Is DRexit Next?

Sean MacStiofain said “most revolutions are caused… by the stupidity and brutality of governments.” Regulation without legitimacy, predictability and fairness always leads to backlash instead of compliance.

Here’s a prediction for you: If something is not done to stop MACRA implementation, more physicians will opt-out of Medicare and Medicaid than is fathomable.

Once DRexit begins, there will be no turning back.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is destructive to the physician patient relationship because it prevents physicians from prioritizing patient care. MACRA supporters like to point out this legislation was passed with bipartisan support; in reality, it was passed simultaneously with repeal of the Sustainable Growth Rate Formula.

The Sustainable Growth Rate Formula was enacted through the Balanced Budget Act of 1997 and was designed by lawmakers to control Medicare expenditures. The SGR formula limited the annual increase in cost per Medicare beneficiary to the growth of the national economy. Under the SGR formula, if overall physician costs exceeded target expenditures, a reduction in payments would be triggered. Expenditures continued to climb, so Congress stepped in 17 times with short-term legislation (referred to as “doc fix”) to avert the payment reduction since 2002.

These patches kept increases in physician payments below inflation which ultimately resulted in a huge discrepancy between the actual level of Medicare physician-related spending and the target in the SGR formula. In 2015, if Congress did not act by March 31, payments to Medicare physicians would have been reduced by 21.2 percent.

Enter stage left, MACRA, known as the Permanent Doc Fix, which was passed concurrently with the Sustainable Growth Rate Formula repeal legislation. This was the original repeal and replace. MACRA established yet another new (and untested) method by which to pay doctors. MACRA is the largest scale reform on the American health care system since the Affordable Care Act in 2010 and the jury is still out how great (or not) that system is working for the American people.

Under MACRA, the Secretary of the Department of Health and Human Services was tasked with implementation of a Merit Based Incentive (MIP) program which consolidated three useless incentive programs into one big colossal unworkable program for eligible physicians everywhere. The legislation also allows for Advanced Alternative Payment Models (APM), which shockingly, are not actually saving money on care.

Even better, MACRA related regulations also addressed incentives for use of health IT by physicians and other care providers. Similar in scope to the Meaningful Use (aka Meaningless Abuse) Program except, now on steroids. The Government Accountability Office in partnership with the DHHS have been assisting with the implementation of electronic health records (EHR) nationwide, while at the same time comparing and selecting programs for providers.

So to recap, Congress has been working on a “doc fix” system in conjunction with every lobby possible on the planet EXCEPT that of Practicing Physicians since 1997. They “repealed and replaced” SGR (first disaster) with the atrocity known as MACRA, which will end in a mass DRexit. They are rapidly moving ahead with non-evidence based payment methods intended to decrease costs, yet are highly unlikely to be successful based on recent studies. On top of all that, they are selecting computer systems for physicians which incentivize computer data entry while discouraging the placement of hands on patients. Did I miss anything?

Recent studies show physicians spend twice as much time on technology than we do with patients. Maybe with full MACRA implementation, we can be retrained as data entry clerks to treat conditions instead of people. Imagine if we just called in prescriptions for hypertension, diabetes, or even started chemotherapy regimens without seeing patients at all? MACRA pays us more for “doing less,” so now we can practice “drive-by medicine.” I wonder if health outcomes will improve and mortality will be lower when compared with “drive-by shootings.”

Controlling costs involves four major pillars of change to our healthcare system, about which I have been writing for some time. Listening to a talk given recently by the executive director for the Association of Independent Doctors, Marni Jameson, helped focus the strategy. The first cost control pillar is to educate patients and lawmakers as to how consolidations of hospitals and medical practices raise costs, reduce quality, decrease access, eliminate jobs, and result in unnecessary testing and procedures. The second pillar is to increase price transparency, so consumers can compare costs and choose the most affordable option. The third pillar is eliminating the onerous ‘facility fee’ to bring payments of hospital-employed doctors in line with the lower payments to independent doctors for the same care. The final pillar is ensuring hospital profits are taxed equally across-the-board, regardless of whether they are non-profit or for profit institutions.
In the next four posts, I will cover these issues in more detail as each deserves its own separate discussion. It will be an interesting mathematical exercise to calculate the forecasted cost savings of these four interventions alone. If you are reading this post, you have skin in the healthcare game, whether as physicians, lawmakers, economists, hospital administrators, government, or IT experts alike. As I have said before, we will ALL be patients eventually.

