Health Reform and Capitation 2.0

New recipe for capitation?

Readers of Kaiser Health News, Politico and The Hill (here, here and here, respectively) were treated to the faux news of another expert report on the tedious topic of physician payment reform.  While the Disease Management Care Blog is a big fan of the brainy Society of General Internal Medicine (SGIM), this physician compensation communique is another rehash of "misaligned incentives" leading to "quantity over quality."

Yawn.

The good news is that there may be insights that were missed by KHS, Politico and The Hill.  In this instance, the DMCB has been listening closely and found one thing the experts aren't saying.

What was said?

Like the many other decrees that have preceded it, the Report of the National Commission on Physician Payment Reform recommends the recalibration and then phasing-out of stand-alone fee-for service (FFS) while transitioning to other payment models that blend FFS with global payment, salaries or "capitation."  It also advocates increasing payment for "congnitive" over procedural services, removing any hospital overhead costs from the fees that are paid for any service that can also be performed at a free-standing facility, rewarding measurable quality, paying for telemedicine, increasing the use of risk adjustment, repealing the sustainable growth rate (SGR) and reforming the RUC.  And like everyone else, it assures the reader that paying for the savings from all these reforms will more than pay for themselves.

And yes, the word "capitation" was in the report.

What isn't being said is that there is a growing consensus that scuttling of traditional fee-for-service will usher in a new era of capitation.  The DMCB thinks of it as Capitation 2.0.

"Capitation" doesn't necessarily have a good name, but that doesn't mean this new rose doesn't smell as sweet or have fewer thorns. Originally spawned by the go-go managed care era of the 1990s, it was blamed for putting profits before patients by giving physicians an incentive to withhold needed medical services.  While a much younger Donald Berwick reported that the medical literature "did not make capitation out to be the villain that some believe it is," the complex risk taking, a lack of individual physician support and unseemly group practice behaviors undoubtedly fueled the physician backlash and the end of managed care in the 1990s.

 So why is capitation coming back?  The DMCB suspects one reason is that there are only passing references to it and that it's been rebranded with more benign sounding names like "gain-sharing" and "global payments."  Another is Medicare FFS fatigue, caused not only by the SGR but by CMS' unending hassles, the uncertainty surrounding PQRS and the dread of having to go through one of those repugnant "RAC audits."  Unwilling (so far) to simply drop out of Medicare altogether, docs are backing into acquiescing to the recommendations of groups like the SGIM.

And why does the DMCB call it Capitation 2.0? Writing in SGIM's Journal of General Internal Medicine more than a decade ago, Thomas Bodenheimer predicted the survival of managed care thanks to the allocation of full capitation to institutions, not individuals. It's then up to those institutions to leverage both FFS and capitation at the individual physician level.  The DMCB would add that a third ingredient is tying any payments under capitation to specific quality goals, like control of chronic illness or maintaining access to care.

The DMCB's conclusions?

What they didn't say: The track record of original capitation or advent of Capitation 2.0 doesn't mean physicians are embracing what their organizations and political allies are saying what's best for them.  They simply don't see an alternative. The 1990s could happen again.

What they got right, sort of: Outside of large organizations that take capitation, we have much to learn about the best combination of FFS and fixed payments when it comes to physician incentives and protecting patients.  Like other reports before it, the National Commission suggests we need 5 years to assess new payment models.  Given the decades of experience with managed care's capitation and Medicare's institutional inertia, that may be overly optimistic.

The "Doc-Fix" Debacle and Why Medicare Access Is In Jeopardy In Both Salaried and Physician Owned Settings

Don't underestimate the physician dismay over the looming "Doc Fix" debacle. Unless some budget compromise gets hammered out, Medicare is about to stick it to a lot of docs.

Ever since the passage of the Balanced Budget Act of 1997, Congress has been repeatedly delaying a yearly mandated cut in Medicare's physician fees. That statutory reduction has been slowly accumulating through no fault of the physician community and is now estimated to be more than 27%.  Assuming most physicians' practices are made up by a majority of Medicare beneficiaries, that represents a huge hit to their cash flow. KHN has a good summary of the partisan mutual assured destruction that has led us to this crisis here.

The docs are not happy:

From the AMA ("shameful"):

"Congress has again failed to fulfill its responsibilities. It is shameful that patients and physicians are the collateral damage; the citizens of this country deserve better. Congress had the entire year to repeal the broken physician payment formula and provide stability for the millions of seniors...who rely on Medicare... but has failed to act. It is long past time for members of Congress to act decisively and protect access to care for seniors..."

From the American Academy of Family Physicians ("outraged"):

“The American Academy of Family Physicians is outraged that Congress failed to prevent the 27.4 percent Medicare physician pay cut mandated by current law. That failure has presented their elderly and disabled constituents a bitter holiday gift — uncertainty whether their physicians will be able to provide the services they need."

A family physician blogger ("very upset"):

"I have talked some of my colleagues and some of my patients, and all of us are very upset about this. Some of my physician friends are really thinking this time about completing the necessary paperwork to stop accepting Medicare patients. How can any business (except government) run with such uncertainty as not finding a permanent fix to the broken current Medicare system. Patients will be unable to see their physicians, resulting in delayed care, increased hospitalization, and illness."

