Tag: Jeff Goldsmith

An Indecent Proposal That Just Might Solve the Primary Care Crisis: Meet the 35 Hour Work Week

Apr 16, 2013• 34

By Leslie Kernisan, MD

A few weeks ago, The Health Care Blog published a truly outstanding commentary by Jeff Goldsmith, on why practice redesign isn’t going to solve the primary care shortage. In the post, Goldsmith explains why a proposed model of high-volume primary care practice — having docs see even more patients per day, and grouping them in pods — is unlikely to be accepted by either tomorrow’s doctors or tomorrow’s boomer patients. He points out that we are replacing a generation of workaholic boomer PCPs with “Gen Y physicians with a revealed preference for 35-hour work weeks.” (Guilty as charged.) Goldsmith ends by predicting a “horrendous shortfall” of front-line clinicians in the next decade.

Now, not everyone believes that a shortfall of PCPs is a serious problem.

However, if you believe, as I do, that the most pressing health services problems to solve pertain to Medicare, then a shortfall of PCPs is a very serious problem indeed.

So serious that maybe it’s time to consider the unthinkable: encouraging clinicians to become Medicare PCPs by aligning the job with a 35 hour work week.

I can already hear all clinicians and readers older than myself harrumphing, but bear with me and let’s see if I can make a persuasive case for this.

The Gold Plated Health Care System: What the New Numbers Tell Us about the State of the Economy

Feb 2, 2013• 36

By Jeff Goldsmith

For the third year in a row, national health spending in 2011 grew less than 4 percent, according to the CMS Office of the Actuary. However, the report said modest rebounds in pharmaceutical spending and physician visits pointed toward an acceleration of costs in 2012 and beyond. CMS’s analysts make much of the cyclical character of health spending’s relationship to economic growth and also forecast a doubling of cost growth in 2014 to coincide with the implementation of health reform.

This non-economist respectfully disagrees and believes the pause could be more durable, even after 2014. Something deeper and more troublesome than the recession is at work here. As observed last year, the health spending curve actually bent downward a decade ago, four years before the economic crisis. Health cost growth has now spent three years at a pre-Medicare (indeed, a pre-Kennedy Administration) low.

More Than The Recession Is At Work

Hospital inpatient admissions have been flat for nine years, and down for the past two, despite compelling incentives for hospitals to admit more patients. Even hospital outpatient volumes flat-lined in 2010 and 2011, after, seemingly, decades of near double-digit growth. Physician office visits peaked eight years ago, in 2005, and fell 10 percent from 2009 to 2011 before a modest rebound late in 2011 — all this despite the irresistible power of fee-for-service incentives to induce demand.

The modest rebound in pharmaceutical spending (2.9 percent growth) in 2011 appears to have been a blip. IMS Health reports that US pharmaceutical sales actually shrank in 2012, for the first time in recorded history, and that generic drugs vaulted to the high 70s as a percent of prescriptions!

There is no question that the recession’s 7-million increase in the uninsured depressed cost growth. But the main reason health cost growth has been slowing for ten years is the steadily growing number of Americans — insured or otherwise — that cannot afford to use the health system. The cost of health care may have played an unscripted role in the 2008 economic collapse. A 2011 analysis published in Health Affairs found that after accounting for increased health premium contributions, out-of-pocket spending growth and general inflation, families had a princely $95 more a month to spend on non-health items in 2009 than a decade earlier. To maintain their living standards, families doubled their household debt in just five years (2003-2008), a debt load that proved unsustainable. When consumers began defaulting on their mortgages, credit cards and car loans, the resultant chain reaction brought down our financial markets, and nearly resulted in a depression.

By sucking up consumers’ income since 2008, the rising cost of health benefits has weighed heavily upon the recovery. According to the 2012 Milliman Cost Index, the cost of health coverage rose by 32.8 percent from 2008 to 2012, while family income did not grow at all in real terms. The total cost (employer and employee contributions plus OOP spending) of a standard PPO policy for a US family of four was $20,700, almost 42 percent of the US household median income in 2012.

