Thursday, March 18, 2010

What Health Care Reform Means to a Practicing Physician

The following paper was written by an Atlanta-area Urologist regarding the pending Health Care Reform issue. The author goes to great lengths to remove the politics from the issue, and I believe he makes a number of great points and reveals facts about cost and quality of care that are not showing up in the public discussions of this very important issue. I believe it is worth your time to read the following:

We are all aware that the health care reform legislation is nearing its conclusion. Before that endpoint is reached, I wanted to write an informative piece from the perspective of a physician who loves the practice of medicine and who can say, like most doctors, that I try to do what is best for my patients. It is in that mindset, and as one who also wants to see our nation reach the goal of providing readily accessible high quality medicine for all, that I am writing this. Not only do I love what I do, but I love my wife and my two girls and I want to be sure we do not leave the albatross of a failing and expensive healthcare system to them.

I am struggling to make this interesting, to find an enticing story or analogy that creates a level of excitement. I, unfortunately, cannot. But then, this is so important. We make such an effort every day to do what is right, to raise our kids, to provide for and protect our families the best that we possibly can. Yet we are willing to accept major changes in our ability to obtain health care, and we accept it without taking enough time to see whether the changes are beneficial or hurtful. Health is so precious and fleeting. Once gone, it cannot be restored. I see that every day. Reading this will be boring; it will be work. But it should not take more than 20 minutes. So please take a breath and push through some of the doldrums of numbers and data. BECAUSE OUR HEALTH CARE IS WORTH IT.

I have no hidden agenda. I do not see a Democrat prostate cancer, a Libertarian kidney cancer, a Republican bladder cancer. I treat people, and I choose treatment based on evidence and data that directs me to the best cure. This has nothing to do with our President and I am making no statement in this writing other than expressing an educated commentary about the health care legislation.

Health care reform should be implemented in ways that make sense, ways that have been shown to effectively rein in costs while maintaining quality of care. I am not going to delve into any of the political theater or discussions regarding abortion or kickbacks or death panels. This is to be a pragmatic discussion of the effects of this health care reform bill based on historical models along with current information specifically pertaining to this bill.

I am going to discuss information regarding the Senate bill, as it is the piece of legislation that will become law if the House votes it through. I will relay information that is within the CBO reports and the Chief Actuary of Centers for Medicare and Medicaid Services’ (CMS) Estimated Financial Effect of the Senate bill. These are readily found online. And remember the goal as stated in the opening quote in the legislation: “The purpose of this is to provide affordable, quality health care for all Americans and reduce the growth in health care spending.”

According to the latest CBO report from 3/11/2010, the cost of the bill has been estimated at $875 billion for years 2009-2019 with a few other additions that bring the total to around $1 trillion. This expenditure is above and beyond the normal cost for delivering health care, currently running about $2.5 trillion a year. Despite this additional cost, the CBO estimates that the bill will “yield a net reduction in federal deficits of $118 billion over the 2010-2019 period.” Sounds great. Even better, the bill is estimated to bring health insurance to an additional 31-33 million people. And best yet, if you make less than 4x the poverty level ($88,000 for a family of four), then you will get money from the government to help offset the cost of insurance if purchased through the exchanges (outside of employer-supported plans). The health insurance industry would have to accept all applicants (guaranteed issue) and could not vary premiums based on health differences between applicants (modified community rating).

So we have a $1 trillion plan that covers more people, assists families with the cost of insurance, gets rid of those detestable insurance practices, and does all this while decreasing the federal deficit. Maybe that sounds too good to be true, but let’s see what conclusion a broader understanding brings.

We have been repeatedly told that health care costs are unsustainable, and they are. Our businesses, families and government cannot sustain this level of spending. Our country will go bankrupt. We need to find a way to spend less money on health care. And remember the stated purpose: “to reduce the growth in health care spending.” The CBO only comments on the effect of the bill on the federal budget—“the agency has not assessed the net effect of the current legislation on NHE” (national health care expenditures, the cost our country pays for health care).

