The United States is the only major nation in the industrialized world that does not guarantee health care as a right to its people. Meanwhile, we spend about twice as much per capita on health care and, in a wide number of instances, our outcomes are not as good as others that spend far less.
Under our dysfunctional system, 45,000 Americans a year die because they delay seeking care they cannot afford. We spent 17.6% of our GDP on health care in 2009, which is projected to go up to 20% by 2020, yet we still rank 26th among major, developed nations on life expectancy, and 31st on infant mortality. We must demand a better model of health coverage that emphasizes preventive and primary care for every single person without regard for their ability to pay.
It is certainly a step forward that the new health reform law is projected to cover 32 million additional Americans, out of the more than 50 million uninsured today. Yet projections suggest that roughly 23 million will still be without insurance in 2019, while health-care costs will continue to skyrocket.Continue reading…
A recent story in the New York Times (As Physicians’ Jobs Change, So Do Their Politics) highlights the political shift underway within the physician community. While doctors used to be mainly male small businessmen, who were a natural fit with the Republican Party, they’re now much more likely to be female and employed by larger organizations. According to the Times, that’s making doctors more likely to be out of sync with the GOP, and the article cites examples from around the country. The American Medical Association came out in support of the Patient Protection and Affordable Care Act, which was a surprise to many. State medical societies find themselves increasingly allied with liberal activist groups, and even historically “red meat” issues like malpractice reform aren’t that big a deal for those whose malpractice premiums are paid by their employers.
It seems to me there’s an important facet missing from the article. When I was growing up in the 1970s, being a doctor was viewed as one of the surest ways for an ambitious person to make money. That started to change as the advent of managed care made medicine less lucrative and the explosion of the financial services industry provided opportunities to make a lot more money in investment banking, hedge funds, private equity and venture capital. As I observe my own generation and those somewhat younger than me, it seems that those intent on making a lot of money aren’t as drawn to the physician path.
My father in law, of blessed memory, used to compliment certain physicians by saying, “he’s not a money doctor.” That really boiled it down to the essence.
On the whole, younger doctors –and older ones who are sticking with the profession– seem to have the patients’ interest increasingly at heart. And that’s no bad thing.
David E. Williams is co-founder of MedPharma Partners LLC, strategy consultant in technology enabled health care services, pharma, biotech, and medical devices. Formerly with BCG and LEK. He writes regularly at Health Business Blog, where this post first appeared.
We live in a society that loathes uncertainty – particularly the unintended consequences that sometimes result from a catastrophic event or in the case of PPACA, landmark legislation. Wall Street and the private sector crave predictability and find it difficult in uncertain times to coax capital off the sidelines when the overhang of legislation or geopolitical unrest creates the potential for greater risk. Despite our best energies around forecasting and planning, some consequences, particularly unintended ones – only reveal themselves in time.
In the last decade, employers have endured an inflationary period of rising healthcare costs brought on by a host of social, political, economic and organizational failures. There was and remains great anticipation and trepidation as Congress continues to contour the new rules of the road for this next generation’s healthcare system. Optimists believe that reform is both a way forward and a way out of a mounting public debt crisis and a bypass for an economy whose arteries are clogged by the high cost of medical waste, fraud and abuse. Cynics argue reform is merely a Trojan Horse measure that offers an open invitation for employers to drop coverage and for commercial insurers to “hang themselves with their own rope” as costs continue to spiral out of control — leading to an inevitable government takeover of healthcare.
Meanwhile, leading economic indicators are flashing crimson warning signs as recent stop-gap stimulus wears off and long overdue private/public sector deleveraging results in reduced corporate hiring, lower consumer confidence and increased rates of savings. The symptoms of a prolonged economic malaise can be felt in unemployment stubbornly lingering around 9.2% and a stagnating US economy that is struggling to come to grips with the rising cost of entitlement programs. Across the Atlantic, the Euro-Zone is teetering as Italy and Spain (which represent more credit exposure than Greece, Portugal and Ireland combined) stumble toward default. Despite these substantial head winds, US healthcare reform is forging ahead – – right into the teeth of the storm.
Like children gathered around a card table, America’s special interests are engaged in a high stakes game of Monopoly. But the winner of this game gets more than a day or two of bragging rights; this time the spoils are nothing less than control of our health care delivery system for the foreseeable future.
Let’s meet the players: on one side, Big Medicine; across the table, Big Insurance; and between them, Big Government. There’s room at the table for a 4th player…but we’ll get to that later.
Introducing Big Medicine
To compete in this high-stakes game, Big Medicine is reforming itself into large, multi-disciplinary organizations. Independent hospitals are merging into hospital systems. Hospitals and doctors are coming together as self-regulating Accountable Care Organizations (ACOs).
With computerized health systems, physicians can place orders as easily as they can shop online at Amazon.com. Just a few clicks and your physician can purchase a panel of blood tests, futuristic imaging and diagnostic procedures that will hopefully guide their path to solving your ailments.
Search. Click. Submit. Repeat.
Except, unlike online shopping, physicians don’t see the price tags and they never get the bill. Doctors are the true consumers of health care dollars, but the rules of economics falter when the consumers aren’t the ones that pay up. This disconnect is a fundamental cause of the uncontrollable inflation of health care costs in the US. Ignorance about cost fuels spiraling inflation in healthcare because without cost-related restraint in utilization there is no incentive for suppliers of healthcare services to get any cheaper.
