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Health care reform impacts physicians, patient care

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As an orthopedic surgeon, John Dietz, MD, is up to speed on the latest procedures in spinal fusion. But medical knowledge alone won’t ensure he continues to find success and satisfaction in his career with OrthoIndy in Indianapolis. Like his fellow physicians, he stays on top of the latest health care talk coming out of Washington, DC, too.

What do clinicians think about health care reform?

In fact, when medical software firm Epocrates Inc. surveyed clinicians and health care professionals on their thoughts about reform in June 2007, 80 percent of respondents said health care reform will be a central topic in the 2008 elections. Fifty-eight percent of primary care physicians believe that the United States should move to a single-payer health care system; 60 percent of primary care physicians predict the U.S. health care system will worsen in the next five years. Even the youth are pessimistic—32 percent of medical students say we’re in for an even rockier ride in that time frame.
“There is a great philosophical battle in health care as to whether competition is a viable way to control cost and improve quality or whether regulation and mandatory oversight or a single-payer system would be a better way to go,” Dietz says. Chalk him up as a fan of competition, a conviction he clings to after serving as a career military orthopedic surgeon working with a fully managed system. “The more control the physician has in the business, the more alignment of incentives and priorities will occur,” he says.

But that’s just one viewpoint swirling in a highly charged political year.  Epocrates’ surveys reveal that 45 percent of health care professionals believe uninsured patients are the greatest challenge facing the industry; 36 percent point to restrictions placed by managed care; 35 percent say declining reimbursement; 34 percent cite not enough time with patients; 29 percent think our troubles lie with increasing cost of medical liability insurance, and 24 percent mention underinsured patients – which circles back to the top of the list.

Here’s what four experts (physicians and healthcare executives) told Unique Opportunities:

1. Tevi Troy: Deputy Secretary of Health and Human Services: Working closely with Secretary Mike Leavitt, Tevi Troy oversees all operations, including Medicare, Medicaid, public health, medical research, food and drug safety, welfare, child and family services, disease prevention, Indian health, mental health services, and many other activities. He also serves as the Regulatory Policy Officer for HHS, overseeing the development and approval of all HHS regulations and significant guidance.

UO:  What are the health-related policies or laws put into effect since 2000 that you believe have had the most effect on our country?
TT : We’ve had some very important healthcare initiatives that have made this the most consequential healthcare administration in four decades. Number one is Part D under Medicare, where prescription drugs are now available to seniors on an outpatient basis. It used to be you had to be in a hospital to get prescription drug coverage—that was crazy. Not in line with the current practice of medicine.
We tried to offer up a floor of benefits and say private plans could come up with flexible ways to provide at least this amount. With the latest numbers that are just about to come out, 39.5 million seniors have some form of prescription drug coverage. Eighty-five percent of seniors are happy with their plan; 90 percent have chosen plans that offered more options than the Congress’ basic plan. It has shown that market-driven solutions can work in health care, and that’s extremely important.
Number two is the creation of health savings accounts. The idea is to remove distortions in the tax code and give families more control over their health insurance, independent of where they work. More than 4.5 million Americans already have HSAs, which in itself is an impact study. It shows when you give people choices, they will exercise them, and people who are more involved in health care make better decisions.
Finally, when President Bush came into office, he said he would fund, improve or increase the number of community health centers by 1,200 [the Health Center Growth Initiative]. He met that goal in December 2007. That has brought the total number of sites to over 4,000, serving more than 16 million Americans. Again, these are impoverished, uninsured Americans and giving them real options for health care: Access without people having to clog up the emergency rooms. You can go to a community health center where you are recognized and where the doctors and staff know you and treat you in a friendly way. In fact, I was up in Harlem recently and went to one of the community health centers there and it was such a friendly and open environment. It was a great place. They also provide dental care, which is extremely important, especially in lower income areas. So I think that’s a great way to help individuals who need access but also from the doctors’ perspective, it lets the emergency rooms deal with emergency cases. And let the people go for regular treatment to community health centers.
UO:  What has been the impact for physicians and patients?
TT : With Medicare Part D, doctors can now prescribe drugs to that person without putting them into the hospital on an inpatient basis. It makes a huge difference for any individual doctor, opening up the practice of medicine to give them more flexibility in how they practice.
HSAs get families more involved in health care. They’re not just blind reactors to what the insurance company dictates. Families look at what their costs will be and discuss with their doctor the best type of health care for them.
UO: What should the next administration do in the health care arena?
TT : The president set a goal of half of all Americans having transportable health records by 2014. We don’t think this will work if it’s imposed by government. But (HHS) Secretary Leavitt has helped set the standards for the marketplace. There are a lot of emerging leaders in this area. For example, Microsoft has the HealthVault initiative, where they are offering personal health records and shooting for 40 million customers in the next several years. That would go a long way toward meeting our goal.
The President called for in the State of the Union, both this year and last year, a standard deduction for health insurance. I talked a bit about the market distortions in our current system where you have to be employed by a company willing to provide health insurance, but only the company gets the tax deductibility. The President wants that to go to the individuals, which will make health insurance that much more portable. It will make people more likely to purchase health insurance thanks to a very strong, powerful tax incentive.  In an election year, things don’t move as quickly as we’d like, so if that does not get done we’d like to see that done in the next administration.
We’d like to see more progress on medical malpractice reform, and that will have a real impact on doctors. We just talked to my wife’s OBGYN, who said that his annual malpractice insurance costs are $140,000 a year—that’s for each member of the practice.  It drives a lot of people out of the practice. Unfortunately, malpractice reform been stuck in the Senate a couple of times and we’ve not been able to get that out. That would really help drive down costs.