 From an email that was forwarded to the Disease Management Care Blog:

"Who can help us? 28% cut are you kidding me, some of us cannot sustain the disruption of cash flow.
I had a great home equity line on my house, but it was closed (not just frozen) because my bank just got taken over by the feds."

Observers may believe that the fallout will be limited to the small-business physician-owned practices and that the larger systems with salaried physicians will be able to carry on.  That would be a mistake.

Within each large provider systems, clinical "work units" are still responsible for meeting revenue expectations which, in turn, are tied to physician salaries and non-physician support staff.  A fee schedule cut courtesy of Medicare will be just as much of a problem for them too.

How will both the physician-owned and salaried practices respond?  The DMCB predicts that most will conclude that seeing more Medicare patients (volume) will not make up for the reduction in fees.  As has been noted by persons far wiser than the DMCB, "if you're losing 25 cents on every watermelon you sell, you can't make up for it by selling more watermelons."

As a result, both physician-owned and salaried practices will limit access by Medicare patients. Most will probably continue to see their active and established Medicare patients, but they will functionally "deactivate" their other Medicare patients and decline to take on new ones.  They'll then "backfill" those open appointment slots with patients who have better insurance.  Here's how it's done.

The DMCB will close with three additional thoughts:

1. If rates go down by 27%, there may be increased merit to the notion of "balance billing."

2. "Concierge practices," thanks to this stand-off, just got a lot more attractive to thousands of physicians.

3. Now would be an opportune time for the population health management community to close ranks and communicate with their legislators on behalf of their physician partners.

Seven Reasons Why Small Physician Owned Practices Will Continue to Do Well Despite Accountable Care Organizations (ACOs)

Since the Disease Management Care Blog not only wants to be informative but also helpful to its readers, it has developed a seven point generic physician employment inquiry response and recruitment letter.  It is available below. 

The DMCB is confident that those smaller physician-owned private practices that remain independent will find this form letter very helpful in the coming years.  The DMCB releases this to the public domain and its colleagues are welcome to copy, paste, distribute, share, alter, modify or adapt all or some of the document as it becomes necessary.

Dear [insert name of physician here]:

Thank you for your recent [select: tweet, email, Facebook posting or VM] inquiry about leaving your current salaried position and joining our practice.  Thanks to widespread patient dissatisfaction with the institutions that were spawned by "health reform," our small business has experienced tremendous growth. We are constantly on the lookout for new talent that complements our projected demand.  Maybe you can join our team!

As you are undoubtedly aware, many of our colleagues nationwide have been lured into full time employed positions involving large complicated corporate practice arrangements, many of which were set up to be ACOs. Savings haven't materialized and many of these organizations have responded by demanding more patient "throughput" from their employed physicians and imposing cutbacks in vital support services.

In contrast to those organizations, our practice offers you:

1) a completely transparent compensation arrangement that equitably divides our net revenue income among the owner-physicians.   No more having to deal with an unwieldy administration that allocates salary amounts based on some opaque budget of anticipated revenues and upside savings minus overhead and capital allocations that you have no say in.

2) a team-based environment that not only relies on your expertise but knows who's boss.  Unlike those other complicated practice settings with layers of middle management, our office personnel report directly to you, period.

3) a patient population that is not only grateful for our high "same day" service standards and efficient and compassionate practice style, but who also recognize that unnecessarily calling at the end of the business day or repeatedly while we're on night call is reason to be assisted in finding another physician.  We have carefully cultivated a very loyal following of patients who genuinely partner with us.

4) a highly trained and motivated administrative support and care management staff that not only uses state-of-the-art approaches to deal with private managed care commercial insurers, but uses a "3A" approach of Anticipating, Automating and Appealing any service that requires prior authorization from you.  You'll only get involved in these matters when it's necessary.

5) a stable practice environment. Speaking of managed care insurers, they comprise the bulk of our business. While they are far from perfect, Medicare and Medicaid they are not.  They don't threaten us with arbitrary fee schedule cuts, audits, and payment delays.  We firmly believe patients and taxpayers should get what they pay for.  It's not our fault if they haven't paid for our level of clinical and consumer excellence. 

6) an EHR system is not only low cost and user-friendly, it's modular and cloud-based.  Our vendor has agreed to performance guarantees, there are no one-sided "hold-harmless" clauses and it's seamlessly compatible with any hand held device of your choice any time and any where.

7) a unique market niche that sits in that "sweet spot" between a local employer community that likes us, insurers that respect us, specialist physicians work with us and a multispecialty ACO close by that welcomes our referrals.

Once again, thank you for contacting us.  Please send your CV to [insert P.O Box address here] where we will store it in strictest confidence along with dozens of your colleaques' CVs.  We promise you that when we get to it in the coming months, we will contact you. 

Best regards,

More On Posing As Patients To Monitor Access For Persons With Different Types Of Insurance

I'm listening!

In a prior post, the Disease Management Care Blog described a research study that compared Medicaid vs. commercial insurance access to care.  Research assistants posed as parents calling for an appointment for their child and found - all things being equal - that having Medicaid was associated with less access and longer appointment times.  The DMCB found the difference clinically, statistically and ethically significant.

