Friday, July 20, 2018

Physicians

Physicians
The doctor is in ...

POLICY/PHYSICIANS: Beauty Contest

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Modern Physician is running a poll where you can go and vote for the
best looking, err…most powerful physician executive in American
health care.  It’s actually quite a tricky call. For example is Tom Frist from HCA the most powerful doc because he and his family own the biggest hospital chain and have a sibling who runs the Senate? (For that matter why isn’t Bill on the list as overall he’s obviously by the far the most powerful MD in the nation even if it hasn’t got much to do with his increasingly dubious behavior when he claims to be using his medical training). Is Jack Rowe from Aetna or Bill McGuire at United Health the most powerful because everyone at one the biggest insurers has to do what they  say (plus Bill’s probably got the most money!)? But maybe as the doc preaching the word of disease management at the single biggest insurer Sam Nussbaum (Wellpoint) is now the most powerful?

But then again while I don’t think Carolyn Clancy (AHQR) is that powerful, and that’s a bad thing for American health care, Mark McClellan (CMS) has got the biggest stick and seems to be prepared to use it in the interest of promoting "the right things" from Medicare in the years to come.  On the other hand Don Berwick (IHI) or Jack Wennberg (Dartmouth) have probably had more influence in promoting P4P and the quality movement that McClellan’s now espousing than anyone else.  Influence?  For sure. Power?  Well in some ways they wouldn’t have had the time they’ve had to build up their influence if they’d had the power to achieve their goals!

Maybe it’s some new fangled IT whiz who’s got the most power — readers in one poll last year called David Brailer the most powerful man in all of health care — then he didn’t even get $50m from the Congress to fund his office so I’m not convinced that he has any real power.  Maybe Blackford Middleton at Partners is the most powerful, showing that real EMRs can be brought into the ivory tower (Well I met a bunch of his serfs last night and they all seemed real scared of him!!). Molly Coye is great, but for all Healthtech’s influence with the big hospitals her days of real power were back when she struck fear into the heart of Medi-Cal managed care plans (or at least would have done if they’d figured out what she was up to!).

Is Jack Lewin at the CMA (the largest state medical association) the most powerful? Hmm…you don’t hear much about Michael Maves at the AMA either for that matter.

So my vote this year for the first and last time will be for someone who’s not in the mainstream.  David Graham, the FDA gadfly, is pretty much responsible for destroying Vioxx and crippling Merck, and has had a hand in causing problems for the rest of big pharma. I can’t vote for him as he’s not on the list, but Sid Wolfe shares the same views so I can vote for him and call it a team vote. That’s real power even if its effervescent and more destructive than constructive (although something constructive may yet come out of all their work).

But overall this tells me that physicians are just not that powerful in health care as big names. It’s not the star power here that counts. It’s the collective behavior of all the doctors in practice and the power they exert in decisions they make every day that still more than anything else really determines what happens in American health care.

 

INTERNATIONAL: The UK plans for a group practice future

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Showing again that innovation isn’t dead in single-payer (and for that matter socialized) systems, the Brits are serious about creating the environment for pay for performance.  In an article called Super-surgery plan signals end for the family doctor, the Times reports that the British government is planning on coalescing its traditional onesy-twosey GP practices into bigger units.

While the article is full of fears about the end of Dr Finlay (the UK’s TV version of Marcus Welby), and also ridiculous claims that it’s being pushed because mass murdering GP Harold Shipman got away with his crimes because he had no partner looking over his shoulder, the real issue is that the Brits now believe that group practice in primary care will create better quality care.

They have already instituted a pay-for-performance model for primary care that rewards physician practices for hitting a number of process targets.  And over the last decade, they have spent the money and the necessary political capital to computerize practices.  Now they are going to force the GPs into the organizational form that has been shown in the states to create the environment for continuous care quality improvement, and of course have the shared resources to put in the systems that can monitor those processes.

Obviously there are lots of problems with the British system, and the connectivity both in terms of IT and in terms of communication between the primary care and the specialty care parts of the system is still an issue, and will be even when the huge IT project gets done — and that has its own problems.  But the fact remains that, despite all the knocks on the UK system, because it is government controlled it’s able to push the providers into a format that–according to the tenets of the best health services research–has been shown to produce the most effective medical care.

