Summary: In Part 3 of “Myths & Facts about the Impact of Reform on Hospitals and Patients Who Need Hospital Care,” I addressed the fear that cuts in Medicare spending will threaten the financial health of the nation’s hospitals. Reform’s critics argue that hospitals already lose money on Medicare patients, and that if the government tightens its belt, they will lose revenues that they sorely need if they are going to provide high quality care. The truth is that, today, more efficient hospitals make money or at least break even on Medicare beneficiaries. The Medicare “cuts” will not affect needed care; they aim only at reducing waste, infections and inefficiencies that hurt patients. I also explain how Medicaid’s expansion will help hospitals.
Here, in Part 4, I respond to rumors that because government pays less than private insurers, hospitals will continue to shift costs to insurers, and thus, insurance premiums will rise. The truth is that private insurers are over-paying some hospitals, not because Medicare pays too little, but because large brand-name hospitals have more clout in the marketplace than insurers, and can force them to accept high charges. As reform regulations put insurers under financial pressure, it’s likely that they will begin to fight back. Meanwhile, states will follow Massachusetts in taking a closer look at “marquee hospitals” that charge more for basic services, without providing better care.
Other critics of reform worry that millions of formerly uninsured patients will flood hospitals, and we’ll all wind up waiting on line. The fact is that community clinics now care for many of the uninsured, and the legislation provides $11 billion in new funding for these clinics, enough money to let them continue to care for those patients, while treating 20 million additional patients, or almost two-thirds of the newly-insured.
Many of the uninsured who don’t have nearby neighborhood clinics now get most of their care in hospital emergency rooms; under reform they will find medical homes in new clinics. I also explain how the legislation provides incentives for primary care doctors and nurse practitioners to staff clinics. Many little-known provisions in the reform bill address the nation’s nursing shortage.
Some of reform’s most vociferous opponents object to the fact that the legislation prohibits construction of new doctor-owned specialty centers while restricting growth of existing facilities.”Lawyers can invest in hospitals,” they say, “why shouldn’t physicians –who know far more about medicine—take a financial interest in hospitals?” The post below spotlights peer-reviewed medical research that reveals how physician-owned medical centers cherry-pick patients and help drive health care inflation heavenward, while undermining the community hospitals that provide the less profitable services that we all need.
Finally, this post whacks the myth that hospitals cut a “sweetheart deal” with politicians. I cite Moody’s, the bond-rating agency, to argue that, over the long-term, the legislation will rein in sky-rocketing hospital bills by requiring hospitals to reduce errors, increase patient safety, and provide better value for our health care dollars.
MYTH #1: Because government payments to hospitals are so low, hospitals will continue to shift costs to private insurers, pushing premiums higher.
FACT: This is a canard that insurance lobbyists like to perpetuate because it helps justify climbing premiums. The non-partisan Medicare Payment Advisory Commission (MedPAC) has taken on exaggerated accounts of “cost-shifting” by showing that a hospital’s relative market strength determines what a hospital is paid by private payers.
MedPac points out that from 1994 through 2000, during the heyday of “managed care,” insurers had more power than hospitals in most markets: “managed care restrained private-payer payment rates.” But “by 2000, hospitals had regained the upper hand in price negotiations due to hospital consolidations and consumer backlash against managed care.”
Private insurers no longer tried to “manage care.” Huge hospitals had the clout to perform as many tests and treatments as they wished, without having to prove that the patient needed the procedure, and newly-consolidated hospitals could charge insurers as much as they pleased. They knew that the insurers’ customers wanted those large medical centers in their networks. Insurers “in turn passed along these costs through higher premiums to enrollees and employers,” MedPAC reports. “While insurers appear to be unable or unwilling to ‘push back’ and restrain payments to providers, they have been able to pass costs on to the purchasers of insurance and maintain their profit margins.”
Large hospitals with marquee names now have enormous power. Earlier this year, Massachusetts’ Attorney General reported that elite medical centers have been charging insurers twice as much as other hospitals charge for the same procedures. Insurers comply with their demands because they want “brand name” institutions in their networks. A 2008 Boston Globe investigation broke the story, revealing that hospitals such as Massachusetts General Hospital and Brigham and Women’s Hospital typically are paid 15 percent to 60 percent more for the same basic services that other hospitals provide, even though, when it comes to basic services, quality is not superior.
More recently, over at Managed Care Matters, Joe Paduda has highlighted a Health Affairs report which shows how “hospitals in California now occupy the high ground.” As the state’s hospitals consolidated they have forced insurers that need coverage in key areas to accept ever-higher rates: "In current health reform discussions and proposed legislation, providers' growing market power to negotiate higher payment rates from private insurers is the ‘elephant in the room’ that is rarely mentioned,” the authors write. . . . “A recent study has shown that in California, after a downward trend in hospital prices for private-pay patients in the 1990s, a rapid upward trend began about 1999 that produced average annual increases of 10.6 percent over the period 1999-2005. The study's authors concluded that the source of the near-doubling of California hospital prices remains "something of a mystery." Analysis of Medicare Cost Report data by the Medicare Payment Advisory Commission (MedPAC) . . . shows that how much it cost hospitals to treat patients increased only 5.5 percent per year during that period."
