House committees are expected to introduce their versions of healthcare reform measures Monday. A public option of government-pooled coverage competing with private carriers is included in the consoldated bill that would extend insurance to the estimated 45 million uninsured and underinsured. That in itself will add to the spiraling increase of health costs now reaching $2 trillion annually.
Avoiding serious discussion, as far as I can tell, is an industry peer review aimed at lowering costs of unnecessary diagnostic tests and surgeries authorized by physicians more interested in their private income than their patients’ needs. Such a review system is tantamount at the Mayo Clinic in Rochester, N.Y., and its satellite branches and a medical cooperative in Grand Junction, Colo. In both cases, the medical costs per patient is among the lowest in the United States while simultaneously providing the best health care possible. Not coincidentally, physicians contracted by these two medical facilities are paid by salary or have no financial incentive to order redundant tests.
No question the American Medical Association if not its associated groups oppose a public option or single-payer system because the government reimburses physicians’ even less than private insurance carriers.
The latest and most typically-stated opposition comes from Wellpoint, Inc., the nation’s largest publicly-traded healthcare benefits company. “The Health Action Network supports building a strong, sustainable private-sector health care system — and opposes creating a government-run plan,” Wellpoint says on its website. “Many in Congress believe that creating a government-run health plan is better than working to improve the current system. However, a government-run plan will impose new costs and ultimately limit choices and access… Nonetheless, there are proposals in Washington that would threaten our ability to continue serving individuals, families and employers. We cannot allow that to happen.” WellPoint, which merged with Anthem in 2004, serves about 35 million members.
One measure focusing on how to pay for reform,will come out of the House Ways and Means Committee headed by Rep. Charlie Rangel, D-N.Y. He said the bill included a tax on Americans earning more than $350,000 per year that would raise $540 billion over 10 years. The tax would begin in 2011 and have higher rates at the $500,000 and $1 million income levels.
About 40 moderate and conservative “Blue Dog” Democrats as are most Republicans skeptical that reform costs are unsustainable as they apply to universal coverage . It prompted a statement by President Obama issued this week at the G8 conference in Italy: “There are going to be some tough negotiations in the days and weeks to come, but I am confident that we’re going to get it done.” Obama also has said he has identified nearly $950 billion in potential savings within the budget to help pay for reform.
Other Democrats such as Rep. Gerry Connolly of Virginia said the public plan is part of the bill and would save about $140 billion over 10 years.
Here’s the problem: With all these numbers floating around and fear mongering about health coverage many now enjoy but could lose and private carriers crumbling in competition with the feds — How do we know these politicians and special interests are not blowing smoke?
We don’t.
For example, former Treasury Secretary Paul O’Neill, writing an op-ed article in The New York Times, estimates $1 trillion in savings if rigid procedures to prevent new and the spreading of diseases would only be imposed by hospitals themselves. He cited infections acquired in hospitals, 300 million medication errors, pneumonia caused by ventilators and patient accidental falls.
“If we could capture all of it, the savings over 10 years would be five times what President Obama has said he will extract from insurance companies over the same period,” O’Neill writes. “The president’s vision of bringing down health care inflation by 1.5 percent a year over the next decade would not be a victory, but a capitulation to the enormous waste in the delivery of medical care.” He said such procedures are enacted and work, demonstrated by Doctors Brent James at Intermountain Health in Utah, Gary Kaplan at Virginia Mason Clinic in Seattle and Richard Shannon at the University of Pennsylvania — who have helped bring infection rates down drastically at their own hospitals and at others.
One thing I managed to learn in 26 years in the newspaper business was to attack an issue by going to a credible source within the system. I found essays written by a Long Island cardiologist and a New York surgeon making more sense than anything I have read from a politician or television commentator (specifically Ed Shultz of The Ed Show on MSNBC-TV, perhaps the most passionate proponent of a government option reform plan).
Dr. Sandeep Jauhar, the cardiologist, writing in The New York Times, said it is doubtful that doctors and other medical professionals would voluntarily cut their own income. “Few people believe the recent pledge by leaders of the hospital, insurance and drug and device industries to cut billions of dollars in wasteful spending,” he writes. “Most doctors I know say they are not paid enough.”
Business is not taught in med schools, Jauhar writes. He adds:
The rising commercialism, driven in part by increasing expenses and decreasing reimbursement, has obvious consequences for the public: ballooning costs, fraying of the traditional doctor-patient relationship. What is not so obvious is the harmful effects on doctors themselves. We were trained to think like caregivers, not business people… Of course, there has always been a profit motive in medicine. Doctors who own their own imaging machines order more imaging tests; (he knows) a doctor who owns a scanner is seven times as likely as other doctors to refer a patient for a scan…But financial considerations have never been as prominent as they are today, probably because so many hospitals and doctors, especially in large metropolitan areas, are in financial trouble.