Of course, while there is a good game talked about that by Brailer and McClellan, they must be very envious of the relative power of their British equivalents.

PHARMA/PHYSICIANS: How to deal with the prostate conundrum

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Dame Edna was always making a running gag about her husband Norm’s enlarged prostate. But what should one do about it? Contributor Dr Krankheit (who as you might suspect is just playing one on television) has a solution:

The results of a recently completed project allow me to offer some tips in the interest of informed medical consumerism. It appears there is a major split among urologists in methods of treating benign prostatic hypertrophy
depending upon the specialist’s age.  Younger uros still possess the fantasy
image of themselves as surgeons and this disproportionately inclines them to
procedural/surgical fixes. In the case of BPH this means TURPs (transurethral
resectioning procedures) and TUNAs (transurethral needle ablations).  As with
older, neutered cats, older uros lose interest in these insertion procedures
because the callbacks from patients and evening/weekend rounds start to become a
drag.  Older uros instead prefer pharmaceutical remedies for BPH such as the
5-alpha reductase inhibitors (Proscar or Avodart).  So as an informed medical
consumer, if you find yourself getting up more than once a night to go to the
bathroom, you can choose to remedy the condition with someone putting a laser up
your wang and burning off part of your prostate or, alternatively, by taking
pills that may cause you to develop breasts (gynecomastia).  Select a
young buck urologist for the stick-and-burn option and one into his 50’s for the
D-cup treatment.

PHYSICIANS/QUALITY: Now it’s smoking too many old doctors kills you, by The Industry Veteran

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A recent study instead of looking at specialists versus generalists showed that there’s a strong correlation that the older physicians get — and the further away from medical school — the worse the outcomes for their patients. While you may see this as an inevitability or a trick of the data, The Industry Veteran suggests that there are more malevolent factors at work:

My clients are blithely perceiving this news as confirmation of the admonition from Marketing 101 that they should segment physicians by age in addition to their usual criteria of specialty, Rx writing volume, current product preferences and so forth.  By contrast I perceive the news in a more dour fashion, taking it as further confirmation of the medical profession’s malevolence. Organized medicine’s failure to institute and enforce rigorous standards of continuing medical education is a menace to public health. Their failure reflects all pernicious elements of the guild mentality and the sense of entitlement that we perpetually see in physicians. Once they have completed that residency, they are as regents of the kingdom, set loose upon a defenseless public.  The fact that the profession exempts its practitioners from self-funded CME requirements virtually invites some of the worst excesses of pharmaceutical and other manufacturers. The companies provide continuing education programs that just happen to serve as promotional platforms for their respective products.  The added incentive of these company sponsored programs also providing mini-vacations for physicians and their families/mistresses is a mere incidental. Perhaps George Bernard Shaw used a bit of hyperbole in saying that every profession is a conspiracy against the public, but his language is a strict, empirical description of reality in medicine.

POLICY/PHYSICIANS: Smoking too many specialists will kill you

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Health Affairs is out with one of its fun articles looking at the physician labor force. Here’s the press release which basically explains that on a county level  and controlling for a bunch of other confounding variables (like race, income, etc), places with more specialists have higher mortality rates than those that have relatively more primary care doctors.  Here’s the full article from Johns Hopkins’ workforce specialist Barbara Starfield.

There are also some follow up articles with commentary. One by David Goodman, another of those socialist reprobates at the Dartmouth School who’ve been causing trouble in this arena for a long time, asks that given that we test the health impacts of every drug on the market extensively based on studies, why don’t we similarly seem to care in any empirical way about the health impacts of our structuring of the physician workforce? To be fair he does point out some limitations of the county-based study (e.g.. in California, Los Angeles county is huge, Placer County is not), but overall he thinks that COGME and others backing physician (and specialist) workforce expansion should do more to justify themselves.

