Thursday, July 8, 2010

The Risk of a Physician Boycott of Medicare, Congress' Duty, Enterprise Risk Management & What MedPAC Should Do

The Disease Management Care Blog thinks of Medicare as a large health insurance company overseen by a Board of Directors that just also happens to be called "Congress." As a Board, Congress' job is to provide oversight, including approving the benefit, premium levels and the provider fee schedules. Like other Boards, it's also supposed to be ultimately responsible for the appointment of executive leadership. Last but not least, it should engage in "enterprise risk management" (ERM). More on this later.

Medicare's "Board" has struggled with the cumulative costs of repeatedly delaying the Sustainable Growth Rate (SGR) reductions for the Part B fee schedule. A perfect storm of election year politics, deficit spending concerns and partisan brinkmanship has led to another "temporary fix" of the scheduled 21% cut. The day of reckoning has been pushed back to November 30, 2010. While grumpy organized physician organizations are publicly concerned about the SGR's impact on patient "access" and "choice," the real threat is that many physicians who currently accept Medicare will "go Texan" and boycott the Medicare if the SGR goes through.

Should Medicare's "Board" be concerned?

As the American College of Physician's* (ACP) Advocate Blog's Bob Doherty points out, physicians have been repeatedly warning for years that Medicare's payment rates are unsatisfactory. In the meantime, the Medicare Payment Advisory Commission (MedPAC), which uses surveys of Medicare beneficiaries to gauge whether physicians really really mean it, remains unmoved. According to MedPAC's data, the vast majority of Medicare beneficiaries still have adequate access and most docs still accept Medicare. Liberal pundits, such as Maggie Mahar, think that threat of a physician boycott is an "overblown" paper tiger unsupported by facts on the ground involving real docs, like hospitalists, cardiologists and geriatricians.

Yet, the ACP's Bob Doherty wonders if things could be different this time. His anecdotal conversations with docs makes him think that substantial - if unquantifiable - numbers of physicians are really thinking about dropping out of Medicare.

Which brings the DMCB back to the topic of "ERM." This is defined as the systematic and objective quantification of all significant risks to a business. ERM typically includes identifying what risks exist, their individual likelihood, their potential magnitude, strategies for their mitigation and assessing progress in keeping them at bay.

Congress' Medicare ERM issues are multiple and include the growing number of baby boomer beneficiaries, their considerable appetite for pricey technology, looming government debt and the involvement of sophisticated organized crime networks in Medicare fraud. But one important risk that continues to languish is the SGR and the potential for a physician backlash.

The DMCB thinks Medicare's Board, i.e., Congress should perform its fiduciary duty and use ERM to carefully examine the issues raised by Mr. Doherty.

What is the risk of a physician boycott?

While the prospect of a wholesale nationwide exodus of physicians from Medicare participation is still small, it is not zero and, given Mr. Doherty's credible suspicions, the risk is growing. The risk is probably greater among the smaller physician owned practices with access to alternate sources of patient care income. It's likely to first show up in refusals to accept new Medicare patients. It'll occur regionally (Texas may be a good example) and vary by practice specialty. The risk is highest among the "cognitive" physicians who a) can't make up for lost revenue with additional patient volume, and b) are dealing with payment rates that have been widely regarded as inadequate.

What is the potential magnitude?

There are two dimensions: operational and political.

It's operationally moderate because of two factors:

1) the relationship between the threat of an SGR reduction and a physician boycott is not linear. While current physician Medicare non-participation rates are low, reaction to inadequate payment rates could quickly cascade under a classic self-reinforcing phenomenon. This is discussed by the DMCB in greater detail here,


2) the interplay between spotty regional access issues and other parts of the health care system - even if access is maintained - could lead to further stressors. While low numbers of Medicare beneficiaries per primary site may not be able to receive primary care, the phenomenon at a regional level across multiple sites could easily lead to delays in care, emergency room crowding and spikes in avoidable hospitalizations.

It's politically high because even spotty regional access problems could be spotlighted by the news media and used by opponents of health care reform to further gum up the President's agenda.

How can it be mitigated?

It's going to take either a) finding new money or b) moving money from other sources. That's the topic for another DMCB post but two additional points should be made:

1) thinking that "savings" from efficiencies, prevention, wellness or the electronic medical record, medical home and accountable care organizations demos and pilots will solve the SGR is fanciful thinking. Don't even bring it up, because the doctor-audience won't believe you. They're too smart.

