Category: Medical Practice

CONSUMERS: Trade up players, but maybe not enough of them

Once again there’s something very important in a WSJ/Harris poll which concentrates on the people that, when I was at Harris, were called the "Trade up players". These are the people with enough discretionary income to buy themselves a better class of service from their providers.  As I know many of you don’t have WSJ access, I’ve quoted most all of the results.

"Do you have health insurance? It could be from an employer, that you purchase yourself or from a government program like Medicare or Medicaid?"

Base: All Adults

Yes, have health insurance 87%
No, do not have health insurance 13

* * *

"Which one of these statements best describes you?"

Base: Adults with health insurance

I only go to doctors that accept my health insurance 85%
I sometimes go to doctors who don’t accept my health insurance 15

* * *

"Whether or not you have done so in the past, how willing would you be to go to a doctor who doesn’t take your health insurance if he or she was highly recommended by a source that you trust?"


"How willing would you be to pay the full cost of a doctor’s visit – rather than use your health insurance – if you . . .?"


The important issue is that pretty uniformly, those with incomes over 50K, which is a little over average household income and around US median income, are willing to spend more money to get a better class of service. Obviously this means a couple of things

a) If you are marketing a health care service to wealthier Americans there is a willingness to pay for it. Of course that’s a well known fact to chiropractors, orthodontists, and cosmetic surgeons. But it might mean that other physicians and providers might start to think about providing better access and customer service, for a small fee (and I don’t mean insisting on $20,000 for concierge service). This is the Nordstroms approach, and one that health care providers should be thinking about emulating (and one that some are).

b) This willingness to pay is a minority effect — it’s a big minority and may be a majority in the case of referrals from someone the patient trusts.  But for most of these services more people are unwilling to pay extra, and of course large majorities of those with lower incomes, even those with health insurance, do not want to pay extra.

This tells me that continued bifurcation is likely to be the case when people seek health services that they have to pay out of pocket for, with roughly double the number who want to "trade up" skimping on "extras". Why does this matter?  Because in our brave new consumer world, cash may be an increasingly important way that patients pay for health care, especially for "minor" care out of their HSAs. So this correlates with much other data about user fees at the point of care–they tend to prevent lower income people from getting care (including often needed care).

Like it or not, we are slowly heading towards this future.  Unless, that is, you live in Rochester New York.

Meanwhile, (and this is a bit of a throwaway for Ron) the Kaiser Network Health Policy Report notes that the CBO is out with a study showing that "Uninsured workers are unlikely to purchase individual health insurance, regardless of whether they receive tax credits or other subsidies to help cover the cost of premiums, according to a report released on Friday by the Congressional Budget Office". Proving to my mind once again that high deductible health plans are not going to solve the uninsurance problem and that voluntary universal health care is a myth.

INTERNATIONAL/PHYSICIANS: Canadian doctors going home means the US sucks, n’est-ce pas?

This one I find hilarious and gives me great deal of personal satisfaction. The pro-American health care system, "it’s the finest on earth crowd" goes on and on about how terrible the Canadian system is and how all the doctors are leaving. In fact it was that sentiment especially from the wonderful, but confused, Sydney Smith over at Medpundit that inspired my "Oh Canada" tome.  (Actually I re-read "Oh Canada" the other day and it’s a pretty damn good piece of analysis if I say so myself).

Syd was basically saying that all the doctors were leaving cos they hated the clinical restrictions of the single payer system and wanted to move to the glorious homeland of free-choice medical practice and CABGs for 97 year olds. I showed pretty conclusively using actual real life data that a) very few doctors were leaving Canada for the US, and that b) if they were leaving it wasn’t that surprising as they get paid about twice as much by sneaking below the 49th parallel.

Well now we have more actual statistics and real data that shows that more Canadian doctors are heading back to Canada than are leaving — and this was in 2004 when hockey was on strike so there was no real reason to go to Canada! The numbers are:

Canada has seen more doctors returning than leaving for the first time in 30 years, a report by the Canadian Institute for Health Information (CIHI) shows. The report, released Wednesday, says that between 2000 and 2004,the number of physicians leaving Canada declined by 38 percent. In 2004, 317 physicians returned to Canada and 262 left. That was a drop from 2000, when 420 doctors left the country and a significant decrease from the peak of 771 physicians who moved abroad in 1994.