The group from the Robert Graham Center in Washington DC point out the relatively obvious–specialists make (and generate) more money for themselves and the economy, and therefore you can argue that the creation of a specialist is better for overall economic growth than that of a generalist. I think their tongue is firmly wedged in their cheek, but surely a bright economist in the THCB reader corps can remind us of the "products versus services" argument from Econ 101–after all as it said in the Hitchhikers Guide to the Galaxy, the telephone sanitizers aren’t that productively useful no matter how much they get paid. (Until of course the civilization dies out from a disease caught off a dirty telephone)

Finally Edward Salsberg is director of the Center for Physicians Workforce
Studies at the Association of American
Medical Colleges. In other words he represents the
status quo of the current residency and training environment. He
thinks that any number of factors but not necessarily an "excess" of
specialists are to blame
for this mortality differential, and that we should reorganize the system to better integrate PCPs and specialists. Somehow I suspect that by "reform" he doesn’t mean getting rid of specialists or reducing the residency places provided for them and the money the taxpayer provides to the AAMC members for those places!

Let’s all be real for a moment. Every doctor with a quarter of a
brain who is going through the hassle of med school and residency
realizes that for a couple more years in fellowship they can double or
triple their salary if they reject pediatrics and general practice and
head to orthopedic surgery or diagnostic radiology. Even with the
downturn in some specialist’s income in some parts of the country in
the 1990s that’s still the case as this list  shows. So the demand for those residency
slots is high.

Furthermore because specialists can create their own demand (see
Fuchs et al ad nauseam for this) and we have in a system where payers
are prepared to stick in 15% more money each year apparently ad infinitum, there’s no real incentive for
the specialists themselves to limit their own numbers. And of course
the government is paying, and paying alot, to subsidize those
residency slots (at least $22,350 per slot per year), and the US government will almost always do what its
interest groups, in this case medical schools, AMCs and their students, want.
In other countries, the money available for specialty care is centrally
limited, and so the specialists are happy that their supply is limited,
so they and the government are happy to keep those specialist residency
slots down.

The current Administration is unwilling to take on the AMA, or the specialty societies over physician income, or the AAMC over residency slots, or today’s medical students and their families who want their son to be the highly-paid sub-specialist. And it would also be unwise for the Administration to take them on directly given that it has no real reason to care much about the overall state of the physician workforce compared to the myriad other things wrong with the health care system that it blithely ignores. So the top down approach of limiting residency slots is not going to happen.

So I’m left with two questions. First, does this have any minor impact on the whole pay for performance notion?  And can Medicare start thinking about this "impact of specialty mix on outcome measure" as something that far down the road it might think of "rewarding", in order to have a very, very long term impact on specialty mix. Second, if the answer is no, as I’m sure it is, why does Health Affairs keep on pissing into the wind by printing this stuff, if no one is going to take a blind bit of notice!

 

 

PHYSICIANS: Better up your political contributions, AMA

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California Healthline points to this Chicago Tribune story about physicians and collective bargaining. It’s again based on the report the DOJ put out last week–the same one that was so glowingly endorsed by the PBMs. Andy Ribner pointed out, this is pretty unfair as hospitals have been allowed to merge and "systematize" with little intervention from DOJ to bargain back at the insurers, while physicians (who are biologically incapable of merging well it appears) seem to be about the only people left in American business who are not allowed to operate as a monopoly or cartel, (or at least on a no-bid cost-plus government contract). Hospital costs have gone up much faster than physician fees, and the AMA is of course squealing. But that’s the logical outcome of the ban on the corporate practice of medicine which maintained the guild model and prevented the evolution of physician organizations in a business-like direction for over half a century.

But for the doctors, the news is not so good. The DOJ re-solidifies its current stance which is that self-employed doctors cannot unite and engage in collective bargaining with insurers. As TCHB contributor

Having made that bed over time, the AMA’s only choice other than to lie in it is to increase how much they’re paying in DC.  They put in enough to get a raise in Medicare payments of 1.5% in the MMA bill instead of the cut they were due.  Now they have to up their contributions so they get treated as well as hospitals, insurers and drug companies.

POLICY: Too many physicians? UPDATE midday Friday

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We’ve been told by COGME no less that there’s an impending physician shortage, and today I reviewed a whole bunch of material for a hospital that looked like it was true.  However, to put a spike in this balloon, an article published online in Health Affairs by Jonathan Wiener showed that even with extra recruitment over the 1990’s, the large prepaid group practices like Kaiser and HealthPartners still managed to serve their populations with far fewer physicians per 1,000 patients than already exist in the US, let alone the number that will be practicing in 20 years time. And all this with physicians allegedly working shorter hours and seeing fewer patients than in the wider FFS world.