“The net is this,” Paduda observes: “hospitals' market power enabled them to raise prices by 10.6% while their costs only went up about half that fast.” The authors of the Health Affairs report conclude: “California is leading a trend that will be felt in many other states, and soon.”
But under reform, perhaps the trend can be stopped. As I noted in Part 1 of this post, reform regulation will put private insurers under financial pressure. If hospitals over-charge, it will be harder for insurers to simply pass the cost along to customers. Under the new legislation, insurance companies will have to submit justification for requested premium increases. Already, some state regulators are getting tougher.
As a result, insurers will be more likely to stand up to hospitals. Meanwhile, states like Massachusetts and California will be taking a closer look at variations in hospital prices. And perhaps the media will continue to expose hospitals that are gouging insurers. It’s a good story. On the other hand, both newspapers and cable television reap revenues from hospital advertising. The Boston Globe deserves credit for digging into the facts. I hope that other members of the mainstream media follow suit.
MYTH #2 When 32 million formerly uninsured Americans begin flooding our hospitals and emergency rooms, we’ll all find ourselves standing on long lines.
FACT: The final legislation increases funding for community health centers to $11 billion over five years (2011 to 2015). Today, community clinics care for 20 million people—many of them among the 32 million uninsured. With the new funding, clinics will be able to absorb an additional 20 million of the 32 million newly-insured patients who will be seeking care in 2014.
This provision takes effect this year; it’s likely that Washington will begin to hand out funding in December. Of course some of the formerly uninsured will need hospital care; clinics won’t be able to accommodate all of their needs. But many patients who now receive most of their medical care at an ER will find “medical homes” in new and expanded clinics that are open evening
s and week-ends. And if they receive ongoing care at a clinic, they will be far less likely to need hospitalization in the future.
Who will staff the community clinics? The legislation adds $1.5 billion to a medical school loan forgiveness program designed to encourage 15,000 primary care physicians to work in community clinics. Nurses and nurse practitioners also will play a vital role. To increase the nursing workforce, the law includes a loan repayment program that repays 60 percent of nursing student loans in return for at least two years of practice in a facility that has a critical shortage of nurses. The law also provides grants to nursing schools and academic health centers to enhance education and practice for nurses in master’s and post-master’s programs. These programs prepare nurse practitioners, clinical nurse specialists, nurse midwives, nurse anesthetists, nurse educators, nurse administrators, and public health nurses.
As I explained here, the nursing shortage has been caused, in part, by the fact that we don’t have enough nursing school teachers. As a result, nursing schools are forced to reject qualified applicants. The legislation establishes additional loan programs within schools of nursing to support students pursuing masters’ and doctoral degrees. Upon graduation, loan recipients are required to teach at a school of nursing in exchange for cancellation of up to 85 percent of their educational loans, plus interest, over four years.
This law also provides for “nurse-managed health clinics,” creating a new $50 million grant program to support innovative safety net providers. These clinics are designed to serve as crucial health care access points in rural areas such as Tyrell Count, North Carolina, where there are no doctors. As the Kentucky Herald Leader explains: “There's only Irene Cavall, a licensed nurse practitioner and the sole source of primary care for 4,000 residents spread out over 600 square miles. It's been that way since the county's lone doctor moved away two and a half years ago.”
Nurse-Family Home Visit Partnerships also will help take up the slack. The new law’s “maternal, infant and early childhood home visitation provision” adds $1.5 billion over five years that can help programs that send specially trained registered nurses into homes to visit first-time, low-income mothers for a period of 2 1/2 years, coaching them on healthy pregnancies and helping them cope with the realities of caring for small children. It’s much less likely that these mothers will turn up in ERs, seeking medical help for their babies.
MYTH #3 New rules restricting doctor-owned hospitals will leave us short of hospital beds.
Fact: It is true that after December 31, 2010, physicians will no longer be able to invest in hospitals to which they refer patients, and existing doctor-owned hospitals will not be able to expand. (There is a limited exception to the restriction on growth: if the doctor-owned hospital treats a higher percentage of Medicaid patients than any other hospital in the county–and is not the only hospital in the county–it can add beds.)
Why interfere with a physician’s right to invest in a hospital? Lawyers can own hospitals, why not doctors? According to the American Hospital Association (AHA) when physicians refer patients to facilities they own, they are tempted to “cherry-pick” relatively healthy well-insured patients, while sending difficult cases and uninsured patients to the local community hospital. In effect, they skim the most lucrative business, focusing on money-making procedures such as heart surgery, while leaving it to the community hospital to provide money-losing services such as burn units, ERs and trauma centers.