I’m looking forward to the barrage of articles from the know-it all alleged "free-market" crowd who get spoon-fed rubbish by Frasier, PRI, Manhattan et al offering their apologies to the Canadians and admitting that their system is better than the one down here.  After all the alleged rush of Canadian doctors to the US was absolute proof in their mind that the reverse was true.

I’m waiting, I’m waiting….

POLICY/PHYSICIANS: Is the Medicare reimbursement issue more serious this time?

This week things are starting to get a little serious regarding physicians’ Medicare reimbursement. The AMA is gearing up for a fight, trying to avoid a scheduled 4.3% cut in Medicare reimbursement. Meanwhile a survey of California doctors suggested that they would stop taking new patients at the lowered rates. Much of this is just bargaining rhetoric, but CMS is determined to start Medicare down the pay-for-performance road, and has already begun to initiate this process by paying hospitals for reporting quality measures (even though it’s less than 0.5% of their Medicare revenue).

Meanwhile Republican house rep Nancy Johnson is pushing a pay-for-performance bill which would change how physicians get paid. Anytime you put doctors, money, and quality and performance requirements in a sentence together, be prepared for at the least a vigorous debate. Medicare is still the big Kahuna, and where it goes other payers will follow — if they’re not moving there already.

PHYSICIANS: How to easily increase access to care, by Eric Novack

NovackEric Novack is an orthopedic surgeon who went to medical school in liberal San Francisco, but is now practicing in the red state of Arizona. Eric has been sparring with me and others in the comments on THCB, and also has his own weekly radio show. It’s on a station called "960 The Patriot" — and you can guess that it’s line up is a little different than San Francisco’s 960 The Quake, which is our local Air America affiliate. Eric’s weekly show is very well done, and I recommend that you head over there to take a listen to his archived shows. Some of you might perceive a bias in his guest line-up, and Eric has strong opinions on policy, many of which I do not share.  But I’m very hopeful that by encouraging Eric to write for the blog, (and we are also planning some podcast conversations in the near future), we can get to some of the heart of the issues about which we disagree. For his first post, Eric starts simply, with an idea to get physicians to provide more uncompensated care.
In what I hope is the first of many posts for THCB, I propose a simple step to increase access to care. The number of uninsured is large. Depending upon your perspective, the number can be as low as around 20 million Americans or as high as 45 million. Of course, you can find those who claim a number larger or smaller. It is a great bit of semantic legerdemain to equate lack of insurance with lack of access to health care. Stating "no access" implies that no care is available and that the government has "abandoned" this group. This is simply not true.

Congress passed a law in 1986 called Emergency Medical Treatment and Active Labor Act" or EMTALA. EMTALA has a variety of provisions but can be simply stated that persons who come to emergency departments cannot be turned away because of an inability to pay. This applies to the hospital emergency department (ED), the emergency room physicians, and the specialists and internal medicine doctors "on-call" for the emergency department. "Emergency" for the purposes of the emergency room is anyone who comes to the hospital– the hospital cannot say– "it is just a cold, so we will not treat you". If someone breaks a leg and an orthopedic surgeon is on call to cover the ED, the surgeon must take care of the problem and the patient including the operation and all appropriate follow-up care.

One of the many problems is that all of this uncompensated care falls back on the doctors– remember that many hospitals are non-profit or have received federal funds that require them to provide a certain amount of uncompensated care.

Let me give an example, (any similarity to any real patient of mine is coincidental…). I am on call for "Arizona Hospital". Bill Jones is brought to the hospital after a fall from his ladder at home, where he was taking down his Christmas lights (it is never too late, is it?). I am called by the ED because Mr. Jones has broken his femur (thigh bone). I see the patient in the ED, he is admitted, and I operate on him at midnight. I finish surgery, the paperwork, and head home around 2:30 AM.  I then see Mr. J for the next 3 days after clinic. After discharge, Mr. J comes to the clinic regularly over the next several months for checks and x-rays and advice and guidance. Total charges for all the work, time, expertise, and liability risk is $5000.

Mr. Jones has his own landscaping business.  He has no insurance.  He never pays a bill.  I cannot abandon his care– it is unethical and against the law (abandonment). I get tired of this happening and stop taking call at the hospital. Losers in this scenario–the physician, the hospital (less coverage), and future patients–insured or not- who would benefit from my expertise.

