An Opinion about the Future of Medical Care

By George H. Rice, MD (retired)

On physician reimbursement, I think all physicians should be on salary.  The salaries could be based on local factors such as the Rockwood Clinic or Group Health, statewide clinics such as the Everett Clinic and national clinics such as Kaiser, Mayo, etc.  My friends in those settings seem to be happy with their salaries.  I think fee for service is a bit of a joke anyway, the insurance companies are going to pay you their set fee no matter what you charge.  Also, setting a salary would do away with unnecessary visits and extra tests.

Electronic records are a must and record banks need to be organized where all of a patient’s information is collected and can be easily tapped into by providers at any time.  In other words the medical data on an individual is obtainable almost immediately.  All provider visits are recorded, as are pharmaceuticals, lab tests, hospital visits, x-rays, CAT scan, MRIs, etc.  The biggest hurdle is communication between the disparate entities and the ability o f a provider to tap into the system when approved by the patient.  A wonderful example of how the system would work is the Cancer Northwest network, where no matter what office you visit, they have all your current information readily available.  Patients should also be allowed to tap into the record bank so they can be active participants in their own care and can read results or know what tests they have had or vaccinations they have received and when. 

The way we provide care needs changing.  I think it should be divided by age such as birth to 18, 18 to 65 and 65 to death.  The providers of care in those settings would be nurse practitioners/physicians assistants.  The initial providers would receive backup by physicians in their respective fields, say pediatricians for birth to 18, internists and gynecologists for 18 to 65 and gerontologists for 65 and older.  In addition other specialties would be available for consultations and some special cases such as obstetrics, cancer, heart care, etc. would have independent practices for that special treatment.  You notice I have not included family practitioners.  I think that is a bit of a misnomer.  They should be incorporated into the mix of pediatricians, internists or gerontologists.  I think, in today’s advanced medical care it would be extremely hard to be a “jack of all trades.”  Many family physicians do not have hospital privileges and do not do obstetrics or surgery today.

As an adjunct, I would add that the medical home would fit into the above setting nicely with four to six nurse practitioners/physician assistants in the home with one or two physician backups.  Also, it would work in the rural setting with the home being in the local town and the possibility of home visits a reality.

I think this would meet the need of the baby boomer population that is looming and also would be cheaper way to provide care for all our citizens.  I realize we need more gerontologists and that should be the focus of our “new medical school.”

Cost Effective Medical Care

By Rod Trytko, MBA MD

Affordability is a primary factor affecting health care insurance access. A primary driver of medical cost is utilization, and utilization is growing very rapidly. New technology and medical inflation magnify the cost effects of increased utilization. The result is insurance premiums with double digit annual increases, thus pricing many out of the market every year.

We can no longer afford to provide all the care that everyone wants. We must develop a strategy for rationing care and reducing costs in a generally acceptable manner.

One strategy to decrease utilization is to eliminate care that provides no benefit or may be harmful. Nobody can argue with the fact that unnecessary care should be totally eliminated from the system. Another strategy is to manage the value proposition of various medical interventions. We must make medical care more cost effective and of higher quality.

In a recent article in the Annals of Internal Medicine, Owens and Qaseem describe such a strategy for reducing utilization while preserving high value care.1 Their strategy involves the application of the following three steps.

Step one: assess the benefits, harms and costs of interventions. The benefit of an intervention can be estimated by multiplying the number of additional years of life gained by the quality of each year. Quality of life is a crude measure that can be estimated in a number of ways. A generally accepted way is the Quality Adjusted Life Year (QALY) model.

QALY assumes that the quality of an each additional year of life is as important as the year itself. Each year that an individual lives in perfect health is a QALY of 1.0. If the individual is in less than perfect health, the QALY is between 0 and 1.0. The scoring of the quality of an individual’s life is based on five equal dimensions: mobility, pain level, self-care, level of depression or anxiety and ability to conduct usual activities.2

Many current medical interventions are associated with harms. Harms can be short term or long term, and iatrogenic or random. They always are associated with costs and reduced quality of life therefore; they must be factored into any cost benefit analysis. Those interventions that only result in harms (Appendix, right of A) must be identified and aggressively eliminated.

Step two: assess the downstream net costs of an intervention. These costs should be included because they are real and would not have occurred if the intervention did not occur. Downstream savings are possible and should be included as well. Any subsequent costs or savings are a direct consequence of the intervention and must be included in the analysis.

Step three: assess the incremental cost effectiveness ratio of an intervention. Some interventions are more effective and cheaper than others, and some are less effective and more expensive. In general, choosing between those is fairly straight forward. The problem arises when an intervention is both more costly and effective. It is the incremental cost effectiveness ratio that must be assessed in order to determine the relative value of the more expensive intervention.

