Wednesday, May 2, 2012
Dr. Otis Brawley: 'The System Really Is Not Failing ... Failure Is The System'
(courtesy of Kaiser Health News)
Anyone going to hear a speech by Dr. Otis Brawley might think he or she could easily predict what Brawley will say. Since he's the chief medical officer and executive vice president of the American Cancer Society, you might expect him to urge doctors to aggressively screen all their patients for cancer, and to aggressively treat them as well.
You'd be wrong.
At a recent Association of Health Care Journalists meeting in Atlanta (where Dr. Brawley also serves as a professor at Emory University), he slammed everyone in the health care system for overuse of under-proven treatments. These themes are also in his new book, How We Do Harm: A Doctor Breaks Ranks About Being Sick In America.
Dr. Brawley's whole speech can be seen here, and here is a transcript of edited excerpts:
I spend a lot of time as chief medical officer at the American Cancer Society worried about where trends are going and what's happening and trying to make sure that people actually focus on relevant pertinent things. So first thing I'm going to say is always keep in mind that the leading cause of cancer and indeed the leading cause of heart disease is tobacco usage. Also please keep in mind that the second leading cause of cancer is the combination of very little physical activity, bad diet, which usually means high caloric intake and obesity.
At some point in time health care is going to so dominate commerce and so dominate costs in the United States, so dominate our economy it's going to cause our economy to collapse. What we've gone through in the last couple of years is going to be nothing compared to what we will go through when health care is 25 to 30 percent of every dollar spent in the United States. And that's only going to be in the next 10 to 15 years.
We have an amazing health care system. Or I should say a health care system with amazing potential that it is not meeting. When we had the conversation about health care reform, I can remember some of the politicians talked about how great our health care system is. And I was thinking 'gee, we're 50th in life expectancy. We're 47th in infant mortality right. Countries such as Cuba do better than the United States in those.'
There really is a subtle form of corruption in American health care. Who is at fault for this corruption? Quite honestly it's the doctors, it's the hospitals, it’s the hospital systems, it's the insurers. It's the drug companies, it's the lawyers and it's even the patients. Everyone is at fault for the fact that the system really is not failing. Quite honestly, failure is the system.
We have doctors who want money. We have companies that want money, they give — those doctors give unnecessary chemotherapy. In my business those doctors give unnecessary surgeries and treatments, unnecessary imaging. They make promises about screening tests that we don't know.
Then we have patients who consume too much health care. Patients who want things. We have patient families who are unable to accept that fact their comatose father with stage four, widely-metastatic prostate cancer, widely-metastatic lung cancer is dying. And they insist that everything be done.
Actually in my book I talk about how I still think I have post-traumatic stress disorder from what I did as a 28-year-old second-year resident to a man who had widely metastatic lung cancer for whom the answer was: 'We need to try to keep him comfortable because he's dying.'
But we kept him alive for an additional six weeks. And finally on the day that he died I was sitting at his bed — at the foot of his bed and I realized that he was on a ventilator. [I]t would be interesting to know what this guy would have thought of this, had he been able to think, because he was probably a redneck and I was this poor kid from Detroit sitting at the foot of his bed deciding how much air he would breathe in with every breath, how often he would breathe it, what his respiratory rate would be.
[H]is family could not accept the fact that he was dying and what we should do is try to keep him comfortable. They continuously said we need to give this guy everything possible. We would say: 'Do you mean everything reasonable?' And they would say: 'Everything reasonable is everything possible.'
That happens all the time. … [P]eople cannot accept that death is a part of life. Death is an imminent part of life. And so let's get back to how doctors promise people and indeed many of these people can't accept that folks die because we in medicine have subtly lied to them over the years and thought that we can do much more in medicine than we actually can do.
We started widespread prostate cancer screening in the United States in 1990. It was 2010 that the first study actually was recorded that told us that prostate cancer screening might save lives.
Dr. Otis Brawley
So we did it for 20 years because some people thought it might save lives. [W]e in medicine told people it does save lives and you should get it. My own American Cancer Society recommended every man over 50 get prostate cancer screening, every black man over 40 back in 1992, without adequate scientific data.
Of course the study in 2010, which is still questionable as to whether it saves lives, but the study actually suggests that it might, which was published with the study that suggests that prostate cancer screening actually increases the risk of death, by the way. The one study that suggests that it might save lives said that we had to treat 48 men in order to save one life.
Prostate cancer treatment with radical prostatectomy in the United States has a one percent risk of death. You can kind of start doing the math. There's not a lot of people saved.
[When I became] an assistant director at the National Cancer Institute and I have to go out [to a hospital] that is an NCI-designated cancer center. And there is the whole dog and pony show where they tell you how great the hospital is and how much service they do.