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27 replies »

  1. “gang rape of the medical profession”. I could not have said it any better myself. “Meanwhile, the patient feels kicked to the curb, again and again.” This is what is hardest for me to watch. When I see new patients, sometimes I cannot believe how their care has been mismanaged because of the time crunch physicians face.
    Good for you for already DRexiting! I know there will be many more to follow. Unless they exempt rural and small practices, we will all end up opting-out. The patients will be losing the most. 🙁

  2. So glad you are opening up questions about my next post. Actually, when you delve into the details of literature, it is overwhelmingly clear that consolidation increases prices as high as 15%. The closer the consolidating hospitals are the higher the jump in costs.

    The AHA does not want anyone looking into this topic further and have spent millions trying to squash the movement. Cost are NOT mixed. Once you include the facility fee in the total charges, the cost increase is astounding. If your network charges a facility fee, forbids procedures at an ambulatory surgery center and insists on a hospital outpatient departments instead, then there is no mistaking that your network absolutely costs more.

  3. Meltoots, your comments made my night. I, too, am going to keep fighting. There is no doubt in my mind (and overwhelming evidence is on our side as well) that independents provide better quality for lower cost. Our local hospital recently bought the last independent ortho group left. The docs are absolutely miserable and cannot operate at the local ambulatory surgery center anymore. They are all good surgeons and good people. Costs are higher than they have ever been. Cheers to better care for our patients!

  4. Mommy Doc, I am completely with you on all this. As a fiercely independent practicing orthopaedic surgeon, in a small group in a small town we are the last remaining group. ONC and CMS should be scared to death about the damage they have done and are doing to medicine. If they want to turn healthcare into the postal service or the DMV, they are well on their way. But there a some remaining fighters left. And I am going to fight for those that are younger. I could easily retire, but I am choosing to stay and fight. For my patients, for better care, Just like you.

  5. “The first cost control pillar is to educate patients and lawmakers as to how consolidations of hospitals and medical practices raise costs, reduce quality, decrease access, eliminate jobs, and result in unnecessary testing and procedures.”

    Our experience in our network has been a bit different. We have improved quality, jobs stayed about the same, many fewer unnecessary tests and procedures. Costs have been mixed. I think the literature on consolidation is mixed, but them will se how you define consolidation.


  6. I agree on using best evidence-based practices to cinch down chronic care costs, with a focus on the most expensive conditions and patient situations.

    I respectfully disagree when it comes to what patients are willing to pay to access medical expertise that is absent in all but a few medical settings. And when that expertise is unfettered by 3rd party bureaucrats, corporatists, lobbyists, and non-medical policy gurus, patients whose problems do not submit to easy answers grow increasingly grateful for an approach to medical care that relies on protocols that are data-driven and supplemented by unconstrained, experience-based, clinical judgment.

    Funny how consumer-driven health care came to be defined by higher deductibles. As if health care consumers can make sense of health care value even if pricing were 100% transparent.

  7. “It only feels beleaguered to those who do not spend every day mired in paperwork and useless technology.”

    This is so true, to the patients and physicians whose leeway to develop mutual understanding and collaborative relationships have been torn asunder by ever increasing time constraints on physicians. It feels less like beleaguered and more like the gang-rape of the medical profession, with patients left to make sense of why their doctors are too boxed to listen to them anymore.

    I opted out of Medicare, Medicaid, and commercial insurance. When productivity targets and non-translatable clinical guidelines started appearing from up-top somewhere, they were incredibly intrusive to caring for the patient. Were I too diverge from dictums that discount the complexity of human illness, I’d be challenged and possibly punished. To hell with that.

    What happens to patients whose multi-system problems go unexplained? We diagnose them with somatic symptom disorder, anxiety, or depression, prescribe therapy or a cheap generic, call it “evidence based” and show that we’re team players. Meanwhile, the patient feels kicked to the curb, again and again. Turns out many of these patients have diagnosable conditions that consolidated system “evidence-based” guidelines fail to take into account. The consolidated system approach to the patients that I evaluate and treat do not qualify as patient-centered, accountable care. But that doesn’t stop them from calling it that.

