PNHP

Why are physicians becoming hospital employees?

Why are physicians becoming hospital employees?

Apprehensive, Many Doctors Shift to Jobs With Salaries

By Elisabeth Rosenthal
The New York Times, February 13, 2014

American physicians, worried about changes in the health care market, are streaming into salaried jobs with hospitals.

Last year, 64 percent of job offers filled through Merritt Hawkins, one of the nation’s leading physician placement firms, involved hospital employment, compared with only 11 percent in 2004.

Today, about 60 percent of family doctors and pediatricians, 50 percent of surgeons and 25 percent of surgical subspecialists — such as ophthalmologists and ear, nose and throat surgeons — are employees rather than independent, according to the American Medical Association.

Many of the new salaried arrangements have evolved from hospitals looking for new revenues.

Health economists are nearly unanimous that the United States should move away from fee-for-service payments to doctors, the traditional system where private physicians are paid for each procedure and test, because it drives up the nation’s $2.7 trillion health care bill by rewarding overuse. But experts caution that the change from private practice to salaried jobs may not yield better or cheaper care for patients.

“In many places, the trend will almost certainly lead to more expensive care in the short run,” said Robert Mechanic, an economist who studies health care at Brandeis University’s Heller School for Social Policy and Management.

Dr. Joel Jacowitz, a cardiologist in New Jersey, and his 20 or so partners decided to sell their private practice to a hospital.

Dr. Jacowitz said that the economics drove the choice and that the only other option would have been to bring in more revenue by practicing bad medicine — ordering more heart tests on patients who did not need them or charging exorbitant rates to people with private insurance.

“Some people are operators and give the rest of us a bad name,” he said, adding that he had changed his opinion about America’s fee-for-service health care system. “I’m fed up — I want a single-payer system.”

http://www.nytimes.com/2014/02/14/us/salaried-doctors-may-not-lead-to-ch…

Follow the money. Hospitals consolidate to increase market power, moving more patients into higher priced hospital outpatient services. Doctors have joined hospitals because “economics drove the choice.” Current national policies encourage physicians and hospitals to organize in order to provide “accountability,” but this oligopolistic power grab results in “accountability” that only their chief financial officers would admire, certainly not the people who pay the medical bills.

Under a well designed single payer system, excess spending would diminish by improving pricing and by reducing incentives to use worthless or harmful health care services. Many physicians have grown weary of having to attend to the business side of their practices when what they really want is simply to take care of their patients.

More and more physicians will be echoing the words of Dr. Jacowitz, “I’m fed up — I want a single-payer system.” When the patients start repeating those words, the politicians will have to follow.

EBRI report on HSAs

Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2013

By Paul Fronstin, Ph.D.
Employee Benefit Research Institute, January 2014

Employers first started offering account-based health plans in 2001, when a handful of employers began to offer health reimbursement arrangements (HRAs), employer-funded health plans that reimburse workers for qualified medical expenses. In 2004, employers were able to start offering health plans with health savings accounts (HSAs), tax-exempt trusts or custodial accounts that individuals can use to pay for health care expenses. The theory behind these accounts is that giving individuals more control over funds allocated for health care services will cause them to spend the money more responsibly, especially once they become more educated about the actual price of health services.

Number of HSA accounts

  2013:  7.2 million

  2012:  6.6 million

Total assets in HSAs

  2013:  $16.6 billion

  2012:  $11.3 billion

Average HSA balance

  2013:  $2,311

Average rollover (HSA and HRA)

  2013:  $1,165

  2012:  $1,206

  (10% had no rollover in 2013)

http://www.ebri.org/pdf/briefspdf/EBRI_IB_395_Jan14.CEHCS.pdf

Comment:

By Don McCanne, M.D.

HSAs (health savings accounts) have been with us for a decade, preceded by Archer MSAs. They supposedly reduce health care spending by incentivizing the account owners to spend their health care dollars more responsibly. Let’s do a couple of calculations to see how much impact they really have.

National Health Expenditures (NHE)

  2013: $2,915 billion

  2012: $2,807 billion

  (from CMS – Office of the Actuary)

HSA assets in 2013 as % of NHE:  0.57%

HSA assets rolled over in 2013:  $7.16 billion

HSA assets spent in 2012:  $4.14 billion

HSA assets spent in 2012 as % of NHE:  0.15%

(Calculations are approximate since they are based on extrapolations from incomplete data.)

Clearly only a small fraction of one percent of our national health expenditures comes from health savings accounts. Since most people with HSAs will go ahead and get the care that they need, their diligent shopping can only have had an impact on maybe ten percent of the HSA spending, meaning that HSAs may have reduced spending by only about one one-hundredth of one percent of our NHE. For those who say that shopping would reduce HSA spending by 30 percent (a dubious contention since so much care is not price shopped) then that would still be only about three one-hundretdths of one percent of our NHE. So why should we even care if those people want to play that game?

The important issue is not the health savings account. That money could have come from any other savings the person had. HSAs merely grant tax expenditures (our tax money) to the owners of HSA accounts that regressively favor the wealthy – lousy, inequitable tax policy, but it doesn’t have a very big impact on the three trillion dollars we spend on health care.

What really is important is the high-deductible insurance plan that is coupled with the HSA. That is what makes the patient a “diligent” shopper, except that it really doesn’t since most of our health expenditures are not amenable to shopping. What it does do is cause the patient to decline some care even though it is usually quite appropriate. Statistics showing that the patient doesn’t die or have other serious adverse outcomes by declining care that is unaffordable miss the point. Most studies are not powered to detect rare outcomes (e.g., deaths), and they do not bother measuring more subtle but important benefits of receiving care, even if it is as simple as being reassured that the presenting symptoms do not represent a serious problem.