In McAllen, Tex., a large group of physicians have expanded medical business enterprises to make Hidalgo County one of the most expensive health-care markets in the country. Only Miami—which has much higher labor and living costs—spends more per person on health care. In 2006, Medicare spent $15,000 per enrollee, almost twice the national average. The income per capita is $12,000. In other words, Medicare spends $3,000 more per person in the Mexican border county than the average person earns.
Dr. Atul Gawande, a surgeon, writing in The New Yorker Magazine, visited McAllen and found out why.
What he learned was McAllen’s healthcare system did not offer better treatment results despite the high cost of delivery. Its hospitals are ranked in the lower echelon by Medicare metrics despite being up to date in medical technological equipment.
Doctors, he said, were racking up charges with extra tests, services, and procedures.
To determine whether overuse of medical care was really the problem in McAllen, I turned to Jonathan Skinner, an economist at Dartmouth’s Institute for Health Policy and Clinical Practice, which has three decades of expertise in examining regional patterns in Medicare payment data. I also turned to two private firms—D2Hawkeye, an independent company, and Ingenix, UnitedHealthcare’s data-analysis company—to analyze commercial insurance data for McAllen. The answer was yes. Compared with patients in El Paso and nationwide, patients in McAllen got more of pretty much everything—more diagnostic testing, more hospital treatment, more surgery, more home care.
The Medicare payment data provided the most detail. Between 2001 and 2005, critically ill Medicare patients received almost 50% more specialist visits in McAllen than in El Paso, and were two-thirds more likely to see 10 or more specialists in a six-month period. In 2005 and 2006, patients in McAllen received 27% more abdominal ultrasounds, 30% more bone-density studies, 60% more stress tests with echocardiography, 200% more nerve-conduction studies to diagnose carpal-tunnel syndrome, and 555% more urine-flow studies to diagnose prostate troubles. They received one-fifth to two-thirds more gallbladder operations, knee replacements, breast biopsies, and bladder scopes. They also received two to three times as many pacemakers, implantable defibrillators, cardiac-bypass operations, carotid endarterectomies, and coronary-artery stents. And Medicare paid for five times as many home-nurse visits. The primary cause of McAllen’s extreme costs was, very simply, the across-the-board overuse of medicine.
Compounding the problem is that high-risk patients received little, if any, preventive care and those that did failed to follow the advise, Gawande said.
He reviewed protocol at the Mayo Clinic where patient costs are among Medicare”s lowest, $6,688 per enrollee in 2006, which is $8,000 less than the figure for McAllen.
The core tenet of the Mayo Clinic is “The needs of the patient come first”—not the convenience of the doctors, not their revenues. Decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers. It pooled all the money the doctors and the hospital system received and began paying everyone a salary, so that the doctors’ goal in patient care couldn’t be increasing their income. Mayo promoted leaders who focused first on what was best for patients, and then on how to make this financially possible.
The Mayo Clinic is not an aberration.
One of the lowest-cost markets in the country is Grand Junction, a community of 120,000 that nonetheless has achieved some of Medicare’s highest quality-of-care scores. Michael Pramenko is a family physician and a local medical leader there. Unlike doctors at the Mayo Clinic, he told me, those in Grand Junction get piecework fees from insurers. But years ago the doctors agreed among themselves to a system that paid them a similar fee whether they saw Medicare, Medicaid, or private-insurance patients, so that there would be little incentive to cherry-pick patients. They also agreed, at the behest of the main health plan in town, an H.M.O., to meet regularly on small peer-review committees to go over their patient charts together. They focussed on rooting out problems like poor prevention practices, unnecessary back operations, and unusual hospital-complication rates. Problems went down. Quality went up. Then, in 2004, the doctors’ group and the local H.M.O. jointly created a regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States.
Concludes Gawande:
Advocates of a public option say government financing would save the most money by having leaner administrative costs and forcing doctors and hospitals to take lower payments than they get from private insurance. Opponents say doctors would skimp, quit, or game the system, and make us wait in line for our care; they maintain that private insurers are better at policing doctors. No, the skeptics say: all insurance companies do is reject applicants who need health care and stall on paying their bills. Then we have the economists who say that the people who should pay the doctors are the ones who use them. Have consumers pay with their own dollars, make sure that they have some “skin in the game,” and then they’ll get the care they deserve. These arguments miss the main issue. When it comes to making care better and cheaper, changing who pays the doctor will make no difference…. The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes. You get McAllen…
Dramatic improvements and savings will take at least a decade. But a choice must be made. Whom do we want in charge of managing the full complexity of medical care? We can turn to insurers (whether public or private), which have proved repeatedly that they can’t do it. Or we can turn to the local medical communities, which have proved that they can. But we have to choose someone—because, in much of the country, no one is in charge. And the result is the most wasteful and the least sustainable health-care system in the world.
I highly recommend readers click on the New Yorker link and read the entire article.
Jerry Remmers worked 26 years in the newspaper business. His last 23 years was with the Evening Tribune in San Diego where assignments included reporter, assistant city editor, county and politics editor.