Research suggests that the AHA has a point. In 2006, Business Week reported on a study of heart hospitals in Arizona which found that about 21% of patients admitted to physician-owned hospitals undergo routine surgeries such as a heart bypass, but are otherwise relatively healthy. At facilities that were not doctor-owned, only 10% of patients fit that profile; “the vast majority of cases at these hospitals were more complicated and expensive to treat because patients suffered from multiple problems, such as diabetes and other chronic conditions.” Another study by the Texas Hospital Assn. (THA) found that the year after a physician-owned heart-imaging facility opened in one town, the cardiac care center at the nearby community hospital slid from a $524,646 net profit to a $20,786 net loss. "We're all for competition," THA spokesman Gregg Knaupe told Business Week. "Problem is, this isn't fair competition.”
That community hospital in Texas began losing money because it was treating many uninsured and Medicaid patients while the doctor-owned center welcomed well-insured patients. On average, Medicaid pays 70% less than Medicare, and Medicare often pays less than private insurers. Little wonder, then, that doctors don’t usually refer Medicaid patients to facilities they own. A study by MedPAC, confirming earlier work by the Government Accounting Office (GAO), reveals that physician–owned heart hospitals treat 75 percent fewer Medicaid patients and that orthopedic hospitals owned by doctors take in 94 percent fewer Medicaid patients.
Physician owners deny the charges, and claim that their focused surgical centers offer better care. But if facilities owned by doctors tend to treat easier cases it becomes hard to compare quality of care. As a study published in Health Affairs in 2006 observes: “Peer-reviewed research finds that lower unadjusted mortality rates in cardiac specialty hospitals [owned by physicians] are largely attributable to the fact that these facilities admit healthier patients. After adjusting for procedural volume and patient characteristics, mortality rates and outcomes were similar” to outcome at large non-profit community hospitals.
Moreover, even though the patients are healthier, MedPAC reports that care at specialty hospitals owned by doctors tends to be more expensive.
Finally, there is evidence that when physicians own hospitals, they are more likely to over-treat. A study published in Health Affairs, comparing "practice patterns of physician owners before and after they became owners” confirms that rates of use of [magnetic resonance imaging], physical therapy treatments . . . increased significantly” when physicians have a financial interested in the hospital. Business Week highlights a separate survey by the Center for Studying Health System Change which suggests that specialt
y hospitals owned by doctors may also drive up aggregate health-care costs by spurring demand for pricey elective surgeries.
The bottom line then, is that, too often, physician-owned facilities help drive health care spending higher, while providing care that is no better. Meanwhile, they undermine the community hospitals that we all need by siphoning away health care dollars that could support essential but low-margin service.
Nevertheless, reforms’ critics charge that by restricting the growth of doctor-owned hospitals, the legislation will leave us with too few hospitals beds. This is yet another myth. The truth is that we have more inpatient beds than we need in most parts of the nation—and excess capacity leads to over-treatment. As Dr. Donald Berwick pointed out in a 2008 speech at Famlies USA’s annual health care conference, after adjusting for differences in local prices and the underlying health of the population as well as the age and race of the patients–Medicare spends $3,000 more per beneficiary per year, in some parts of the country–for no apparent reason.
Berwick, who President Obama has tapped to head the Centers for Medicare and Medicaid, asked what high spending regions in parts of Louisiana, Texas, Florida, New York, New Jersey, and Southern California have in common. The answer: “32 percent more hospital beds, per capita, and 65 percent more medical specialists. . . . Supply drives demand. When more technology, more beds and more specialists are available, the extra resources are automatically used, without anyone thinking too much about it.” Outcomes are no better, sometimes they are worse.
I have often wondered why research shows that Medicare spends more in Louisiana than in other states—even after researchers correct for the low incomes and relatively poor health of the population. Then I discovered that Louisiana ranks second only to Texas in the number of doctor-owned specialty hospitals in the state. This helps explain both the number of beds, and the higher Medicare bills.
MYTH #4: Hospitals cut a sweetheart deal with Washington. Reform will do little to rein in hospital bills that have been climbing by over 7% a year.
FACT: As I noted in Part 3 of this post, when you consider who won and who lost under reform legislation, hospitals emerge as winners—for the short term. When it came to negotiating with reformers, they “got into the tent early,” and the reductions in Medicare increases that they accepted will be offset by an influx of paying patients.
It’s also true that our hospital bills have been spiraling– up more than 7% a year, from 2005 through 2007. In 2008, higher fee-for-service hospital spending once again spurred inflation; by year-end, hospital care accounted for fully 31% of the nation’s health care bill.
But as Moody’s, a bond rating agency that rates hospital debt, points out, over time “as governmental auditing and oversight of revenue is tightened, hospitals will be pressured to operate more efficiently, forcing spending cuts and mergers among smaller hospitals.” “After 2014,” Moody’s observes, “many key provisions will be implemented."
For example, beginning in 2014, the U.S. Health and Human Services Department will report every hospital’s record for medical errors and infections involving Medicare patients on its hospital web site, notes Consumers Union, publisher of the highly-regarded Consumer Reports. “It’s definitely a step forward,” says Lisa McGiffert who leads Consumer Union’s Safe Patient Project. “It’s not everything we wanted,” McGiffert adds. “But it will create a lot more attention on hospital acquired infections.”