The tragedy is that this concept of consumer driven health care – making patients informed shoppers by requiring that they pay maybe a couple thousand  dollars before their insurance kicks in – doesn’t impact only those HSA account holders who want to be price shoppers, but it has extended to impact an ever larger percentage of us. Exchange plans were deliberately designed with low actuarial values which require high deductibles that shift spending from the insurers to patients. Employers are now greatly expanding their use of high-deductible plans, which, of course, shifts more responsibility for up-front health care spending to their employees.

The subsidies for the silver plans in the exchanges help a little bit, but they are not enough. Middle-income families are particularly hard hit by cost sharing. That is really tough in this age of growing income inequality that has left working families so far behind.

Instead of continuing with these HSA games that benefit the rich, indirectly hurt lower- and middle-income families, and fail to deliver on their promise of controlling our national health expenditures, we should adopt a program that benefits everyone and does contain costs – a single payer national health program. HSAs should not even be a part of the conversation. Besides, they should be done away with because their primary function is to provide an unfair tax-preference for the rich.

The French way of cancer treatment

By Anya Schiffrin
Reuters, February 12, 2014

When my father, the editor and writer Andre Schiffrin, was diagnosed with stage four pancreatic cancer last spring, my family assumed we would care for him in New York. But my parents always spent part of each year in Paris, where my father was born, and soon after he began palliative chemotherapy at Memorial Sloan Kettering my father announced he wanted to stick to his normal schedule — and spend the summer in France.

I humored him — though my sister and I didn’t want him to go. We felt he should stay in New York City, in the apartment where we grew up. I could visit him daily there, bringing takeout from his favorite Chinese restaurant and helping my mother.

I also didn’t know what the French healthcare system would be like. I’d read it was excellent, but assumed that meant there was better access for the poor and strong primary care. Not better cancer specialists. How could a public hospital in Paris possibly improve on Sloan Kettering’s cancer treatment?

After all, people come from the all over the world for treatment at Sloan Kettering. My mother and I don’t even speak French. How could we speak to nurses or doctors and help my father? How would we call a taxi or communicate with a pharmacy?

But my dad got what he wanted, as usual. After just one cycle of chemo in New York, my parents flew to Paris, to stay in their apartment there. The first heathcare steps were reassuring: my parents found an English-speaking pancreatic cancer specialist and my dad resumed his weekly gemcitabine infusions.

My parents were pleasantly surprised by his new routine. In New York, my father, my mother and I would go to Sloan Kettering every Tuesday around 9:30 a.m. and wind up spending the entire day. They’d take my dad’s blood and we’d wait for the results. The doctor always ran late. We never knew how long it would take before my dad’s name would be called, so we’d sit in the waiting room and, well, wait. Around 1 p.m. or 2 p.m. my dad would usually tell me and my mom to go get lunch. (He never seemed to be hungry.) But we were always afraid of having his name called while we were out. So we’d rush across the street, get takeout and come back to the waiting room.

We’d bring books to read. I’d use the Wi-Fi and eat the graham crackers that MSK thoughtfully left out near the coffee maker. We’d talk to each other and to the other patients and families waiting there. Eventually, we’d see the doctor for a few minutes and my dad would get his chemo. Then, after fighting New York crowds for a cab at rush hour, as my dad stood on the corner of Lexington Avenue feeling woozy, we’d get home by about 5:30 p.m.

So imagine my surprise when my parents reported from Paris that their chemo visits couldn’t be more different. A nurse would come to the house two days before my dad’s treatment day to take his blood. When my dad appeared at the hospital, they were ready for him. The room was a little worn and there was often someone else in the next bed but, most important, there was no waiting. Total time at the Paris hospital each week: 90 minutes.

There were other nice surprises. When my dad needed to see specialists, for example, instead of trekking around the city for appointments, he would stay in one room at Cochin Hospital, a public hospital in the 14th arrondissement where he received his weekly chemo. The specialists would all come to him. The team approach meant the nutritionist, oncologist, general practitioner and pharmacist spoke to each other and coordinated his care. As my dad said, “It turns out there are solutions for the all the things we put up with in New York and accept as normal.”

One day he had to spend a few hours at Cochin. They gave him, free of charge, breakfast and then a hot lunch that included salad and chicken. They also paid for his taxi to and from the hospital each week.

“Can’t you think of anything bad about the French healthcare system?” I asked during one of our daily phone calls. My mom told me about a recent uproar in the hospital: It seems a brusque nurse rushed into the room and forgot to say good morning. “Did you see that?” another nurse said to my mom. “She forgot to say bonjour!”

When the gemcitabine stopped working, the French oncologist said he would put my dad on another drug — one my dad’s U.S. insurance plan had refused to approve in New York.

By this time, I had become a French healthcare bore. Regaling my New York friends with stories of my dad’s superb care in Paris, I found people assumed he was getting VIP treatment or had a fancy private plan. Not at all. He had the plain vanilla French government healthcare.

I had read many articles about the French healthcare system during the long public debate over Obamacare. But I still I hadn’t understood fully, until I read this  interview in the New York Times, that the French system is basically like an expanded Medicaid. Pretty much everyone has insurance, it explained, and the French get better primary care and more choice of doctors than we do. It also turns out, as has been much commented on, that despite all this great treatment, theFrench spend far less on healthcare than Americans.

In 2011, France’s expenditure on health per capita was $4,086, compared to $8,608 in the United States, according to the World Health Organization. Spending as a percentage of gross domestic product was 11.6 percent in France while in the United States it was a far higher 17.9 percent.