Accidental Tourist: Visiting the Bumrungrad Hospital in Bangkok

Jan 14, 2013• 77

By Jeff Goldsmith

There’s been a lot of recent speculation that more Americans will be taking their elective medical problems overseas. In 2008, Deloitte’s Center for Health Solutions estimated that 750 thousand Americans travelled overseas for medical care in 2007, and forecast a eight-fold increase by 2010 In a 2009 update, Deloitte found that the 2008 financial crisis devastated overseas medical travel, but still forecast 1.6 million US citizens going abroad for medical care in 2012.

Among overseas medical destinations, no facility is mentioned more than Bumrungrad (last syllable rhymes with “hot”) Hospital. Bumrungrad is a privately owned but publicly traded 550 bed acute care hospital in central Bangkok. On a recent trip to Thailand, I stopped at Bumrungrad to find out what all the shouting was about and was really impressed with what I saw.

Bumrungrad’s CEO is a courtly, silver-haired Virginian named Mack Banner, who spent most of his career in the US investor-owned sector. Though the hospital was founded in 1980, it moved into its new facility in 1997, just in time for the Asian financial crisis. The facility was Joint Commission (International) certified in 2002, and one fifth of its physicians are US Board certified in their respective specialties.

In 2008, the hospital opened a beautiful 21 story Clinic building next door, housing 30 specialty clinics and most of its medical staff. Bumrungrad’s Clinic Facility is Mayo-esque, enabling patients with particular specialty problems to be worked up, evaluated and cared for on a single floor. The hospital subsequently renovated its inpatient rooms, which resemble those of the Asian-themed Washington DC Park Hyatt in elegance. The hospital is a sunny, happy place, with apparent high morale and very high service standards. English is spoken widely throughout the hospital.

Behind The Numbers, A Diminishing Sense Of Urgency

Sep 26, 2012• 5

By Jeff Goldsmith

After a summer of disappointing economic news, the recent Census report on the uninsured was a rare bit of sunshine. The number of uninsured Americans declined by about 3 percent, or 1.34 million, to 48.6 million in 2011. This was the largest one-year numerical decline in twelve years. There were “only” about 1.7 million more uninsured in 2011 than there were in 2006, before the devastating recession.

Medicaid’s vital role. The search for policy fingerprints on these findings points directly to Medicaid. For all the controversy over this program, the safety net did its job. Medicaid enrollment rose another 4.4 percent in 2011, or 2.2 million people, likely masking continued shrinkage in private insurance coverage. If Medicaid rolls had not expanded by 10 million folks from 2006 to 2011, the number of uninsured would have soared due to the recession.

Digging deeper into the Census numbers, one surprise was the relatively modest decline in the number of uninsured between the ages of 19 and 25, about 540,000, or about 40 percent of the overall drop. The reported reduction in the uncovered 19-25 year olds falls far short of the 3.1 million newly covered GenY’ers claimed by the Department of Health and Human Services due to the Affordable Care Act’s mandate to retain them on parents’ health policies.

Health Care: An Alternate Economic Universe

Aug 29, 2012• 37

By Jeff Goldsmith

In July, 2012, the US economy produced roughly the same volume of goods and services as it did five years earlier with five million fewer workers. Yet, during the first four years of the recession (May 2007 to May 2011), the US health system, despite slowing or declining utilization, added 1.149 million workers. Key sectors, specifically hospitals and physician offices, grew their workforces despite declining admissions and office visit volume. (Employment data in this post comes from the Bureau of Labor Statistics’ (BLS) National 4-digit NAICS Industry-Specific Estimates from May 2007 and May 2011.)

Compared to the rest of the economy, health care seems to exist in an alternate economic universe. This would be good news, rather than a problem, if we were not borrowing roughly half of every dollar of general revenue the federal government is spending on health care and if employers were not robbing their workers of wage increases to fund their health benefits.

Hospitals and physician offices saw declines in their core activity in the past few years. Hospital admissions have been flat the past five years, and have shrunk the past two. Even hospital outpatient volume growth has subsided into the low single digits, only partially offsetting the lost admissions. Yet hospital employment rose by over 220,000 workers, or 4.4 percent from mid-2007 to mid-2011.
Continue reading…

Roberts’ “Flying Squirrel” Maneuver Takes Down the Affordable Care Act

Jul 7, 2012• 29

By Jeff Goldsmith

After a four month “death watch” in the mainstream media for President Obama’s health reforms (following an ineffectual defense in March’s Supreme Court hearings), instant analysts were quick to characterize last week’s Supreme court decision as a ringing vindication of the Affordable Care Act and a big political victory for a struggling President Obama.

