The Value of Socialized Medicine: The Impact of Universal Primary Healthcare Provision on Birth and Mortality Rates in Turkey

By Resul Cesur, Pınar Mine Güneş, Erdal Tekin, and Aydogan Ulker
NBER Working Paper 21510, National Bureau of Economic Research, August 2015

Abstract

This paper examines the impact of universal, free, and easily accessible primary healthcare on population health as measured by age-specific birth and mortality rates, focusing on a nationwide socialized medicine program implemented in Turkey. The Family Medicine Program (FMP), launched in 2005, assigns each Turkish citizen to a specific state-employed family physician, who offers a wide range of primary healthcare services that are free-of-charge. Furthermore, these services are provided at family health centers, which operate on a walk-in basis and are located within the neighborhoods in close proximity to the patients. To identify the causal impact of the FMP, we exploit the variation in its introduction across provinces and over time. Our estimates indicate that the FMP caused large declines in mortality rates across all age groups with more pronounced impacts among infants and the elderly, and a moderate reduction in the birth rates, primarily among teenagers. Furthermore, the results are suggestive that the program has also contributed towards equalization in the mortality disparities across provinces. Our findings highlight the importance of a nationwide supply-side intervention on improving public health.

From the Introduction

An  increasing number of countries are devising reforms aimed at improving public health and reducing disparities in the delivery of and access to basic healthcare services. Many countries have taken a primarily demand-side approach to extending health coverage, through mechanisms such as health insurance, user-fees on the basis of ability-to-pay, and conditional cash transfers. There are also countries that have opted for mainly supply-side schemes by extending government financed public provision of healthcare services or creating incentive mechanisms that financially motivate providers to expand their coverage.

The emerging consensus from the strand of the literature that focuses on the demand-side healthcare financing reforms is that extending health insurance coverage improves both access and utilization, at least among the targeted groups. However, the evidence on the degree to which these interventions limit out of pocket expenditures for services and improve health outcomes is mixed and inconclusive.4 The relatively few studies that have focused on supply-side reforms, on the other hand, find that increased availability of free or heavily subsidized healthcare improves both access and health outcomes.

In this paper, we study the impact of a supply-side healthcare intervention implemented in Turkey on measures of mortality and birth rates. The Family Medicine Program – called FMP hereafter – introduced in 2005, has extended basic healthcare services to the entire Turkish population under a free-of-charge and single-payer system that is fully financed and administered by the central government. The key operational feature of the FMP is the assignment of each Turkish citizen to a specific family physician, who offers a wide range of basic healthcare services at easily accessible walk- in clinics called the Family Health Centers.

The Turkish reform has essentially established a socialized medicine program for basic healthcare services since the services are provided free-of-charge by state-employed family physicians. This is in sharp contrast with most other interventions, especially those concerning demand-side incentives, which primarily focus on the impact of reducing out-of-pocket healthcare expenses. Additionally, there is a growing conviction among the leading global health organizations, policymakers and practitioners about the importance of achieving universal health coverage, i.e., ensuring basic and affordable healthcare services to whole citizens irrespective of their ability to pay.

Our results indicate that the FMP led to considerable health benefits. In particular, we find that the FMP caused a large and statistically significant decline in overall mortality rate with more pronounced and long-lasting effects among infants and the elderly. We also find that the FMP reduced the birth rates, especially among teenagers.

From the Conclusions

Over the past decade, the Turkish healthcare system has undergone a major transformation marked by significant investments in infrastructure, education of healthcare personnel, modernization of patient tracking and payment systems, and most importantly, the launching of the Family Medicine Program (FMP). With the introduction of the FMP in 2005, Turkey has essentially established a socialized healthcare system for primary healthcare services, under which every Turkish citizen is ensured a comprehensive package of healthcare service that is free-of-charge irrespective of the citizen’s ability to pay. This paper provides the first comprehensive analysis of the impact of the FMP on the outcomes of age-specific birth and mortality rates using province level data between 2001 and 2013. 

Our results indicate that the FMP has caused reductions in both mortality and birth rates. The benefits associated with the FMP appear to be the strongest among the most vulnerable populations, i.e., the infants and the elderly for the mortality rate, and the teenagers for the birth rate. Furthermore, the results indicate that the program resulted in a more rapid reduction in mortality in provinces with a higher baseline mortality rate. This implies that the FMP might have also contributed towards an equalization of the mortality disparities across provinces.