I’ll update my thoughts about this later (It’s late and I just got off the plane!) BUT go give the article a read.

UPDATE. OK I’m off my 3 hours early morning call and can spend a moment extending this post, especially as it has a passing relevance to the project I’m working on.  Here’s the argument:

Way back in the early 1990s those forecasting the physician workforce made some assumptions that the US would move closer to gatekeeper/managed care model.  This type of a model assumed a split between specialists and generalists that’s close to 50-50, and in many countries it’s closer to 20-80.  The model also assumed that there would be fewer surgeries and procedures as the model unfurled.  At that point consultants wondering around with bed days per enrollee of Medicare managed care plans in southern California became a familiar feature of the hospital boardroom (yes, I admit I was one of them).  Essentially if you played out that model nation-wide we had about 75% too many hospitals and a few too few generalists and 50% too many specialists. That future never happened for a variety of reasons, mostly connected with the death of managed care. However we did see a reduction in the number of residency slots, including some teaching hospitals being paid to not train residents.

Instead we started seeing a rash of new procedures and technologies, especially in the unmanaged Medicare population, and the newly unmanaged HMO-lite population. Meanwhile there was a rash of hospital consolidation and bed reduction in the 1990s (although only about 10%). Then the prognositcators started to notice the impending arrival of the baby boom, the leading edge of which hits 60 next year and Medicare in 2010.  So we can do more things to more people and will have an increasing number of people to do them to. They also noticed that medical school applications had fallen (although not the number of those in med school, just fewer candidates for each place) and some surveys showed that most physicians wouldn’t recommend medicine as a career to a new student.  Yet we didn’t fundamentally change our system in the last two decade. So about a couple of years ago you started seeing articles like this one warning that we had a shortage coming and that we needed more doctors, and in fact late last year COGME recommended that we increase the level of residency slots 15%.

Weiner’s article simply points out that we can give appropriate care to a given population with a physician-to-population ratio that is 22-37% below the current national rate.  How do the bigger PGPs do it?  Not apparently by working their doctors harder–in fact they probably work fewer hours. Not by adding more primary care doctors–over the years primary care doc numbers in these groups grew less slowly than those of specialists, although the share of primary care docs remains higher than in the overall physician population. In fact specialty position growth in these PGPs exceeded that of the national average. Instead they use more physician extenders (nurse practitioners and physician assistants) for between 17% and 25% of primary care providers–as opposed to the 10% they represent in the overall primary care provider population. Kaiser in particular uses specialty care nurse practitioners–their growth was 16% annually in the 1990s. They also use more preventative care and disease management programs, probably work their procedural specialists harder (this is certainly the case abroad), and probably do less surgery

Meanwhile Solucient projects strong demand for cardiologists, GI and orthopedics docs while the folks at the Advisory Board (who’ve been known to extend a chart line well beyond breaking point in their time–anyone remember their forecast of 90% capitation by 2005?) believe that there’ll be a shortfall in specialist hours of between 35% for intensivists and up to 70% for cardiologists by 2030. They also have a neat chart in their recent report on physicians which correlates GDP per head in the US with MDs per thousand — in other words the richer we get the more money we want to spend on doctors? (Well that’s one interpretation!)

So how will this play out?  One thing to remember is that thanks to the expansion of med schools in the 1960s and 1970s we are still pumping out docs out of residency programs at about the rate of 20,000 a year, with only about 8,000 a year retiring, and that growth will continue until about 2015.  So the number of active non-federal doctors per 100,000 population, which is about 225 now, will peak at 235 in 2010 and only fall back to 230 in 2020. In a chart which includes NPs and PAs, Wiener shows that while the US now has a total of 230 MDs, DOs, NPs and PAs per 100,000, the big PGPs get by with 145-175. So although the rest of US health care lives in a different world than Kaiser and Group Health, anyone wanting more money for medical school and residency places is going to have to make a pretty convincing argument that they’re really needed–especially with $500 billion deficits out as far as the eye can see.  So, as it takes 8-10 years for a policy change to show up as the first "additional" doc in practice, I believe we’ll work with what we’ve got at least out until 2030 and probably beyond.