In 2014, Medicare will trim payments by one percent for hospitals with the highest rates of medical harm as measured by “hospital-acquired conditions.” Consumers Union explains what the term means: “These include certain preventable infections and medical errors, such as serious bedsores, catheter-associated urinary tract infections and certain types of falls and trauma.”
Moody’s expects “additional Medicare cuts for high-cost, less efficient hospitals in high-cost markets.” As Moody’s analyst Mark Pascaris explains: “The key longer-term challenge for not-for-profit hospitals is reform's reliance on extracting long-term cost efficiencies from hospitals, probably resulting in diminished hospital revenues.” This is, of course, good news for patients. “More efficient” hospitals mean fewer errors and higher quality care as well as lower costs. Medicare also will be experimenting with ways to pay hospitals for value, not volume. Those that have relied on overtreatment and over-testing to stay in the black will be in trouble. And Moody’s notes, “We also expect hospitals will face more difficult negotiations with commercial and managed care insurers who themselves face increased scrutiny and fees and are most affected by sweeping changes in the legislation."
Finally, reform legislation calls for closer scrutiny of the federal income tax exemption that non-profit hospitals now enjoy. The bills requires that non-profits conduct a community health needs analysis at least once every three years, soliciting input from the communities that they serve. In addition, if they want to hold onto their tax-exempt status, they will be expected to be a little more forthcoming when it comes to helping the poor. They must notify patients of financial assistance policies through “reasonable efforts,” before initiating various collection actions or reporting accounts to a credit rating agency. Even after reform, some families will remain uninsured. But under the legislation, hospitals will no longer be allowed to charge uninsured, indigent patients more than they generally charge insured patients.
Going forward, the Internal Revenue Service will review the exempt status of hospitals every three years. In addition, the legislation requires the U.S. Department of the Treasury, in consultation with the U.S. Department of Health and Human Services (HHS), to prepare an annual report for the U.S. Congress on charity care, bad debt expenses, certain unreimbursed costs and costs incurred for community benefit activities.
Recently, an Illinois Supreme Court made headlines by denying property tax exemption to a nonprofit hospital. It’s likely that in the years ahead, these new standards will lead to debate as to whether and to what extent nonprofit hospitals are distinguishable from for-profit hospitals. Do they all deserve their tax breaks?
In Part 5 of “Myths & Facts,” I’ll consider this question: Under reform, will universal coverage mean that your health insurance premiums will climb?
Maggie,
I will disagree with you to some degree when it comes to physician ownership of hospitals. Most of the focus has been on specialty hospitals which do indeed cherry pick the most lucrative buisiness: usually orthopedics or cardiac surgery. These should be banned for all participants; physician owned and otherwise. If you do not offer the full breadth of services including a functioning emergency room, then you are not classified as a hospital, period. There is no reason to prevent physicians from ownership assuming that they play by the same rules and are not allowed to cherry pick.
We are currently engrossed in a big cherry picking type of practice anyways by the existing providers , since they are all advertising their “advanced, state of the art” (code for anything that costs alot and generates alot of profit) services and competing mightily to capture the paying patients needing these more lucrative services. You could make the same claims that large medical referral centers are cherry picking these patients from smaller community hospitals through heavy marketing and using their marquis names to the detriment of these smaller instituions which are then forced to rely on the less profitable services left over. Are they not unfairly cherry picking patients as well? When is the last time you saw a hospital advertise its state of the art psychiatric services or sell it’s excellent rheumatologists, endocrinologists, or infectious disease services? How does this differ from physician owned instituions?
You argue that physician owned facilities have higher utililization of medical services and this is likely true. But what is to prevent big health care institutions from pushing and incentivising their physicians to utilize more and more resources as well? We are steadily moving toward a model where physicians are employed by large health care centers, and I see the wide potential for leverage being placed on health care providers to drive utilization upwards as long as we remain in this fee for service mode. We wil still be faced with the tendency of overutililzation of health care services as long as we remain in the same fee for service payment model, and I do not know why you assume that hospital administartors will act any differnet from physicians. In fact I would be more worried that adminstrators will be more likely to act in a purely money driven mode to push utilization upward.The only difference I see is tht administartors and physicians will need to collude to do this to some degree, but where increased monetary incentives are involved, this will be all too easy to accomplish. Has anyone ever looked at hospital utiliztion where physicians are in salaried positions vs independent users of the hospitals services?
Keith-
Thanks for the comment.
I definitely agree that big brand-name medical centers also cherry-pick from smaller community hospitals by advertising their “state of the art” (read expensive and redundant) equipment and services. You should see the ads in Manhattan.
But I think reform is going to begin to address this. See Myth #1. Right now, these large medical centers have the leverage in the marketplace to demand high fees from private insurers. (See the Boston Globe story I refer to and the Health Affairs piece on hospitals gouging insurers in California.) What’s important to realize is that these hospitals are charging far more for very basic services–delivering a baby for an average-risk woman, etc. We’re not talking about specialized services that only a hospital with high-tech resources can provide.