A handful of recent studies highlight the importance of supply-side reforms in improving public health and reducing disparities in health outcomes in countries like Brazil and Thailand. The current study builds upon this growing strand of literature by documenting evidence on the effectiveness of a nationwide supply-side intervention from Turkey, which emphasizes direct service provision and effective government oversight. The findings in this paper provide further compelling evidence in favor of the view that extending healthcare services to all citizens is critical to achieving universal coverage and improving public health.

The signature feature of the Turkish FMP is the assignment of every citizen to a new category of “family physicians,” who are the central and first point of contact for patients. Every Turkish citizen is required to register with a particular family physician, who is in charge of providing a wide range of healthcare services at neighborhood clinics that operate on a walk-in basis.

http://www.nber.org/papers/w21510

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OECD Reviews of Health Care Quality: Turkey 2014

OECD, November 25, 2014

From the Executive Summary

Over the past decade, Turkey has implemented remarkable health-care reforms, achieving universal coverage in 2003, and dramatically expanding access to care for the population. Accompanied by significant investment in the hospital sector and the establishment of a family physician system, the Health Transformation Programme (HTP) has delivered a high level of activity in the health system. The reforms benefited from ambitious leadership and a clear set of priorities (focused on expanding health insurance and improving access and, in the clinical domain, on maternal and child health). An evaluation culture built in from the beginning and a willingness to open up the reform process to external scrutiny were also fundamental elements. Centralisation and rationalisation of the health system’s governance was critical in achieving recent health-care successes.

http://www.oecd.org/publications/oecd-reviews-of-health-care-quality-turkey-2013-9789264202054-en.htm

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Comment:

By Don McCanne, MD

Turkey’s phenomenal success in health care reform is largely due to the establishment of the supply-side Family Medicine Program – a socialized health care system for primary health care services. Maybe we in the United States should be thinking beyond a single payer social insurance program. A single payer socialized medicine program built on a primary care infrastructure offers many advantages that may never be realized if we stop short with mere insurance reform. Just a thought.

Larger Issuers, Larger Premium Increases: Health insurance issuer competition post-ACA

By Eugene Wang and Grace Gee
Technology Science (Harvard University), August 11, 2015

Abstract

The Patient Protection and Affordable Care Act (ACA) has substantially reformed the health insurance industry in the United States by establishing health insurance marketplaces, also called health exchanges, to facilitate the purchase of health insurance. The ACA has increased transparency in insurance pricing and in issuer pricing behavior. Using 2014 and 2015 Unified Rate Review (URR) data, this study examines changes in health insurance premiums made by individual health insurance issuers in 34 federally facilitated and state-partnership health insurance exchanges.

Results summary: Our study shows that the largest issuer in each marketplace had a 75% higher premium increase from 2014 to 2015 compared to other same-state issuers. On average, the largest issuers raised rates by 23.9%, while the other issuers only raised rates by 13.7%. Moreover, the largest issuers’ premium increase affects a larger proportion of plans and do not seem justified from the standpoint of incurred claims-to-premium ratio. Projected Index Rate from the rate review process is used as a summary of an issuer’s premiums across different plans and Projected Member Months as a proxy for on-exchange market share. Our findings suggest that even after the Affordable Care Act, the largest on-exchange issuers may be in a better position to practice anti-competitive pricing compared to their same-state counterparts.

From the Results

But can the largest issuers justify their higher premium increases in 2015 by claiming that they had higher incurred claims relative to collected premiums in 2014, compared to other issuers? To test this hypothesis… (technical details available at link)…

Note that this is very similar to the Medical Loss Ratio (MLR) as formulated in 45 CFR §158.221, which is used to calculate the MLR rebates issuers have to give to consumers if the MLR falls below 0.80 (i.e. they spent too little on medical expenses) in the experience period. But the MLR calculation would require the denominator to include only premiums collected in the experience period net of taxes, licensing and regulatory fees, which data is unavailable in the URR (Unified Rate Review public use files).

To test if the largest issuers in each state have higher incurred claims relative to premiums in 2014, the following null hypothesis was tested… (technical details available at link)…

After omitting states where data on the largest issuer was not available (the largest issuers having only joined the exchange in 2015) and omitting issuers without experience data (issuers can choose not to input experience period claims and premiums data if they deem that the data they have collected is not substantially representative), the test statistic is eventually calculated… (technical details available at link)…

… with a mean of 0.02, which means that the largest issuer has a higher claims ratio of only 0.02. Figure 9 shows that the claims-to-premium ratio for the largest issuers is 0.85 while that for the other issuers is 0.83. Since the test statistic is 0.50139 with a one-tailed p value of 0.31092, we conclude at 5% significance level that there is insufficient evidence to reject the null hypothesis in states where this ratio could be calculated. The claims-to-premium ratio of the largest issuer is not statistically significantly higher than other same-state issuers. Even if it were significant, a 2.5% higher claims-to-premium ratio is unlikely to be sufficient to justify the 75% higher premiums increase that the largest issuer incurred.