Last fall, my mother asked me to come and see their general practitioner in Paris so we could plan ahead for my father. My mom got an appointment for the next morning and we walked to the office, five minutes from my parents’ apartment. We waited for a half-hour on a comfortable couch, chuckling over the very French selection of magazines on the coffee table (Elle and Vogue) andadmiring the lush garden view. The waiting room was quiet. I realized what was missing: There was no billing department.

We spoke with the doctor for about 45 minutes. My mom wanted to know what would happen when my dad was no longer able to walk. “Oh,” said the doctor, speaking in English. “I prescribe a wheelchair and it’s delivered to your house. Shall I do it now?”

When I asked the price, she looked surprised. No charge. She asked if we wanted someone to come to the house every day and it was my turn to look surprised. What would they do? For example, someone could come and give my dad a massage to alleviate his neck pain. Again, no charge.

At the end of the appointment, my mom pulled out her French insurance card. Total cost of the visit? 18 euros.

When my dad began to get worse, the home visits started. Nurses came three times a day to give him insulin and check his blood. The doctor made house calls several times a week until my father died on December 1.

The final days were harrowing. The grief was overwhelming. Not speaking French did make everything more difficult. But one good thing was that French healthcare was not just first rate — it was humane. We didn’t have to worry about navigating a complicated maze of insurance and co-payments and doing battle with billing departments.

Every time I sit on hold now with the billing department of my New York doctors and insurance company, I think back to all the things French healthcare got right. The simplicity of that system meant that all our energy could be spent on one thing: caring for my father.

That time was priceless.

http://blogs.reuters.com/anya-schiffrin/2014/02/12/the-french-way-of-cancer-treatment/

EBRI report on HSAs

Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2013

By Paul Fronstin, Ph.D.
Employee Benefit Research Institute, January 2014

Employers first started offering account-based health plans in 2001, when a handful of employers began to offer health reimbursement arrangements (HRAs), employer-funded health plans that reimburse workers for qualified medical expenses. In 2004, employers were able to start offering health plans with health savings accounts (HSAs), tax-exempt trusts or custodial accounts that individuals can use to pay for health care expenses. The theory behind these accounts is that giving individuals more control over funds allocated for health care services will cause them to spend the money more responsibly, especially once they become more educated about the actual price of health services.

Number of HSA accounts

2013:  7.2 million

2012:  6.6 million

Total assets in HSAs

2013:  $16.6 billion

2012:  $11.3 billion

Average HSA balance

2013:  $2,311

Average rollover (HSA and HRA)

2013:  $1,165

2012:  $1,206

(10% had no rollover in 2013)

http://www.ebri.org/pdf/briefspdf/EBRI_IB_395_Jan14.CEHCS.pdf

HSAs (health savings accounts) have been with us for a decade, preceded by Archer MSAs. They supposedly reduce health care spending by incentivizing the account owners to spend their health care dollars more responsibly. Let’s do a couple of calculations to see how much impact they really have.

National Health Expenditures (NHE)

2013: $2,915 billion

2012: $2,807 billion

(from CMS – Office of the Actuary)

HSA assets in 2013 as % of NHE:  0.57%

HSA assets rolled over in 2013:  $7.16 billion

HSA assets spent in 2012:  $4.14 billion

HSA assets spent in 2012 as % of NHE:  0.15%

(Calculations are approximate since they are based on extrapolations from incomplete data.)

Clearly only a small fraction of one percent of our national health expenditures comes from health savings accounts. Since most people with HSAs will go ahead and get the care that they need, their diligent shopping can only have had an impact on maybe ten percent of the HSA spending, meaning that HSAs may have reduced spending by only about one one-hundredth of one percent of our NHE. For those who say that shopping would reduce HSA spending by 30 percent (a dubious contention since so much care is not price shopped) then that would still be only about three one-hundretdths of one percent of our NHE. So why should we even care if those people want to play that game?

The important issue is not the health savings account. That money could have come from any other savings the person had. HSAs merely grant tax expenditures (our tax money) to the owners of HSA accounts that regressively favor the wealthy – lousy, inequitable tax policy, but it doesn’t have a very big impact on the three trillion dollars we spend on health care.

What really is important is the high-deductible insurance plan that is coupled with the HSA. That is what makes the patient a “diligent” shopper, except that it really doesn’t since most of our health expenditures are not amenable to shopping. What it does do is cause the patient to decline some care even though it is usually quite appropriate. Statistics showing that the patient doesn’t die or have other serious adverse outcomes by declining care that is unaffordable miss the point. Most studies are not powered to detect rare outcomes (e.g., deaths), and they do not bother measuring more subtle but important benefits of receiving care, even if it is as simple as being reassured that the presenting symptoms do not represent a serious problem.

The tragedy is that this concept of consumer driven health care – making patients informed shoppers by requiring that they pay maybe a couple thousand  dollars before their insurance kicks in – doesn’t impact only those HSA account holders who want to be price shoppers, but it has extended to impact an ever larger percentage of us. Exchange plans were deliberately designed with low actuarial values which require high deductibles that shift spending from the insurers to patients. Employers are now greatly expanding their use of high-deductible plans, which, of course, shifts more responsibility for up-front health care spending to their employees.

The subsidies for the silver plans in the exchanges help a little bit, but they are not enough. Middle-income families are particularly hard hit by cost sharing. That is really tough in this age of growing income inequality that has left working families so far behind.

Instead of continuing with these HSA games that benefit the rich, indirectly hurt lower- and middle-income families, and fail to deliver on their promise of controlling our national health expenditures, we should adopt a program that benefits everyone and does contain costs – a single payer national health program. HSAs should not even be a part of the conversation. Besides, they should be done away with because their primary function is to provide an unfair tax-preference for the rich.