The prescient DMCB also predicted that State Medicaid programs would...

1) adopt the same methodology to monitor access, and

2) possibly figure out a way to sanction physicians who discriminate on the basis of insurance status. 

Little did it know it would get the first part right so quickly, the only minor difference being that it's being run out of Washington D.C. 

Despite official protestations to the contrary, the veracity of the second part remains to be seen.

+++++++++++

Follow-up, 6/28/11, 21:49 hrs:  In an unusual display of common sense, CMS has decided to cancel this ill-fated initiative.  The DMCB still takes credit for the prediction.

Loss of Physician Autonomy: Gimme a Break?

In its befuddlement over this post on physician autonomy, the Disease Management Care Blog circled back to its DMCB spouse muse. Compared to most Americans, she observed, the profession still lives very well, yet suffers from more than its fair share of tone-deaf entitlement, arrogance and narcissism.

She pointed out that an instructive case in point is the DMCB's not-infrequent conversation with the the living room flat screen, when it observes that it should be the one being interviewed on GMA, CNN and Fox. The DMCB retorted that it wouldn't have to say that if she did.

Exactly, replied the DMCB spouse.

Reports of the Death of Physician Private Practice Have Been Greatly Exaggerated

When it comes to the survivability of physician owned practices, is the Disease Management Care Blog being a naive, starry-eyed simpleton? After reading yesterday's DMCB linkfest, it'd be easy to think so.

Yet, the DMCB thinks it's being a contrarian realist about the 'death' of private practice and the rise of salaried physicians. Here's why.

At a past national meeting of the American College of Physicians, the DMCB ran into a elderly doc. Over libations, it mentioned how much things had changed for the worse. That wise doc disagreed. Things are always changing he said, and the profession and patients are better off for it.

That was 25 years ago.

The pace of change has increased, but the fact is that there are still plenty of smaller and physician-owned practices that also continue to adapt. The DMCB has run into these docs at countless meetings, seminars and meals. They are working very hard, are very cynical, are not happy with their current income levels compared to the past, but they're also far from walking away from their practices. The DMCB suspects the same is true in countless towns and cities across the U.S.

Anecdotes alone, however, don't tell the whole story. These 2008 data show the majority of U.S. physicians remain committed to their businesses and their patients and are not about to become salaried: 61% of docs are self-employed and only 21% work in "institutions." In fact, 59% work in settings with 9 or less physicians.

That being said, however, there is a trend away from physician owned practice settings that began decades ago. According to the AMA link above:

"....the proportion of patient care physicians who were owners fell from 75.8 percent to 57.7 percent between 1983 and 1994. Liebhaber and Grossman (2007) report a decline from 61.6 percent in 1996-1997 to 54.4 percent in 2004-2005 using data from the Center for Studying Health System Change’s Community Tracking Study Physician survey."

What accounts for this? Again, according to the AMA:

First, [younger] physicians tend to enter practice as employees. Also, older physicians ... started practice at a time when ownership was more common among all physicians regardless of age. Finally, the great influx of women into the profession of medicine over the past few decades also contributes to the observed age difference in ownership data.... Because women physicians are—at every age—more likely than men to be employees, this also drives the difference in ownership between the youngest and eldest age groups of physicians.

The DMCB interprets this to mean that while there's been a long term demographic trend away from small private practices, it's hardly been the wholesale stampede that's been portrayed in the media or apparently wished for by the Commonwealth Fund.

Last but not least, this downward trend could stablize to a new equilibrium. There are several reasons why:

1) the rise of the "concierge" private physician business model, where a hefty annual fee is charged in exchange for highly personalized care.

2) the persistent income gap between private practice and large academic group practices combined with opportunities for entrepreneurship.

3) the growth of larger yet still independent physician owned practices, especially in specialty areas.

4) the economic impact of the recently passed health reform legislation.

Based on these trends, it would appear the death of private practice has been greatly exaggerated.

The Decline of Small Physician Owned Practices Explained.... and a Prediction That Private Practice Will Hang In There

Are small physician-owned practices, along with Theodoric of York's long discredited leeching, cupping and poultices, destined to go extinct? Check out this article in the American Medical Association's AMNews, describing how private practice docs are selling out to joint ventures and agreeing to outright ownership. Or, according to the New York Times, they're becoming salaried employees of their local hospitals. And this article says the rest are just going to quit altogether.

It seems physicians are unable to make a business of tight-fisted insurers and debtor patients.

The Disease Management Care Blog agrees something is happening, but it thinks this picture is more complicated. Much like an impressionist painting, stand too close and you will miss the picture for the dots. The DMCB stands back and sees:

This Is a Stick-Up (and the Stick Is Getting Bigger): The reason physicians can be pushed around by increasingly dominant regional payers is that the insurers have even greater control of their markets, which is only destined to grow thanks to reform-powered mandates and subsidized premiums. In the meantime, consolidations have made hospitals more powerful, leaving physicians as the next best target for insurers' quality and cost-control efforts.