This [hospital marketing] guy explained to me how if his hospital announced they were going to do free prostate cancer screening in six weeks at a particular mall, and they would screen the first 1,000 men who rolled up their sleeve and said 'please screen me' - men over 50. He explained to me how much free publicity they would get off of that announcement. And how much increased business their chest pain center would get off that announcement. How much increased business their breast screening service, their women's center would get off that announcement.
If they screen 1,000 men, they'll have 145 abnormal. They're going to charge about $3,000 to figure out why each of the 145 abnormals is abnormal and that's how they charge for the free screening.
Now with this mall about 10 of that 145 won't come to this hospital ... Now the 135 that they have, 45 will die of prostate cancer and the other percentage they're going to get radical prostatectomy at about $30,000 to $40,000 per case. With a percentage they're going to get [radioactive] seeds and about $30,000 a case. IMRT radiation therapy at the time was about $60,000 to $70,000.
And then his business plan goes further. He knew how many guys are going to have so much incontinence that diapers don’t do it so he had in his business plan how many artificial sphincters the urologists were going to implant. And then he was a little apologetic because there is this new thing called Viagra on the market and that screwed up his estimate about how many penile implants he was going to sell because of guys who were upset about impotence due to prostate cancer treatment.
This is 1998. [I said] if you screen 1,000 people how many lives are you going to save. He took his glasses off, looked at me like I was fool and he said ‘Don't you know nobody has ever shown that prostate cancer screening saves lives. I can't give you an estimate on that.’
Quite honestly, a whole bunch of doctors have drunk the Kool-Aid. They don't actually understand that prostate cancer screening may not save lives. The fact that some of them make money off them helps them to not understand, of course.
And unfortunately doctors tend to confuse what they believe with what they know. That's actually something that we docs need to work on. We also need to realize that a profession is a group of people who puts its customers and the welfare of its customers above the welfare of members of the profession. A profession is a group of people who polices itself.
That's one of the reasons why when a group of doctor professional organizations a couple of weeks ago announced these are tests that we are overdoing and we need to stop doing so often. I actually thought that was a good thing. We're starting to finally realize what the real meaning of the profession is.
When I hear the politicians talk about death panels and rationing, we need to be talking about rational use of medicine. Not rationing but rational. And unfortunately that is not happening in the United States.
There is this drug called Prilosec. Suppresses acid in the stomach. Great drug. AstraZeneca only had one problem. Eighteen-year patent. Four years left on the patent.
Five billion dollar a year drug. Lots of money made off of Prilosec. ‘What's going to be our next multibillion dollar drug?’ Well they started this thing called 'operation shark fin,' the search for the next multibillion dollar drug.
They couldn't find a new drug but they found a very smart chemist who knew a little bit of patent law. You see Prilosec when it was made is a big molecule and - not to get too much into the chemistry - there is really two chemicals there and they're mirror image isomers.
Well, you have the pill Prilosec - the left suppresses acid, the right [side of the pill] your liver takes out sends it to the kidney and you urinate it out. But it’s the left [side] that's active.
Well the smart chemist realized it's just one quick easy chemical step in the lab to do what your liver does for you. Separate left from right. And so they separated left from right, they did a series of studies that they sent to the FDA arguing that this new drug, which we have patented called Esomeprazole is equivalent to the old drug.
And the FDA agreed that the new drug was equivalent to the old drug so the FDA approved it. It's equivalent in side effects, its equivalent in efficacy. And then they went to their marketing guys and they said how are we going to market this drug, the next multibillion dollar drug for AstraZeneca? And the marketing guy said 'we're going to package it as a big purple pill and then they said what are we going to call our next multibillion dollar drug? Let's screw them, let's call it Nexium.'
Okay, now I happen to go to Costco yesterday. A pill of Nexium is $6. A pill of Prilosec is $1 and a pill of generic Prilosec is 35 cents. Okay. Now one of the ten most prescribed drugs in the United States today is Nexium. At $6 a day. But, all the science tells us it was FDA approved because it was equivalent to something that costs 35 cents a day.
And we wonder why we have 18 percent of our GDP going towards health care.
By the way, about $8,000 per man, woman and child is what health care costs in the United States today. The number two country, which is Switzerland, is a little less than $4,000. Switzerland is fourth among UN countries in life expectancy and we're 50th. I don't think we get what we pay for.
You see, what we need to do and what we desperately need to do is not reform health care. We need to transform how we view health care. We need to become much more appreciative of prevention efforts. We need to reimburse doctors who coach and talk to patients far better than we are.