The authors finally group interventions into two broad categories: those that provide minimal or no health benefit and those that provide net benefit. While certainly effective in reducing medical waste, such categorization severely limits the ability to manage the various types of marginally effective care. I believe the primary reason why this was done was to avoid the complicated proposition of recommending a value of a QALY. Placing a value on QALY would permit a third and extremely valuable category of interventions where the marginal costs are less than the marginal value.

The determination of the value of a QALY is extremely complicated. Factors such as age, income, wealth, race and national origin are extremely important. Poor countries with limited resources value individuals who are productive members of society. In those countries, the young and the old are worth less than middle aged working individuals. Some countries simply value life less than others or choose to limit resources globally allocated to healthcare. Finally, some individuals choose to spend much more on the margin for an additional QALY.

The range of values for a QALY is huge. The World Health Organization places the value of a QALY at three times Gross Domestic Product (GDP) per capita, or about $22,000. The British National Institute for Health and Clinical Excellence places it at about $40,000.3 Not surprisingly, in the US the value is often quoted at $100,000 or more. No wonder the US spends much more on healthcare than others - we value each QALY more than anyone else in the world.

Once we decide on a reasonable QALY value, we then can expand our analysis to three categories of interventions in order to manage each very differently. First, interventions where the marginal benefit is more than the marginal cost (Appendix, left of B) should be fully covered and fully paid. Most public health interventions: vaccinations, prevention and wellness programs are in this category. Any management of those interventions reduces utilization and therefore overall health.4 Second, interventions where the marginal benefit is less than the marginal cost (Appendix, between A and B) should be covered and managed. This is the area where managed care must be permitted to creatively effect allocation and overall utilization. Third, interventions where the marginal benefit is not positive (Appendix, right of A) should not be covered and aggressively eliminated. Non-beneficial care causes harm and crowds out scarce resources for beneficial interventions.

Finally, once a cost curve is defined for each specific disease, we can actively bend the cost curve downward. Medical waste is rampant and medical profits are excessive.5 Even worse, those problems are very difficult to fix because each healthcare dollar saved is a dollar lost by someone else. Medical waste and profits have politically active constituents who do not care about access.

Our healthcare resources are scarce and must be utilized wisely in order to ensure access. Getting rid of interventions that are of no benefit, managing interventions of marginal benefit, encouraging interventions of high benefit and increasing the efficiency of all interventions will dramatically improve the access of healthcare to everyone.

Appendix

References

1. Owens, D.K., Qaseem, A. High-value, cost-conscious health care: concepts for clinicians to evaluate the benefits, harms, and costs of medical intervention. Ann Intern Med. 2011;154: 174-180.
2. Parkin, D., Rice, N. Statistical analysis of EQ-5D profiles: does the use of value sets bias interference? Med Decis Making 30:556-565.
3. National Institute of Health and Clinical Excellence. Guide to methods of technology appraisal. Accessed May 27, 2011. http://www.nice.org.uk/media/B52/A7/TAMethodsGuideUpdatedJune2008.pdf
4. Buntin, M.B., Haviland, A.M. Healthcare spending and preventative care in high-deductible and consumer-directed health plans. Am J. Manag Care.17(3): 222-230.
5. Fuchs, V.R. Eliminating “waste” in health care. JAMA 302(22): 2481-2481.

The AMA and You

By Rodney L. Trytko, MD, MBA

Changes in health care are occurring at an unprecedented rate and the path forward is a dismal one. Medical homes and acute care will be controlled by large corporations. The corporate practice of medicine will likely fail to achieve the two primary stated objectives of healthcare reform legislation – access to care and reduced costs. Those that support single payer approach will claim that now is the time for true reform.

More than ever before, all physicians need an organization that will protect our interest and those of our patients.

The ability of any entity to effectively advocate is based on its organizational strength, scope, and primary constituents. All three attributes are necessary. Let’s consider each attribute as it pertains to the AMA.

Organizational strength requires effective management and non-dues financing. The AMA clearly has the largest and most experienced staff of any physician society. AMA products and database supply vast revenue. Its lobbying staff, history, name recognition, marketing, and relationships cannot be rivaled by any other medical society. Coordination efforts with national specialty and state medical associations leverage the strength of all medical organizations. If an issue is at the national level, the AMA needs to be involved.

Scope is the second factor. The AMA has been providing effective advocacy for physicians on a national level for decades. Never has that been more important than now. National legislative efforts, regulatory issues, and a host of legal actions necessitate an AMA response and anticipatory actions.