From the Discussion

Overall, this study is important in light of recent market consolidation efforts in the health insurance industry. This paper provides evidence that even after ACA, the largest on-exchange issuers may be in a better position to practice anti-competitive pricing compared to their same-state counterparts. This evidence should be prudently considered in any antitrust debate.

http://techscience.org/a/2015081104/

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CMS seeks emergency review of request for more insurance information

AMA Morning Rounds, August 31, 2015

Congressional Quarterly (8/29, Subscription Publication) reported that the Centers for Medicare and Medicaid Services “is seeking an emergency review of its request to collect more information from health insurance companies in connection with the medical-loss-ratio data and risk corridor regulations, which both are part of the agency’s effort to fully implement the 2010 health law.” The agency said it found a “number of significant discrepancies in the 2014 benefit year submissions that insurers made.” CMS officials said in a filing with the Federal Register “that they are concerned that the agency ‘will be unable to verify the accuracy of the submission and validate the data needed to operate the MLR or risk corridors programs’ if it doesn’t get additional information.”

http://www.ama-assn.org/ama/pub/news/newsletters-journals.page

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Comment:

By Don McCanne, MD

This is scandalous. The co-authors of this article, Eugene Wang and Grace Gee (with Harvard degrees in Applied Mathematics), have shown that the largest insurance issuer in each federally-facilitated and state-partnered ACA insurance exchange had a 75% higher premium increase this past year than did other insurers in the same states. But what is really shocking is that they have shown that, based on claims-to-premium ratios, these excess premium increases are in no way warranted.

This should not have happened since the Affordable Care Act requires that at least 80% of the premiums be spent on health benefits (the medical-loss ratio). Now we learn that the Centers for Medicare and Medicaid Services found a “number of significant discrepancies in the 2014 benefit year submissions that insurers made” regarding medical-loss-ratio data. CMS is seeking an emergency review of its request to collect more information from the health insurers.

With the current merger activity of the nation’s largest insurers, we should be very concerned about their too-big-to-follow-the-rules attitude. The insurers contend that they need higher premiums because of their claims experience, yet they have failed to provide CMS with adequate, accurate data to show that they are spending at least 80% of the premiums on health care. This study strongly suggests that they are not.

It’s time to throw out the crooks and establish our own single payer national health program – one owned by the people. We aren’t going to cheat ourselves.

Moody’s revises US not-for-profit healthcare outlook to stable from negative as cash flows increase

Moody’s Investors Service, August 26, 2015

Moody’s Investors Service has revised the outlook for the US not-for-profit and public healthcare sector to stable from negative due to improvement across the industry’s fundamental business, financial and economic conditions. The outlook had been negative since 2008.

Following several years of flat growth, operating cash flow growth increased to 12.3% in 2014 from 0.3% in 2013.

Moody’s says factors driving the stronger operating cash flow are increases in the number of insured individuals and a reduction in bad debt, particularly in states which expanded Medicaid eligibility.

The outlook change to stable from negative expresses Moody’s views for the sector will neither erode nor significantly improve materially for the 12 to 18 months. Looking beyond that horizon, pressures linger.

“The not-for-profit and public healthcare sector industry faces long-term challenges stemming from who pays for care, how providers are reimbursed, and changes in patient behavior. These risks may weigh on profitability and growth,” says (Moody’s Vice President — Senior Analyst Daniel Steingart ).

https://www.moodys.com/research/Moodys-revises-US-not-for-profit-healthcare-outlook-to-stable–PR_333323

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Comment:

By Don McCanne, MD

It seems ironic to celebrate profits in the not-for-profit and public health care sector, but at least this Moody’s report does show that the not-for-profit/public sector has moved from negative to stable as cash flows increase. That is reassuring.

Nevertheless this industry still faces long-term challenges, especially based on uncertainties of future funding.

This sector is particularly important since it serves as the primary safety net for those who have impaired access for reasons such as being uninsured. So it is essential that a reliable source of adequate funding is always available.