Apprehensive, Many Doctors Shift to Jobs With Salaries

By Elisabeth Rosenthal
The New York Times, February 13, 2014

American physicians, worried about changes in the health care market, are streaming into salaried jobs with hospitals. Though the shift from private practice has been most pronounced in primary care, specialists are following.

Last year, 64 percent of job offers filled through Merritt Hawkins, one of the nation’s leading physician placement firms, involved hospital employment, compared with only 11 percent in 2004. The firm anticipates a rise to 75 percent in the next two years.

Today, about 60 percent of family doctors and pediatricians, 50 percent of surgeons and 25 percent of surgical subspecialists — such as ophthalmologists and ear, nose and throat surgeons — are employees rather than independent, according to the American Medical Association. “We’re seeing it changing fast,” said Mark E. Smith, president of Merritt Hawkins.

Health economists are nearly unanimous that the United States should move away from fee-for-service payments to doctors, the traditional system where private physicians are paid for each procedure and test, because it drives up the nation’s $2.7 trillion health care bill by rewarding overuse. But experts caution that the change from private practice to salaried jobs may not yield better or cheaper care for patients

“In many places, the trend will almost certainly lead to more expensive care in the short run,” said Robert Mechanic, an economist who studies health care at Brandeis University’s Heller School for Social Policy and Management.

When hospitals gather the right mix of salaried front-line doctors and specialists under one roof, it can yield cost-efficient and coordinated patient care. The Kaiser system in California and Intermountain Healthcare in Utah are considered models for how this can work.

But many of the new salaried arrangements have evolved from hospitals looking for new revenues, and could have the opposite effect. For example, when doctors’ practices are bought by a hospital, a colonoscopy or stress test performed in the office can suddenly cost far more because a hospital “facility fee” is tacked on. Likewise, Mr. Smith said, many doctors on salary are offered bonuses tied to how much billing they generate, which could encourage physicians to order more X-rays and tests.

Mr. Mechanic studied 21 health systems considered good models of care — including the Mayo Clinic and the Palo Alto Medical Foundation — and discovered that many still effectively rewarded doctors for each procedure. “It doesn’t make any sense,” he said.

Hospitals have been offering physicians attractive employment deals, with incomes often greater than in private practice, since they need to form networks to take advantage of incentives under the new Affordable Care Act. Hospitals also know that doctors they employ can better direct patients to hospital-owned labs and services.

“From the hospital end there’s a big feeding frenzy, a lot of bidding going on to bring in doctors,” Mr. Mechanic said. “And physicians are going in so they don’t have to worry — there’s a lot of uncertainty about how health reform is going to play out.”

In addition, Medicare had reduced its set doctors’ fees over the last decade, while insurers have become more aggressive in demanding lower rates from individual practices that have little clout to resist. Dr. Robert Morrow, a family doctor in the Bronx, said he now received $82 from Medicare for an office visit but only about $45 from commercial insurers.

Dr. Cathleen London practiced family medicine for 13 years outside Boston, but recently took a salaried job at a Manhattan hospital. She said she accepted a pay cut because she could see that she was losing ground in her practice. “I think the days of what I did in 1999 are over,” she said. “I don’t think that’s possible anymore.”

The base salaries of physicians who become employees are still related to the income they can generate, ranging from under $200,000 for primary care doctors to $575,000 in cardiology to $663,000 in neurosurgery, according to Becker’s Hospital Review, a trade publication.

Because of the relatively low salaries for primary care doctors, Dr. Suzanne Salamon said that for the last two years she has had trouble filling a prestigious Harvard geriatrics fellowship she runs.

Dr. Howard B. Beckman, a geriatrician at the University of Rochester, who studies physician payment incentives, said reimbursements for primary care doctors must be improved to attract more people into the field. “To get the kinds of doctors we want, the system for determining salaries has to flip faster,” he said.

Doctors can become employees by practicing in a hospital building, or by selling their multispecialty practice to a hospital, so their office becomes part of a network. That has attracted specialists, including many cardiologists who took up such offers several years ago after Medicare reduced physician payments for cardiac procedures like the placement of stents to hold open clogged arteries. The fraction of cardiologists employed by hospitals rose to 35 percent in 2012, up from 11 percent just five years earlier, according to the American College of Cardiology.

Dr. Joel Jacowitz, a cardiologist in New Jersey, and his 20 or so partners decided to sell their private practice to a hospital. In addition to receiving salaries, that meant they no longer had to worry about paying malpractice premiums themselves or finding health insurance for their staff members.

Dr. Jacowitz said that the economics drove the choice and that the only other option would have been to bring in more revenue by practicing bad medicine — ordering more heart tests on patients who did not need them or charging exorbitant rates to people with private insurance. He said he knew of one cardiologist in private practice who charges more than $100,000 for a procedure for which Medicare pays about $750.

“Some people are operators and give the rest of us a bad name,” he said, adding that he had changed his opinion about America’s fee-for-service health care system. “I’m fed up — I want a single-payer system.”

Dr. Kirk Moon, a radiologist in private practice in San Francisco, also sees advantages for the nation when doctors become employees. “I think it’s pretty clear that sooner or later we’re all going to be on salary,” he said. “I think there’ll be a radical decrease in imaging, but that’s O.K. because there’s incredible waste in the current system.”

Various efforts to change incentives for doctors and hospitals are being tested. An increasing number of employers or insurers, for example, pay health systems a yearly all-inclusive payment for each patient, regardless of their medical needs or how many tests are dispensed. If doctors order unnecessary tests, it costs the hospital money, rather than bringing it in.

