Monday, March 30, 2009

Health Care Reform meets Financial Reality

From the Healthcare Marketplace and Policy Review....a pretty good site, and Bob Laszewski is someone I know, and he is as smart as they get.

"Irrational exuberance" over the chances for health care reform meet the budget realities.

The House and Senate Budget committees have begun work on the federal budget.

Last week’s CBO report estimated the Obama budget would:
Produce a nearly $9.3 trillion deficit over the next decade.
Generate annual budget deficits of nearly $1 trillion in each year from fiscal year 2010 to 2019.
Increase budget deficits to more than 4% of GDP each year over the next decade.
Double the national debt to 82% of GDP by 2018 (it was 8% of GDP in 2001).
Still stunned from that report, and under immense pressure from moderates in the Democratic party to cut spending, both the House and Senate Budget chairs have made it clear they intend to reduce the Obama budget and see the Congress proceed with health care reform following the pay-go rules.

That would mean any new health care reform spending over the next ten years needs to be offset with either cuts to existing spending or with new revenue.

President Obama outlined a $634 billion “down payment” on health care reform in his budget.

Half of that, $318 billion, came from raising taxes by reducing the charitable and mortgage deductions high-income folks pay. That proposal is deader than a doornail up on the Hill.

Another $175 billion comes from payments private Medicare plans get. That proposal will likely survive the budget process--although it may well just get swallowed up fixing the upcoming 21% Medicare physician fee cut. Another $141 billion over ten years comes from minor cuts to health care providers and has a chance of surviving the legislative sausage factory.

So, assuming the HMO cuts and provider cuts survive in the form they were proposed in the Obama budget, we would begin the health care reform process with about $318 billion toward the ten-year cost of the effort.

The consensus of opinion is that an Obama campaign-like comprehensive health care plan will cost at least $1.5 trillion over ten years.

That means for the Congress and the President to achieve comprehensive health care reform they will have to come up with at least $1.2 trillion from a combination of revenue sources and cuts.

Since there aren’t any extra dollars elsewhere in the budget, it’s a good assumption any cuts to pay for health care reform are going to have to come from the health care budget itself.

Comprehensive health care reform of the kind Democrats talked about during the campaign literally comes down to finding another $1.2 trillion to pay for it.

I will remind you of the CBO’s December report on health care budget choices that provides a list of 115 options. It literally provides us with an a la carte menu of options to choose from. It also makes it clear that the cost containment “lite” proposals like wellness, prevention, pay-for-performance, and health information technology hardly make a dent. The big money is in the politically problematic areas of cutting providers and beneficiaries in very tangible ways.

Even if a politically acceptable tax increase can be found to replace the first one the President proposed, that still leaves us about a trillion short.

Any volunteers?

More Here

This is scary stuff. 82% of GDP???? 141 billion in cuts to providers? 21% cut in Medicare Payments??

As I said in another post, we are all going to see a pay cut...

Friday, March 20, 2009

Rationing of Care...

Good article in the times....

NY Times

Blue Cross and Blue Shield of Massachusetts, the state’s largest insurer, recently devised an innovative model that pays doctors a flat fee per patient, with adjustments for age, gender and health status, and then adds bonus payments for high standards of care.

Blue Cross officials say they believe that the new plans can cut the growth of premiums in half over five years and expect them to account for 15 percent of their business by June. “We’re very committed to this path because we feel it’s the only credible place to go,” said Cleve L. Killingsworth, the company’s chairman.

Some health policy experts argue that changes in payment practices will not be enough to slow the growth in spending, even when combined with other cost-cutting strategies. To truly change course, they say, the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care.

“Really controlling costs requires just stopping spending,” said Stuart H. Altman, a professor of health policy at Brandeis University.

Because Massachusetts now requires its residents to be insured, it cannot fall back on the strategy used by other states in hard times — to simply remove people from the public insurance rolls by restricting eligibility.

“It forces us to look in the mirror and say, ‘What do we do about health care spending?’ ” said Jon M. Kingsdale, executive director of the agency that administers Commonwealth Care. “And the reason that’s so challenging is that it means limiting resources for people doing really good stuff.

“It’s not like the fat sits out here easily identified and you just slice it off. It’s marbled throughout the meat.”

This is going to be more problematic than I think they realize. It will almost certainly lead to rationing of care, just like the flat fee HMO payments did, and this was noted on Whitecoats Call Room blog as well.

Many are concerned about this, problem is...Rationing already occurs to a large part. Right now, we ration care by insurance status. Patients without insurance, or without good insurance, cannot obtain appointments, and cannot get adequate care.

Rationing is inevitable. Look at it this way. There are two factors here.

1. There is a finite amount of money available to pay for care. Despite you having insurance, there is still only so much money in the pool.

2. There is a limit to the amount of resources, or care available.

NOW, in order to provide unlimited care to everyone, you need to have an unlimited pool of money, which we do not have. Therefore, one pool, or the other needs to be managed, or rationed effectively.