How can we do that? Simple. Establish a single payer national health program which will fund the entire health care delivery system equitably. Part of that process involves converting the investor-owned, for-profit delivery system to not-for-profit status. Why? The primary mission of non-profits is patient service whereas the primary mission of for-profits is creating wealth by achieving a maximum return on investment. The former works better for patients than does the latter.

Although it is nice that the not-for-profit/public sector has temporarily stabilized, we could be assured of more funds in the future if the administrative waste of our entire system were eliminated. Single payer would ensure stability in our system well into the indefinite future… and beyond.

Quality Improvement: ‘Become Good At Cheating And You Never Need To Become Good At Anything Else’

By David Himmelstein and Steffie Woolhandler
Health Affairs Blog, August 27, 2015

The Centers for Medicare and Medicaid Services (CMS) has trumpeted the recent drop in hospital readmissions among Medicare patients as a major advance for patient safety. But lost amidst the celebration is the fact that hospitals are increasingly “observing” patients (or treating returning patients in the emergency department) rather than “readmitting” them. But while re-labeling helps hospitals meet CMS’ quality standards (and avoid costly fines), it probably signals little real quality gain and often leaves patients worse off financially.

Observation Status

In most cases, observation patients receive care in a regular inpatient unit, and get treated just like other inpatients. And in many cases, observation stays stretch out to several days: in 2012, 26 percent lasted two nights and 11 percent at least three. But from Medicare’s point of view, this is outpatient care, which leaves patients responsible for more of the bill, and ineligible for Medicare-paid rehab or skilled nursing care.

Hospitals started designating more stays as “observation” after Medicare’s auditors began disallowing the entire payment for some brief hospital “admissions.” Even though “observation stays” pay less than inpatient admissions, hospitals took a better safe than sorry approach, classifying many brief stays as “observation.” Between 2006 and 2013, observation stays increased by 96 percent, accounting for more than half of the apparent decline in total Medicare admissions during that seven-year period.

Observation Classification

Medicare’s recent adoption of penalties for readmissions offered hospitals a new incentive to shift some patients returning within 30 days of their discharge to observation status. A patient stay labeled “observation” doesn’t count as a readmission, allowing hospitals that might otherwise be fined for having too many readmissions to skirt the penalty.

About 10 percent of all hospital stays occurring within 30 days of discharge are now classified as “observation;” a quarter of hospitals classified 14.3 percent or more of all repeat stays as “observation.” Moreover, analysis of time trends in observation stays makes it clear that they account for a significant chunk of the reduction in readmissions. Between 2010 and 2013, 36 percent of the claimed decrease in readmissions was actually just a shift to observation stays.

Emergency Department Use

And it’s not just observation stays that have been on the increase. More of the recently discharged patients are being treated in emergency departments (EDs) — without being admitted — as well.

Factoring in the 0.4 percent increase in ED visits within 30 days of discharge, the fall in the percent of discharged patients returning to hospitals for urgent problems is only 0.3 percent over the past three years — less than one-third of the improvement that CMS claims. And even this 0.3 percent overall fall may be partly an artifact of hospitals’ “upcoding” (exaggerating the severity of patients’ illnesses), which boosts diagnosis-related group (DRG) payments, and could also corrupt the formula used to risk-adjust expected readmission rates.

Medicare’s readmission penalties are among the growing number of pay-for-performance (P4P) and value-based purchasing initiatives that offer bonuses to high performers and/or penalize the laggards. We previously pointed out that the evidence for this carrot and stick approach is unconvincing. More recently, a long-term follow-up of the English hospital P4P program found that P4P generated no improvement in patient outcomes, damping the enthusiasm generated by the rosy short-term findings, and reinforcing the need for skepticism.

Adopting unproven everywhere P4P strategies that have been proven nowhere risks quality failure on a monumental scale. It pressures hospitals to cheat, saps doctors’ and nurses’ intrinsic motivation to do good work even when no one is looking, and corrupts the data vital for quality improvement.

As the graffiti artist Banksy once said: “Become good at cheating and you never need to become good at anything else.”

http://healthaffairs.org/blog/2015/08/27/quality-improvement-become-good-at-cheating-and-you-never-need-to-become-good-at-anything-else/

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Comment:

By Don McCanne, MD

In lieu of adopting comprehensive health care financing that actually would improve value – a single payer system – our national leaders have elected to continue with our current dysfunctional system and try to make it work. One measure that has been introduced is the assessment of penalties for patients who are readmitted within 30 days of being discharged from a hospital – on the theory that the patients should be fully stabilized at discharge with followup arranged that would prevent the need for readmission.

