E-DMN - June 29, 2009

June 29, 2009

Editor's Column: The Best Stand Is To Move Forward
In My Opinion: Not Enough Money? Print Some More
In My Opinion: A Simple Outline For Government-Run Health Care
Response: Physicians Must Mobilize Allies For Reform
Response: Public/Private Health Plan Option Can Work
Health Care Reform Update
Medicare Scam Alert
Integrated Health Focusing Event

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Editor's Column: The Best Stand Is To Move Forward

By JOSEPH WEISS, MD
What we need is not a patch but an overhaul. In April, the MSMS House of Delegates defeated a resolution supporting a single-payer health care system. The American Medical Association should not see this vote as the Michigan delegation taking a position against change, but rather that Michigan physicians opposed that particular change.

We are at the verge of a revolution in the way we will provide health care to the nation. We should view movement with favor, almost any avenue is useful if it moves us out of the present inertia that characterizes what we call the tradition of care.

We should move forward on adapting the patient registry. We should look at electronic medical records not as a way to write notes but as a catalyst for bringing the totality of medical information into the view of a single reader.

We need another perspective toward group practice. It is not only a way of doing business, but is a way of setting up a more sophisticated division of medical labor than possible in the small physician office.

We cannot become polarized in the debate of government-supported vs. private health insurance. We should march onward with both for now and learn from experience what mix of types works best.

We should not oppose the changes coming from Congress, but rather advocate for those we believe are best suited to our work. If we are not part of the driving force of health care change, we will become its fuel.

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In My Opinion: Not Enough Money? Print Some More

By ALLAN DOBZYNIAK, MD
With all the posturing surrounding the rush to health care reform, viewing this from the perspective of further increasing the growth of government is more than alarming.

At present the budget deficit is projected at 13 percent of gross domestic product (GDP), by far the largest in US history. This is the result of massive increases in government spending, a recession, decreased economic growth and decreasing tax revenues. Adding to this the hugely underfunded liabilities related to the multitude of ill-conceived and mismanaged entitlements including Social Security, government pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid, and the final result is an incomprehensible $100 trillion-plus financial shortfall in the long term. If this is not scary enough, consider the radical increase in the monetary base (money supply) by the Federal Reserve. Now couple this to a decreased demand for money in a recession with its decreased employment and decreased output.

There are inevitable conclusions that can be assumed when these circumstances are examined. To service this huge debt will be impossible given the present GDP, now about $14 trillion, and with present tax revenue of about $2.4 trillion. A rate of economic growth to manage this debt is not possible. The outcome must be increased interest rates and increased taxes. A VAT (value-added tax), taxing of health care benefits and various schemes to tax energy usage are already being considered. These are taxes on all citizens, tend to be severely regressive and demonstrate the sham of suggesting that increasing taxes on the “rich” can fill this financial black hole, ridiculous. Worse yet is the inevitable decrease in the value of the dollar and the ugliest tax of all, rampant inflation with its associated accelerating interest rates.

The coup de gras is the addition to this already preposterous shortfall of another $1.2 trillion in annual underfunded liabilities for government’s increased intrusion into health care, and the already disastrous financial consequences are worsened. Also, delivering health care as an entitlement is, as it has been, a formula for cost increase. Entitlements have never appropriately constrained cost increases. Individual consumers functioning in markets driven by value incentives do. A quick look at history will validate this truth.

There will be inflation, increased interest rates, increased taxes on all citizens, stagnant economic growth and claims on the assets of our children and grandchildren. There must be a measure of default on government’s promises especially including health care. I ask again, when will the rationing begin?

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In My Opinion: A Simple Outline For Government-Run Health Care

By ALLAN DOBZYNIAK, MD
A single-payer system ("socialized medicine") will occur as a result of this quite simple outline.

Start by underfunding the Medicare Advantage programs and carefully managing physician compensation. As the Advantage programs fail, the remaining single alternative would be the current open ended fee-for-service Medicare entitlement. Of course cost management here is by price controls and the threat of punishment to providers found non-compliant to the massive, confusing, regulatory bureaucracy ("Medicare police"). Dollars could then be shifted from the underfunded Advantage programs to physicians. This would be orchestrated in such a way as to keep physicians sufficiently satisfied with perceived compensation security such that real entrepreneurial activity in a free market did not happen. Unfortunately, the ongoing trade-off would be an ever-expanding bureaucracy and increasing regulations.

Employers would be required to provide health care for their employees. As the cost of care continued to escalate because of the inflationary stimulus caused by the redirection of more and more federal dollars (commonly referred to as taxes) into this swelling entitlement, the ability of employers to pay this cost and continue to be competitive or even remain in business would be more onerous. But alas, government to the rescue. An alternative federal program would be created to which employers could contribute. Again, subsidy would be needed. This would be accomplished by either printing more money or directing more tax dollars.

Of course a Medicare-like program would be created or Medicare expanded as a competitive alternative to private insurance. And, since it could be subsidized, the pricing and benefits could always be adjusted to confer a market advantage. Over time, the ability of the private insurers to compete would disappear.