    The Toxic Substances Control Act (TSCA), passed by the United States Congress in 1976, was revised last year based on discussions held by representatives from government, industrial lobbies, and non-profit environmental organizations.

    Representatives from the medical profession were not invited to the table, yet I spend 65 hours per week mopping up medical problems created by indoor environmental exposures related to water damage. Patients pay high fees to see me.

    They’re disappointed by the cost, of course, but they’re not surprised and are grateful to avoid getting kicked to the curb and to get help with medical problems that consolidated systems brush aside – consolidated systems that have no choice but to bend to the will of MACRA and other hare-brained cost containment schemes concocted by non-physicians or by physicians who must bend to the will of their organizational superiors.

    So we find ourselves in the objectionable position where the only players in the health care sector with no leverage on how to reform things are patients and their doctors.

  8. The thing is that doctors influence virtually all healthcare costs because they’re the people that order tests, prescribe drugs, admit patients to the hospital, refer patients to specialists, consult with patients and perform procedures themselves.

    With so much of healthcare costs attributable to the expensive stuff and the management of chronic disease, I can understand why payers think they need to focus their cost control efforts on how doctors practice. Patients in aggregate are never likely to pay more than about 25% of healthcare costs our-of-pocket at most even if everyone has a high deductible insurance plan and a Health Savings Account.

  9. Much of the left wishes physicians to act as widgets and be paid salary and adhere to whatever their desires might be. The far left uses healthcare to control. Many Republicans are corporatists and do not understand Adam Smith’s “willing buyer/ willing seller. The more conservative Republicans and perhaps the populists have a better understanding of marketplaces. I don’t know where Trump stands, but I have confidence in him because he is a businessman not strongly connected to corporate interests that feed off of the federal government. If he goes the correct way he will be facing against almost all Democrats and many from his own party.

  10. Yes, we must work to stop the constant consolidation and buy-ups of physician practices. It increases costs across the board.

  11. Yes. Barry, this is exactly the goal I am hoping for. System change that allows physicians and patients to work together for the best outcomes without breaking the bank unnecessarily. Thank you for seeing the forest for the trees.

  12. I completely agree with have lots of work ahead. But this is such a complex problem, it is time physicians had input in helping to solve it. If it is only a one-sided effort, we will never turn things around.

  13. It may still be done elsewhere, but to a lesser extent. Laws were passed that opened up the records of the comittee. I don’t remember if they were federal or state laws. That inhibits the ability of physicians to police their own. Other things have had an impact as well. Physician power is almost non existent at the hospitals I know and since many of my friends practices have been bought up they are now employees on salary with little say as to what happens at the hospital.

  14. “Today that cannot be done. ”

    We still do this in our network. What would stop you from down it where you work?


  15. Health care has some astonishingly tough intellectual–mostly economic–problems. And they are all over the world. The worst is that we have to have someone else paying for everything. 3rd Party Payer. Can you imagine: buyer and seller and payer for every transaction. The entire machine is forever defective because of this one glaring defect in its construction. It is like an engine that has to have a wooden crank shaft.

    My own guess is that if we could make it appear as if all the money was coming from the patient that we could begin to see some healing of the system. Fake the provider into thinking that the patient is paying for everything.

    Indemnity type plans where all the claim money goes through the patient first is one approach. This might not work if the patients and human nature are too corrupt.

    HSAs are helpful here too, but if the prices are astronomical, the patient hardly has the enthusiasm to fund these.

    Vouchers might work here too.

    The other way to avoid the 3rd party payer defect is to forget money transactions completely and do no billing. FFS kaput. Everyone on salaries, financing by the smallest government entity that can do the job (hospital district, county, state).

    Even if we solve this one problem, we still have to figure out how to bring new technology into the system most efficiently; how to handle LTC; how to handle the moral hazard of mental health; how to do rehab and drug prevention.

    Lots of work ahead.

  16. It is near impossibile for physicians to do much of anything. People that think in a certain direction and you are part of that group have prevented physicians from acting and have made them servants of the state and the insurers. Stop blaming physicians.