Today we give doctors who do interventions in patients a lot more money than they should be getting and doctors who talk to patients very little money. The incentive on the doctor today is to not talk to patients, just move them in, move them out and get volume.
We need to understand and appreciate science. We're not going to have improvements in our healthcare system until the mass population demands that doctors appreciate science, justify their recommendations and justify their decisions. We need the skeptical, educated consumer. We need people who consume medicine to think about health care the same way they think about buying a television set at a Best Buy.
Monday, February 27, 2012
The Misunderstanding of the Current Obama--Catholic Church Controversy
The Obama administration’s recent confrontation with the Catholic Church over religious liberty is emblematic of an administration that is callous towards the religious freedoms afforded by the First Amendment. Although only recently reported, and often misstated by the mainstream media, this conflict has been brewing for over a year and has become heated since August, 2011 when the US Department of Health and Human Services (HHS) held public hearings on their interpretation and implementation of the Patient Protection and Affordable Care Act. The Catholic hierarchy, led by Cardinal-designate Timothy Dolan, president of the US Conference of Catholic Bishops (USCCB), clearly and strongly voiced opposition to the mandate, proposed by unelected bureaucrat HHS Secretary Kathleen Sebelius. The mandatedirectsthat all private health plans throughout the country provide preventive services, such as screenings and mammograms to everyone to prevent disease. In a stretch of reason, HHSconstrues pregnancyto also be a disease and therefore, all private health plans must provide insurance coverage for prevention of pregnancy, including sterilization procedures, oral contraceptives, contraceptive devices, and abortifacients. Religious employers have always been exempt from offering such services under the protection of federal conscience laws. With the new mandate, Secretary Sebeliusexcludes religious institutions like Catholic hospitals and universities from the federal conscience clause and they are now subject to the mandate.
The mainstream media has often presented this controversy as an infringement on thereproductive rights of women and their access to contraception. Regardless of one’s stance on contraception, this has little to do with the controversy. At a time when abortifacient drugs (the morning after pill) are dispensed from vending machines on our college campuses, one can hardly claim that women do not have access to contraceptives. Rather, the media, even conservative cable news channels, has missed the real news. The important, earth-shattering issue relates to how it came to pass that religious institutions lost their religious exemptions under this present administration. Exactly how can a department of the government, directed by an unelected official, by the stroke of a pen, change federal protections afforded by the First Amendment? Under what legal structure does President Obama and his underling, SecretarySebelius, have the authority to force religious institutions to offer services that are clearly and categorically opposed to their core teachings?
Ironically, it is the Catholic hospital’s own mission statement that has rendered it undeserving of the conscience clause exemption under the new ruling. Catholic hospitals were established to provide health care to the poor and the disenfranchised of society, regardless of the patients’ religious affiliation or their ability to pay for services. Therefore, they are obliged to care for all, as directed by the Gospels. The irony is that if Catholic hospitals allowed only Catholic doctors to practice, employed only Catholic staff, and cared for, and provided services to,only Catholic patients, then they would be protected by the new,narrowly defined exemption to the mandate. Catholic churches and other places of worship are still exempt because their memberships are of the same religious affiliation. The Catholic Medical Association has clearly pointed out that thenewly defined law is so assiduously crafted that even Jesus and his disciples would not qualify for thereligious exemption. Likewise, Catholic hospitals and universities, because they serve everyone, from atheists tobelievers of all faiths, do not qualify for the religious exemption. One can be certain that the encroachment on religious freedom from this mandate will cause even further judicial challenges to the already beleaguered Obamacare legislation.
President Obama’s first solution to the dissent was to give the religious institutions a year to comply with the mandate. Having received an unexpected backlash to the mandate, Mr. Obama recently proposed a new compromise: have the insurance plans provide the contraceptive services for free. The savings they would receive from fewer pregnancies would more than offset their expense in providing the contraceptives. So, to understand the president, the solution to the infringement of religious freedom is to strong-arm private companies to offer services ‘for free’. Of course, if faced with a federal mandate, the insurance companies would comply and then quickly pass the cost back to the plan sponsors, leading us back to square one. The USCCB has already rejected this last charade. Unfortunately, the administration continues to dupe some well-meaning, but misled, Catholic leaders like Sister Carol Keehan, D.C., president of the Catholic Health Association of the United States. Sister Keehan would like to believe the president is sincere in promising to protect religious liberty as he stated personally to Cardinal-designate Timothy Dolan, at the White House in August. If the president were truly sincere, the solution is clear: restore the religious exemptions to all religious institutions.No one will go without her contraceptives. Nothing will be different than it is now. The president must just stop trying to force religious institutions, fundamentally opposed to contraception, to fund these services.