Expanding governmental insurance to include all the uninsured (citizens and non-citizens?) would be modeled through Medicaid or an expanded Medicare program.

The inevitable outcome of this really simple process is a government-run health care system. The problem is that despite massive (and I mean massive) subsidization through increasing tax burden, underfunding would still exist. The only solution then would be pricing controls and some system of care rationing as well as the destruction of much that is exceptional with our present health care system. There would certainly be severe marginalization of any future medical progress. Worse, care rationing and arbitrary cost constraints would be in the hands of bureaucrats. Health care would no longer be decided by personal choice with physician guidance but by a system of political policy. This level of governmental control over individual choice regarding one's most personal property, self, would be an unimaginable tragedy.

Unfortunately, this is more likely a reality than speculation. Given the populist indoctrination of the public, only physicians can stem this draconian but seemingly inevitable outcome. Will they?

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Response: Physicians Must Mobilize Allies For Reform

By SUSAN ADELMAN, MD
In general, I think Allan's reasoning is correct. Entrepreneurial activity will still be possible for physicians who opt out of the system, although the cost of doing so will prevent the majority from taking that route. In many countries which have the system we are considering, the public also can opt out if they have enough money to pay for private insurance. In other words, they have a two-tier system.

Physicians alone cannot stem this tide. So far, much of the public thinks that any physician opposition is simply protectionism. We can only sway public opinion if the public thinks the new system will be worse for them. They surely do not care if it is worse for doctors. To continue with this thought, the public will only begin to question the value of this brave new system if they understand that it will suppress innovation, greatly slow the development of new pharmaceuticals, and increase the bureaucracy in health care.

Right now, we keep reading that Medicare's overhead is 3 percent, as contrasted with a vastly higher overhead in private care. In fact, that is because the overhead is shifted to physicians' offices. We need to make it clear that if a new public plan comes forth, the government does not have the expertise to administer it, so it will have to be administered by private subcontractors, and the overhead will be closer to that of private plans. Certainly this has happened in Medicaid throughout the country.

We also hear that we need reform because of a perceived quality problem with health care in America. That has been a politically motivated drumbeat for the last several years, intended to build a constituency for change. This is similar to the oft-quoted 100,000 unnecessary deaths per year from medical error. That is based on a very old study (Institute of Medicine – To Err Is Human: Building A Safer Health System, November 1999) that estimated something between 48,000 to 98,000 deaths per year from medical error.

Ideally, we should be able to bring forth statistics showing that when celebrities or any people with money from all over the world need the very best care, they come to the United States. We should also refute the inaccurate statistics about our quality of care that are being thrown around for political gain. Unfortunately, we may not have the time to do this before the train leaves the station.

What we need to do is identify those who understand, or should understand, what they have to lose, and urge them to stand up and fight. These include the elderly - who would be affected first by rationing and by the loss of potential new drugs or procedures, those who currently enjoy good private insurance, and advocates of a free market. It also should include those with rare diseases who are hoping for new "orphan" drugs. The future of the health care debate will depend on our ability to identify these (and other) allies and to mobilize them to understand what is at stake for them. Then, we need to get them to write letters, Op-Eds, use the media and lobby their congressmen. Doctors cannot and should not do this alone.

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Response: Public/Private Health Plan Option Can Work

By VICTOR BLOOM, MD
I don't agree with Dr. Dobzyniak. He evidently wrote this before president Obama's June 23 press conference,in which he predicted that all the dire consequences Dr. Dobzyniak predicts will happen if nothing is done. As it is, health care costs are ballooning to the degree that they will soon be unsupportable. Health care reform, according to Obama, is absolutely necessary and has been postponed too long; put on the back burner because of powerful special interests, such as the insurance industry and Pharma. In the reform package, there will be no single payer; that plan is not inevitable. Government-subsidized insurance and private insurance will compete on fair and equal terms. Those that produce the best medical care at the cheapest price will compete with those companies that are inefficient and too costly. Efficiencies will produce better medicine with lower premiums when waste is cut and inefficiency is eliminated. The main thing is to enable all Americans to have medical insurance, so that people are not saddled with debt or fear to go to the doctor. Most Americans want this, because we care for our fellow Americans. Some rationing is inevitable, and we will have to learn to live with it, because the people will not want their taxes raised to pay for it. As it is, taxes will have to be raised, as anyone can compute, if he does the math.

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Health Care Reform Update

Here's an edited version regular update on efforts by the American Medical Association (AMA) to work with lawmakers in reforming the nation's health care system.

Legislative committees release details about reform proposals
Details are beginning to emerge on congressional proposals for reforming the nation's health care system. The three committees of jurisdiction in the U.S. House of Representatives—Ways and Means, Energy and Commerce, and Education and Labor—released a draft bill on June 19. The legislation calls for creating a national health insurance exchange, mandating coverage for individuals and employer contributions to coverage, creating a public option insurance plan, and resetting Medicare's flawed sustainable growth rate (SGR) formula to eliminate the accumulated debt that is undermining physician payments. The bill would set the 2010 Medicare fee schedule update at the Medicare Economic Index and establish two new expenditure targets, one for primary care and preventive services, and a second for all other physician services. The AMA will finalize comments on the draft bill and submit them to the House commitees by June 26. The House committees are expected to mark up their health reform legislation simultaneously in July.