And instead of offering bonuses for productivity — doctors cite pressures from hospital employers to order physical therapy for every discharged patient or follow-up M.R.I. scans on every patient who got an X-ray — some hospital systems are beginning to change their criteria. They are providing bonuses that reward doctors for delivering high quality and cost effective care, such as high marks from patients or low numbers of patients with asthma who are admitted to the hospital.

“The question now is how to shift the compensation from a focus on volume to a focus on quality,” said Mr. Smith of Merritt Hawkins. He said that 35 percent of the jobs he recruits for currently have such incentives, “but it’s pennies, not enough to really influence behavior.”

http://www.nytimes.com/2014/02/14/us/salaried-doctors-may-not-lead-to-cheaper-health-care.html?partner=rss&emc=rss&smid=tw-nytimes&_r=0

Private insurers go where the money is

For Many, Few Health-Plan Choices, High Premiums on Online Exchanges

By Timothy W. Martin and Christopher Weaver
The Wall Street Journal, February 12, 2014

Hundreds of thousands of Americans in poorer counties have few choices of health insurers and face high premiums through the online exchanges created by the health-care law, according to an analysis by The Wall Street Journal of offerings in 36 states.

Consumers in 515 counties, spread across 15 states, have only one insurer selling coverage through the online marketplaces, the Journal found. In more than 80% of those counties, the sole insurer is a local Blue Cross & Blue Shield plan. Residents of wealthier, more populated counties in the U.S. receive lower-priced choices than those living in counties with a single insurer.

The price differences reflect the strategy of insurers to pick markets where they believe they can turn a profit—and avoid areas of high unemployment and a concentration of unhealthy residents they deem more risky.

Aetna Inc. and UnitedHealth Group Inc., for instance, have limited their participation in the new health-insurance marketplaces, where consumers shop for coverage, to a much smaller map than their traditional business. They offer coverage in more counties outside of the marketplaces, where plans are sold directly to consumers and federal subsidies aren’t available.

Aetna targeted areas with stable levels of employment and income to attract desirable customers to its marketplace offerings, Chief Executive Mark Bertolini said last fall. “We were very careful to pick the markets” where the insurer could succeed, he said.

Reversing the trend presents a challenge because low-population areas are unlikely to draw more insurers, said Glenn Melnick, a health-care economist at RAND Corp: “I don’t think the health law can overcome those economics.”

http://online.wsj.com/news/articles/SB10001424052702304450904579366950560009742

Comment:

By Don McCanne, M.D.

We’ve always know that insurers market their plans in areas where there is the greatest potential for business success. As USC Health Finance Professor Glen Melnick explains, the Affordable Care Act cannot overcome those economics.

Clearly we have the wrong model for reform. Private insurers respond to business opportunities. Public insurance, such as a single payer national health program, simply enrolls everyone; there are no market decisions to be made.

So is it going to continue to be about private insurance markets, or will it be about patients – all patients? An improved Medicare for all would be about the latter.

Sunday Dialogue: Medicine as a Business

The New York Times, February 10, 2014

Dr. Howard Corwin’s letter to the editor of the New York Times on how the drive to increase profits has compromised doctors’ ethics and their treatment of patients prompted several responses. Dr. Corwin’s original letter, two of the responses, including one by the former editor of the New England Journal of Medicine, Dr. Arnold Relman, and Dr. Corwin’s response are below. The full selection of responses is posted online here.

To the Editor:

Recent accusations against the for-profit hospital chain Health Management Associates (“Hospital Chain Said to Scheme to Inflate Bills,” front page, Jan. 24), including that it put pressure on doctors to admit patients to increase profits, demonstrate the destructive power of the corporatization of medicine on the practice of medicine. The ethical base is lost when businesspeople take over and destroy the traditions of medical practice. Hospital Corporation of America, the nation’s largest for-profit hospital chain, is under investigation for similar practices.

Leaders of corporate America care little about the credo that established medicine as a noble profession, operated not for profitability but for the good of the patients. Sadly, doctors within the corporate system who have opposed fraudulent and illegal practices designed to maximize profitability are punished and terminated. Meanwhile, the white-collar criminal behavior of corporate executives is not adequately punished.

Such practices have a corrosive effect on independent doctors as well. This leads many to game the system and find loopholes to maximize profits. Costs soar. Hospitals and medical schools are often complicit.

Many decent doctors deplore the changes in health care delivery systems that foster such abuses. But I find it hard to be heard when I speak of accountability. I call on our current and next generation of medical school graduates to have the vision and courage to take back the leadership of medicine and restore its right to be considered a noble profession.

HOWARD A. CORWIN
Naples, Fla., Feb. 3, 2014
The writer was a clinical professor of psychiatry at Tufts University School of Medicine.

Readers React

As a physician myself, I have often shared Dr. Corwin’s lament. But on further reflection I can no longer blame either the corporations or the profession itself.

First, we as a society have decided that medicine and capitalism are a suitable match. We have done so despite the fact that almost no other developed nation considers this a way to dispense health care. Doctors have been not so subtly influenced to make decisions that do no harm, but also maximize income.

Second, when physicians have banded together to form corporate entities or hospitals, they have eventually found themselves out of their depth. None of us learn anything about managing a business in medical school. Enter the management consultant, accompanied by his band of trusted executives with large salaries and a new vocabulary. They have sometimes provided good advice, but unlike the physicians they put profits first and patients next.

Asking new graduates to take back medicine is not the solution. Instead, we must open up a debate in America about whether we consider health care a basic right rather than a commodity. If so, then we must move toward some sort of universal single-payer system.

If not, we should resign ourselves to further encroachment by the corporations and invite the executives into bedside rounds each morning.

