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Jonathan Cohn has a very nice piece in the New Republic about Blue Cross, the transition from community rating to risk rating, and the transition from not-for-profit to ginormous profits. I recommend reading it as it explains better than I can why we’re in this mess. In sum, this is a very skewed market. A market based overhaul, while possible, would require a rethinking of our national sense of “goodness” (would we really be willing to let people die on the streets for the sin of being sicker?).

The question for those of us in Alabama is why, when Alabama Blue Cross is a not-for-profit, are our costs not lower. It would seem that not paying attention to the stock prices would make it a kinder, gentler company. After reading this article, I feel I gained a little insight into our unique problems.

First, apparently it may be that competition from the other insurers might be bad. When BC/BS of Alabama was the only game in town, it could afford to offer community ratings because it was a sole source provider. With other insurance companies bidding on insurance for businesses, Blue Cross claims (and they are probably correct) that they must offer rates and packages competitive with these insurers otherwise the HR folks won’t choose BC/BS. This was explained to me by the medical director of a HMO I used to work with when I was pushing him to offer more comprehensive care. he said he could push quality for an entire presentation and then the CEO would point out that the competitors rates were $1.00 per employee lower and what was he going to do about that? Without a benefits floor, it’s all about price.

Secondly, BC/BS is competing with itself. Every year or so, it goes to the client and discusses the new cost of care based on what happened in the company last year. The companies, for the most part, pay for all of their own costs and BC/BS takes a cut off the top (called a third-party adminstration fee). Don’t think the CEOs aren’t aware of which employees have cost them health care dollars and aren’t asking what can be done to alter benefits and render health care less expensive. Again the answer may be “nothing” but my bet is that if BC/BS offers that answer, United Health gives a different answer that may be more than a little draconian.

Lastly, we (Americans and Alabamians) are already paying for the most expensive health care utilizers. Almost 50% of the health care dollar is funded through our taxes and much of that goes to Medicare and Medicaid. Everyone (well 96%) of folks over 65 are Medicare eligible and consume quit a bit of health care in their last 20 – 30 years. Medicaid in Alabama covers the vast majority of premature infants. The goal of all good companies is to reduce risk. The best way to reduce health care risk is to move people who will consume health care completely out of the risk pool. Again, done potentially through manipulating copays and other means.

It looks like some of the tools to reform this system may make it to the President’s desk for signature. If not, the current system is still far from market based despite what some people  claim.

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While at the Alabama Academy of Family Physicians meeting this weekend, the discussion turned (as it is in a lot of places) to health care reform, the climate in Alabama, and whether primary care can survive the next 10 years in Alabama. As I have chronicled the environment for Family Physicians in private practice is not very favorable and Medicaid in Alabama is inherently unstable. To give ourselves yet something else to worry about that we can’t control, the conversation around the table moved the suspicion that the major payors (Blur Cross and Medicaid) are attempting to transform the care delivery system by dropping the reimbursement so low that non-physician providers will be the only ones who can afford to provide primary care services.

This concern has been around at least since the HMO “revolution”. The New York Times ran an article detailing the demise of the primary care physician and the rise of non-physician primary care in 1997. On the service, it is an appealing concept. Advanced practice nurses take less time to train (5 years with undergrad counting) than physicians (7 years post-baccalaureate). To the untrained eye as well as to the partialist physician, what I do seems “so easy a caveman could do it” so why should we waste physician resources on primary care? Lastly, patient satisfaction is always higher for visits to advanced practice nurses when reported than it is to physicians.

 So why am I not unemployed? As my friend Bob Bowman has posted, Family Medicine Advanced Practice Nurses spend only 3.5 years in primary care before moving onto something else. They will constitute at best only 12% of the primary care workforce. Expansion of training to take advantage of the more rapid training cycle without fundamental change in the delivery system will result in more Advanced Practice Nurses but no more in primary care practices. It is true that Advanced Practice Nurses are likely to practice in rural areas when they go into primary care and this must be captured and expanded upon.

It is true that if 30,000,000 folks who do not currently have access are given access, there will be a signficant unmet need for primary care. As Lori Heim, the president of the American Academy of Family Physicians stated, our  common goal of improving access should dictate the relationship between physicians and Advanced Practice Nurses. I suspect there is enough business in the new model of healthcare for both groups.

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In our (soon-to-be-paperless-but-not-soon-enough) office, we have boxes where messages from patients, abnormal labs, and such are placed by the staff for action by the provider. Because it is not possible for everyone to know where everyone else is at any given time, we have taken to placing paper over the cubby-holes notifying the staff that we will be out until a certain day. If one is going someplace fun, a picture or something else fun is placed on the message as well. As Chairman, my cubby is covered more that most and this past week I used my “Out Reforming Healthcare” message for 3 of the 5 days.