But under reform, insurers won’t be able to just pass these higher charges along in the form of higher premiums. They’ll have to justify higher premiums to state regulators. This means explaining that hospital A has just raised its fees for certain services by 8%. and that it’s now charging 15% to 20% more than it costs an efficient hospital to deliver the servcie. ..
State regulators will be taking a much closer look at “surpluses” at these high-profile marquee hospitals, and how the money is being used (construction, adding beds that are not needed, adding spa-like amenities that are not needed. . )
Also, non-profit hosptials are going to be required to justify their tax-exempt status every three years. (See the end of the post) This suggests that they are going to have to begin taking more Medicaid patients, as well as uninsured patients (and there will still be uninsured patients) that now wind up at public hospitals and safety-net hosptials.
Some of those public hospitals are underfunded, and shoudl be turned into well-staffed community clinics rather than being under-staffed hospitals. (I know of one such hospital in NYC where most of the care is provided by unsupervised residents working very long hours. The people in that community would be better off with a community clinic. If they need hospitalization, they could then be sent to one of our marquee hospitals in Manhattan.)
I also agree that when phsycians work for hosptials some hospital administrators will push them to do more tests, admit more patients from the ER, etc.
I’m working on a story about that right now. (Docs who were not co-operative were “laid off.”)
This is why Medicare wants to move away from the fee-for-service model as soon as possible. We have to reward hospitals for value not volume–doing less and doing it well.
Dr. Don Berwick, Obama’s candidate to head up the Centers for Medicare and Medicaid has even talked about paying hospitals for empty beds. In Sweden, empty beds are a sign that the hospital is efficient– patients are not “bouncing back” as re-admissions because the discharge was done right in the first place; patients are not admitted who don’t need to be in a hospital, Patients who are admitted are less likely to pick up an infection in a patient-centered efficient hospital, and so they don’t stay as long.
In Sweden, hospital CEOs are very proud of having empty beds.
As Berwick puts it, hospitals need to begin to think of themselves as cost centers, not revenue centers. Their goal should be to achieve excellent outcomes while keeping costs down–not to grow revenues.
This means changing how hospital CEOs think about their jobs–and replacing many of them with a new breed of CEO— not an MBA, or a businessman, but a public health expert (MPH) or MD or NP who understands that more care is not better care and that higher quality and lower cost go hand in hand.
Berwick is very good at inspiring people and Medicare has the clout to change the name of the game. Going forward, hospitals and doctors who will be eligible for bonsues will be the ones willing to try new payment models–“bundling,” (which works at Geisinger) capitation, etc.
On your last question: We have good researach showing that at hospitals like the Cleveland Clinic and Mayo where docs are on salary (no bonuses) care is more efficient.
And we have reserach showing that when doctors are on salary and part of one fairly cohesive culture it’s much easier to get them to focus on Quality Improvement.
Since higher quality and lower spending go hand in hand this suggests that when docs are on salary you are more likely to see them working together to
make the hospial more efficient.
Docs who are in private practice and have privileges at a hospital are paid fee for service.
If one of their patients lingers in the hospital for 6 days instead of 3, the hospital, which is paid a lump sum based on the diagnosis, may lose money, but the doctor, who can bill for each day that he sees the patient, makes more money.
He has no particular resason to try to conserve hospital resources.
When I look at the Dartmouth research I note that many of the hospitals that send the highest bills to Medicare are used by a large number of docs in very lucrative private practices–hospitals in Southern California, for example. . .
I doubt that this is accidental.
The models that seem to work best are those that don’t see the doctor as an employee of hospital so much as a member of a collaborative group practice which includes docs and hospital.
I think that today, too many hopsital CEOs are not medical professionals–they are businessmen who view doctors as the hospital employees.
These CEOs are not particularly patient-centered. Theythey stress “productivity” (how many patients a doctor sees per hour.)
That needs to change. It all goes back to creating a collaborative culture –and putting patient welfare first. It’s been done, in different ways, in many places (Intermountain, Geisginer, Mayo, etc. Kaiser in N. California) and the Dartmouth research shows equal or higher quality outcomes at a lower cost.
Finally, in one of his most recent articles Dr. Atul Gawande reported that he and some other doctors at Brigham were talking about whether they should be on salary . . .
Tell the folks at McBride Orthopedic Hospital that their issues are merely myths.
http://tinyurl.com/2bl3wte
I will tell you that as salaried physicians (at one of the above mentioned hospitals) we have little incentive to go the extra mile for our patients and we don’t. When we were in private practice we were very concerned about all aspects of quality. We made sure we were always available.
No, we didn’t own a hospital, equipment, or self-refer. It meant more to own our business. Now we work for ‘the man’ and it is really depressing. The patients get their care, but no extras and we turn our pagers off as soon as possible. Soon it will all be like this.
Maggie,
Unfortunately “Myth #1” is not a canard. The hospitals have massive purchasing power in almost every urban area from Florida to New York, Illinois to California. I think it is only hopeful that a bunch of cranky insurance regulators will change the market dynamics and force hospitals to cut executive, physician, nurse and other salaries and benefits, and do the other things necessary to be more efficient.