Physician and hospital administrators do not want patients readmitted soon after discharge. Their efforts are directed at providing the best care appropriate to improve patient outcomes. But there are some clinical conditions that are inherently unstable, or that can have unavoidable complications, that can result in the need for readmission. Also, in spite of outreach efforts, socioeconomic variables can result in destabilization of the patient’s condition. Some readmissions are absolutely inevitable.

This report is important because it shows that the improvement in lowering readmission rates that occurred after the introduction of penalties is not so much due to improved inpatient and post-discharge management, but rather is due to gaming rules that are characteristic of pay-for-performance (P4P) schemes.

Specifically, there has been a dramatic increase in placing patients on observation status instead of formally admitting them to the hospital. The care may be identical – provided in the inpatient service departments – but by not certifying the patient as being a formal readmission within 30 days of the last admission, the penalty is avoided. Medicare comes out ahead since outpatient services are priced lower than inpatient services, even if they are identical services – thus the trumpeting by CMS of another success in their reform efforts. But the patient loses since the cost sharing requirements for outpatient services are much higher than they are for inpatient. But then who ever said that health care reform was to benefit patients?

A variation of this gaming is to manage the followup hospitalization completely within the emergency department, perhaps even holding the patient overnight. The result is essentially the same as holding them on observation status.

This P4P-type gamesmanship is really a form of cheating. But it works. Instead of shifting to a much more efficient financing infrastructure – a single payer system – we can continue to follow the Banksy dictum – “Become good at cheating and you never need to become good at anything else.”

Maybe we should start to think about becoming good at financing health care instead.

Results from the 2015 Cal Wellness–Field Health Policy Survey – Part 1

By Mark DiCamillo, Director, The Field Poll
The Field Poll, August 26, 2015

Increasing voter support for extending Medi-Cal to undocumented residents

The current survey repeated a question first posed to California voters last year about whether the state’s Medi-Cal program should be expanded to provide preventive health services to undocumented residents, who are not currently eligible for coverage under the ACA. The results show that 58% of the state’s registered voters now favor extending Medi-Cal for undocumented residents, while 39% are opposed. This represents a significant increase in voter support from last year when supporters outnumbered opponents by a narrower 51% to 45% margin.

However, there are big differences in voter opinions about this proposal by party. Democrats favor the idea four to one (78% to 19%), while Republicans are opposed nearly three to one (72% to 25%). No party preference voters largely reflect overall voter sentiment, supporting the proposal 60% to 38%.

When examining voter opinions by race and ethnicity, registered Latinos report the highest level of support for extending Medi-Cal to undocumented immigrants, with 77% in favor. However, the proposal also now receives majority support from the state’s white non-Hispanic, African American and Asian American voters.

Topline findings

10. I am going to read some proposals that have been made to expand or modify the way the health care law is implemented in California, and please tell me whether you favor or oppose each one. Do you favor strongly, favor somewhat, oppose somewhat or oppose strongly this proposal?

a. Expand the state’s Medi-Cal health care program for low income residents to provide preventive health services to undocumented residents who are not eligible for coverage under the current health care law.

35%  Favor strongly

23%  Favor somewhat

14%  Oppose somewhat

25%  Oppose strongly

 3%  Don’t know/Refused

http://www.field.com/fieldpollonline/subscribers/Rls2510.pdf

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Comment:

By Don McCanne, MD

One of the major deficiencies in the Affordable Care Act is that undocumented residents were deliberately excluded from mandated coverage. It has been estimated that roughly one-third of the 30 million or so who will remain uninsured are these undocumented residents. Was Congress following the wishes of the people when they excluded these individuals from coverage? Not if you judge by the views of Californians: 58% support expanding Medi-Cal to low-income undocumented residents.

In fact, every racial group of California voters polled is in support: Latino, white non-Hispanic, African American and Asian American voters.  The only group opposed is not racial, but rather political: Republicans, with 72% opposed, while 78% of Democrats are in support.

At Physicians for a National Health Program, we support health care reform that advances health care justice through sound health policies, devoid of politics. Although we can expound on the virtues of those policies, it is unfortunate – no, tragic – that our voice is muffled in the tainted arena of politics.

Conservatives frequently chastise progressives for accusing them of supporting mean-spirited policies. Well? Prove us wrong. You can do that by supporting the replacement of our inequitable, fragmented, dysfunctional system of financing health care with a single payer system that ensures equitable access and affordability for everyone, including our undocumented residents.

How Many Employers Could be Affected by the Cadillac Plan Tax?