But the system’s stuck. While physicians ultimately control the tap of healthcare costs, exerting that control can contradict their primary objectives. Physicians feel a responsibility to do the most they can to make the patient in front of them better. If young doctors don’t order a test, a superior may berate them for not considering it in their differential. Malpractice always lingers as a consequence for a diagnosis missed. Some claim that it is irresponsible or unethical for physicians to consider cost in their clinical decision making. Perhaps good doctoring should be blind to finances. And after all, it’s no skin off the doc’s back to just click a little more, some of that money may even end up back in their own pockets.Continue reading…
Today, GE and Microsoft announced a joint venture (JV) that will lead to the formation of a new company (NewCo) targeting the clinical healthcare market sector. The NewCo will be located near Microsoft HQ in Redmond, WA, start with roughly 700 employees and combine the remaining Microsoft clinical products, Amalga UIS and the former Sentillion products Vergence and expreSSO with GE’s eHealth and Qualibria suite. NewCo’s new CEO will be GE’s Michael Simpson, who has been heading up the combined Qualibria-eHealth group since earlier this year after a re-org at GE. Along with this announcement, Microsoft’s Health Solutions Group (HSG) leader, Peter Neupert stated that he’ll be retiring.
Combine the above announcement with Microsoft’s long anticipated sale of Amalga HIS, which went to Orion Health in October, and you are left with Microsoft completely pulling out of the clinical market. Sure, they’ll claim to be still in healthcare by directly selling their horizontal products (e.g., SharePoint, MS Office, various server products, etc.) into this sector and having a stake in this JV, but it is also exceedingly clear that Microsoft will no longer have any direct involvement in this market, that will be left to GE. That being said, Microsoft did state that they’ll hang onto HealthVault, but even here, that is more likely a by-product of no one wanting to take on HealthVault rather than Microsoft’s strong desire to continue to try and build a viable, revenue generating entity out of it. Do not be too surprised if, in a year’s time, HealthVault falls to the wayside much like Google Health did this year.
Last week, Don Berwick completed his 17 month tenure as administrator of Medicare and Medicaid. The nation should be grateful that such a visionary was at the helm. The nation should frustrated that he was never confirmed.
Berwick listed five reasons for the enormous waste in health spending:
*Patients are overtreated
*There is not enough coordination of care
*US health care is burdened with an excessively complex administrative system
*The enormous burden of rules
Certainly regulatory reform is needed, but electronic health records can go far to addressing each of these issues.
On Wednesday the Centers for Disease Control and Prevention (CDC) released the results of its yearly survey on Electronic Health Records (EHR) adoption for office-based physicians. No surprises. Generally speaking, the majority of physicians in ambulatory practice are now using an EHR, and over half of surveyed doctors say that they intend to seek Meaningful Use incentives. The report is also presenting results broken down by state, so you can learn what folks are doing in your immediate vicinity. The more instructive exercise is to compare last year’s survey results [Fig. 1] to this year’s estimated EHR adoption numbers [Fig. 2].
The Medicare Payment Advisory Commission (MedPAC) is the closest thing Congress has to adult supervision on important health policy questions. The Commission commands bipartisan respect both for its record of sound policy advice and for its leadership.
With its October recommendations, MedPac attempted to solve the sustainable growth rate (SGR) physician payment formula budget crisis by spreading its more than $300 billion cost beyond the physician community. More than two-thirds of the burden would fall on hospitals, pharmaceutical and device manufacturers and, significantly, on Medicare beneficiaries themselves. Clearly MedPac’s intent was to widen the circle of pain.
However, a significant portion of the burden, over $100 billion, would still be borne by the physician community through 17 percent reductions in specialists’ fees and a ten-year freeze on primary care fees. If implemented, MedPac’s policies will give rise to a festival of unintended consequences: weakening multi-specialty group practices (which rely upon specialist comp to cross-subsidize their primary care services); winding down private practice-based primary care medicine; accelerating the hospital roll-up of medical practices while widening hospitals’ losses on the practices they already own; and triggering a further wave of ill-timed cost shifting to private insurers.
To date, one federal appellate court has held the minimum coverage requirement to be unconstitutional (although severable from the remainder of the ACA), while fiveother appellatecourtdecisions have held that the courts lacked jurisdiction to consider the challenge brought to them, either because the plaintiffs in the particular case had not been injured by the minimum coverage requirement or because a federal statute, the Anti-Injunction Act, denies jurisdiction.
This is a very important decision. Judge Laurence Silberman, who wrote the majority opinion upholding the statute, is a highly-respected conservative judge, appointed by President Reagan. Judge Harry T. Edwards, a Carter appointee, joined Judge Silberman in the majority. Judge Brett M. Kavanaugh, another well known conservative judge appointed by George W. Bush, dissented in an opinion that was much longer than the majority opinion, but on jurisdictional grounds rather than on the merits. Kavanaugh would have held, as the Fourth Circuit did in the Liberty University case, that the Anti-Injunction Act deprives the federal courts of jurisdiction. In the course of his lengthy opinion, Judge Kavanaugh suggests that there may be prudential as well as legal reasons why the courts may want to stay out of this fight, and suggests that if there is in fact a constitutional defect with the ACA (which he does not decide), it could be easily fixed by Congress.
This decision comes down two days before the Supreme Court will consider, and quite possibly decide, whether or not to take certiorari in one or more of four other appellate court cases that have been decided in ACA challenges. Although a grant of certiorari is almost certain at this point, the D.C. Circuit’s decision, as well as the earlier opinion of Judge Jeffrey Sutton, another prominent conservative who sided with the constitutionality of the ACA in a Sixth Circuit case, will certainly be noted by the Supreme Court justices. Moreover, the media narrative that seemed to explain the district court opinions—Republican appointees strike down the law while Democratic appointees uphold it—seems again not to work for appellate court judges. It may not work for predicting the Supreme Court vote either.