The final attribute is primary constituents. The AMA House of Delegates had many spirited debates on health care reform. Support for Obama Care was clearly led by primary care, and was hotly opposed by southern states and surgical specialists.

After controversially supporting the original House Bill which included an SGR fix (worth about $300b), the AMA House decided upon seven guiding principles that the association would base further support of a health care reform bill. They were:
1. Cover all Americans
2. Expand choice, eliminate denials
3. Protect the patient-physician relationship
4. Repeal Medicare SGR
5. Reduce defensive medicine
6. Streamline administration
7. Promote quality, prevention, wellness
By my count, only two or three of these guiding principles were included in the final bill. Despite this and with no notice to the AMA House of Delegates, the AMA Board decided to endorse that bill. This created a real and possibly insurmountable division in the AMA.

So the AMA has an outstanding organization and a national scope. With so many important issues at the national level, what other entity can effectively replace the AMA? At the present time, the answer is none.

Who are the AMA’s primary constituents? Many of us are not real sure. I sincerely hope that the AMA will be able to resolve the current divisions for the benefit of all physicians.

Small practices: Adapting to survive

By VICTORIA STAGG ELLIOTT, amednews staff. Posted June 27, 2011

When she began medical school, Delicia Haynes, MD, a family physician in Daytona Beach, Fla., envisioned a practice of her own where she could care for those with and without insurance.

Dr. Haynes opened Family First Health Center in early 2009. Most days are devoted to primary care, although she provides some aesthetic procedures. The financial model is basic fee for service, but she is looking at setting up some form of hybrid concierge care.

"My peers think I'm brave," she said. "It's not for everybody. If someone needs the safety of a guaranteed paycheck, then it's not for you. It's a lot of headaches, but they are all mine."

A few decades ago, the majority of physicians were hanging out a shingle or working in a small practice with some sort of ownership stake. Today, more doctors are choosing to work in large groups or those owned by hospitals.
"Obviously, small practices are diminishing," said Paul Settle, MD, a family physician who recently sold his two-physician practice, Piedmont PrimeCare in Danville, Va., to Centra Medical Group, a regional health care system in Lynchburg, Va. "I'm not sure medicine is going to be a cottage industry going forward."
According to data released June 3, 2010, by the Medical Group Management Assn., 65% of established physicians hired, and 49% of those finishing residencies, landed positions in hospital-based practices in 2009. The most recent American Medical Association figures show that 25% of physicians were in solo practice from 2007-08. An additional 21.4% were in groups of two to four. Previous AMA data are not directly comparable, because different survey methods were used. But they do indicate that the number of physicians in small practices is declining. Slightly more than 37% of self-employed physicians were in solo practice in 2001, and nearly 26% worked in groups of two to four.

Just about any expert watching practice trends will say the numbers of physicians in hospitals and large practices only has gone up since these numbers were released. Management consulting firm Accenture on June 13 released a report that based on its read of MGMA and AMA numbers, health system hiring of independent physicians will increase 5% each year for the next three years, leaving only 33% of doctors self-employed.

Why practices are getting larger

Most surveys suggest that the current generation of physicians coming out of residency is more interested in work-life balance than previous generations, and has more of a need for stable incomes to pay off student loans. That usually means taking a staff job.

Students who graduated medical school in 2010 left with an average of $157,944 in loans, an increase of 1% from 2009, according to the Assn. of American Medical Colleges. About 13% carried debt of more than $250,000.
"I did harbor fantasies of my own practice when I started medical school, but then I realized that I didn't have an appetite for risk," said John Schumann, MD, an internist and assistant professor of medicine at the University of Chicago. He finished residency more than a decade ago; few of his peers are in private practice.
"I'm very pleased with my decision not to go into private practice. It just seems harder and harder. I don't have a lot of control over my practice, but my malpractice is paid. I have young children, and I very much like having a work-life balance," Dr. Schumann said.
In addition to a generational shift, there are economic pressures that make it more likely physicians who are more established will sell. Small practices are faced with declining reimbursements as well as the challenge of complying with a growing list of regulatory requirements and installing EMRs.
Many small practices are having problems recruiting new doctors.
"I have been my own boss for 25 years, but physicians have become more difficult to find. I obviously have mixed emotions, but [joining Centra Medical Group] is a good way to ensure longevity of the practice. I'm 58 years old. At some point, you have to figure out how to keep things going," Dr. Settle said.
13% of medical student graduates in 2010 carried debt of more than $250,000.
Before Family Medicine Clinic in Sibley, Iowa, was sold to Avera McKennan & University Health Center, based in Sioux Falls, S.D., the practice had two physician-owners and one employed physician, but it used to be a group of five doctors.