2) Just the threat - real or not - of an SGR reduction is undoubtedly causing physicians to plan for the possibility of a boycott. Accordingly, "the SGR" needs to be removed from the public spotlight and replaced by a credible signal that Congress and the Administration are taking Medicare payment rates seriously.

How should progress be measured?

In addition to regularly reading the ACP and DMCB blogs (and being skeptical about the can-do-no-wrong loyalty of liberal media sycophants), MedPAC should reinvigorate its reports (like this one that said no problem) and reexamine access from the perspective of ERM with special attention to specialty, region, practice size, non-linearity and worse case scenarios.

The Federal government failed to adequately assess the environmental risks of deep water oil drilling and the systemic financial risks from the easy money and housing bubble. It's not unreasonable to ask if MedPAC is on the verge of committing the same mistake in a key part of healthcare policy.

(Addendum: Interested in this debate? There's more here)

*an organized physician group that represents internists, who focus on prevention, diagnosis, and treatment of adult diseases. The DMCB not only a proud member of the AMA, it is an internist and an ACP Fellow.


Dr Synonymous said...

Physician practices will mostly relate to Medicare by varying available capacity for Medicare patients. Many (no one knows how many) have been closed to new Medicare for months.

The four government betrayals this year are not encouraging to physicians in primary care. They can't bet their survivability on Medicare reimbursement.

Medicare will have no way to know how much capacity for new patients they'll have until a few months after they don't have enough.
Physicians don't have to drop out of Medicare when they can just take new patients from other insured groups (or direct primary care without insurance involvement such as Qliance or Health Access Rhode Island) instead.

maggieimahar said...

Thank you for linking to HealthBeat,
but I didin't write the post suggesting that fears of doctors boycotting Medicare are overblowm.

The post was written by my associate, Naomi Freundlich (She came up with the idea, wrote it without any help from me.)

I doubt Naomi would characterize herself as a "liberal pundit." Formerly the Science Editor at Business Week, she's an excellent journalist and her posts tend to be fact-based. (I also wouldn't call myself a pundit--to me this suggests someone on TV who comes up with clever one-liners. But I am happy to be labled liberal/progressive.)

Finally, I do agree with Naomi. The facts suggests that docs aren't moving away from Medicare in large nubmers.

For what it's worth, I have a relative in NYC on Medicare who has no trouble specialists, and not too much trouble finding a new primary care doc--though everyone is having a hard time finding primary care docs. This is not unique to Medicare patients.

And the numbers support Naomi's argument.

Of course, it could be "different this time" but those three words usually turn out to be wrong. And docs have been threatening to stop taking Medicare patients for years.

More importantly, only quite young, very successful docs would actually be able to keep a practice going without Medicare patients. (Younger patients tend to prefer younger docs).

More than 43 million Americans are on Medicare. Medicare patients account for over 22 percent of U.S. health expenditures . .

And of course older people go to more specialists. The average age for a cancer diagnosis is 67, which means it would be particularly hard for oncologists, as well as cardiologist, orthopedic surgeon (who do all of those knee and hip implants) urologists or many other specialists to make it with Medicare customers.

Middle-aged people will come in for testing adnd check-ups, but seniors are much more likely to need the big-ticket invasive procedures that keep a practgice afloat.

Could docs begin turning down new Medicare patients? Sure--as long as the Medicare patients they have never die . .

Finally, it would be odd if, after all of these years, primary care docs dropped Medicare, just when they are about to get significantly better payment (up 10%) plus many opportunities for bonsues.

And by and large physicians are very enthusiastic about Berwick heading up Medicare.

All in all, a strange time for a cascade of phyicians leaving Medicare

Anonymous said...

I practice in North Alabama and speak to physicians across the southeast. In the last 2 weeks in Mississippi, Tennessee, Georgia and Alabama - states already with a relative shortage of Primary care physicians - over 90% of the PCPs that I have spoken with have ALREADY STOPPED seeing new Medicare patients. Contrary to maggieimahar - a 10% increase still is grossly inadequate to reverse the financial penalty of being a PCP.
And I know of no practicing physician here supporting Dr Berwick.