One must ask himself: ‘Why would the administration pick a fight with an institution that provides roughly a quarter of all the healthcare in the country, often to the uninsured poor and the most vulnerable in our society, at a time when we are facing a crisis in access to healthcare and skyrocketing costs?’ The answer lies in the hubris of this administration and their unceasing efforts to secularize our society to such a degree that all religious thinking and belief is ridiculed and belittled, to the point that God no longer has any place in public discourse. The First Amendment is often mischaracterized to support this viewpoint.
The administration’s ideological bent trumps even political expediency in bringing this issue before voters in an election year. The administration well understands that the president cannot be re-elected without the Catholic vote. Nonetheless, this has not refrained them from creating a quagmire that may threaten the president’s re-election hopes. Hopefully, all Catholics and religious citizens will be heard next November.
This administration favors a truly secular government where rights and liberties are dispensed by the government. Given by the government, these rights can be rescinded at any time, just like they were whenan unelected bureaucrat altered the conscience clause to suit the administration’s agenda. The president himself has often said that he is ‘tired of old worn out ideas’. Remember ‘change you can believe in’? Perhaps these old ideas include the founding principles of this country like the First Amendment of the Bill of Rights and the Declaration of Independence. Our founding documents are based on the principles of Judeo-Christian belief that all men are created equal and are endowed by their Creator with certain unalienable rights. God, not government, grants us these rights. It’s disappointing that a constitutional attorney like the president would have such disregard for these soundly crafted documents.
Alfonso Oliva, MD
530 S. Cowley Street
Spokane, WA 99202
Thursday, December 22, 2011
Medicare SGR Faces A Bitter End
Dear Medical Executives, President’s Forum, Trustees and Interested Physicians,
The 2011 Congressional legislative session comes to a bitter end today. Members of Congress will go home for the holidays in a rare standoff that will not result in a last-minute agreement to stop the Medicare SGR 27.4% fee-for-service program payment cut, or extend the payroll tax cut and unemployment benefits.
CMA is absolutely outraged that Congress will adjourn and let this devastating nearly 30% payment cut take effect. For a decade, CMA and organized medicine has been calling upon Congress to eliminate the Medicare SGR. All year, Members of Congress made commitments to CMA physicians and seniors that they would stop the cuts and adopt a long-term solution to the failed Medicare SGR physician payment formula. In the height of irresponsibility, Congress will go home for the holidays and deal a terrible blow to physician practices and their patients. Most physicians will not be able to sustain such a cut and remain in the Medicare program. Others could be forced to close their doors. Seniors in California are already experiencing difficulty finding physicians. This will have a devastating impact on access to physicians for California’s 5 million seniors and nearly 1 million military families.
Late last week, when negotiations failed between the House and the Senate, a bipartisan group of Republican and Democratic Senators crafted a short term two-month extension on the Medicare SGR, payroll tax cut and unemployment issues to avoid the devastating cuts that will occur next week. The Senate passed the measure with overwhelming support 89-11. However, under the direction of Speaker Boehner, the House leadership rejected the 2 month extension and are holding out for a longer term deal. The standoff will remain unresolved until Congress returns in January 2012.
CMA has been advocating for legislation that eliminates the SGR and adopts a longer-term path to an alternative payment system. Within the last few days, to avoid the inevitable, CMA supported the 2-month stop-gap on the Medicare SGR to avoid devastating cuts and a retroactive payment restoration.
Unfortunately, the Medicare SGR was tied to much larger controversial issues in the year-end legislative package. While no formal statements have been made by either the Senate or House leadership about their intent to return in January to stop the cuts, we expect Congress to return on January 3 rather than January 17 to address these issues. The House has created a conference committee to bargain over the differing House and Senate bills.
The Centers for Medicare and Medicaid Services (CMS) announced that they would hold claims starting January 1 through January 17 to avoid paying physicians at the lower rate and to avoid a retroactive reconciliation of claims in the event Congress acts in early January to stop the cut.
CMS said they will be forced to process claims at the lower rate starting January 18 if Congress does not stop the cut.
CMA encourages physicians to review their Medicare participation options in the CMA Medicare Participation On-Call Document available on the CMA website.
CMA will keep you informed as the debate continues. We have expressed our anger to our Congressional delegation for failing to keep their obligation to appropriately finance the Medicare program and to protect access to care.
Thank you for your efforts this year to restore the Medicare program. CMA will “fight like hell” in 2012 to develop a proactive Medicare payment alternative and to hold Congress accountable for these actions.
Elizabeth McNeil
Vice President
Federal Government Relations
California Medical Association
415 310 2877
Friday, July 29, 2011
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.
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.
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
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.
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."
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:
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.
- 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."
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