However, on closer reading, the instant analysts were wrong. The Roberts Court actually punched a huge hole in the law, potentially reducing its historic coverage expansion by as much as a third. In addition, the Court’s ruling will set off serious political conflict in southern and mid-western states that will ripple through those states’ health care markets, and fracture hospitals’ and health plans’ support for health reform.

Unlike the Act itself, which was almost unreadable, the Court’s opinions were written in English and will reward readers with fresh understanding of this complex law. They reveal two incommensurable philosophical positions eloquently argued and improbably bridged. There were two big surprises: Justice Robert’s apparent last minute support of the Court’s liberal wing in preserving the mandate and the remarkable decision to render the Medicaid coverage expansion optional! (Justice Kennedy, the presumed swing vote, actually supported killing the entire law).

Jeff Goldsmith on what’s next, post-SCOTUS

Jun 30, 2012• 3

By Matthew Holt

Hours after the SCOTUS verdict and about the same time as a feisty (and not too productive) shouting match on the NY Times site between Maggie Mahar & Michael Cannon with commentary from Bob Reich and “expert” Grace Marie Turner, a real health care expert dissected the future of health care.

Here’s Jeff Goldmsith‘s talk (done for Eliza with Queen Bee/Chairman & Chief Visionary Officer Alexandra Drane refereeing). And it’s excellent. (It also has a tad of rambling from me at the very end….). I suggest you spend a chunk of your Saturday morning listening to Jeff tell you more.

WEBINARVID from Leigh Eck on Vimeo.

MedPAC’s SGR Solution: Bad Medicine For A Chronic Problem

Nov 17, 2011• 16

By JEFF GOLDSMITH

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.

The Fallen Souffle Economy

Aug 10, 2011• 4

By JEFF GOLDSMITH

It is increasingly clear that the United States’ economic troubles are far from over.

The stock market plunge that began in earnest last week reflects the market’s belief that we’re not going to recover fully from the recession that began in 2007. As a Wall Street Journal commentator said mid-Monday’s plunge: “The market is pricing in a double dip recession”. In reality, the 2007 recession (caused initially by $150 a barrel oil) never really ended.

Past remedies for recession basically involved nearly free money and Keynesian pump priming to stimulate demand with either borrowed or freshly printed money. The most recent (bipartisan) stimulus effort, nearly a trillion worth of extended Bush tax cuts, unemployment extensions, payroll tax cuts, etc. which Congress and the Obama Administration negotiated in December, seems to have disappeared into thin air, producing a whopping 0.8% economic growth in the first half of 2011 and a July unemployment rate of 9.2%. This Economist analysis argues that the political system has exhausted its remedies for our economic problems.

Letting Go Of Employer-Based Health Insurance

Jul 25, 2011• 12

By JEFF GOLDSMITH

Other than the egg-laying exercise surrounding the ACO regulations, 2011 was a quiet year among Washington health policy experts until June 6 when McKinsey released the results ofa survey of employer plans under the Affordable Care Act. The McKinsey study found that roughly 30 percent of employers were considering dropping their employee insurance coverage and encouraging their employees to receive federally subsidized health insurance through the Exchanges created in the Affordable Care Act. This compared to low- to mid-single digit estimated drop rates based upon economic modeling by the Urban Institute, Lewin and, importantly, the Congressional Budget Office (CBO).

To judge by the storm of angry political reaction, you would have thought that McKinsey had advocated mass psychedelic drug use. Senator Max Baucus (D-MT) sent McKinsey a letter demanding that the firm disclose its methods and questioning its motives. There followed a flurry of hostile press coverage of the study, echoed in the progressive blogosphere. Horrified, McKinsey released its study methodology, survey instrument, and tabulations of responses.

Why such a sharp reaction? If McKinsey turns out to be right about employer intentions, the cost estimates of the federal subsidies for individuals to purchase coverage through the Exchanges (roughly $777 billion from 2012 to 2021 according to CBO’s March, 2011 analysis) are far too low, making the program even more vulnerable to Republican efforts to cancel it. And if a third of employers drop coverage, President Obama’s pledge that “if you like your health insurance coverage, you can keep it” won’t look so great either.