By Gary Claxton and Larry Levitt
Kaiser Family Foundation, August 25, 2015

As fall approaches, we can expect to hear more about how employers are adapting their health plans for 2016 open enrollments. One topic likely to garner a good deal of attention is how the Affordable Care Act’s high-cost plan tax (HCPT), sometimes called the “Cadillac plan” tax, is affecting employer decisions about their health benefits. The tax takes effect in 2018.

The potential of facing an HCPT assessment as soon as 2018 is encouraging employers to assess their current health benefits and consider cost reductions to avoid triggering the tax. Some employers announced that they made changes in 2014 in anticipation of the HCPT, and more are likely to do so as the implementation date gets closer. By making modifications now, employers can phase-in changes to avoid a bigger disruption later on. Some of the things that employers can do to reduce costs under the tax include:

• Increasing deductibles and other cost sharing;
• Eliminating covered services;
• Capping or eliminating tax-preferred savings accounts like Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), or Health Reimbursement Arrangements (HRAs);
• Eliminating higher-cost health insurance options;
• Using less expensive (often narrower) provider networks; or
• Offering benefits through a private exchange (which can use all of these tools to cap the value of plan choices to stay under the thresholds).

For the most part these changes will result in employees paying for a greater share of their health care out-of-pocket.

How Many Employers Could be Affected by the Cadillac Plan Tax?

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Comment:

By Don McCanne, MD

During the markup process for the Affordable Care Act it was common to hear our legislators talk about patients demanding too much health care as an explanation for why our health care spending was so high. They blamed health plans that provided extra-rich benefits – plans they labeled Cadillac plans. The problem is that their premise was wrong.

These supposedly extra-rich benefits were merely standard benefits characteristic of the older employer-sponsored indemnity plans such as Blue Cross and Blue Shield. These were not plans with Cadillac benefits but rather they were plans with standard benefits, but benefits that are now provided at Cadillac prices because of our failure to adopt a health care financing system that would slow the rate of health care inflation.

In recent decades, plan purchasers in the individual market became less able to afford the high premiums commanded by the ever-increasing health care costs. In order to keep their premiums affordable, insurers reduced benefits and increased patient cost sharing, making health care less affordable even for those who were insured. Medical debt became a significant contributor to personal bankruptcy and having insurance often no longer prevented it.

Our legislators, after being spoon-fed by lobbyists and the policy community, decided that these inferior plans on the individual market would become the new standard, and the more traditional plans that provided more effective coverage would suddenly become Cadillac plans.

Thus the advent of the high-cost plan tax (HCPT) – often referred to by the misnomer, Cadillac plan tax – a 40 percent tax on plan costs above a certain threshold. This tax was intended to disincentivize the selection of full coverage plans. By having out-of-pocket money at stake with less comprehensive coverage, patients would be forced to decide which of their medical problems they would want managed and which they would decide to live with (or die from). What a terrible way to reduce spending.

In retrospect, both Republicans and Democrats in Congress have decided that this tax should be repealed, but for different reasons. Republicans are simply opposed to any taxes, and Democrats are concerned about additional tax burdens on lower income individuals with employer-sponsored plans that provide reasonable coverage (assuming the tax is paid by forgone wage increases). Hurdles to the repeal of this tax include reluctance to compensate for the loss of these government revenues by either assessing new taxes (Republicans opposed) or by cutting spending on other programs (Democrats opposed), plus a reluctance for a highly polarized Congress to work together on anything.

The important policy issue is not the tax, it is the decision to control spending by erecting financial barriers to care through the design of the insurance product – consumer-directed health care. This prevents patients from getting care that they should have while exposing them to financial hardship. Instead we should be providing everyone with prepaid health care while controlling spending through more humane, proven policies that are in use in many other nations. Of course, these are the policies that are inherent in a well-designed single payer national health program.

Forget the Cadillac imagery. Let’s talk about providing affordable health care for everyone.

New Program in Coachella Valley Seeks Affordability in Personalized Primary Care

By Lauren McSherry
California Healthline, August 24, 2015

Joseph Scherger, a primary care physician at Eisenhower Medical Center in Rancho Mirage, opened an email one morning earlier this month with an update on one of his patients who had recently suffered a heart attack.

The email had been sent directly by the patient, who wanted to put Scherger in touch with the cardiologist who had treated him while he had been traveling out of state.