2.  Mark Pauly: healthcare economist with the Wharton School of the University of Pennsylvania

Mark Pauly, PhD, is a professor, the vice dean, and the chair of the health care systems department in the Wharton School at the University of Pennsylvania. He teaches courses on health care, public policy and management, insurance and risk management, and economics. Pauly was previously a professor at Northwestern University for 16 years. He has also consulted for a number of organizations including the Greater New York Hospital Association, the Urban Institute, various pharmaceutical companies and Economic Research Associates.
UO: What are the health-related policies or laws put into effect since 2000 that you believe have had the most effect on our country?
MP: The tax treatment of health savings accounts. I don’t think we have reached the peak yet, although when candidates talk about changing the law one way or the other, it slows down people’s day-to-day decision making beyond the merits of the case. My own judgment—and it’s really just guessing—I would be surprised if the fraction of the population that took these plans was more than 10 percent.
It’s better than nothing, but I wouldn’t have done it that way. I would have changed the tax treatment of health insurance but, more in line with the President’s proposal [in 2007] to offer a cap, a limited fixed dollar deduction or ideally a tax credit. It would have been a simpler program than the HSA went with. After all, there are a lot of rules that you have to abide by to get your tax break.
For instance, the requirement that you take out a catastrophic policy of a certain level to be eligible.  I would be in favor of just saying you would be eligible if you just set aside money for medical spending. It wouldn’t be reasonable for people to take out a first dollar policy, because what would they need the money for? Having rules that you have to meet just deters people and are unnecessary in this case. So if someone is only willing to set up an account and nothing else, I would be willing to let them do that.
UO:  What has been the impact for physicians and patients?
MP: I couldn’t hazard a guess. I don’t think we have enough evidence that it really changed dialogue [between doctors and patients] that much. It probably did, but I don’t think anyone knows definitively.
UO: What should the next administration do in the health care arena?

MP: Something more serious about the uninsured as a starting point. There are a lot of options, and I would personally be happy to see any one of them done compared to nothing

On the positive side, virtually all the proposals envision subsidies that are related to income, which I think is a good thing. The other feature that is common on both sides of the aisle is multiple choice options on coverage—public or private—and the nature and extent of coverage, managed care, big deductible, small deductible. If you were a devotee of choice, you would be worried that some of the Democrat plans have a lot of regulatory limits. You are perfectly free to choose a good plan, but they would define what a good plan is.  On the Republican side it’s about setting budget priorities. The candidates aren’t imaging that they could somehow raise $100 billion immediately, which is what you would need for an effective program. At some future date, maybe it would be possible.