A Hostile Work Environment: Not only is it easy to blame them for quality shortcomings, physicians have to put up with the SGR monkeyshines, dreaded RAC audits and constant threats of litigation.

Throw In the Towel: The return on investment from a 7 to 9 year medical education is being battered by decreasing incomes with increasing debt, practice hassles, an unfavorable trade-off between life-style and hamster-wheel hustling, variable cash flows, and having to run the business like... a real business.

Bowling Alone: Organized medicine is struggling to maintain its allure. The DMCB thinks singled minded focus on reimbursement isn't helping. As a result, what's left of any physician community is fractured and unable to fight back with a coherent voice.

You Must Be Kidding: And spending $30K per doc on electronic health records will fix this? A lot of docs may be willing to take the incentive payments but have little doubt about what the impact will be on their practice environments.

As for the hospitals... the DMCB thinks that they, thanks to their consolidated market power (see above), are feeling quite bullish and want to grow their way out of their perenially thin margins. Plus, the warm after-glow of health reform has them hankering for capital. It's so good, even the dogs are looking like good investments.

Which is why more dots on the canvas are needed to see why hospitals view docs as bull market opportunities. They are more than happy to joint venture and hire or own more physician assets because:

The Best Defense Is a..... Not only do the existing revenue streams need to be protected, but new ones have to be developed. The means ever more services by ever more physicians.

Integrated Delivery System (IDS) Lust: Hospital administrators are not immune from succumbing to the fantastical visions from our national addiction to IDS Kool Aid. They dream that by getting their own critical mass of docs, they too can some day be invited from their new born IDS to another IDS to talk about how wonderful IDS' are!

A Rose By Any Other Name Smells As Sweet: Let's call it an ACO! If it includes the Patient Centered Medical Home, that's even more reason to bring the docs on board. Oh, never mind, the more physicians, the better, whatever you call it.

Never Mind the Not-for-Profit Status Either: Hey, they're running a business and they have bills to pay also. Don't like it? Well, they're probably also the biggest employer in your county and would be happy to hire even more people. That includes docs.

Those Who Read About the Past Are Condemned to Repeat It: The DMCB suspects the current crop of hospitals execs have forgotten the '80's Physician-Hospital-Organization (PHO) debacles. While some PHOs succeeded in managing episodes of care, most were unable to achieve the most important part of making this work: cost-effective utilization.

All of which leads to a DMCB Prediction:

Despite the dire circumstances, there are still plenty of practices out there that are and will continue to be profitable. They are owned by savvy, hard working and entrepreneurial physicians that know how to manage overhead, maximize cash flows, hire the right kind of office help, keep their customers satisfied, document things to satisfy any audit, vigorously defend against any allegation of malpractice, show their unsatisfied customers to the door, work with their local medical society, handle bad debt, minimize the percent of Medicaid in the practice, aggressively refuse to be pushed around by insurers and, most importantly, keep the local hospital at arms length. While the Wal-Marts and Kaiser Permanentes are currently in the ascendancy, there will always be smaller and moderate size businesses in their shadow who can profitably service a sizable market segment. They won't go away and many will thrive. What's more, some of the reborn PHOs-ACOs will struggle and the bloom will come of the rose of physician-hospital integration. The only question is where the market will equilibrate over the short term. It will not be 0% private practice.

As for over the long term, who knows? That will be the topic of a future post (which is here) .... and maybe a different allegory.

(There's lots more on Accountable Care Organizations here)

More on Back Surgery Rates and What Physicians Can Do To Support Health Reform

Regular Disease Management Care Blog readers may recall two recent posts here and here on a) physician involvement in health care ('not enough,' sniffed the DMCB) and b) lumbar stenosis ('not as bad as the media would have you think,' opined the DMCB).

Thank goodness for careful readers like c3, who has provided some insightful responses on each posting. Rather than file them away on the "Comments" section, the DCMB thought they deserved more attention and is copying them here.

Recall that the lumbar surgery posting was about a freshly minted JAMA article that found that while the overall rate of back surgeries among Medicare beneficiaries was unchanged, the relative proportion of complex and expensive surgery had increased. The authors concluded that this was an example of profits being put before patients. The DMCB was less sure about that and pointed out that there may be some sources of research bias.

c3 also looked at the article and pointed out.......

The confidence interval, EXCEPT FOR COST (and rehospitalization in 30 days), for most complications generally overlapped (Readers can look at the data table here)

All of the surgeries (CPT codes) are covered by Medicare. And since Medicare doesn't do prior auth, its all a moot point.

It sure would have been nice to know the "positive outcomes" (i.e. improvement in pain and/or function). If there was no difference then why would we pay more for more risk and no additional benefit?

The DMCB totally agrees.

Even though the confidence intervals for overlapped, the authors based their conclusions on p values. This is outside the DMCB's statistical expertise, but suspects this has something to do with non-normal distributions involving odds ratios. That being said, the conclusion that the complication rates for more complex surgery are lower may be not quite correct.

Readers may recall that 'prior auth' (or 'authorization') is the "1-800-mother-may-I" style of managed care. This requires doctors to call ahead of time to get approval for a treatment, otherwise it won't be paid for. While c3 is correct that Medicare fee-for-service doesn't "do" prior auth, the DMCB isn't sure if that will always be true.