Medicare will inevitably have to slowly change its payment arrangementss to reflect this–although that’ll be a touch battle. Private plans are already working on similar ideas, such as pay for performance, and the folks at Leapfrog and IOM are also pushing for changes in the model of care delivery. So slowly over time expect the obvious:

–More use of phsyician extenders, such as other clinical professionals. 
–More and better use of technology to make physicians more efficient and patients better at self-care
–Innovative patient-centered practices that get around the "broken chassis" of the 8 minute office visit, and require less physician intervention
–Longer waits (eventually) for the real hard-core sub-specialists, higher salaries for those guys and more struggles between hospitals for the revenue generating superstars.
–Concominant rationing of the really expensive stuff. Don’t worry–you wouldn’t be able to afford it by then anyway!

PHYSICIANS/INDUSTRY: Notes from my wanderings on EBM and malpractice

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Apologies for the lack of posting. When you read the first paragraph you’ll figure out why. I’ve been touring around the East Coast talking to various people in the health care business and then on Thursday went to the UK. Or more accurately got on a plane, which sat on the runway at JFK overnight before deciding that it didn’t want to go and dumping all its grumpy passengers on the next plane. I have a few observations about the state of play with physicians, and Medicare.
I spoke with a group of physicians and a separate group of managers and clinical managers in a rural health system in Pennsylvania, and with various industry watchers and participants on New York and Philadelphia. The doctors are (not surprisingly) concerned about malpractice….given the current deal in Pennsylvania where the governor has decided to pay their malpractice insurance for the current year by raising the cigarette tax. If this goes through it’s a temporary win for the Pennsylvania Medical Society, which has billboards up across the state reading “when the last doctor leaves the state the malpractice crisis will be over”. While this may solve some of their problems immediately, it doesn’t resolve the longer-term issues. In my Q&A with the doctors three major points emerged.
1) There was broad if grudging acceptance that though malpractice reform was needed (from the doctors point of view) simply saying that we need a cap on awards for pain and suffering of $250,000 is not good enough, and that some more valid solution needs to be proposed. On physician told me that 20 years ago both sides of the malpractice equation were taken care of– Anyone hurt badly by the system was looked after institutionally (e.g. a child with brain damage from a “bad birth”) Now the parents only option is to see a lawyer and go after the poor OBGYN who just happened to be there at the time. On the other side, the physician I spoke with is so scared of lawyers that he will not give any kind of a reference about a doctor or nurse, especially a bad one, for fear of being sued by that clinician. That’s one reason why it took so long for the New Jersey “Angel of Death” to be discovered). So lawyers are the problem but also for many patients the only solution. I believe that this view romanticizes the “good old days” especially as way back then doctors’ incomes were lower in real terms and the communal support for victims of poor care wasn’t that great. However, we did agree that lawyering may remain the only solution unless physicians do something constructive about it.
So what might that something be? Well, physicians, nurses and pharmacists have a huge amount of public trust. Amazingly enough, politicians, lawyers and HMO managers do not. As a profession, doctors need to spend some of that “trust capital” by developing education for the public about what evidence based medicine is, and also amongst themselves by showing that they are working to implement it. I appreciate that following evidence-based medicine is very tricky, but the profession needs to level with the public about the fact that not every doctor is practicing state of the art medicine, and that although agreeing on what constitutes EBM is complicated, physicians as a whole are dedicated to working towards that end–rather than simply telling the public that “we have the best health care in the world” and ignoring Don Berwick, the IOM and Michael Millenson.
The real issue is how to do that and to some extent whether they already are doing that. I was accused, perhaps accurately, of identifying organized medicine as only being the AMA. But of course the IOM and the IHI is composed of doctors too, and their work is beginning to have an effect. Many dedicated physicians are working hard to promote the understanding and application of evidence based medicine both among the public and among physicians. The question is how will the public understand this issue and how will that interact with the malpractice issue. If doctors are perceived as simply covering their own rears, and not seen as promoting the best science in the interest of their patients, that “trust capital” may not be there to be spent in ten years time.
2) There were several comments about how much is “too much”. The specter of the Oregon Medicaid insurance experiment (organized rationing for the poor) was invoked. I’d introduced the QALY notion in my talk and one comment I heard was that “we have to get away from the concept that any procedure, test or pill that shows a statistically significant improvement should automatically become standard practice now matter what the cost.” Cost efficiency as a rationale for new Rx introduction has been introduced in the UK, which recently said no to various new drugs for MS and osteoporosis. The concept of introducing that type of assessment to the US is still light years away–we love technology too much for that. But a couple of factors suggest that a compromise might be developing here. First is the slow growth of shared-decision making. Frequently that ends up with a less aggressive course of treatment, because the patient tends to be less interested in a heroic procedure than the physician. The other is the long range state of Medicare, which is eventually going to have too may people at too high a cost to be able to say yes to absolutely everything.