It is simply reality. My question, is how should we ration care?

My opinion is to really ration care in the last six months of life, and amongst the elderly. Greater utilization of hospice for end stage patients. Decreased use of multiple medications and procedures that cost a lot, but have little if any proven benefit.

For example, in the UK, if you are 80 years old, and develop renal failure. You don't get dialysis. Not usually. They have decided that at the age of 80, the amount of return that their society will get, measured against the massive costs, are not worth the investment. How would that go over here?

Wednesday, March 18, 2009

Future of Healthcare, part One.

I wanted to post a series of thoughts, and discussions on the future of healthcare. We are going to start with midlevel provider utilization. Now, I do not like the term "midlevel" because it implies a lack of training or a heirarchal, rather than team approach to medicine. I have worked in the past in positions, where I was reminded often that I was indeed, just a "PA". Fortunately, I am now in a position, where I am treated with respect, and as a colleague, rather than a subordinate. Some in medicine, well, they don't like PA's or NP's much, and that's okay. No one will force them to hire one, but they had better get used to the fact that we are here, and we are here to stay.

Let's start with economics. Even at an average salary for an EM board certified physician of 226, 957 dollars per year, I make approximately 55% of this amount. Now, since I see many patients independently, I bill for my services, and am reimbursed, if you follow medicare guidelines at 85% of the physician reimbursement, for every SINGLE patient that I see independently, and bill for, the group/department makes 30% additional profit over what they would make should a physician see that patient. This can become a substantial amount of money. As a friend has told me that works in a private group out west. Even after the PA's in his group recieve salaries, benefits, bonuses, retirement, etc., THE group makes approximately 250k per month in additional profit, over what they would with a similar number of MD providers seeing the same patients. This amounts to 3 million dollars per year.

Now, with regards to hospital practice, there has been great concern over residency hour restrictions, and how that void may be filled. This was recently in the New England Journal.

"The committee commissioned health services researcher Teryl Nuckols and health economist José Escarce (both of UCLA and the RAND Corporation) to construct a model that would estimate the numbers of workers and the amount of money that would be required to supplement the resident workforce under various duty-hour scenarios. Nuckols and Escarce found that nationally the health care system would need to create and fill new full-time–equivalent positions for 229 nursing aides, 45 laboratory technicians, 320 licensed vocational nurses, 5984 midlevel providers (nurse practitioners or physician's assistants), and 5001 attending physicians; if hospitals were to increase the number of residents instead, an estimated 8247 additional residency positions would have to be created. "

As far as EM is concerned, "The GAO has estimated that ED visits increased by 26% in one decade. (90.3 million in 1993 to 113.9 million in 2003). At the same time, the number of doctors available to provide care has decreased by 12.3 percent during the same time frame. (CDC-2006) The GAO has also estimated that visits will continue to increase by 3 million annually, although other health policy analysts have suggested that such a linear projection model underestimates the accelerating growth in demand for Emergency Medicine Services (Aminzadeh and Dalziel 2002)"

Some physicians have suggested simply hiring more MD's....well, that is a novel thought. However, let's examine the data. "Of the 4,917 hospitals in the US, 4,862 have an emergency department. The average ED employed 7.5 physicians and saw 15,711 patients in 2001 ( Sullivan, et al 2006), BASED on this data, hospitals currently require 32,036 to staff existing emergency departments. As of 2003, there were 31,797 practicing clinical physicians, and 3,654 residents. Almost 1,300 residents entered medical practice that same year. This supply estimate of 4% per year offsets the emergency provider attrition rates of 3% per year. However, with emergency department utilization increasing by 3% per year, it will take until 2025 for the supply of physicians to meet the demand. (Hollimon, Kirsch, Green, Wolfson, and Tom 1997)"

This also does not even begin to take into account the numbers of physicians who either do not practice clinically, or choose part time or administrative work.

Bottom line, PA's and NP's are essential for providing the emergency medicine services that are vital throughout this nation.

Friday, March 13, 2009

Doctoral degree to start

On monday.....can't wait to get this over with. Another step on the journey.

First course is "Writing for Medical Professionals"...

As I've already written, published, and even function as an abstract and article reviewer for JAAPA, and the AAPA, I think this one might not be too bad. Might be in for a surprise though.


Decided to try P90X.....Have watched the infomercial and thinking it was basically a big fake bag of nothing. I decided to mention it to some friends, but was surprised to hear of several of them that had obtained outstanding results. Decided to try it, and I am only about to start day 3......

All I can say....OMFG....I am so, SO sore. The Plyometrics was today, and everyone warned me how bad it be honest, maybe because of my triathlon and cycling background, I didn't think that was that bad. HOWEVER, the day before, the Chest and Back and Ab Ripper routines rocked arms are abs were screaming.....

Kinda feels good.