Scherger, Eisenhower’s vice president of primary care, often uses email to correspond with his patients. In fact, email tends to be a big part of the day-to-day job for some of Eisenhower’s primary care physicians. Through a program called Eisenhower Primary Care 365, patients pay an annual fee to have direct email access to their doctors and other benefits.

Scherger calls the E365 program a new direct primary care model, one of many that have been popping up across the nation in recent years. It is intended to be a more-affordable version of expensive concierge medicine, in which patients pay a fee for 24/7, unlimited access to their primary care doctors.

Jay W. Lee, California Academy of Family Physicians president, said doctors involved in the program see it as a way to equalize and democratize care.

“What I’m most excited about is that we’re starting to innovate,” he said. “It’s clear that this has resonated with a population of clinical physicians. What I’ve seen is that there is growing interest, not only in California but across the country.”

With direct primary care, patients pay a subscription fee — either annually or monthly — that enables them to have immediate access to their doctors, scheduling same-day visits and bypassing the long wait times.

But rather than paying $1,800 to $5,000 a year for that privilege, as they would for concierge medicine, patients pay $395-$595 per year, depending on their age, in the E365 model.

“The real story is that alternatives to concierge medicine are emerging that are going to cause concierge medicine to recede,” Scherger said.

Scherger began developing the program in 2009, when a new outpatient clinic, the Eisenhower George and Julia Argyros Health Center, was about to open. He was faced with a recruitment challenge “because too many of the good primary care doctors were going into high-cost concierge medicine” in the Coachella Valley. So he developed a hybrid model, one that accepts most insurance and Medicare and covers the cost of non-visit communications through a fee.

Since launching, the program has gained steam and now has 14 doctors treating 6,500 patients at four locations in the Coachella Valley.

Personalized Care, Longer Visits

Direct primary care has several characteristics that are attractive to doctors, such as having fewer patients and being able to spend more time with them, Lee said.

“In many ways, the promise of it is that there is an opportunity to control flow and pace,” he said.

A typical primary care doctor may have 90-120 patient visits per week and can only spend 10-15 minutes with each patient. In contrast, an E365 doctor will have around 50 visits per week and can spend 20 minutes with a patient, Scherger said.

The average panel size for a primary care doctor is 2,000 to 3,000 patients. Concierge practices usually limit their physicians to 200 or 300 patients. Direct primary care models fall somewhere in between. In the case of the E365 program, physicians each take care of 850 to 950 patients, Scherger said.

Scherger says direct primary care models began emerging about 10 years ago because primary care physicians were getting burned out under the traditional private practice model. One early model was GreenField Health, launched in 2001. Another model, Qliance, reportedly has 35,000 patients, with about half of whom are enrolled in Medicaid.

According to a 2014 survey by the American Academy of Family Physicians, about 2% of members were currently working in direct primary care settings and 7.2% reported they were currently determining if they would transform their practices to that model.

“The direct primary care model is slowly gaining momentum,” said Robert Wergin, the group’s president. He said the model is increasing in popularity because it moves away from the acute, episodic, fragmented care that is common with volume-based medical services, and it allows doctors more time to focus on quality of care rather than paperwork and billing.

Could Direct Primary Care Exacerbate a Physician Shortage?

One of the looming issues surrounding direct primary care is whether it will exacerbate the shortage of primary care doctors in California, particularly in the Coachella Valley where the shortage is severe.

The Coachella Valley has a cluster of nine cities, including Palm Springs in eastern Riverside County, a region containing both incredible wealth and far-reaching poverty.

“The question I have is around scale,” Lee said. “If everyone is doing this, are we going to meet the needs of the population?”

He is concerned because more patients are now covered by Medi-Cal as a result of the Affordable Care Act, and it’s unclear whether the direct primary care model will serve those patients.

Beth Capell, a policy advocate with Health Access California, said the direct primary care model eases physician workloads but doesn’t solve the issue of access to primary care for all populations in the Coachella Valley. The Coachella Valley and Merced are two of the most underserved regions in California, she said.

Nearly 40% of Coachella adults live in households below the federal poverty line, according to the Health Assessment and Research for Communities’ 2013 Executive Report. The report also estimates that about one-third of adults in the region, roughly 74,600 people, lack health insurance.

“The disparity in health resources only compounds the underlying reality that people who are low income need more access to care,” Capell said.

People who are affluent are generally healthier, while people with lower incomes are disproportionately likely to be in poorer health, often with multiple chronic conditions that are more difficult to manage, Capell said.

The UC-Riverside School of Medicine has launched several programs to expand the physician workforce in the region.