On Tuesday I traveled to Birmingham to meet with the folks from the Patient Centered Primary Care Collaborative and hear Paul Grundy speak to primary care physician leadership as well as Alabama business leadership. His message is always strong and consistent and it is getting more focused.  As a physician who is involved in direct patient care as well as population based care for IBM employees, he is encouraging all employers to stop paying for garbage (his words). From a recent interview:

“40% of the care that’s delivered, according to some folks, is unnecessary and I see it every single day.  I know parts of the country where it costs $17,000 for the last six months of life and others where it’s $127,000 and by the way the patients in the $17,000 category, this particular case in Iowa live longer and are happier with the care than the ones that are in a scenario that is over $150,000.”

He sees transformational change coming and being lead by an empowered primary care workforce. Denmark is being looked at as a model with the number of hospitals reduced by 80%, for example.

On Wednesday I traveled to Montgomery to preside over the Alabama Rural Health Association board of directors meeting. As I have detailed previously, Alabama has an impending crisis regarding the healthcare workforce in rural Alabama. Although this meeting will not make a difference as a stand-alone activity, it is refreshing to get people in a room who are able to agree on a problem, potential solutions, and set in place a strategic planning activity focused in addressing the shortage. In that meeting we committed to focusing resources on FaceBook to recruit young folks interested in rural Alabama (search on FaceBook to find the page yourself), creating a strategic plan to better direct our resources, and finalizing issue briefs on the manpower crisis in rural Alabama health care prior to January 2010. We also committed to doing rather than talking.

Lastly, we went to New Orleans on Thursday to recruit Tulane students into our Family Medicine Residency program. The refreshing thing about this trip (aside from the soft shell crab) was that we spent a lovely evening with students who clearly entered medicine for the “right reasons” and they were committed to Family Medicine. We had a very pleasant visit and hopefully will see them in Mobile during the interview process.

In summary, like Paul Grundy I believe transformational change is coming. I believe it can happen in rural Alabama. The attitude of the students on Thursday confirmed my optimism. It was, however, a long week…

Better Homes & G copyAmericans like to believe they have the best health care system in the world. They certainly seem to believe that access to specialist physicians and high end technology is important in maintaining the “quality” of the health care delivery system. Little by little, the word is getting out that more is not necessarily better and almost certainly is often worse. The most egregious example of this is Michael Jackson’s death which was ruled a homicide, allegedly perpetrated by his personal cardiologist. Turns out that having a cardiologist attending you 24/7/365 may not be a good thing. On a more mundane note, NPR decided to look into this and has posted an in-depth look at health care variation that is very well done. The key points of this report are that 1) Americans are the same no matter where you go (despite the belief of some folks that we’re made differently), 2) doctors influence patient choices when determining among choices of equally appropriate healthcare, and 3) money and payment structure influences doctors. This is not rocket science but the fact that it took Alix Spiegel 20 minutes to explain may mean it is more difficult for the average person to grasp than I might believe (and then again, I suspect the NPR demographic may not be average anyway). NPR quotes the Dartmouth Atlas data that suggests almost 1/3 of all healthcare costs are for procedures that are not helpful and may be harmful.

Why is this important to Alabama? The talk of “Health Care Reform” has morphed into “Health Insurance Reform” and now has morphed again into “Covering the Uninsured with Private Health Insurance.” In 2008, Blue Cross of Alabama reported $4,000,000,000 in premium collection. Most of this business, as I understand it, was done with companies who use Blue Cross of Alabama to administer their plan. They have no risk (the companies put money into the plan and take money out) but they take a percentage of the money (8%) and get to hold the premium in the bank (drawing interest) until it is needed. It would seem that they do better as more money is spent on health care, necessary or not. I certainly hope that someone pressures them to look at the payment structure and outcomes, not just  Alabamians’ satisfaction with their product.

large_9-20-09HealthyDebateThe Press Register has been full of Mobile physicians who now are willing to share the secrets of what we need to do to provide adequate health care coverage for the citizens of Alabama. From Saturday’s news comes the  results of a poll of the membership of the Mobile County Medical Society that identifies fear of lawsuits as being the number one reason that they practice expensive and not very effective medicine. The President of the group, local nephrologist Craig Kleinmann, said “fears of lawsuits force many doctors to take expensive precautions and order extra tests — often called defensive medicine — because they don’t want to be accused of missing something.”  A story in the Washington Independent on the other hand quotesTom Baker, a law school professor at Penn as saying that eliminating the ability to sue would only reduce costs by 1.5%. Ahh, but you say it’s not the actual costs, it’s the defensive medicine. Do physicians who profit off of ownership of diagnostic equipment do it for “defensive” reasons?