And last but not least, until we can understand the link between complex back surgery and patient centered outcomes (less pain, greater mobility), all we can do is guess about the likelihood that taxpayers are getting their money's worth. Unfortunately, it doesn't look like this is a priority topic for Comparative Effectiveness Research.

As for the other DMCB posting on what docs can do to improve the health care system, c3 turns to the same seven point system used in the article and provides additional commentary:

1) Work Daily to Provide High Quality Care

But be prepared to prove it

2) Control Costs

At its core no business is in the business of reducing revenue. As much as I'd like docs to always be pre-disposed to save the system $$ I know they're not inclined to do so. However, if they provided pricing transparency and the patients had a financial stake in the game, that would make difference.

3) Improve Communication

Amen. But EHR's need to talk to each other. And we still haven't mastered the management of so much more info

4) Become Involved Locally

A nice sentiment but it feels pretty mom and apple pie

5) Help Implement Creative Payment Reform Solutions

As physicians consume 25% of every health care dollar (not to mention much of the 31% that hospitals consume) I think the "creative solution" is to make less (or better yet shift from costly specialists to less costly PCP's)

6) Talk About Reform With Patients

In one sense noble; in another sense creepy. It sounds kind of like "patients need to understand!". If patient have more "skin in the game" they will quickly understand the need for reform. What did LBJ say "When you have them by the b**ls, their hearts and minds will soon follow"

7) Minimize Conflicts of Interest

Again, people don't naturally reduce their income so this seems more like a system change than an individual physician change.

I do agree with your overall sentiment that physicians needed a better "system-sense" but that's a long term training issue

All good points. Thanks c3.

JAMA Article on How to Increase the Involvement of Physicians Falls Short

Writing in the latest issue of JAMA, Drs. Erica Spatz and Cary Gross of Yale's Robert Wood Johnson Clinical Scholars Program share their insights on the immediate and concrete steps that physicians can take to improve the health care system.

They also unwittingly demonstrate the atrophy of higher order cognitive brain functions that result from the reality deprivation that afflicts many of our finest medical schools. Non-inhabitants of the academosphere that read JAMA may think these bright docs speak for the avant-garde of the mainstream physician community. That would be a mistake and would only make the Disease Management Care Blog's migraine worse.

The Disease Management Care Blog summarizes Drs Spatz's and Gross' suggestions below.

1. Work Daily to Provide High Quality Care - physicians should adopt 'new approaches' to measuring and improving quality of care.

2. Control Costs - physicians can act locally/think globally and 'consider' the costs of medications, tests and treatments.

3. Improve Communication - this can be achieved via electronic records, information exchange systems. giving lists to patients and 'shared decision making.'

4. Become Involved Locally - physicians should get involved or even volunteer in 'community based programs.'

5. Help Implement Creative Payment Reform Solutions - the 'several testable options' underway for control costs and increasing quality cry out for physician participation.

6. Talk About Reform With Patients - patients trust physicians to give them the insights they need about 'why change is needed.'

7. Minimize Conflicts of Interest - with the 'pharmaceutical' industry.

While the DMCB agrees with the technical merits of each of these seven points, they are astonishing for their their emphasis on the traditional role of the physician that still continues to be perpetuated by an unresponsive medical education system. Maybe the folks at Yale haven't heard about the emerging consensus on teaming, health consumerism, systems of care, increasing complexity of insurance designs, growing sense of alarm over health care costs, novel approaches to physician reimbursement, coming heavy-handed involvement of the U.S. government and work that remains in making health information technology useful.

The DMCB wishes that JAMA's editors had demanded more on behalf of their physician readers.

Anyone paying minimum attention to what is going on in health reform knows there is far more to the story at the bedside, the clinic and the community:

1. Work Daily to Provide High Quality Care - like it or not, physicians need to adapt now to new expectations and changing work roles that increase the delivery of high value. For example, they need to become experts in optimizing local work flows and the 'systemness' of leading non-physicians in ways that help their assigned patients maximize self-care.

2. Control Costs - physicians need to be responsible for helping patients and insurers navigate through increasingly complex insurance benefit designs with increased out of pocket costs. For example, they need to demand that HIT decision support also helps patients make decisions about care options that are aligned with their personal values and their pocket books.

3. Improve Communication - this can be achieved not only via electronic records, information exchange systems, giving lists to patients and 'shared decision making,' but through web-based and 'push' cell phone technologies, support of personal health records and better coordination with resources that include, but are not limited to, insurers and community groups.

4. Become Involved Locally - physicians should not only get involved or volunteer in 'community based programs,' but communicate with their elected representatives, join at least one organized medicine group (there are options that range from the AMA to PNHP to PSR), write letters to the editor and serve in one or more advocacy groups - and that's just for starters.

5. Help Implement Creative Payment Reform Solutions - physicians need to be highly skeptical that any of the pilots and demos will be enough to reconcile escalating health care costs, limitless demand and ballooning government deficits. If there are any good ideas out there, now is the time to talk about them.