The Senate Committee on Health, Education, Labor & Pensions (HELP) released legislative language on some aspects of its reform plan. The committee's proposal, the "Affordable Health Choices Act" (PDF), includes mandates for individuals to obtain health coverage and for employers to contribute to the cost of coverage for their employees, the creation of a public health insurance option, and health insurance market reforms. The committee does not have jurisdiction over Medicare, and its proposal does not address Medicare physician payment issues. The committee began its consideration of the "Affordable Health Choices Act" on June 16 and will continue the markup process through this week.

Senator proposes alternative to public plan option
Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee and a member of the Senate Finance Committee, proposed an alternative to the controversial public plan option that may be included in a broad health system reform package. Conrad proposed to create consumer health cooperatives, or co-ops, that would operate at the regional or state level and provide a nonprofit, nongovernment, consumer-driven coverage option. Conrad envisions that the co-ops would provide insurance coverage to individuals and businesses with less than 10 employees and have the ability to partner with accountable care organizations and other integrated health care systems to help foster delivery reforms. Conrad has been discussing his proposal with key senators as well as President Barack Obama.

Three former Senate leaders develop health reform plan
Former Senate Majority Leaders Tom Daschle (D-S.D.), Bob Dole (R-Kan.) and Howard Baker (R-Tenn.) unveiled a blueprint June 17 for what they would like Congress to consider as it works to develop health system reform legislation. They released their proposal under the auspices of the Bipartisan Policy Center, a nonprofit organization established in 2007 to provide a forum to develop policy solutions that can be embraced by both parties.

Their proposal recognizes "that the lack of meaningful SGR payment reform stands in the way of physician leadership in reforming the delivery of health services to improve quality and reduce overall costs." The report goes on to note that "(f)ailure to act on the SGR reimbursement liability means physicians participating in Medicare will experience real payment cuts, and will be less able to implement prevention-oriented reforms in care, potentially threatening access to quality care." As a result, they conclude that the "SGR policy challenge should be addressed in the context of broad health reform." In addition, the proposal includes state-based health insurance exchanges offering a variety of plans, with the federal government supplying technical assistance and standards. The plan also would require all Americans to purchase insurance and proposes to reform Medicare by paying more for care coordination and quality outcomes. Read the complete proposal.

Two House Republican reform outlines unveiled
The moderate-leaning House Republican Tuesday Group and the House Republican Health Care Solutions Group recently unveiled separate summaries of health system reform proposals. In addition to addressing health coverage and access issues, the Tuesday Group's "Medical Rights and Reform Act" would repeal the SGR formula and provide for medical liability reforms. The Health Care Solutions Group, which is led by Rep. Roy Blunt (R-Mo.) and comprised of Republican leadership and physician members, proposes to expand access to care by reforming the tax treatment of health coverage and eliminating discrimination based on pre-existing conditions. An outline (PDF) of the proposal indicates the group's intent to reform the Medicare physician payment system and medical liability laws. Additional legislative detail on the two proposals is forthcoming.

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Medicare Scam Alert

The Centers for Medicare & Medicaid Services (CMS) has become aware of a scam where perpetrators are sending faxes to physician offices posing as the Medicare carrier or Medicare Administrative Contractor (MAC). The fax instructs physician staff to respond to a questionnaire to provide an account information update within 48 hours in order to prevent a gap in Medicare payments. The fax may have the CMS logo and/or the contractor logo to enhance the appearance of authenticity.

Medicare FFS providers, including physicians, non-physician practitioners, should be wary of this type of request. If you receive a request for information in the manner described above, please check with your contractor before submitting any information. Medicare providers should only send information to a Medicare contractor using the address found in the download section of the CMS.gov website found at http://www.cms.hhs.gov/MLNGenInfo/ or http://www.cms.hhs.gov/MedicareProviderSupEnroll .

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Integrated Health Focusing Event

The Detroit Wayne County Health Authority invites you to attend and participate in a discussion focused on integrated behavioral health services in the Detroit-Wayne County region. We will examine the current realities and look ahead to new possibilities. Representatives from the State of Michigan, Wayne County Health and Human Services, and Wayne County Community Mental Health will be in attendance. Administrators from Community Health Centers, Managed Care Networks, and Mental Health Providers are invited and encouraged to participate.

Day/Date: Tuesday July 21, 2009

Time: 9:00am-12:00pm

Location: Detroit Wayne County Health Authority

3031 W. Grand Boulevard – Suite 545

Detroit, Michigan 48202

RSVP: (313) 871-3751 or nlabrie@dwcha.org By Tuesday, July 14th

We look forward to seeing you and sharing ideas at this event. Please e-mail or call me to RSVP or with any questions:

Nicole LaBrie

Detroit Wayne County Health Authority

3031 W. Grand Boulevard – Suite 545

Detroit, Michigan 48202

Phone: (313) 871-3751

Fax: (313) 871-3756

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