    I’ll give one example. At my hospital the physicians would discipline other physicians. I was on that committee when one of the more powerful physicians was disciplined. He was practicing substandard medicine. For one year he was quietly watched and turned into a reasonable physician. Our hook was he would follow what was reasonable for a physician or his refusal would lead to more open methods of correction.

    We got rid of a physician turning bad and got a good one in exchange. Today that cannot be done. Those people that think in a certain way prevented these committees from acting privately. In the open doctors are subject to suit with claims of conspiracy. There are many more examples that are similar and very different, but you have to spend the time looking for them instead of blaming the doctor.

  17. Paul Starr’s book, while a comprehensive history of American medicine, was published in 1982. A lot of good things have happened since 1982 along with some that are not so good as Niran notes. As a patient that’s been through quite a lot over the last 18 years especially, I would not want to go back to 1982 medicine at 1982 prices. If I had to, I most likely would not be here today. That said, I hope Niran and her fellow doctors can lead the way toward systemic changes that will enable doctors to provide great care at low enough cost so healthcare doesn’t continue to crowd out other worthwhile priorities, both public and private.

  18. It only feels beleaguered to those who do not spend every day mired in paperwork and useless technology. I appreciate your respectful comments, but unfortunately you are missing my point. I provide health care, an embodiment of the social good about which you are talking. Maybe you should google me before answering glibly. The one-on-one relationship with my patients IS the point.

    I have spent much time writing about better metrics, more patient empowerment, more physician driven outcomes so you can compare and contrast the good and the bad. MACRA is not just technically difficult; it is asinine. Quality care can be easily determined by using claims data.

    Healthcare is too important an issue to NOT be seen through the eyes of patients and physicians alike, together. You clearly view yourself standing across the street from your physician and need to advocate “on your own behalf.” I hold my patients hands while standing next to them on the same side of the street as one unit. My expertise is nurturing the one-on-one relationship; I treasure the individuals who place themselves and their children in my care. Until you view you and your physician on the same team, you will never be able to understand what MACRA will destroy. It is not my autonomy; it is my opportunity to partner with my patient and help them be the best version of themselves.

    This morning I had a patient drive 90 minutes to come and see me after moving away. She went for one visit to the new doctor and said it was nothing like the visits in my office. You do not know that kind of care until you have experienced it; if more understood how transformative the physician-patient relationship could be, they would be fighting MACRA tooth and nail as well.

    We do not need more government oversight to provide “less care for less cost.” We need less involvement from non-essential healthcare people, to provide “outstanding care for less cost.” Thank you for your comments, but I simply disagree and it is too bad you view my thoughts as just another self-centered MD complaining. At least read this before passing judgment on the MD viewpoint: http://peds-mommydoc.blogspot.com/2016/11/how-this-physician-grieves.html

  19. Thank you for sharing the MD viewpoint, one which now feels a bit beleaguered. I am not an MD, so I offer my comments respectfully, reflecting my experience as a patient and a family caregiver advocate. I can understand why there is discontent – having worked in the healthcare delivery system in one form or another for more than 30 years, I can remember when MDs had total autonomy. Anything other than that must feel like “so much less.”

    Now retired, I wonder if anyone has any comments about Paul Starr’s work, The Social Transformation of American Medicine.” If not, please google it to get a perspective on how we are again confronting the tension between medical care and health care, between business and a social good. The one-on-one relationship between patient and MD that has prevalied for decades – that is now being challenged. Yes, MACRA might be technically deficient and needs to be streamlined and improved. But PLEASE DON’T THROW THE BABY OUT WITH THE BATHWATER. If there are better ways to make outcomes available (so we can compare one MD and health system against another) and the electronic medical/health record interoperable and controlled by patients, not vendors or providers – Please bring those better ideas forward. This is too important an issue to be seen only through the eyes of MDs. The days where I had to depend on physicians to represent my point of view, the claim of Patient-Centered Care – those days are gone. I am perfectly capable of speaking on my own behalf to define “patient-centered care” for myself.

  20. What the powers that be seem to want is to control doc “cost”, but not that of hospitals and pharmaceuticals. Even if you “ration” care by not ordering tests, eventually someone will get sick enough to need expensive care, and those costs do not seem to be receding, just escalating.