6. Talk About Reform With Patients - it's time for physicians to trust and listen to their patients so that they can gain better insights about 'why change is needed' and how to make it happen

7. Minimize Conflicts of Interest - physicians need to decide which is worse: the appearance of being fixated on preserving income while being played like puppets on a string by a government incapable of fixing the Sustainable Growth Rate, or, taking a huge cut in income that is likely to occur sooner or later anyway while preserving our self respect. Right now, the DMCB can't tell which is worse for the profession.

More On the Parallels Between the Airline Industry and Population-Based Care Management

In its various speaking gigs, the peripatetic Disease Management Care Blog has alluded numerous times to the parallels between flying jets and plying care management. Sure, the delays, nuisance fees and cramped seating can make for misery, but you have to admit that the safety record is superb. It's no longer up to just the pilot. It takes a team. Passenger safety depends on systems. Travel quality divided by price times consumerism equals value. While these and some other insights have generally stood the test of time in numerous presentations, some recent media reports have made the DMCB pause.....

First off, WHYY's Radio Times with Marty Moss-Coane had an interesting interview with an experienced pilot. If you're a road warrior, it makes for good insightful listening. But there were two major points of significance to the population-based care management industry:

1) While today's aircraft are backed up with state of the art digital avionics, computerized decision support and automatic safety systems that practically fly themselves, the truth is that the pilot's job has become far more complicated. While there are flight envelope protections, the complexity of today's planes commands ever higher skill sets that are no longer restricted to old fashioned flying.

And so it is for the physicians. They not only need to know to singlehandedly deal with the manifestations of disease, but they also need to navigate wards or clinics full of people through the myriad other issues of a complex health system. Both pilots and docs are now also network operators.

2) Despite their unique talents and the lives that are stake, pilots' compensation has not been immune from the travel industry's economics. Starting annual salaries for the regional jet pilots are now in the unbelievably low range of $35,000. While there are 8 hour rest rules, it's not unusual for pilots to put in 16 hour days with multiple take-offs and landings capped off with an hour to get to their hotel room for 6 hours of sleep so that they can get back to the airport the next day after day after day. It's hard work, sleep deprivation and low pay over many years before they get to fly those coveted international routes with a six figure income.

And so it may be for the physicians. The cost structure of the airlines back in the 1990's became unsustainable. Costs had to be cut everywhere and the industry did what it had to do. Unfortunately, despite assertions that we can preserve much of the status quo with payment reform, information technology, better use of research and rooting out fraud and abuse, our highly paid physicians may end up like our nation's commercial pilots. $35,000? Yikes.

And finally, check out this 'Bring Back the Off Switch' Wall Street Journal editorial. In it, Holman Jenkins argues that we need an analog option to deal with the rare but still possible human-digital interface system malfunctions. It's called an 'off' switch. Lexus cars can accelerate out of control with no way to turn the 'key' and Airbuses' speed sensors were vulnerable to ice build-up, leading to a cascade of errors which may overwelm pilots. Ditto on the healthcare future of our digital home monitoring devices, computerized clinical decision support, drug delivery systems and robotic surgeries (to name a few). The DMCB thinks that one of the roles of a pilot or a physician is to know when to recognize systems failure, turn it off and take control.

For maintaining that skill and knowing when and how to use it, both classes of professionals deserve to be richly compensated by passengers and patients. Whether that happens remains to be seen.

Physicians and Health Reform: Heal Thyselves

The Disease Management Care Blog is a member of the American Medical Association, it's State Society and the County Medical Society. It's also a member of the specialty organization for internists, the American College of Physicians.

The DMCB may be something of an exception. Depending on the practice type, many physicians may not belong to any of the usual organized medicine groups. There are other professional organizations, however, that address the needs of specialist physicians such as gastroenterologists or orthopedic surgeons. Each individual group probably has an idea of it's 'market penetration,' but the DMCB doubts it's 100%.

This is important because despite the wide number of professional associations out there, there are a significant number physicians in clinical practice who are 'disengaged.' These groups not only serve educational and professional needs, but they also provide advocacy on behalf of its members and the patients they serve. Not participating in any association, organization or society means not having any input during what is arguably one of the most tumultuous times in the history of American medicine.

The DMCB has two suggestions:

1) To its physician colleagues who haven't joined at least one professional group, you are doing your patients a disservice by letting your opinions go unheard. You owe it to yourself to join up with at least one organization that comes close to what you believe. That may mean the AMA or it may mean PNHP or it may mean a specialty society. If either of these groups are too 'left' or 'right,' it may be because you're not participating. If they haven't succeeded in getting anything done, it may be because you're not participating. Dues can cost less than a large flat screen T.V., but that's not the point: you ultimately can't afford to not join.

As an aside the DMCB points out that the local preachers in its home town don't care which church the local neighbors go to, just so long as they go to a church every Sunday. Organized medicine groups should take a page out of that playbook and promote the idea of professional membership somewhere. Physicians would be better off for it.

2) To policy makers, the DMCB recommends that efforts to promote greater integration among physicians, such as the creation of 'Accountable Care Organizations,' include an assessment of how many physicians are involved in a professional organization that promotes education, establishes professional standards and is involved in advocacy efforts. It wouldn't be all that difficult to create language that establishes the standards. The point is that ACOs and their patients would be better off it were populated by physicians who gave a damn.

