at the VHA (Today's Hospitalist, 2004). ON PATIENT SATISFACTION, CHRIS--a good question. IN 2006: "Veterans continued to rate the care they receive through the Department of Veterans Affairs health care system higher than other Americans rate private-sector health care for the sixth consecutive year, a new annual report on customer satisfaction reveals. For VA Secretary R. James Nicholson, the news is affirmation of what he called "the greatest story never told," that the VA offers top-quality care for its patients. VA medical services received high marks during the annual American Customer Satisfaction Index, which has ranked customer satisfaction with various federal programs and private-sector industries and major companies since 1994. Veterans who recently used VA services and were interviewed for the 2005 ACSI survey gave the VA's inpatient care a rating of 83 on a 100-point scale -- compared to a 73 rating for the private-sector health care industry. Veterans gave the VA a rating of 80 for outpatient care, five percentage points higher than the 75 rating for private-sector outpatient care and 9 percent higher than the average satisfaction rating for all federal services. Happy Hospitalist-- On this blog we try to avoid words like "laughable" when talking about someone else's argument. You score the "culture of mutual respect" of a government hospital, but that is exactly the kind of culture we try to foster here--even when we diagree. Finally, you have said repeatedly that you are adamantly opposed to "government medicine"--so quite naturally, that would give you a bias against the VA. I think government medicine can work--but that doesn't make me think Walter Reed (run by the army not the VA) is a good hospital. NOr does it make me think that Mayo or the Cleveland Clinic are bad hospitals. It's a matter of looking at outcomes data, patient satisfaction, etc. Barry-- As you know, the Heritage Foundation is a coservative think tank with a strong commitment to privatizing all social services. It cannot bear to admit that the VA does a good job; and, since it is in bed with drugmakers, it believes that the most expensive drug should always be in every formulary, even if it is ineffective or unproven. The Heritage Foundation also regularly publishes facts that simply are not true. See The Conservatives Have No Clothes, a book by Greg Anrig. There are liberal organizations that also distort numbers. For example, PNHP distorts just how much private health insurance costs our health system. I have met and like many people in PNHP --and agree with many of their goals--but I would never use them as a source becauase they are so biased. I'm surprised you would cite Heritage. PCB-- YOu are right about the waits-- since 2000 this has been a problem. But my brother-in-law still goes to the VA for care (and he lives in Manhattan where there are many other choices. He also is on Medicare, and is comfortable enough financially to seek out private care. But he likes the VA--particuarly since a primary care VA doc solved his hearing problem. He had going to a couple of hearing specialists in private practice--no luck. But this doctor took the time. This seems to be part of what Friendly Anonymous minds about the VA culture: "it is possible the va selects for people who like to be more thoughtful and spend more time per patient, but as noted above the culture of non-urgency that permeates the va system tends to overwhelm most everyone." I think it's no doubt true that the VA culture is not a good fit for every good doctor. But overall, it's an impressive health care system. And it's the only place in American medicine which has fully integrated electronic medical records into care.
Maggie,
I don’t think the Heritage Foundation’s bias is relevant in this particular case, at least as it relates to the description of how the VA does business with drug companies.
According to Heritage, drug prices are set by statute. That is, the VA gets the lowest price given to any other federal buyer (except for Medicare and the FEHBP) under similar terms and conditions plus an additional discount of at least 24%. This is quite different from a team of VA negotiators sitting across the table from counterparts at each drug company to arrive at drug prices. The fact that the VA’s formulary is much more restrictive than the typical Part D plan is also clearly the case.
If Congress were to pass legislation that would apply the VA drug pricing approach to Medicare as well, it is less than clear how it would play out. I can easily see how drug companies are willing to accept the VA’s terms for a population that is not only comparatively small but is also a highly sympathetic group. If the VA’s prices also applied to the Medicare (and possibly the Medicaid) population, neither one of us can predict with any certainty how that would play out. The VA may well benefit from the fact that it is only accounts for a very small part of the drug market. As you know, economists call this the fallacy of composition, also sometimes called the importance of being unimportant. To scale up the approach to a much larger population could easily have significant unintended consequences including an adverse effect on the scope and pace of future innovation. Neither you nor I can forecast how applying the VA approach to the Medicare population will play out, regardless of whatever bias we may have.
As for seniors themselves, they are likely to be unpleasantly surprised if they suddenly find the formulary of drugs available to them is one-third the size that it was before. Older veterans, who can access Medicare for drugs not on the VA formulary, would probably not be pleased either. I don’t think seniors currently perceive that one of the likely consequences of Medicare either negotiating or legislating lower drug prices could be far less choice than they currently have. Maybe the list of available drugs could be cut by two-thirds without adversely affecting health. I don’t know one way or the other, but seniors are not likely to be pleased if it happens.
maggie,
I’ve noticed in discussions regarding govt delivered care in other contexts that waits, poor access, delayed testing and care are usually defended by the “of course there are excessive waits and delays, the system isn’t being funded adequately.”
I’m starting to think that’s the rule for such systems and cannot be explained away.
It has been argued before that when the care is free or “covered” for a population, the main (only?) way to control costs is to limit access to care. which is exactly what happens in the VA.
Hi,
It’s an excellent site and also has really useful information in it. Thanks
Hi,
Nice info at this post thanks!!! I really like it.
Hi,
Really nice post! Thanks for sharing such an informative article. Keep up the good work.
Hi,
This is inspiring; I am very pleased by this post. Nice info at this post thanks!!! I really like it
Hi,
I personally like your post; you have shared good information.
Hi,
This is really a nice post, you share good piece of information.
Yea, congess must do somethnig in this situation.