Fortunately, the Chief Actuary for CMS has described this impact. The report from 12/10/2009 states that “total national healthcare expenditures under this bill would increase by an estimated total of $234 billion” more than if we just kept our current system. Read that again. This plan makes an unsustainable path more unsustainable. It actually raises the cost curve. If we are worried about bankrupting our country, then why are we looking to a plan where the costs actually go up? And this is in direct contradiction to the stated purpose of the bill. This means that our government will eventually be unable to pay for Medicare for seniors, that funds will not be available to help decrease the costs of health insurance premiums for poor families, that those children needing government assistance may not have any. This means that we will once again be putting off truly fixing a problem to future generations, at which time the fix will be even more difficult and the damage perhaps irreparable. This is a major sticking point for me. Costs go up, and everyone agrees that the costs are too high now.

How does the CBO say that the plan decreases our federal deficit (not overall health care cost)? Does the plan have efficiency-driven savings? Well, according to CMS, this plan will bring about “a relatively small reduction in non-Medicare federal health care expenditures of $2.3 billion.” So the plan does not make health care delivery more efficient. If we are to see deficit reduction in the face of rising costs, then that can only occur through cuts and taxation.
First for the cuts: Medicare gets cut to the tune of $493+ billion. I will not delve too deeply into the cuts, but they will be based mostly around decreasing reimbursement to hospitals, physicians and other aspects of health care for our seniors. The cuts in Medicare will hold off the expected bankruptcy of that program by all of 9 years, moving the expected date of exhaustion of the trust fund from 2017 to 2026. Shouldn’t a $1 trillion plan do better than just keep Medicare from bankruptcy for an additional 9 years? What happens to those 65 and older when Medicare runs out of money? And what will be the effect of the cuts upon our seniors?

CMS states that “providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibly jeopardizing access to care for beneficiaries).” Even worse, “simulations by the Office of the Actuary suggest that roughly 20% of Part A (hospital) providers would become unprofitable within the 10-year projection period.” Currently, only 72% of physicians currently take new Medicare patients. When hospitals go out of business and fewer doctors accept Medicare, access for seniors will worsen.

But Medicare cuts do not even begin to cover the entire cost of this plan. So now come the taxes. Individual and business mandate penalties are expected to raise $64 billion for the government. The payroll tax for Medicare will go up. High-cost employer-sponsored health plans (a.k.a Cadillac plans often part of union contracts or for those workers at high risk jobs like policemen or firemen) will be taxed. Medical device manufactures like those that make pacemakers will be taxed. Pharmaceuticals will be taxed. Insurance companies will be taxed.
Investment income will be taxes. The taxes will either stifle innovation or according to the Chief Actuary, be “passed through to health consumers in the form of higher drug and device prices or higher insurance premiums.” The revenue to the federal government, i.e. taxes, will total $486 billion. The folly of taxing people and businesses in the midst of a recession is fairly self evident. I don’t know many who would say that increasing taxation increases the availability of jobs and drives economic recovery.

The expansion in health insurance to 33 million people sounds good, at least until we look just a little below the surface. A majority (15-18 million) will come from the expansion of Medicaid. Currently, just over 50% of physicians take Medicaid. Once again, the Chief Actuary of CMS states that “providers might tend to accept more patients who have private insurance and fewer Medicare and Medicaid patients, exacerbating existing access problems for the latter group…(an) outcome (that) should be considered plausible and even probable.”

The problems regarding Medicaid expansion extend further. According to the CBO, state spending on Medicaid would increase $25 billion. In Georgia, we are furloughing teachers, decreasing the numbers of firemen and policemen, and limiting our legal system because of budget shortfalls. The states cannot tolerate any increased costs passed along by the federal government. In expanding the Medicaid program, we are giving people health insurance that does not equate with access to health care, and we are doing it at the expense of our seniors and our economic well-being.

To now recap with a bit more detail: we have a $1 trillion dollar plan that expands healthcare to 31-33 million people. It raises the costs of what is already considered an unsustainable cost problem by $234 billion more than if we kept the current system. It cuts access to health care for our seniors and raises over $486 billion in taxes. A majority of those that receive insurance receive a substandard product (Medicaid) that few physicians will take. Our states will have to find more cuts or raise taxes. Medicare goes bankrupt in 2026. And in this environment, less people will be inclined to pursue a medical career, further worsening a physician shortage already expected to leave us short of 200,000 doctors by 2025. Our economic recovery and the availability of jobs are negatively impacted.

The plan does not sound as palatable as before. But before I reject this treatment plan, I will look back at history to see if perhaps I am reading this incorrectly.