Then today Jeff Terry, a local Urologist, had his say. He believes that individuals will make dispassionate correct health care choices if only they were allowed. It is “government” that gets in the way. Interestingly, the New England Journal of Medicine also called for a retrenchment regarding health insurance reform. In looking at the administrative costs and physician incentive problems of the current system, they have called for a reconsideration of the single payor system. One or the  other of these folks must be correct.

It turns out, in Alabama we have come close to a single payor. For those without “government” health care, 90% choose Blue Cross. They are the provider of choice for 2.2 million Alabamians.

Mentioned in the President’s speech suddenly people are a lot more knowledgeable about Blue Cross of Alabama. They are a self described “not-for-profit healthcare company” whose goal is to return 100% of premium back to their client. This not seeking profits has led them to proudly state that over the last 10 years, Blue Cross and Blue Shield of Alabama’s profit has averaged 0.6% of total dollars received from our customers.

Blue Cross of Alabama recently discovered the incentives were skewed to reward specialists over generalists in Alabama. The company is doing the right thing and owning up to the fact. A Birmingham Business News review of some of the new reimbursement rates shows severe fee cuts for arthroscopic knee and shoulder procedures as well as colonoscopy and endoscopy exams. Reimbursements for each of those was cut by at least 16.6 percent with arthroscopic surgeons losing more than $200 per procedure.

I’m curious if the physicians who will take a significant cut will simply agree that the invisible hand has spoken and cheerfully take home less money.

I have been out recruiting residents, providing direct patient care, and assisting in a rewrite of the hospital bylaws so I have been unavailable to comment on the President’s speech. For those of you that watched, you no doubt noted the “shout out” given to Alabama. Turns out that “government” is the only viable competitor to Blue Cross because no one else is able to compete. Although the Republican gubernatorial candidates see the evil had of communism, I can’t help but think competition would be healthy. Blue Cross sells their policies to  businesses by offering virtually unlimited access to employees. They then try to manipulate physicians into making decisions in Blue Cross’s economic interest. Consumers, then, are encouraged to seek unlimited health care and providers are encouraged to put barriers in their way. Not the incentives that will “bend the curve“, or even give me a warm fuzzy feeling.

It seems that I’m always getting involved with my kid’s friend’s injury. I saw one yesterday that I was fairly convinced had a mid shaft metatarsal fracture and told them it could wait until morning for treatment. My daughter tells me today she is going to have it plated. She is in the high school band and although I have no direct knowledge, I wondered if a decision may have hinged in part on whether she would have to miss the season (which plating would allow her to return to activity sooner). It got me to thinking about whether the “system” is fixable.

Let’s say you live in Canada, which has limited numbers of  orthopedists. I suspect some decisions are made based on availability. You may not be willing to travel into another province (or country) for a 4 week advantage in healing. The physician may not be willing to take you to the OR for that advantage, either. You and your priamry care doctor may, however, be able to negotiate that cost if the benefit is percieved to be high enough.

Let’s say you live in America, work as a waitress and have no insurance. You will likely not get offered surgery which brings with it a 4 week advantage in healing, regardless of how many orthopedists are around. You will be out of work for 6 weeks but the cost to the healthcare system is negligible. Unless you have a lot of money, few orthopedists will take you to the OR on credit for a self-limited ailment (somewhat differnt for plastic surgery).

If you live in America under the current system, the orthopedist can either take care of the fracture with casting or with surgery. It pays better (at least under Blue Cross/ Blue Shield of Alabama) to go to the OR. In addition, if the physician owns the OR as a part of a free standing practice, he or she can now pay the OR personel, the rent on the OR space, and other fixed costs which are associated with the practice.

For those with insurance, most of America has an infrastructure where access to outpatient orthopedic operative care for is almost instantaneous. This infrastructure is expensive to maintain but it means jobs for scrub techs, nurses, x-ray techs, and other personnel. We also have patients who are accustomed to getting the same treatment as professional athletes almost immediately and for little to no out of pocket expense. For those without insurance, giving them this level of care might just increase expenses more than we think.

Do we need for the genie to go back into the bottle on her own? Do we need to create a different type of care for those to whom the genie has yet to come?

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