PRAMEET SINGH
Bronxville, N.Y., Feb. 5, 2014
The writer is a psychiatrist.

What needs to be added to Dr. Corwin’s grim but accurate description of the commercialization of our health system is that physicians have compounded the problem by choosing in large numbers to become employees of hospitals. Hospitals, whether for profit or nonprofit, usually behave like business corporations seeking more income. To this end, they expect help from their physician-employees in referring patients and ordering hospital services.

This corruption of the independent professional practice of medicine could be avoided if physicians chose to join nonprofit doctor-managed groups, and with their patients actively supported the kind of basic reform advocated by Physicians for a National Health Program.

ARNOLD S. RELMAN
Cambridge, Mass., Feb. 5, 2014
The writer is professor emeritus of medicine at Harvard Medical School and former editor in chief of The New England Journal of Medicine.

The Writer Responds

The heart of the doctor is the soul of medicine. Historically the doctor-patient relationship has earned medicine recognition as a noble profession. Corporatization keeps doctors from practicing that time-honored tradition. It is demoralizing to the profession and unsatisfactory for the patients.

I agree with Dr. Singh that America must decide if health care is a basic right rather than a corporate commodity. Dr. Relman decries commercialization in both for profit and nonprofit settings and advocates for single-payer health insurance.

Most doctors believe that receiving adequate medical care should be a human right. Medicine was not meant to be corporatized on a profit-and-loss balance sheet. Capitalism is right for many fields, but not for medicine.

The next generation of sophisticated and caring doctors will have multidisciplinary skills and perspectives that include training in economics, business, public health and public policy. They can be the engine of change and take back medicine from business domination. Their vision, courage and idealism can lead us to well-managed, government-sponsored, single-payer universal health care. Doctors long to return to a system that understands and values doctors and patients, and a code of ethics that ennobles, not degrades, their calling.

HOWARD A. CORWIN
Naples, Fla., Feb. 6, 2014

A version of this letter appears in print on February 9, 2014, on page SR10 of the New York edition with the headline: Medicine as a Business. 

Private insurers go where the money is

For Many, Few Health-Plan Choices, High Premiums on Online Exchanges

By Timothy W. Martin and Christopher Weaver
The Wall Street Journal, February 12, 2014

Hundreds of thousands of Americans in poorer counties have few choices of health insurers and face high premiums through the online exchanges created by the health-care law, according to an analysis by The Wall Street Journal of offerings in 36 states.

Consumers in 515 counties, spread across 15 states, have only one insurer selling coverage through the online marketplaces, the Journal found. In more than 80% of those counties, the sole insurer is a local Blue Cross & Blue Shield plan. Residents of wealthier, more populated counties in the U.S. receive lower-priced choices than those living in counties with a single insurer.

The price differences reflect the strategy of insurers to pick markets where they believe they can turn a profit—and avoid areas of high unemployment and a concentration of unhealthy residents they deem more risky.

Aetna Inc. and UnitedHealth Group Inc., for instance, have limited their participation in the new health-insurance marketplaces, where consumers shop for coverage, to a much smaller map than their traditional business. They offer coverage in more counties outside of the marketplaces, where plans are sold directly to consumers and federal subsidies aren’t available.

Aetna targeted areas with stable levels of employment and income to attract desirable customers to its marketplace offerings, Chief Executive Mark Bertolini said last fall. “We were very careful to pick the markets” where the insurer could succeed, he said.

Reversing the trend presents a challenge because low-population areas are unlikely to draw more insurers, said Glenn Melnick, a health-care economist at RAND Corp: “I don’t think the health law can overcome those economics.”

http://online.wsj.com/news/articles/SB1000142405270230445090457936695056…

We’ve always know that insurers market their plans in areas where there is the greatest potential for business success. As USC Health Finance Professor Glen Melnick explains, the Affordable Care Act cannot overcome those economics.

Clearly we have the wrong model for reform. Private insurers respond to business opportunities. Public insurance, such as a single payer national health program, simply enrolls everyone; there are no market decisions to be made.

So is it going to continue to be about private insurance markets, or will it be about patients – all patients? An improved Medicare for all would be about the latter.

Physician outcry on EHR functionality and costs

Physician outcry on EHR functionality, cost will shake the health information technology sector

By Daniel R. Verdon
Medical Economics, February 10, 2014

Despite the government’s bribe of nearly $27 billion to digitize patient records, nearly 70% of physicians say electronic health record (EHR) systems have not been worth it. It’s a sobering statistic backed by newly released data from marketing and research firm MPI Group and Medical Economics that suggest nearly two-thirds of doctors would not purchase their current EHR system again because of poor functionality and high costs.

*  Nearly 45% of physicians from the national survey report spending more than $100,000 on an EHR.

*  Nearly 79% of respondents in practices with more than 10 physicians said their EHR investment was not worth the effort, resources and cost.

*  73% of the largest practices would not purchase their current EHR system. The data show that 66% of internal medicine specialists would not purchase their current system. About 60% of respondents in family medicine would also make another EHR choice.

*  67% of physicians dislike the functionality of their EHR systems.

*  45% of respondents say patient care is worse since implementing an EHR.

*  65% of respondents say their EHR systems result in financial losses for the practice.

*  About 69% of respondents said that coordination of care with hospitals has not improved.

The national survey underscores the major disconnect between the current state of EHR software and the needs of physicians.

http://medicaleconomics.modernmedicine.com/medical-economics/news/physician-outcry-ehr-functionality-cost-will-shake-health-information-technol

Comment:

By Don McCanne, M.D.