The big bad insurers are for-profit beasts. It is not due to laziness or lack of incentive that they do not push back.
The only way to fix this one is to super regulate like Maryland (not a great outcome) or to bust up the hospital monopolies, which is also unlikely. This myth will not go away anytime soon, but will get worse.
Bill, Peter—
Bill–
You seem to have misread Myth #1. The point I am makng is that, in fact, large brand-name hospitals have huge market leverage.
Please read Myth # 1 again–perhaps I wasn’t as clear as I should have been, but I’m pretty sure you will see that you and I agree on this one.
Peter, you write:
” I will tell you that as salaried physicians (at one of the above mentioned hospitals) we have little incentive to go the extra mile for our patients and we don’t. . . . we turn our pagers off as soon as possible,”
I guess you are saying that, if the money isn’t there, it’s not worth trying to go the extra mile for patients.
Conceivably, you picked the wrong profession?
(Since the early 1990s, it has been clear that if a young person is mainly intrested in becomng wealthy, there are many, many easier ways to do it–
Being a doctor is a job. Everyone wants to paid to do their job. It just means more when you it is your own. Do you take better care of a rental car or your own car?
Peter,
In fact is is the non salaried who always keep a eye on the insurance of the patient. I know several instances where doctors/specialists on call for don’t come to take care of Medi-aid patients and ask hospitalists to care for them when they get called.For salaried doctors there is no tier system based on your payment ability. In U.K most doctors are salaried and patients do fine,less variation of care and better coordination.
Ray–
Thank you.
Yes, when docs are on salary there tends to be better co-ordination of care and less variation of care based on a patient’s income.
I recall talking to a Mayo clinic doc who explained he has no idea which patients are on Medicaid (Mayo takes Medicaid patients from Minnesota and two adjoining states) and who is uninsured (Minnesota has a surprisngly large population of legal immigrants.
Maggie it is a myth that physicians won’t come in when they are on call because someone is on medicaid. ER docs are legally not allowed to tell the physician on call such things. It is a clear EMTALA violation. I’ve never seen it happen EVER. Ray if you have seen such things looks like you should have reported it. Failure to report is a violation of ethical code as well.
Peter may have been saying that, but he also might have been saying that he has kids he wants to see at soccer games and a life of his own. We all are aware of most of the bad incentives of fee for service if you read this blog with any regularity. I think it is a weekly requirement along with only letting students in med school that are democrats, that people that watch Fox News should be drawn and quartered and Obama is a totally rad president. One problem of getting rid of fee for service is just that, you will lose service. It is the incentive to work in that extra patient, to want to grow your practice. If you pay me to work 9 to 5, sorry I’m leaving at 5, my kids are too cute and I’ve fulfilled my obligations. I’m not going to fall for a guilt trip by anyone that didn’t go to med school, go a quarter of a mil in debt or give up some of the best time of their lives by pulling call all night. That dog don’t hunt. There has to be a middle ground to where a physician isn’t a used car salesman, but they aren’t a teller at taco bell either. Paying someone whether they talk for an hour to every patient about the local basketball team and the price of corn or are efficient and getting stuff done doesn’t seem right either. I know fee for service has problems, but don’t act like straight salary doesn’t as well. It’s not perfect either.
Exactly the point Jenga–the service is lost. No more going the extra mile.
Jenga & Peter-
We have a great deal of reserach showing that care is less expensive (because there is less overtreatment) and outcomes are as good or better when doctors are not paid fee-for-service.
Of course there are always some people who are primarily motivated by money, who may not work as hard unless they are paid fee-for-service. But even when paid more to see more patients, they’re not our best doctors.
Reserach on workers in many fields shows that those who are mainly motivated by pay, promotions or other external rewards just aren’t as good at the job as those who are motivated by opportunites to do the job better. People in the latter group are interested in the work for its own sake–if you try to motivate them with money, you undermine their morale.
I realize it’s hard to believe this if you don’t feel this way. . .
But no one pays me extra to respond to reader’s comments on HealthBeat. Many bloggers don’t respond at all, or respond only occasionally. I do it because I think it makes the blog better, even though it takes a great deal of time.
Was the comment that fee for service aren’t are best doctor’s bait? I’ll bite. I know for a fact that is incorrect. Remember I work at one of the supposedly esteemed institutions that you tout on a regular basis.
The best doctors don’t want to work for a MBA administrator.
I don’t find it hard to believe about different motivations of people. I’m just playing devil’s advocate and trying not to paint wide swaths of people with a broad brush. You can’t say that if you are a fee for service physician the is no way you are a best doctor. “Best doctor” is a term that is getting thrown around with reckless abandon. Are they the “best” because their hospital pays for a survey? Are they the “best” because they cherry pick? Do they teach to the test? I have agreed with you in the past that taking quality measures down to the individual is frought with complications. It’s nice that you respond to your blog,obviously it is something you enjoy and makes it a nice place to visit. Your commentors don’t get paid either and I think they add a lot and I would imagine you learn from them. Just like a physician and patient. It makes you better.