  21. Barry. Interesting points. At least if I have you agreeing on 3/4… that is a great start. It appears based on my research so far, the bigger profits are available in the non-profit hospitals… they should probably be paying their fair share except for exemptions for rural hospitals or those truly serving the underserved. I am not sure physicians are asking to be given a carte blanche regarding reimbursement completely without question. I am one physician who knows the cost of almost everything done in my own office and I think it is extremely valuable for my patients. You are correct that if physicians are more in touch with the economical side of care, it would help tremendously. It is difficult when they are so far so removed from costs in a large conglomerate hospital though, no?

  22. Medicine is one of the professions that does not follow the economic rules making it so difficult to contain costs. Technology increases costs instead of decreasing them. If we could strip away all the junk (EHR, Value based reimbursement, fewer administrators and staff) we would have lower costs and better care. Simple, huh?

  23. Barry, physicians will have to care about costs, both for themselves as patients, and patients they are treating in this era of high deductibles and high costs for pharmaceuticals and outrageous costs for hospital care. That being said, it’s impossible for docs to continually keep abreast of all costs, particularly when many are hidden. I will say though, I myself and many other docs will shift patients to non-hospital outpatient facilities for testing simply because they are much less expensive. I will also base prescriptions on lower cost when feasible.
    While I don’t expect the government and payors to “leave us alone”, I do think at this point the practice of medicine has been degraded to the practice of documentation, and that needs to change if we are to make and keep people healthy.

  24. They won’t have a different outcome, unless the government keeps bailing them out. It is ridiculous for them to keep backing a losing team. Let doctors be doctors and do what they were trained to do. Thank you for getting it Dr. Oates.

  25. The net-evidence now clearly indicates current “value-based” performance metrics worsen actual patient outcomes. While annualized performance metrics can serve as useful, internal KPIs to monitor trends and strive toward improvements, basing $$shifts on them creates more harm than help. Claiming that the current, annualized performance metrics are proxies for measuring quality ignores the evidence base available.
    So, if the current “value-based” metrics worsen actual patient outcomes, how can the APMs where health professionals are placed at financial risk possibly have a different outcome than the HMOs did?

  26. I think it’s important for doctors to be willing to assume a leadership role in reforming the healthcare system in a way that works not only for them and for their patients but for payers as well.

    I agree with the first three of your four pillars. I’ve long thought that the anti-trust people have fallen down on the job when it comes to hospital consolidation but have been much more aggressive in opposing recent attempted consolidation on the insurer side. I’ve been advocating for price transparency, at least for care that can be scheduled in advance and thus lends itself to comparison shopping, for a long time. One complicating factor, though, is defining and measuring quality in a way that patients can easily understand. I also never understood the facility fee just because a physician practice happens to be owned by a hospital system. Site neutral payment is definitely the way to go here in my opinion. Why should I have to pay more for my next stress echo just because the physician practice where I have it done is owned by a hospital system? It doesn’t make any sense to me. As for taxing hospitals, I’m willing to leave the non-profit hospitals alone. Taxation of profits is not that big a deal in the scheme of things because it won’t raise that much money or drive the non-profits to be more cost-efficient.

    One thing that always troubled me in the past is the perception that most doctors don’t consider it part of their job to know or to care about costs for medical services, tests, procedures, devices or drugs unless the patient brings up cost as an issue important to him or her. I think that needs to change as well. I don’t think doctors can expect insurers or Medicare and Medicaid to just leave them alone to practice the way they see fit and to have their bills paid promptly and without question. A system like that just won’t work for payers and healthcare is already way more expensive than it should be in the U.S.

  27. Yes, ironic isn’t it? Doctors will be paid for doing less. Spending less face to face quality time with the patient to make an accurate diagnosis. Spending less time explaining a treatment plan and outcomes.
    The basis of quality for a physician patient encounter should not be a bunch of checked boxes, yet this is how docs will be judged in this new, great system.
    Yes, I think a DRexit is required to make our lawmakers and even our so-called “societies” like AAFP, AMA and AAP understand this is not the way to conduct patient visits and pay doctors.