Congress keeps coming up with schemes to try to control health care costs. Establishing financial incentives for electronic health records (EHRs) appears to be just one more example where Congress has again fallen short, based on this report of physician outcry over EHR functionality and costs.

It’s too bad. Members of Congress have before them a model that has been proven to be effective in controlling costs – a single payer national health program or “Improved Medicare for All.” If we had such a system in place then other improvements such as a health information technology system (HIT) could be developed in a coordinated manner that would better serve patients and their physicians.

The Office of the National Coordinator for Health Information Technology was established under President George W. Bush, but existed primarily to only encourage the private sector to work together to coordinate their systems. That is asking a lot of competitors that each want to have the dominant system in the market while making sure that competitors’ systems would not be compatible, so they could have the whole thing. The profit incentives in the private, fragmented EHR marketplace are considerably different from the patient care incentives that led to the successful VistA EHRs for the VA Health system – a concept developed by the National Center for Health Services Research and Development of the U.S. Public Health Service (now AHRQ).

Some may cite the boondoggle with the startup of the ACA insurance exchanges as an example of the incompetence of the government in such matters, but it was the government’s reliance on the private sector that resulted in the problems that we saw and are still seeing. Congress should enact a single payer system now so that we’ll have something to work with for the betterment of efficient patient care.

Million-Dollar Babies Should Have Been Non-Issue for AOL

By Maggie Fox
NBC News, February 10, 2014

Tim Armstrong has had to apologize twice now for his announcement last year saying the company was changing its 401(k) retirement plan policy in part because it had some hefty health care claims, including two babies costing a million dollars each for care.

Experts say he may also have something else to apologize for — not knowing what he was talking about. No company the size of AOL should be strapped by having to pay for the medical care of two “distressed” newborns. And while it might have once been a problem for smaller employers, they say, the issue shows how the new health care law might provide some relief going forward.

“We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost,” Armstrong, pictured above, said last week.

The mother of one of the babies, Deanna Fei, told NBC News that her prematurely born child was one of the costly newborns and said Armstrong’s remarks made her feel like she and her family were “greedy consumers of health care benefits.”

Armstrong later personally apologized to Fei and he also reversed his controversial decision on the 401(k)s.

Dr. Steffie Woolhandler, co-founder of Physicians for a National Health Program, says it never should have been an issue in the first place. “A company as big as AOL ought to be able to do this, so it is a little confusing why they would be so flummoxed a by a couple of million-dollar babies,” she said.

“A million-dollar baby is not that unusual,” added Woolhandler — citing the enormous costs of U.S. health care in general and of keeping a child in a neonatal intensive care unit.

And, several experts pointed out, even if AOL is self-insured and pays its employee health costs directly, any sensible company has what’s called a “stop-loss” health insurance policy that would pay out once expenses reached a certain point.

Some workers may worry that they may be targeted by their employers if they start running up health costs. But it’s unlikely for several reasons, including two laws that protect workers: the Employee Retirement Income Security Act, known widely as ERISA, and well as the Health Insurance Portability and Accountability Act, or HIPAA.

HIPAA means Armstrong almost certainly did not know the specific details of the two cases, says Jennifer Rathburn, a health care expert at Quarles and Brady, LLP, a Milwaukee law firm. “There is a separation between the health plan and the employer,” she said. Employers who are self-insured must use a third-party administrator, usually a major insurance company, to handle the details of the coverage, and these administrators can pass along only aggregated information on the costs.

“Large employers don’t get claims data on a per person basis. It is very hard to discriminate against a specific person,” agreed Paul Fronstin, a senior research associate with the Employee Benefit Research Institute.

This could be different at a small firm, where the boss very likely knows all of the workers personally. But ERISA makes it illegal to fire someone for making use of their benefits and the National Federation of Independent Business, which represents small businesses, advises directly against trying it.

Smaller employers do worry about the possibility of being driven out of business by high employee costs, says Alden Bianchi, an employee benefits expert at Boston-based law firm Mintz Levin.

“Every few months you get a call from a self-funded plan, asking about an employee with a rare condition,” Bianchi said. “The claim poses a threat to the company’s existence.” They might offer the employee a bigger paycheck on the understanding he will refuse the company-sponsored insurance and go buy some on the new Obamacare exchanges instead, Bianchi said.

“My fear here is that this will happen and the exchanges will become dumping grounds for bad risks,” Bianchi said.

The other argument is that the exchanges could be the answer for small employers. Starting in 2015, they’ll be able to send their employees there, if they want, and the Obama administration argues workers will have better choices there than the one or two policies typically offered by an employer.

http://www.nbcnews.com/health/health-care/million-dollar-babies-should-have-been-non-issue-aol-n26776

Physician outcry on EHR functionality and costs

Physician outcry on EHR functionality, cost will shake the health information technology sector

By Daniel R. Verdon
Medical Economics, February 10, 2014

Despite the government’s bribe of nearly $27 billion to digitize patient records, nearly 70% of physicians say electronic health record (EHR) systems have not been worth it. It’s a sobering statistic backed by newly released data from marketing and research firm MPI Group and Medical Economics that suggest nearly two-thirds of doctors would not purchase their current EHR system again because of poor functionality and high costs.

*  Nearly 45% of physicians from the national survey report spending more than $100,000 on an EHR.

*  Nearly 79% of respondents in practices with more than 10 physicians said their EHR investment was not worth the effort, resources and cost.

*  73% of the largest practices would not purchase their current EHR system. The data show that 66% of internal medicine specialists would not purchase their current system. About 60% of respondents in family medicine would also make another EHR choice.

*  67% of physicians dislike the functionality of their EHR systems.

*  45% of respondents say patient care is worse since implementing an EHR.