On to Massachusetts, where in 2006 the state passed a sweeping overhaul of its health care system. The system, which influenced the current health care legislation, has faced unexpected and unchecked growth in costs, both to the government and individuals. The state’s health care expenditures have increased 42% compared to an 18.3% increase in the rest of the US where this plan was not enacted. According to an analysis by the Rand Corporation, “in the absence of policy change, health care spending in Massachusetts is projected to nearly double to $123 billion in 2020, increasing 8 percent faster than the state’s gross domestic product (GDP).” Without significant policy changes, the program’s long-term viability is in doubt.

And this is occurring despite dropping coverage for 30,000 legal immigrants, increasing the cigarette tax $1 a pack, initiating $89 million in new fees on the health care industry and receiving $1.5 billion from the US government. Meanwhile, the cost of insurance premiums in the state is the highest in the nation, and the cost per person for health care is 15% higher than the rest of the US (that includes downward adjustment for cost of living differences). Double-digit rate hikes are expected again in 2010. And access to care is an issue: the average wait times to see a physician in Boston is 50 days (compared to 11 here in Atlanta).

As a result of the worry that health care spending will overwhelm the state’s budget, Governor Patrick Deval in 2/2010 opened the possibility of capping the fees that physicians, hospitals, medical imaging centers and other health care services can charge as a way to constrain the rapidly rising costs. But this comes at a price. Physicians will flee the state, further exacerbating the access problem. Quality will be negatively affected as well. In the 1970s and 80s, 30 states instituted a similar policy of capping fees that hospitals could charge. A study in the New England Journal of Medicine in 1988 looked at the mortality levels in those states and compared them to mortality levels in other states without the capped fees. The study concluded that those states with the capped fees had a 5-6% higher death rate than those hospitals without the caps. So the outcome from the Massachusetts model is increased health insurance coverage. But access has decreased. Costs have dramatically increased. And soon, quality will decrease as the death rate rises. I do not see that as a desirable model to expand to all American citizens.

Massachusetts is not the only available model to review. In 1994, Tennessee launched TennCare. The program successfully cut the state’s uninsured rate to about 6 percent. But in 2005, the state was forced to scale back significantly, slashing 170,000 people from the rolls after the program’s rapidly increasing costs threatened to send the state into bankruptcy. In 2003, Maine expanded its Medicaid program to cover 22% of the population while also creating a "public option" known as DirigoChoice to compete with private plans. The system that was supposed to save money has cost taxpayers $155 million and rising. The premiums for DirigoChoice have increased 74%, and few low-income Mainers have been able to afford the premiums, even at subsidized rates. The state legislature proposed an infusion of funds through a beer, wine and soda tax, but that was rejected by Maine voters 2:1. Last year the legislature passed a 2% tax on paid health insurance claims contrary to public wishes. Since 1988, many other states—Oregon, Minnesota, Vermont, Washington—have enacted reforms aimed at achieving universal coverage. All offered new government subsidies and/or expanded Medicaid: ALL FAILED. To quote a pair of physicians from Harvard (who are actually in favor of socialized medicine) “There is little reason to think that the current Massachusetts reform, or a national plan modeled on these state reforms, would have any better long-term success.” I could not agree more with their assessment.

I could go on, but I hope my point has been made. We do need to reform our health care delivery system. But we need to choose the right reform. We cannot be led by political ideology and ignore evidence. Medicine is not political. We practice evidence-based medicine to treat disease. It is a concept that we should apply to curing the ills within health care.

While it is beyond this, please let me assure you that good options to truly correct the underlying flaws do exist. In Indiana, the state developed a high deductible health plan with health savings accounts for its public workers, and the state has saved 11% of its healthcare costs as a result. The retention rate of workers in that plan is 97%. In 2005, Safeway Inc began a Healthy Measures program that incentivizes healthy lifestyles through the financial reward of premium discounts. They found that aligning financial incentives to healthy living has decreased their health care costs by 40% while decreasing workplace absenteeism by 11%. Please read about Whole Foods, another example of real-life cost savings that are possible with well designed reforms. No system will likely ever be perfect, but we cannot choose one that increases costs, decrease access and worsens quality. We can and should do better. More effective options and ideas do exist.

Thanks for reading this. Please pass it along. It is in no way political. This is about health care. And please, fight against this bill-call your Congressman again and again.

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