Defending a portion of fee for service does not mean you are motivated primarily by money, again broad brush. Family is much much higher on my list and if I am going to see that last work-in patient, I can at least rationalize that it is for my kids benefit so they can go to college, etc.
Jenga–
I didn’t realize you were playing devil’s advocate (don’t think Peter did either)
And I definitely did not mean to suggest that docs who work fee–for-service are not our best doctors.
What I said is: “Of course there are always some people who are primarily motivated by money, who may not work as hard unless they are paid fee-for-service. But even when paid more to see more patients, they’re not our best doctors.”
I meant to say that people who primarily motivated by money are not our best docotors (or teachers or whatever.).
I believe that people are excellent at what they do if they care about the work for its own sake.
And medicine is such an intrinsically interesting and useful profession that I have to think that most very good docs would be caught up in the work for its own sake.
Peter-There are many excellent docs who work fee-for service. I didn’t meant to suggest otherwise.
Please see my response to Jenga above.
Maggie,
All though there are many benifical ideas incorporated in the present health care reform legislation your synopsis of what is going to occurr in American ERs is the “Real Myth” and you know it. ERs will become more crowdED, total expenses for ER care will increase and the ER cost growth curve will go up. It will put the entire program in jeprody. For every 1% increase in the ER expense growth curve you incease total US ER expeses about $120 billion dollars over the next decade. Most experts predict a 1-2% annual increase of ER growth curve under the present reforms. Primary Care will not alter this in the US just as it hasn’t in any other OECD country. You have put forth many well formulated defenses of the health care reform legislation. Myth #2 is not one of them.
M. Osler-
Thanks for your comment and kind words.
But I’m not convinced ED taffic is going to grow faster than it has in the past –at least not after 2014. I would expect growth to begin to level off, and ultimately (over 10years) fall.)
When community clinics expand capacity so that they can treat an additional 20 million patients after hours and week-ends, they are going to divert traffic from EDs. They’ll be taking many of the new Medicaid patients.
As you probably know, in recent years increased use of EDS has been driven by insured patients going to the ED for care because of:
•Lack of access to medical care outside the ED (such as same-day appointments with a primary care physician, or evening and weekend appointments);
•Lack of advice on how to handle sudden medical problems;
•Lack of alternatives to the ED (such as nurse advice lines or urgent care clinics)
Doubling the capacity of community clinics will certainly address (if not solve) this problem.
Secondly, Medicare plans to pay community clinics for “telemedicine” and for e-maling patients. A NP or PCP can “see” many more patietns by phone in an hour than they can “see” in person. And for the patient, “nurse lines” and other forms of telemedicine means that he can call during working hours without leaving his or her job.
PCPs at community clinics will be trained by specialists to do some jobs that specialists do now, just as more and more NPS will be trained to do many of the things PCPs do now. Greatly increased funding for nursing school educaiton and loans will mean many more NPs.
The Centers for Health System Change also reports that a growing number of patietns go to the ED for non-urgent care, and describes how EDs are learning to redirect these patients to community clinics: “A Miami ED added a nurse practitioner to determine which patients could be treated in a clinic setting and administrative staff to schedule appointments with primary care or dental clinics on the same day or within three days, depending on appointment availability and urgency of the patient’s condition. Over the course of 18 months, ED staff referred an average of 50 patients a day to clinics—almost double what they initially expected and approximately 15 percent of total ED volume. The hospital also placed posters around the hospital and clinics to educate patients on the types of conditions that can be treated in a clinic rather than the ED.”
(Nationwide, CDC reports that about 12% of patients going to EDs don’t need urgent care.)
When clinic capacity has doubled (by 2004) it will be that much easier to find places to send these patients. ERs are required to screen them, but are not required to treat them if the patient is capable of walking out the door. (An executive order during the Bush administration clarified this)
IN addition the cost of treating patients in EDs shouldn’t grow as quickly under reform because both Medicare and private insurers are going to be paying less for many tests. And, insurers are going to be questioning the need for the tests.
Medicare & Medicaid also have boosted funding for investigating fraud and abuse–they are bound to look into blind over-testing in EDS.
Also, beginning in 2011, Medicare will not pay hospitals for an excessive number of readissions–this includes patients who “bounce” back to the hopsital or ER within 30 days of having been discharged.
Hospitals are already working to lower their bounce-back rate.
I wish you had given links to evidence that the ER growth curve will rise under reform. . . . I would like to see the arguments.
Finally, I would point out that health care reform is a process, not an event that will occure in 2014..
My hope is that by the end of the first 10 years of reform (2024) we will see significant structural changes in our health care system that will rein in health care inflation and improve the quality of care. It’s going to be a lengthy process– .There is no quick or easy way to do this.
Maggie,
The details of the above in defending your position that ER visits and costs will remain flat or go down may or may not be accurate, but the logic, although conventional, is faulty. According to you providing PCPs to the uninsured (doubling current volume) through community clinics and their increased capabilities through technological advancement will help accomplish the task of controlling ER visits and costs. The reasons why this is erroneous are to numerous to list, but if this is true then you must explain why from 1999-2009 ER visits went up over 30 million (CDC) despite the fact the number of patients seen in CHCs more than doubled (HHS), the onset of retail clinic phenomenon to 1100 sites (CCA), the explosion of urgent care centers in the last 10 years (pt vol approximately 126 million visits, UCAOA Harvard study)and the markedly increased # of worksite clinics (recently bought up by the retail clinic entities).