Here is a partial solution– but first, a brief preamble. Health care system transformation will need to be incremental, not revolutionary– otherwise, the kind of horse-trading and compromises that resulted in the bloated, inefficient, restrictive system of Medicare result.

Here’s the partial solution. Guess what happens at the end of the year when I file my taxes?  Can I deduct the $5000 in bad debt as a "business loss"?  No. By simply allowing physicians to credit bad medical debt from their income (like other businesses can with losses related to products, etc.), physicians would be have a huge incentive to provide a certain amount of care to the poor. It needs to be a credit and not a deduction as a deduction would return only 35 cents on the dollar at best. So, there it is– tax relief to the providers of care for the amount of "free care" provided. 

No new bureaucracy.  Incentives, not punishment

For some more info on EMTALA see this lawyer’s site.

PHYSICIANS: Physician entrepreneurship

And in just one tiny example of physician entrepreneurship, the LA Times reports on a new bill to close a loophole in California Workers’ Comp law. The Workers Comp problem is one of those perennial problems here in California, where we have too many doctors and too many lawyers, and they are able to hone their skills in separating the insurers from their money. It was "fixed" by Pete Wilson in the early 1990s, and then "fixed" again last year by Arnie. The latest round seems to have done some good, but one little loophole has been exploited allegedly to the tune of $250m.

The loophole is that pharmacy prices for drugs were capped in the law, but prices for those drugs dispensed directly by doctors were not. Well you know what’s coming next. Physicians were enticed by some wholesalers to start prescribing and dispensing drugs, and their mark-ups are a factor of three to ten what the pharmacies can charge. And it’s all paid for by the insurers. Here are some pricing examples from a Rand study quoted in the LA Times.

Pharmacy price vs. Doctor’s office priceSoma $44.68 vs $396.98Prozac $14.81  vs $131.82Darvocet  $12.65 vs $58.31Acetaminophen/Hydrocodone  $12.81 vs $58.31

Even the unions are opposed to this, as they correctly see this type of lilly-gilding as being the kind of thing that might lead to another round of attacks on employee benefits. The employers are of course siding with them.

But it does just show you that in American health care, if there’s a way to bill an extra buck or two, physicians are as quick as anyone else to figure out how. I don’t need to tell you the California Medical Association’s position on the bill…..

PHYSICIANS: Apparently Florida remains exceptional

Why is there a nursing shortage in south Florida? Apparently it’s because the doctors are very badly behaved, sometimes.

The South Florida Hospital and Healthcare Association, seeking to recruit more nurses from other areas, organized focus groups of nurses who had moved here in the past two years and asked them what they didn’t like about South Florida. ”The No. 1 issue was physician abuse,” says Linda Quick, president of the group. ”Sometimes it was omission — the doctors didn’t engage them in the treatment process. But they also indicated there was hollering, yelling, sarcasm. They indicated it was a particular problem here,” compared to other places they had worked.

As ever Florida is just a strange place. We know their practice patterns are out of whack, we know that health care fraud and corruption is a greater problem there than elsewhere, and we know they can’t arrange elections …and left us with the hopeless bunch of clowns running the show now in charge.

I still think they should tow the whole state into the Caribbean and leave it there.

PHARMA/PHYSICIANS: Smoking Gun on the Chemotherapy Drug Concession? by Greg Pawelski

Neil Love, M.D. reports from a survey of breast cancer oncologists based in
academic medical centers and community based, private practice oncologists. The
academic center-based oncologists do not derive personal profit from the
administration of infusion chemotherapy, while the community-based oncologists do
derive personal profit from infusion chemotherapy, while deriving no profit from
prescribing oral-dosed chemotherapy.

The results of the survey show that for first line chemotherapy of metastatic
breast cancer, 84-88% of the academic center-based oncologists prescribed an
oral dose drug (capecitabine), while only 13% prescribed infusion drugs, and
none of them prescribed the expensive, highly remunerative drug docetaxel.