The owners, family physicians Douglas Miedema, DO, and Gregory Kosters, DO, sold the practice primarily to recruit and retain physicians after attempting to do so unsuccessfully for a year. From the hospital, they have received help integrating an EMR system and securing locum tenens coverage.
"We were not particularly interested in selling, but, with physicians leaving, we really had a difficult time recruiting. We needed to do it," Dr. Miedema said.
The ownership change has been in place for half a year, but Dr. Miedema said Avera has allowed the practice to continue doing what it does.
"A lot of our concerns were probably, in the end, more perceived than real. There's been some loss of independence, but little change in the patient-physician relationship."

In his GlassHospital blog on April 25, Dr. Schumann compared the demise of the solo and small practice to the easing out of the "yeoman farmer" in favor of large agribusiness.

"Also being relegated to mythic status is the yeoman doctor. ... The same kinds of issues are in play as with agribusiness: Consolidation brings leverage in negotiating contract prices; working for a large organization means economies of scale. The corporate entity takes care of overhead like malpractice, computer systems, even paying the nurses and medical assistants.

"The health care reform legislation ... passed by Congress in 2010 will only accelerate this process. Organizations that integrate care to provide high quality mean that the little guy will be left out in the cold. The sheer bureaucracy of the new changes (e.g. building 'accountable care organizations' and 'gainsharing risk') will make it harder and harder for solo practitioners and even small groups to survive on their own."

A study in the March 30 New England Journal of Medicine suggested that the recent wave of consolidation most likely would not be reversed, as happened in the 1990s, when there was a spate of hospitals buying practices and physician practice management companies forming as managed care took off.

"Because of all the changes in reimbursement, it will be harder to go back into practice exactly as they did it before," said co-author Robert Kocher, MD, director of the McKinsey Center for Health Reform and a nonresident senior fellow at the Brookings Institution. "It will be a different business than the one you would have left."

Many experts suspect that reimbursement pressures will become only stronger, especially in the wake of the 2010 health system reform law and other federal legislation that may reward or penalize physicians for integrating potentially expensive information technology and integrating practices for quality bonuses through accountable care organizations.

How small practices will keep going

Despite the pressures on small practices, no expert believes they will go extinct. However, if they are to survive and thrive, they aren't going to look like the small practices of even five or 10 years ago -- and they probably will have a strong relationship with a larger organization.

"It's really incumbent on each individual practice and each individual doctor to decide how they are going to adapt. Health care is adapting, and there's no question that we have to make adjustments," Dr. Miedema said.

Most experts believe that a small practice able to maintain independence will need stronger connections to other small practices or a large health system through some sort of physician organization, a common EMR or other affiliation arrangement.
"In a sense, it's the end of the small fragmented physician practice," said Paul Ginsburg, PhD, president of the Center for Studying Health System Change.
Brett Hickman, a partner who works on health care system integration issues in the Chicago office of PwC, said: "We're moving away from fragmented models of care to affiliated models. There are models by which practices can maintain some level of independence and still integrate in a way that is strategically and financially going to make sense for both parties."

A small practice may need to fill a specific marketing niche, such as Dr. Haynes' branching out into aesthetic and, possibly, concierge care. Small practices may operate in rural areas that can't support larger operations, or take advantage of a models that focus on keeping overhead to a minimum. Experts say profitable small practices most likely will incorporate the latest technology and hire nurse practitioners or physician assistants to provide some care.

"I'm sure there will be some successful small practices," Dr. Kocher said. "Small practices that are exceptional at caring for certain types of patients or certain types of diseases will do very, very well. The small practices that are going away are those that don't have some certain clear value for a group of patients."
No matter what the level of consolidation, most experts expect that there always will be some physicians who attempt to make independent practice work. Other industries have been through similar periods of consolidation, but there always are some who remain independent.

For example, the independent pharmacy used to be a staple of a community. Large chains bought many small pharmacies in the 1980s and 1990s, and three chains -- CVS, Walgreen Co. and Rite Aid -- tend to dominate in most metropolitan areas, with nearly 20,000 stores combined nationwide, according to the National Community Pharmacists Assn.

However, the NCPA survey found that 23,117 independent pharmacies were in operation in 2009, a modest increase from the 22,728 in 2008. Most offer services that the large chains do not. Likewise, there will be some doctors who will chose to stay independent and be able to do so.

"Thirty years ago, when I first went into practice, they said solo practice was going to be extinct," said Doug Iliff, MD, a family physician who has been in solo practice in Topeka, Kan., since 1986. "It hasn't happened obviously. It may go down to 2 or 3% of physicians, but it will never go away completely. There will always be people like me."