INDUSTRY: Malpractice & EBM, a modest proposal from Matt Quinn

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Over at DB’s Medical Rants and at the Bloviator there’s been a continued interesting debate on Malpractice.  I suggest that you read DB’s post here, which as a bonus gets you two long comments from Ross (who writes the Bloviator).  The crux of this issue is how do you shoehorn what we theorists know about evidence-based medicine into the ill-fitting shoe of the American court system. Presumably the AMA and organized medicine should be doing something here.  Matt Quinn, who’s been absent from this column working on an interesting new project at Intermap Systems, has some ideas:

    The medical profession needs to spend its time and energy fixing the problem (i.e. care that does harm and/or doesn’t follow institutional best practices) rather than protecting itself from the consequences of bad care.

    I think that a constructive role that the AMA and the various clinical professional associations can play is in establishing evidence-based guidelines for care.  I know – easier said than done.  But every doc in the country doesn’t need to agree on what appropriate care means.  A 2/3 solution is better than none at all and professional associations – in an activist (versus protectionist) role – can drive this.  If I (or another non-clinician) were serving on a jury in a malpractice case, having evidence-based (professional) guidelines would make understanding whether care was appropriate much easier (and perhaps quicker and cheaper) to determine.  Without good (i.e. evidence-based) reasons to deviate from  guidelines – and an adverse outcome for a patient, fault is obvious. 

    Further, clinicians can use the guidelines (perhaps built into EMR systems) to know when the care that they are providing deviates from evidence-based best practices.  If they feel the necessity to deviate, they should justify themselves.  While this might increase the prevalence of "defensive medicine" in exceptional cases, it would largely eliminate the necessity for "defensive medicine" for most cases.  It is incumbent on professional organizations and the physicians who compose them to ensure that their guidelines are updated to reflect the standards by which they will be judged.   

    There isn’t, of course, a direct correlation between proper care and malpractice liability.  Most malpractice victims neither bring suit nor are compensated.  Some people who receive proper care receive malpractice awards.  Limiting liability robs justice from those who were wrongfully harmed and successfully prove their cases – while protecting the
    perpetrators.  And does nothing to address those who received a judgment but weren’t wrongfully harmed, those who were wrongfully harmed and didn’t bring suit, or the incentive for the medical profession to hold itself to its own oath.

Of course Matt nails the real reason for the rise of malpractice in the Administration’s agenda

    I view Bush’s (Rove’s) preoccupation with Tort Reform as a way to damage the political opposition and not a way to "fix" medicine.

As I mentioned in comments over at DB’s my British heart tells me that you shouldn’t be suing someone who’s trying to help you (which I assume is the case in all malpractice cases). My American head tells me that that’s the way things are here, and the end result, as Matt points out, makes a lottery of the medical system. I have no firm opinions about how to solve the malpractice problem, but I do think that a no-fault error reporting system, or a separate medical court system, should be investigated. Unfortunately this is an arena in which none of the protagonists–organized medicine, trial lawyers, both political parties and the corporations looking for immunity from litigation who are hiding behind the medical profession for political reasons–is looking out for  anything other than their basest self-interest. The public good and patient safety are way down the list.

INDUSTRY: Boutique medicine emerges as an on & off-line niche. Will it be turbocharged by HSAs?

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I’m preparing a speech I’m giving next week and I’ve gone back to some of my old charts which essentially said that over time Americans would have less time and more money to deal with our health care (and lives as a whole).  The cause of the less time and most of the "more money" is the disappearance of the (voluntary) stay-at-home spouse.  The additional cause of the more money is the growth in incomes and wealth of higher paid Americans versus the average.