The Fickle Sine Wave of Provider Payments and Implications for the Patient Centered Medical Home

The Disease Management Care Blog has been thinking about the Patient Centered Medical Home. In yesterday’s post, it reviewed a New England Journal of Medicine piece that noted one of the virtues of the PCMH is that it will be paid for by a ‘set fee.’

While it was a medical director in the not too distant past, the Disease Management Care Blog was once told by a veteran health insurer executive that hospitals always seem to pine for one of two contrasting payment methodologies: either ‘per diem’ or ‘DRG.’ The former is ‘per day’ or a payment for each inpatient day. The latter is a global payment, based on a diagnosis (or 'Diagnosis Related Grouping'), for the entire patient stay regardless of how long the patient is there. Under the per diem approach, the longer the patient is in the hospital, the greater the money. Under the DRG approach, the less time the patient stays in the hospital, the greater the money.

And how can you predict which payment system a typical hospital will prefer, asked my mentor? Simple, he said, it’s the one they’re not under. Under the per diem arrangements, hospitals are generally subjected to ‘concurrent review’ or getting regular phone calls from the insurer asking about the status of the patient; if the patient isn’t acutely ill, concurrent review can lead to a lower per diem payment or even a decision to deny coverage (and it works). In addition, hospitals generally feel the per diem payment is not high enough. Under DRG payments, there is no concurrent review, but hospitals have a large incentive to discharge the patient, since the longer they stay, the greater the financial loss. In addition, hospitals generally feel the DRG payment is not high enough.

If per diem reminds you of fee-for service (payment for each service instead of each day), it should. Ditto capitation and DRGs: the former pays for a patient’s care over a month regardless of how complicated the patient’s care is.

The DMCB has been thinking about this because it believes physicians are not unlike the hospitals when it comes to the grass-being-greener-on-the-other-side approach to reimbursement. During the 1990’s, many primary care physicians welcomed capitation because fees were otherwise being denied and they weren’t high enough compared to what could be made under a capitated fee schedule. And capitation did well at first but, as readers will recall, it had many problems including its built-in incentive to undertreat. The backlash led to the return of fee for service.

Guess what: while most descriptions of the proposed payment mechanism for the PCMH don’t call it ‘capitation,’ that’s exactly what it is. And while the PCMH is good and righteous and has many redeeming features, the DMCB has to wonder if part of its attraction for physicians has less to do with its clinical advantages and more with it simply being an alternative to the tiresome nickel and diming of fee-for-service with denials, prior authorizations and underpayment.

And so the cycle goes. The DMCB predicts, assuming the PCMH has legs, that physicians will eventually seek ways to unbundle the services of the medical home so that they can get paid “fairly” for all of the individual work elements involved in coordinating care. Until, that is, they’ll want to be given a global payment.

And so the cycle goes.

The New England Journal, Physician Compensation and the Medical Home

Gasp! Physicians are being pressured to make money! Health care is a business! Woe.

This is the doom and gloom insight of Drs. Hartzband and Groopman in a perspective published the latest January 8 New England Journal of Medicine.

The outcome of this bleak state of affairs you ask? Well, according to these authors, doctors may not freely share their medical opinions with colleagues, expecting instead to be paid. Communality will evaporate in a pernicious web of market-driven bartering. Lacking a sufficient reward, providers will regress to the lowest ratio of effort to reward and, if it's not worth while, go home and watch Oprah or, better yet, learn ophthalmology. No wonder primary care physicians are opening concierge practices. And thank goodness the 'patient centered medical home' (PCMH) has been invented. It emphasizes a 'social exchange that exists in a family,' is a "compassionate partnership," and is expected to yield up 'substantial cost savings.' Be warned policymakers: there's a difference between reimbursement and money. The former fosters physician collegiality, cooperation and teamwork. The latter promotes meanness, evil doing and being naughty.

After reading that article and reaching for the Compazine, the Disease Management Care Blog awards these two Boston academics the Arnold Relman Physicians Should Be Salaried Award. While they’re basking in that recognition, they should also know that the economics of their practice environment make for great preaching but have little basis in the other realities of mainstream clinical practice. What’s more fee-for-service isn’t all that bad. Paying physicians per ‘service’ is not all that dissimilar from paying physicians for performance which, despite some DMCB doubts, would probably be welcome even in Boston.

The DMCB heard an anecdote and it believes it. It was told by a salaried physician at a very large group practice that the most dangerous place in the city was that group’s doctors’ parking lot at 5 PM. As patient access and physician productivity declined, the administration stepped in with ‘variable pay’ with incentives. Once the docs felt the link between their salary and how hard they worked, the spectacle of physicians rushing out of their clinics at the end of a 9-5 workday ceased.

Let’s face it. Physician compensation will be a mix of fee-for-service and capitation for the foreseeable future. The former increases utilization while the latter blunts it. The DMCB predicts this ‘gas pedal and brake’ approach will probably be fine tuned to promote and/or blunt underused and overused services, respectively. The good news is that both systems of payment have the potential to reward docs fairly and richly – assuming it’s done right.