Staying in private practice offers its own rewards

By KAREN CAFFARINI, amednews contributor. Posted July 18, 2011

The number of small, privately owned practices continues to shrink as economic pressures and long hours take their toll on the owner-physician.
Sixty-five percent of established physicians and 49% of physicians hired out of residency or fellowship in a recent 12-month period were placed in hospital-owned practices, according to a Medical Group Management Assn. physician placement report issued in June 2010.
But private practice doesn't need to go the way of the dinosaur, experts say. There are many reasons -- both financial and personal -- why physicians should not sell their practices.
One reason is having more autonomy. If you have your own practice, you are the boss and you run your own ship, said family physician Sanford J. Brown, MD, who has had a solo practice in Fort Bragg, Calif., for more than 30 years.
You set your own work hours, implement your own philosophy of care, spend as much time as you want with a patient and are not strangled by policy like you could be when working for some larger medical groups, said Nina Grant, vice president, managing agency director, with Practice Builders, an Irvine, Calif.-based marketing agency for private physician practices.
"You can design your own office the way you want it," said family physician Roland A. Goertz, MD, president of the American Academy of Family Physicians. "If you can't be happy in that environment, I'm not sure what environment you could be happy in."
Maintaining a strong sense of personality is another reason to keep your practice.
"This is what people went into medicine for. Plus, doctors tend to be Renaissance people -- they can do a lot very well," said Dr. Goertz, whose practice is in Waco, Texas. He said many doctors are fascinated by the business side of the practice as well as the medicine aspect and have the ability and skills to succeed in both.
In addition, a practice can match a physician's values. Dr. Goertz lives in a church-aligned area where some doctors instill their spiritualism in their practices. "These physicians will more easily attract patients with similar beliefs. Patients feel very comfortable with them," he said.
You can create a legacy. When a doctor builds a practice, he or she develops trust between themselves and patients that continues to grow and becomes bigger than just the doctor, Grant said. It also includes paraprofessionals and other staff in the practice.
Other reasons why a physician should not sell his or her practice:

• You despise politics: Grant said large conglomerate-owned or hospital-owned practices are big businesses that often have the same hierarchies and politics that can be found in the business world.

• You have a loyal staff: You're paying your staff's salary so they're loyal to you when you have your own office, Dr. Brown said. Irene Doti, a spokeswoman for Practice Builders, said doctors like to keep their own staffs and some doctors have a difficult time relating to hospital staffs. Plus, Doti said some physicians hire family members, including spouses, to help run their private practices. "The reality is, if the doctor works for someone else, the family member probably won't be able to come, too," she said.

• You have guaranteed income: Once you sell your practice, you have no guarantee of an ongoing income, Grant said. Dr. Brown said the only real job security in today's medical marketplace is the patients. If one mismatched patient leaves your practice, there still are plenty of others. However, if there is a mismatch between a doctor and his or her employer, it could leave the doctor without a job.

• Your practice is filling a need: Dr. Goertz said there are certain areas in the country that will need independent small practices because their location doesn't attract a large number of physicians or large groups.

• You don't have to work around the clock: Dr. Brown said most areas have hospitalists, who free solo practice physicians from making those rounds. "That really freed up my time in the last 10 years," he said. Dr. Goertz said physicians can retain their independent practices, but share after-hours calls with other independent practices.

• Your practice can make a good income: "The biggest fear of some doctors is they won't be able to make it financially. I believe that is an irrational fear," Dr. Brown said. He said small physician practices like his can survive, provided doctors know the nuts and bolts of business. For instance, he said practices tend to be too heavy on the payroll side. "My rule of thumb is one employee per doctor," said Dr. Brown, who offers tutorials at his office to show doctors how they can successfully operate on their own. You can cut costs by not buying expensive décor and sharing overhead with other practices, Dr. Goertz said.

Grant said small practices can grow their income by bringing in additional cash revenue through ancillary products like weight management, hormone balance, allergy management, nutrition supplements and an on-site pharmacy. "Should someone's weight loss be managed by franchise owners or by doctors?" Grant asked. She added, however, that not all these ancillaries are allowed in all states. Doctors can't do pharmaceuticals in New York, for instance, she said.

• It makes you happy: Last, but not least, is the personal satisfaction factor. Experts say many established physicians and new residents went into medicine to be in their own practice, and that is what makes them happy. A heavy college debt load and other economic factors cause them to look for a set income and other perks of being an employee. But Dr. Goertz advised, "Doctors shouldn't look at just the monetary gain they could get from selling their practice. They need to look inside themselves and ask will they be happy."