The 12% you mention as people not requiring urgent care is not the same number most experts quote (except ACEP) as “patients that could have been taken care of by their PCP”. Using the NYU ED algorithm that number is more like 60-70% (FL AHCA). The ED% of total US health care expenses has double in the last 20 years and continues to increase (1.9% in 1987 to 3.8% 2007 CDC & j of PH). Fixing the ER problem in America (as they must and have tried to in Europe)is not a numbers game but must be (for lack of a better word) “hunted down” the way we hunted down small pox. Not to do so will put reform and America in jeopardy. Some day I would like to debate this issue with you, but for now ask yourself this question. Why would 3 different private investment banking firms buy 4 of the largest national emergency physician staffing groups (12-15% of all ERs) over the last 4 years? Their strategic numbers for what’s going to happen is what I want to see. Have a nice day.
M. Osler-
Interesting. I will say the 12% number seemed surprsingly low . . .
And it has occurred to me that there is something cultural on here–particularly when I read phrases like “can’t get a same-day appt.”
If the problem isn’t urgent, what’s wrong with a next-day appt.?
I do believe that while some Americans get too little care, other (insured) Americans get too much care–we’re overmedicated, and undergo too many unnecessary tests & treatments.
We have been taught that there is a cure for everything when, in fact, some problems can’t be cured, and in other cases, you just have to wait things out.
It also strikes me that ERS should be more actively “re-directing” patients whose problems are not urgent–even if that means re-directing them to go to the community clinic the next day.
Docotors tell me about hospitals pressuring ER docs to admit insured patients who don’t necessarily need to be hospitalized . . . Is this why some ERS don’t re-direct patients?
Investment banks investing in ER staffing groups is troubling. We can’t afford to have ER care continue to be a high-growth business.
At the same time, as you no doubt know, the increased traffic in ERS in recent years is NOT more uninsured patients going to ERS. It’s more insured patients going to ERS. So hospitals are making money on many of these patients . . especially if they use them to boost admissions.
But people like Don Berwick (Obama’s candidate to head up Medicare) know this. One major goal of reform will be to persuade Americans that “less care can be better care.” And to cut down on the amount of unnecessary care that we recieve. And I would guess that means Medicare and Medicaid will be trying to steer patients away from unnecessary use of ERS.
There are various ways to do that-financial sticks for hospitals that are using their ERS to admit patients who realliy don’t need to be hospitalized; higher-co-pays for Medicare patients who use ERS on occasions when the situation clearly isnt urgent (a skin rash, etc.);
no co-pays when they go to a community clinic for preventive care (this is already in the legislation).
Investment bankers are often wrong– they may be investing based on the past, without realiz
ing how much things could change under reform.
M. Osler-
Interesting. I will say the 12% number seemed surprsingly low . . .
And it has occurred to me that there is something cultural on here–particularly when I read phrases like “can’t get a same-day appt.”
If the problem isn’t urgent, what’s wrong with a next-day appt.?
I do believe that while some Americans get too little care, other (insured) Americans get too much care–we’re overmedicated, and undergo too many unnecessary tests & treatments.
We have been taught that there is a cure for everything when, in fact, some problems can’t be cured, and in other cases, you just have to wait things out.
It also strikes me that ERS should be more actively “re-directing” patients whose problems are not urgent–even if that means re-directing them to go to the community clinic the next day.
Docotors tell me about hospitals pressuring ER docs to admit insured patients who don’t necessarily need to be hospitalized . . . Is this why some ERS don’t re-direct patients?
Investment banks investing in ER staffing groups is troubling. We can’t afford to have ER care continue to be a high-growth business.
At the same time, as you no doubt know, the increased traffic in ERS in recent years is NOT more uninsured patients going to ERS. It’s more insured patients going to ERS. So hospitals are making money on many of these patients . . especially if they use them to boost admissions.
But people like Don Berwick (Obama’s candidate to head up Medicare) know this. One major goal of reform will be to persuade Americans that “less care can be better care.” And to cut down on the amount of unnecessary care that we recieve. And I would guess that means Medicare and Medicaid will be trying to steer patients away from unnecessary use of ERS.
There are various ways to do that-financial sticks for hospitals that are using their ERS to admit patients who realliy don’t need to be hospitalized; higher-co-pays for Medicare patients who use ERS on occasions when the situation clearly isnt urgent (a skin rash, etc.);
no co-pays when they go to a community clinic for preventive care (this is already in the legislation).
Investment bankers are often wrong– they may be investing based on the past, without realiz
ing how much things could change under reform.
Maggie,
Good luck, we will not have to wait long to see what the future will bring concerning this matter.
Besides, the diseases, in all their forms really don’t care one way or the other.
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Thanks very much!