3. Georganne Chapin: President and CEO, Hudson Health Plan in Tarrytown, NY

Hudson Health Plan is a not-for-profit managed care organization that provides free and low-cost insurance to 70,000 members in the lower Hudson Valley of New York. Chapin has a bachelor’s degree in anthropology from Barnard College, a master’s degree in sociomedical sciences from Columbia University, and a JD from Pace University School of Law in New York City. She founded Hudson Center for Health Equity and Quality, a not-for-profit health advocacy program, in 2005.
UO:  What are the health related policies or laws put into effect since 2000 that you believe have had the most effect on our country?
GC: The biggest federal law, without question, is the Medicare Modernization Act. Obviously what’s good is the widespread recognition that a drug benefit has to be part of any basic health care package. Medications are a critical part of health maintenance—you can’t rely on people to go out of pocket for them. The way the law was adopted also tells us is that the government is willing to pay retail when they could certainly negotiate wholesale.  And all of this is in the name of privatization. That is a horrible thing and a huge challenge for us over the next few years: How we are going to dig out of these commitments we’ve made to the corporate sector to stoke their furnaces?
Health savings accounts are bound to implode. They will probably work for a few people for a period of time, but they give the illusion of insurance until somebody really gets sick. With the state expansions that have been proposed, HSAs are really dangerous because once again, they are affordable in the sense that for less money you can have what passes as insurance. But, nothing at all is done to address cost. So it will continue to go up, and how are we going to pay for health care?
UO: What has been the impact for physicians and patients?
GC: People can’t shop for health care. You don’t go shopping for price with a neurosurgeon. You don’t go shopping for price with an emergency room. And you don’t go shopping for price when you have a baby. You go where you live, or where your networks of contacts send you. And so I think that health savings accounts are very dubious. There is nothing anywhere to show that they work.
That said, I do think that the ideological lessons that these laws teach us are significant. As a nation, we still lack leadership in figuring out how to solve our health care problems and how to control cost. None of the leading candidates are willing to say they will take on the forces of insurance and health care.
OU: What should the next administration do in the health care arena?
GC: The solution to our problem is far simpler than all the gobbly gook out there. We have been conned into thinking this is so complicated and it’s not. Other countries do a perfectly good job in providing health care to all people in their country. And they do it for a third to half as much as we spend, and they’re not Communist countries. These are capitalist democracies that have made the decisions that they need to make. For one thing, their governments negotiate prices without any shame, and there is a commitment to provide basic health care, and some decisions are made about what’s necessary and what’s not necessary to pay for. We are subsidizing the pharmaceutical industry around the world in what we pay. Did we decide that ideologically? That’s crazy. It’s not complicated if we are willing to confront the fact that our health care system is owned by corporate interest.
I am a single-payer advocate, but I don’t think there is an appetite for a single-payer system. It looks like everybody wants to at least retain privatized health care. I do believe that the next administration must establish, if they want competition, a well-funded public system that can compete with the private sector. Make it affordable, a robust benefit package that pays enough so that doctors and hospitals will not hesitate to participate. I predict that system would be more cost effective than the private insurance system, which is just weighted down by huge administrative cost and profits.

4. Don McCanne, MD:  family practitioner, a senior policy analyst and the former president of Physicians for National Health Care Program (PHNP)

McCanne, of San Juan Capistrano, California, retired from practice 10 years ago and is a full-time volunteer for Physicians for National Health program, a single-issue organization advocating a universal, comprehensive, single-payer national health program. PNHP has more than 14,000 members and chapters across the United States.
UO:  What are the health related policies or laws put into effect since 2000 that you believe have had the most effect on our country?
DM: The Medicare Modernization Act (MMA). It’s designed to privatize Medicare to shift from a publicly administered program to a privately administered program. We’ve only seen the first steps, so it hasn’t had too much impact so far. But, we see what’s happening: The Medicare Advantage Plans are being paid a lot more and yet most of the extra is used by the plans themselves rather than providing expanded services and benefits for patients.
This plot to privatize Medicare overwhelmed those of us who work in health care reform.
UO: What has been the impact for physicians and patients?
DM: For physicians, it was a distraction on efforts to reform health care. As people enroll in the Medicare Advantage Plans, support for the traditional Medicare program declines. Right now we are seeing the fight over where physicians will receive a 10 percent cut in their fees, and maybe over the next several years a 40 percent cut, which is exactly what the Republicans wanted when they enacted this MMA. Physicians and hospitals will start dropping out and [that will] basically ruin the program.
It also increases the paperwork because now there are multiple plans and increased complexity in administrative ways.
As for patients, it’s not having that much impact yet. The one that most Medicare beneficiaries talk about is Part D, the prescription benefit, and that actually, at a limited expense, has improved access to drugs. But it’s done in a way that is very flawed, so patients don’t often get the drugs they really want. It depends on the various pharmacy benefit manager formularies. Then the impact of the donut hole has been great. For instance, cancer chemotherapy and very high priced drugs take people into the donut hole, where they have to foot the entire cost. It was unnecessary to structure it that way.

UO: What should the next administration do in the health care arena?

DM: We need a rational system of financing health care for everyone through a single payer national health care program. That is the first step. Once we do that, we would be able to make a lot of the changes that we need to improve the efficiency and equality of our health care.
We totally need to displace the private insurance system. The leading Democrat candidates, [Hillary Clinton, Barack Obama] support offering a public insurance model as an option, with people gradually dropping their private coverage and moving into the public program. But that is unlikely to happen, mainly because the public program would attract the very high-cost patients and would not be able to compete with the private plans that would continue to be successful and selectively market to the healthy people.
You would have to move funds from the private insurance pools that insure healthy people over into the insurance pools that take care of sick people. Well, that’s not a concept you can sell easily, even though we have done it in reverse: We are moving public funds from the traditional Medicare program over to the private Medicare Advantage Plans, and people seem to think that’s OK. Our concept of the market is insane. It’s fine if we take tax money and give it to the people in the marketplace but boy, don’t you dare do it the other way around.

Kelly Kirch

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