*  65% of respondents say their EHR systems result in financial losses for the practice.

*  About 69% of respondents said that coordination of care with hospitals has not improved.

The national survey underscores the major disconnect between the current state of EHR software and the needs of physicians.

http://medicaleconomics.modernmedicine.com/medical-economics/news/physic…

Congress keeps coming up with schemes to try to control health care costs. Establishing financial incentives for electronic health records (EHRs) appears to be just one more example where Congress has again fallen short, based on this report of physician outcry over EHR functionality and costs.

It’s too bad. Members of Congress have before them a model that has been proven to be effective in controlling costs – a single payer national health program or “Improved Medicare for All.” If we had such a system in place then other improvements such as a health information technology system (HIT) could be developed in a coordinated manner that would better serve patients and their physicians.

The Office of the National Coordinator for Health Information Technology was established under President George W. Bush, but existed primarily to only encourage the private sector to work together to coordinate their systems. That is asking a lot of competitors that each want to have the dominant system in the market while making sure that competitors’ systems would not be compatible, so they could have the whole thing. The profit incentives in the private, fragmented EHR marketplace are considerably different from the patient care incentives that led to the successful VistA EHRs for the VA Health system – a concept developed by the National Center for Health Services Research and Development of the U.S. Public Health Service (now AHRQ).

Some may cite the boondoggle with the startup of the ACA insurance exchanges as an example of the incompetence of the government in such matters, but it was the government’s reliance on the private sector that resulted in the problems that we saw and are still seeing. Congress should enact a single payer system now so that we’ll have something to work with for the betterment of efficient patient care.

Lancet/Oslo Commission: The political origins of health inequity

The political origins of health inequity: prospects for change

By Ole Petter Ottersen and 23 other co-authors
The Lancet—University of Oslo Commission on Global Governance for Health, The Lancet, February 11, 2014

Executive summary

Despite large gains in health over the past few decades, the distribution of health risks worldwide remains extremely and unacceptably uneven. Although the health sector has a crucial role in addressing health inequalities, its efforts often come into conflict with powerful global actors in pursuit of other interests such as protection of national security, safeguarding of sovereignty, or economic goals. This report examines power disparities and dynamics across a range of policy areas that affect health and that require improved global governance: economic crises and austerity measures, knowledge and intellectual property, foreign investment treaties, food security, transnational corporate activity, irregular migration, and violent conflict.

Global health inequities

*  About 842 million people worldwide are chronically hungry, one in six children in developing countries is underweight, and more than a third of deaths among children younger than 5 years are attributable to malnutrition. Unequal access to sufficient, safe, and nutritious food persists even though global food production is enough to cover 120% of global dietary needs.

*  1·5 billion people face threats to their physical integrity, their health being undermined not only by direct bodily harm, but also by extreme psychological stress due to fear, loss, and disintegration of the social fabric in areas of chronic insecurity, occupation, and war.

*  Life expectancy differs by 21 years between the highest-ranking and lowest-ranking countries on the human development index. Even in 18 of the 26 countries with the largest reductions in child deaths during the past decade, the difference in mortality is increasing between the least and most deprived quintiles of children.

*  More than 80% of the world’s population are not covered by adequate social protection arrangements. At the same time, the number of unemployed workers is soaring. In 2012, global unemployment rose to 197·3 million, 28·4 million higher than in in 2007. Of those who work, 27% (854 million people) attempt to survive on less than US$2 per day. More than 60% of workers in southeast Asia and sub-Saharan Africa earn less than $2 per day.

* Many of the 300 million Indigenous people face discrimination, which hinders them from meeting their daily needs and voicing their claims. Girls and women face barriers to access education and secure employment compared with boys and men, and women worldwide still face inequalities with respect to reproductive and sexual health rights. These barriers diminish their control over their own life circumstances.

Conclusion

The overarching message of the Commission on Global Governance for Health is that grave health inequity is morally unacceptable, and ensuring that transnational activity does not hinder people from attaining their full health potential is a global political responsibility. The deep causes of health inequity are not of a technical character, devoid of conflicting interests and power asymmetries, but tied to fairness and justice rather than biological variance. Health equity should be a cross-sectoral political concern, since the health sector cannot address these challenges alone. A particular responsibility rests with national governments. We urge policy makers across all sectors, as well as international organisations and civil society, to recognise how global political determinants affect health inequities, and to launch a global public debate about how they can be addressed. Health is a precondition, outcome, and indicator of a sustainable society, and should be adopted as a universal value and a shared social and political objective for all.

http://www.thelancet.com/commissions/global-governance-for-health

The political origins of health inequity: prospects for change (38 pages): http://download.thelancet.com/pdfs/journals/lancet/PIIS0140673613624071.pdf

Comment:

By Don McCanne, M.D.

In reviewing the enormity of the global health inequities and the problems that perpetuate them, our compromised status in the United States seems to be minuscule in comparison. Yet when you think of the difficulties that we do have with addressing our own health inequities, it is mind-boggling to contemplate the international scene.

In a related Lancet article, Professor Ole Petter Ottersen is noted to be at pains to point out that this is far from “a doom and gloom report.” Yet they conclude, “Health equity should be a cross-sectoral political concern, since the health sector cannot address these challenges alone. A particular responsibility rests with national governments.”

Judging from the difficulties that we have had with merely tweaking some of our injustices without addressing effectively the major problems, it is difficult to see how nations will be able to work together in making real progress in improving the health of all – but we have to try.

As this is being written, Prof. Ottersen, in closing remarks in a live webcast from the University of Oslo at which this report was presented, reemphasized that that the improvement in global health will require the involvement of national political systems. And we thought single payer was tough.