Last but not least, the DMCB wonders what the PCMH has to do with fixing physician compensation. The notion of a medical home has merit but is it really going to turn primary care into the paradise described in this article?

Really?

The DMCB Comments About Comparative Effectiveness Research, Payment for Quality, Measuring Resource Use & Physician Payment

The Disease Management Care Blog participated in an interview about some of The Big Medical Questions Of Our Time and, in typical media fashion, adhered to a superficial‘ drive-by shooting’ approach in its responses. This is less about accuracy or thoroughness but more about covering as wide an area as possible and then exiting quickly. So here’s the short and sweet of it:

What is the role of Comparative Effectiveness Research?

It’s suitable for drugs, devices and relatively circumscribed medical interventions. In the CER universe, an academic/research medical-industrial complex approach of head-to-head randomized clinical trials will be a virtue. That’s fine, but the DMCB doubts complex ‘packages’ of interventions that are interdependent and synergistic (like the Medical Home or Disease Management) lend themselves too well to prospective trials because they are hard to randomize, hard to blind, difficult to shield from other sources of bias and certainly hard to pay for.

The key question for readers of the DMCB: If CER determines there is no evidence that an intervention “works,” should that result in 1) no payment, because there is no evidence, or 2) payment until there is evidence that something else works better?

What is the role of Linking Payment to Quality?

While this has yet to really be applied to physicians, in order to discern levels of clinical quality ('high,' warranting payment, versus 'low,' warranting non-payment), the ‘law of large numbers’ requires that a valid statistical sample be used. Most individual physicians in most practice settings don’t have sufficient numbers of patients with a condition in which quality can be confidently assessed. This is an insurmountable problem, unless the solution is “close” is good enough. By the way, even if a sufficiently large sample becomes available, a p value of .05, means 5% of the payments are probably in error.

The key question for readers of the DMCB: A common solution is to aggregate physicians’ data and let the physicians distribute the payment. Is this a conscious or unconscious early step in the aggregation of physicians into groups, PHOs, accountable health systems or integrated health systems – and the demise of the small independent practice?

What is the role of Measuring Resource Use?

Since the subsequent use of resources (back imaging studies and a visit to a specialist or hospital) following an index encounter (the first visit for back pain) is part of the resource consumption, most measures of resource use rely on ‘episodes of care,” which the DMCB thinks of as a packaged timeline with a start (index visit) and a finish (resolution of the condition). The good news is that otherwise independent providers involved in the episode of care can have a stake in optimizing resource use. The measures, if done right, can get them to cooperate and integrate.

The key question for readers of the DMCB: Is measuring resource use around an episode of care the first step in a road that will lead to paying for episodes of care, using a payment mechanism similar to capitation?

What is the role of Medicare Payment Updates from the RUC?

Mainstream primary care physicians are confused by the RVU methodologies, disenchanted with the competing specialties in the process, distrustful of the politics surrounding them and disdainful with the RVU conversion to dollars and payment. While policy, economic and physician experts are grappling over tenths of an RVU, the street level PCPs have become disengaged.

The key question for readers of the DMCB: While us do-gooders in the population-health biz have GREAT ideas on how to make life better for physicians and their patients, why should docs, given their experience with RVUs (and capitation and P4P) believe that we aren’t offering more disappointment?

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Off topic, but DMCB is having an 'egads, what were you thinking!?' moment over the bad Gator behavior of young and future physicians. A study from the Journal of General Internal Medicine:

Abstract

Aim To measure the frequency and content of online social networking among medical students and residents.

Methods Using the online network Facebook, we evaluated online profiles of all medical students (n = 501) and residents (n = 312) at the University of Florida, Gainesville. Objective measures included the existence of a profile, whether it was made private, and any personally identifiable information. Subjective outcomes included photographic content, affiliated social groups, and personal information not generally disclosed in a doctor–patient encounter.

Results Social networking with Facebook is common among medical trainees, with 44.5% having an account. Medical students used it frequently (64.3%) and residents less frequently (12.8%, p < .0001). The majority of accounts (83.3%) listed at least 1 form of personally identifiable information, only a third (37.5%) were made private, and some accounts displayed potentially unprofessional material. There was a significant decline in utilization of Facebook as trainees approached medical or residency graduation (first year as referent, years 3 and 4, p < .05).

Discussion While social networking in medical trainees is common in the current culture of emerging professionals, a majority of users allow anyone to view their profile. With a significant proportion having subjectively inappropriate content, ACGME competencies in professionalism must include instruction on the intersection of personal and professional identities.

According to MSNBC:

'Erick W. Black, one of the researchers, said he found pictures of students grabbing their breasts and crotches, posing with a dead raccoon and multiple photos of residents and medical students drinking heavily.

Many students had joined Facebook groups that could be considered sexist, racist or downright nasty, with many using vulgar language. Some of the tamer groups included 'Physicians looking for trophy wives in training' and 'PIMP' (Party of Important Male Physicians).''

The DMCB asks if instruction in the use of common sense might also be in order. DMCB spouse opines 'they should not be allowed to graduate!'