In contrast, among the community-based oncologists, only 18% prescribed the
oral dose drug (capecitabine), while 75% prescribed infusion drugs, and 29%
prescribed the expensive, highly remunerative drug docetaxel. The existence of
this profit motive in drug selection has been one of the major factors working
against the individualization of cancer chemotherapy based on testing the cancer

This is not to imply that the academic center-based oncologists are without
their fair share of collective guilt. They were misguided in not recognizing
that they were trying to mate notoriously heterogeneous diseases into
one-size-fits-all treatments. They devoted 100% of their clinical trials
resources into trying to identify the best treatment for the average patient, in
the face of evidence that this approach was non-productive. However, such
unsuccessful experiments will never be viewed as such by the thousands of people
whose careers are supported by these experiments.

Henderson, et al, entered 3,100 breast cancer patients in a prospective,
randomized study to compare cyclophosphamide/doxorubicin alone versus
cyclophosphamide/doxorubicin plus Taxol (in the adjuvant, pre-metastatic
setting). The results were microscopically positive, at best, and cannot begin
to justify the enormous financial and human resources expended (while making no
effort at all to test and improve methods to individualize treatment).

But these results changed the face of the adjuvant chemotherapy of breast

Cyclophosphamide+Doxorubicin+Taxol became standard of care. Taxol recently
went off patent. Now the thrust is to identify on-patent therapy which is
microscopically better in clinical trials of one-size-fits-all treatment.
Already, the community-based oncologists are migrating to
Cyclophosphamide+Doxorubicin+Docetaxel (expensive/remunerative) so what was the
purpose of doing that 3,100 patient prospective, randomized Henderson study?


HEALTH PLANS/PHYSICIANS: More patient confidentiality probs at SF Bay area institutions, with UPDATE

So not long after the mess with Kaiser and the Gadfly appears to be heading to a court solution, there are two more weird breaches of patient confidentiality both demonstrating that it’s not technology but the physical security of data and the dealings of employees that are the riskiest part of keeping confidential medical information confidential. 

The first story is really strange.  Apparently a contractor working for Kaiser had some patient data, and tried to recycle carbon paper for their fax machine at a local copy store. But instead of being recycled, somehow it ended up in the paper supply and was sold to another customer who  discovered that instead of being blank, their fax paper had patient data from Kaiser and a Reno ambulance firm. In the end the customer returned it to the copy shop and no harm appears to have been done. (The full story is the second story here) But then again it just shows that this stuff can get out in ways that are hard to imagine, and perhaps every person handling patient date needs to buy a shredder.  I know that I carried around patient date from my 1992 graduate thesis work and only got around to shredding it a few years later!

The other incident is more sinister, and again it appears that the health care organization, in this case San Jose Medical Group, did nothing wrong. However, someone broke into their facility and stole three laptop computers which had patient information and social security numbers on them.  They don’t know if these computers were stolen as a target for identity theft, although they have written to all the affected patients asking them to check with their credit bureaus, or whether this was done just to steal the computers.  But all the same, my source is one angry patient, and I don’t know whether or not this was a HIPAA violation.  Here’s the police report.

All in all a reminder to health care organizations that electronic security is not enough.  Incidentally if you steal my laptop you have to know two passwords to make it start-up and then work for you, and a third to get into my password storing application Roboform.  I suggest anyone reading this who uses a laptop makes sure they are using the root password function that is available by hitting F8 (or a similar key) before Windows starts, and setting a system password required on start-up.

UPDATE: The SJ Merc has more info about this in a story today. While San Jose Medical Group officials seem to believe someone from the outside stole the computers because they were new, the police report doesn’t seem to mention a forced entry. And there’s no word on whether the data was secured with a password, although it appears not to have been encrypted. It does seem that given that a laptop by definition can be mobile (and therefore easily lost), sensitive data should either be encrypted or somehow electronically secured within it.

POLICY/POLITICS: Wanna be physician of the year? Pay Bush $1,500

AwardIn a hard hitting investigation ABC news is shocked, shocked(!) to find out that such an honorable profession as that of physicians is not above creating lots of phony awards so that everyone can win one.  The joke is that the hundreds of physicians who won the "Physician of the year" award found that the title came not from a fake medical college or diploma mill, but straight from the Republican National Committee. Well if they’re dumb enough not only to pay up but also to go to Washington DC for a couple of days to collect, why shouldn’t Tom Delay take their money — after all the half mill or so he needs to pay his wife has to come from somewhere? (Hat tip to Kevin MD & John P for this one)


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.



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