“We have a profound shortage, and our shortage is understated because of the number of concierge practices that exist in the Coachella Valley,” said John Heydt, the medical school’s senior associate dean of clinical affairs.

Market Forces May Be Driving Change

Heydt believes market forces are driving the rise of concierge and hybrid models. He predicts these models will gain even more popularity if insurers continue to expect doctors to see high volumes of patients for lower reimbursement rates.

“There are tremendous physician shortages on the horizon,” he said. “When anything is in short supply, the demand is high. And if you look at the day-to-day life of some physicians, they are run by their practices.”

Christopher Flores, who runs an independent direct primary care practice in Palm Desert, says E365 has filled a niche, and he expects the model to grow in coming years because doctors are feeling burnt out.

“The way the system is going, it’s becoming much more of an impersonal assembly line,” he said.

Whether direct primary care will succeed or evolve into something entirely different is up for debate.

“There is still a little uncertainty as to what the regulatory environment dictates,” Lee said. “I think those nuances have yet to be figured out.”

He stressed, though, that creating new models of care is critical given the pressures that primary care physicians are facing, such as high patient volumes and declining reimbursements. He sees new models that are not tied to in-person visits but that incorporate email, telemedicine, or telephone calls as the way forward.

“It’s pretty clear we don’t have enough supply to meet demand,” he said. “We can grow a workforce — but there’s a long tail on that — or we can practice better.”

http://www.californiahealthline.org/insight/2015/new-program-in-coachella-valley-seeks-affordability-in-personalized-primary-care

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Comment:

By Don McCanne, MD

Today’s article is presented in its entirety since it is important to view the topic from a broad perspective as opposed to simply considering isolated policy topics contained in the article.

Weariness and burnout are common amongst overworked family physicians. It is no wonder that some physicians are exploring other models of medical practice. Concierge practices are based more on a business model – extracting additional fees from patients in order to lighten the workload. Direct primary care practices differ in that they increase access through electronic communication and at fees that are much more modest than with concierge practices – more of a patient service model and less of a business model. But they both have a serious defect – by sharply reducing the patient load, they decrease the productivity of family physicians at a time when we already have a profound shortage of family physicians in underserved regions.

A model which is designed to increase productivity is the primary care medical home. Such a model can certainly include improved electronic access for patients, but that would be only one feature of the wide variety of integrated services characteristic of well designed medical homes. The medical home would be ideal for balancing the overworked physician with the health care needs of the underserved residents in the community. The other health professionals in the primary care team not only could make work schedules more reasonable for everyone, but they could and should be used to adjust capacity so that the community health care needs at large are well served.

As it is, the label, “direct primary care,” is at risk of becoming just another label for concierge practices, just as “medical home” is at risk of becoming a label for managed care IPOs. To counter these trends we must always place first the health care needs of the patient and the community at large. If we do that, family physicians and other health care professionals working together as a team would have a great future ahead.

Financial Burden of Health Care Costs Among Insured: Kaiser Health Tracking Poll: August 2015

By Bianca DiJulio, Jamie Firth, and Mollyann Brodie
Kaiser Family Foundation, August 20, 2013

Among insured:  Thinking about your own health care costs, which of the following do you find to be the greatest financial burden?

17%  The deductible you pay before insurance kicks in
14%  Your health insurance premiums
11%  Your prescription drugs
7%   Your doctor visits
3%   Some other health care cost
44%  Paying for health care and health insurance is not a financial burden

(Note: “All equally” and “Don’t know/Refused” responses not shown)

Kaiser Health Tracking Poll: August 2015

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Comment:

By Don McCanne, MD

It is nice to know that health insurance and paying for health care do not create a financial burden for 44% of those who are insured. The system is working well for the almost half of the insured who have decent incomes who remain in good health. But what about the other half?

Being insured is no assurance that you will not face significant financial burdens. The most common are high deductibles, high insurance premiums, high costs of prescription drugs, and, to some extent, physician fees. But shouldn’t the health care financing system be designed to remove financial burdens whenever people need health care? Our system is not working well for patients who have modest incomes and current significant health care needs.

Under a single payer system, there is no need for deductibles to save money by discouraging the use of beneficial health care services, because spending is controlled though other less intrusive, more patient-friendly economic measures. Physician fees are negotiated and paid by the single payer administrator, and prescription drug spending is controlled through negotiation and bulk purchasing. Insurance premiums are eliminated and replaced with equitable, progressive taxes that place a burden on no one. Instead of deliberately building financial barriers into the system, shouldn’t we eliminate them?