Jaan Sidorov said...

Dr. Syn points out that physicians can "flex" their Medicare availability. Will Medicare be able to detect this is happening?

North Alabama suggests the phenomenon may be regional. What's anecdotally true in NYC may not be true in NC. It also appears that if Dr. Berwick were subjected to an MD vote instead of a Senate one, passage would not be assured....

Anonymous said...

I have practiced as a specialist for 30 years and I have some observations which may be contrary to popular opinion. Far from having a deficit of physicians,longstanding economic healthcare trends , the current economic crisis and personal observations suggest the opposite. In the 60's 70's and 80's, state legislatures could not fund and open medical schools faster with the presumed intention of preventing a presumably inevitable "doctor shortage" (which has not and never will materialize). Technology, sadly has made most "primary care" redundant. Most of my PCP colleague referrers (including their PAs and NPs )use Radiology and clinical serology services as the "physical exam". Obviously, aside from the perfunctory formulamatic H&P and Review of systems,management plan,etc., the Primary Care physician or his NP/PA is not in a position to establish a definitive diagnosis upon which to manage the given case without X-ray, CT, US or MRI. Unfortunately in our dysfunctional system, these folks and the surgeons control the patient. Some actually have the hubris to believe that their artificial placement in the practitioner caste system allows them special ability to acquire and overutilize the above technology(not incidentlally to their own finanacial advantage) without total awareness of appropriate application and timing. Of course there are artificial specious arguments for this behavior: "patient convenience", "lawsuit threats" etc. Declining reimbursements, unassuaged patient appetite for new technology,Insurer and governmental inability to provide consistent controls, have only increased overutilization and healthcare costs. So I say, let them quit (of course it will never happen as long as you analysts continue to incorrectly define the problem). Can the public be adequately(even better) served with fewer practitioners? Absolutely.

karl_marx said...

Physicians conveniently forget that they have almost a total monopoly on the provision of most healthcare services. They commonly style themselves as rugged independent entrepeneurs when their economic advantages derive largely from governmental power. But, by keeping the government monopolies somewhat fragmented via individual state licensure, it has been easy to avoid real reform and keep the different states and the Feds off balance by playing one off against the other.

Medicare pays more than enough. Doctors, hospitals, pharmaceutical companies, insurance companies, and various healthcare executives are overpaid. Eurpopean countries pay roughly half of what we do and virtually every study on the subject shows they get better medical care.

With respect to Medicare, doctors get training stipends from Medicare. How outrageous for them to even contemplate dropping out of the system. Let's give the intern, resident and fellow stipends as loans with a realistic rate of interest. If you want to drop out, at the very least, pay back the money you got for your education.

It would be better to put all doctors on salary. Pay in excess of $100K yearly should be quite exceptional. Alternatives would be a single payer plan such as they have in Canada. To me, the best plans are in Europe in which they retain aspects of private practice and multiple payers but they have stricter regulations which prevent the bloated salaries that are sucking the life out of the American economy. The French pay about 1/2 of what we do and they get significantly better results, for example.

If doctors don't like it they can find some other country where they can do better.

Jaan Sidorov said...

Specialist physician "anonymous" makes a good point. Based on what (s)he's seen, the primary care physicians seem ill equipped to be the diagnostician-coordinators that they should be, and their failure to serve patients lies squarely with them. The market seems to know it, so what's wrong with letting them wither on the vine?

I cannot disagree. In fact, it could be argued that the latest PCP wrinkle - the PCMH - should be allowed to succeed or fail based on its ability to deliver real value for the patients.

Of course, there are MANY primary care physicians that fulfill their roles. Specialists may not be awaare of them because they're invisible: don't have to refer to them very much!

Jaan Sidorov said...

Karl is true to the name! And like many of the real Mr. Marx's past collaborators, it's clear he's spoiling for a fight.

My point is that I'd like to "park" the issue of the adequacy of payment rates off to the side. It makes no difference how much is the "right" amount. My points are a) physicians - based on their perspective - COULD decide to boycott in all sorts of ways and b) if that happens, it could be very disruptive with a lot of social and political toxicities. That's when Congress will be put into the uncomfortable position. Would they follow Karl Marx's advice? Hopefully they'll act before it gets to that point.