As part of the medical profession’s attempt to deal with the new reality of a higher-end consumer, and as part of the rejection of managed care, some of those physicians who can have made the move towards "boutique medicine". Essentially what that means is they charge an upfront fee for some set of enhanced services to patients that is not billable to an insurer, and thus is paid in cash by patients.  The leading example of this is Howard Maron, M.D., MD2’s founder and ex-team doctor for the Seattle Supersonics who apparently has enabled himself and three colleagues to bill over $1 million each annually by taking care of 100 people at $10,000 each (or $20,000 depending on who you believe)–the patients still carry insurance for labs, hospitalization and other expensive stuff.

    MD2 physicians deliver care not available elsewhere, such as appointments often lasting an hour, extensive preventive care, thorough annual physicals, and even advocacy for patients with payers and other providers. MD2 doctors practice a "proactive, preventive" approach to health, he adds. They also provide the full range of primary care.

    MD2 doctors don’t bill insurers or participate in insurers’ networks, Moses notes. "We encourage the patients to have insurance for everything else" besides primary care, he continues, including hospitalization, specialists and drugs. "This is not a replacement for insurance in any way."

 It sounds great for the docs as the overhead is lower and the revenue is higher than typical primary care.  It doesn’t sound so great for the patients, unless the price of doctor visits is much higher in Seattle than I’ve understood.  But if they can get people to sign up for it, good luck to them–it’s the American way.

More realistically The McKinsey Quarterly had an article a while back about Virginia Mason (also in Seattle) which charges $3,000 a year and has over 850 people signed up.

    For $3,000 a year, it offers individual subscribers 24-hour access to internists by mobile telephone or e-mail, as well as house and office calls by physicians. In addition, the Dare Center’s doctors who see 3 to 8 patients a day, compared with 20 to 25 for their colleagues at health maintenance organizations (HMOs) spend more time with each subscriber. Revenue from subscriptions easily fills the gap between the higher fees charged for the longer, off-hour, off-site consultations and the insurers’ reimbursement payments, which are based on the standard charge for an office visit to an internist during normal hours.

    About 850 people, mostly over 60 years of age, have subscribed, far exceeding expectations, and the Dare Center plans to expand. On average, members use it 7 or 8 times a year, while people in their US age cohort make an average of 6.8 visits to clinics a year.

This may work for some clinics and systems, and they may manage to sail around Medicare laws that ban balanced billing.  But it strikes me that that’s a little too much money to become mainstream.  Some other clinics are offering similar services at a lower price–you can get extended phone and email consults, plus the promise of an appointment the next day from GreenField Health Systems for a mere $350 a year, so long as you move to Portland, Oregon! That seems to me to be closer to what most people might find reasonable to pay, if they are regular visitors to their doctor.  For those who want these type of "concierge services" a company like Health Dialog, which uses the Wennberg technique of Shared Decision-Making. Shared Decision Making "presents patients with evidence-based, unbiased views of their healthcare options, and encourages patients to work with their doctors to choose the healthcare options that are right for them". It also tends to make patients use less health care, and so health plans and employers are happy to pay for it, which is why Health Dialog is growing quite fast and why the other DSM companies like LifeMasters and American Healthways are growing quite fast.

There’s a very limited market of people who can or will pay $10,000 or even $3,000 a year for primary care services.  But $1,000 or $1,500 which covers, say, 10 doctor visits, emails, phone calls, and all the hand-holding you can eat, may be attractive to consumers–especially if doctors stop making phone calls for free (mine does, thanks Dr…no I won’t say his name!). The question I don’t know the answer to is whether people will be able to use their yet to be set-up HSA or Consumer-directed health plan accounts to pay for these boutique care services.  But if the fees counts against the HSA and the deductible, then anything else (more or less) hits against the catastrophic insurance.  So the boutique service is more or less free (assuming that the patient would be making those visits any way). And if a primary care doctor can get 3-400 patients to pay it, well that’s a nice bonus.

So watch this one shake out as doctors try to set up to get into the boutique game at a bargain price and make it work for CDHPs and HSAs. Of course the insurers will try to wriggle out from having these payments count as co-pays or against deductibles.

The bigger question is that, as employers and plans push "consumer choice" onto patients (what Ian Morrison calls "You’re on your own pal!"), how big a phenomenon will boutique medicine be? Or will consumers/patients who are already getting aggravated with having to contribute more for their insurance at work, get really mad when they are asked to pay more for the services that they thought they were already getting from their physicians?