Richard Rathe, MD

Associate Professor of Family Medicine (ret.) and Medical Informatician

Thoughts on Healthcare Reform

[Disclaimer: These are my personal musings as a physician for discussion and comment only. They do not represent any official stance of the College of Medicine or University. RR (August 2009) (Updated March & October 2010)]

First let’s define our terms…

Health is not a deliverable commodity and care does not come out of a system.” – Ivan Illich

I fall back on this quote often because it reminds me of two important concepts:

1) Health depends on individuals taking responsibility for their own behavior.

2) Care depends on a relationship between two people (doctor and patient in this context).

Organized “healthcare” interferes with both more often than not!

Ten Scenarios to Test Healthcare Reform

It is useful to ask the question, “How will we know if healthcare reform has been successful?” Here are ten scenarios, each dealing with a different aspect of the current US healthcare dilemma. Any major reform must address one or more of these issues without adversely affecting the others. If reformers cannot accomplish this, it’s probably not a good time for reform!

1) When I move to a new job in a new city, my insurance follows me. (Portability)

2) I developed diabetes five years ago. Now I’m changing jobs and my new employer does not provide insurance. I’m able to sign up for a new plan at a reasonable cost. (Non-Exclusion)

3) I’m 68 years old covered by Medicare. I own three homes and live comfortably. I pay a significant part of the cost of my Medicare and other premiums. (Means Testing)

4) I’m a 25 year old mother of two. Because of child care concerns I work two part time jobs that do not offer insurance. I’m able to join a public or private plan that does not make my financial situation worse. (Lower Rates Due to Sound Insurance Pools)

5) I’m a 45 year old business executive. I’ve had trouble with early diabetes and high blood pressure. With help from my primary care doctor I stopped smoking. With help from my employer, I started working out at a gym. I lost ten pounds and no longer need one of the medications I was on. (Personal Responsibility/Lowering Barriers to Healthy Lifestyles)

6) I generally don’t go to the doctor unless I really need it. This year I cut myself and needed stitches. I paid a reasonable fee out of pocket for this service. (Direct Payment for Routine Care)

7) I was recently hospitalized and I had a complication due to a medical mistake. The doctor apologized for the error and the hospital did not charge me for the extra days. They also told me what steps they were taking to prevent similar mistakes in the future. I did not need a lawyer to resolve the issue. (Patient Safety/Malpractice Reform)

8) I’m a primary care physician. I’m spending more time with my patients because I have 50% less paperwork to do. I no longer need a staff person just to “code” my services for reimbursement. (Reduction of Administrative Overhead)

9) I’m a primary care physician. I’m paid to help keep a community of patients healthy rather than just caring for them when they’re ill. (Reimbursement Reform)

10) I’m a specialist asked to see a complex patient from another city. The basic information I need to care for her is either online or in some sort of “smart” card she brings with her. I send my consultation letter to her primary care and Ob/Gyn physicians via the Internet. There are no legal or bureaucratic hoops to jump through. (Electronic Health Records)

More Thoughts on Healthcare Reform

Here are five background articles I think are important:

  1. This recent editorial by Paul Krugman sums up the problems with the current system pretty well.
  2. The recent piece by Atul Gawande deconstructs modern medical economics in one Texas city.
  3. This recent review by Jacob Weisberg fills in some of the gaps.
  4. A Way Out of Soviet-Style Health Care Analysis by Alexander Solzhenitsyn and Milton Friedman.
  5. Finally, this 2003 article is a good overview of “Baumol’s Disease“, which colors all our future choices in this arena.
  6. [Oct 2010 Addition] Plan to Cut Medicare Without Stifling Innovation

In order to improve healthcare in the US, major change must address one or more of these issues (without making the others worse):

1) All insurance pools must be actuarially sound (ie, enough long term healthy subscribers to subsidize the sick ones). Private insurance cannot be allowed to cherry pick, especially if the public is paying! Likewise subscribers must not be able to game the system as is happening now in Massachusetts.

2) The delivery of care must become less bureaucratic, especially for primary care docs. There is an escalating measure/counter-measure “arms race” that must end — insurer denies payment due to nuances of coding, physician hires a full time employee just to do coding. This is simply dumb! Billing/reimbursement should be based on what doctors actually do, not arcane accounting rules. If the insurers want physicians to provide extensive, but medically irrelevant documentation, they should pay us to do so! This includes most forms of detailed coding. Administrative costs (above 30% in some settings) must come down!

3) Publicly funded care must have means testing and limits/rationing. You can’t get something for nothing and there is no free lunch! Comprehensive care is mostly a creature of the private sector. Individuals can pay for what they want or can afford. True emergency and catastrophic coverage should be covered by all types of insurance, public and private.

4) Private/employer funded insurance should be readily available. I assume here that most people will buy the level of extra coverage that they want/need/can afford. Employer-based health insurance should be taxed or the benefit turned into a tax credit available to all. The upshot of these last few points is to make us much less dependent on employer-based insurance. We don’t need to ban it, just level the playing field and let competition work.

5) Insurance must be portable! Private insurance must allow existing policy holders to remain without penalty when they move or change jobs (provided of course that they or their new employer continue to pay the premiums). There should be some sort of grace period so that folks who suddenly lose their jobs remain covered for a month or two while establishing new employment.

6) Private insurance companies should compete with each other on a level playing field. Individuals should be able to comparison shop for the best plans. Doctors (or if salaried, their employers) should be able to drop “underperforming” plans. We would need to set this up with rules that prevent abuse by all sides.

7) “Pay as you go” should always be an option. For common, routine things we’d probably all be better off paying cash on the barrelhead for services rendered. Insurance should really focus on the things we can’t afford. There should also be a role for good old fashioned charity.

8) Information must flow easily for patient care, operations and education. All good-faith use/exchange of data for legitimate purposes should be exempt from the likes of HIPAA and other intrusive regulation. There should be a simple, standard mechanism to extend this to research approved by an Institutional Reseach Board (IRB) or equivalent. Commercial use of patient or physician data should always require full disclosure and written consent. Identity theft (as opposed to misuse of medical record data) should be dealt with in a larger context, not specific to healthcare. [Ever wonder why it is so easy to steal identities in the first place?! That’s a topic for another day!]

9) Electronic medical records are inevitable, but we can’t change everything at once. Here are two clear first steps however: a) we must have standards for data exchange and ALL prescribing should be electronic. Just like insurance, EMR companies should compete with each other on a level playing field. This will never occur if they are allowed to remain non-interoperable. The cost of e-prescribing should be borne by the pharmacy and pharmaceutical benefit management companies (who reap all the cost savings!), not doctors.

10) There must be a realignment of reimbursement between cognitive and procedural specialties. Spending time with a patient to figure out their complex or occult problems is just as deserving of adequate reimbursement as surgery or invasive tests. I am not arguing that Family Medicine docs and Gastroenterologists should make the same hourly wage, but the pay gap between specialties is too large and continues to grow.

11) Evidence should inform patient care and reimbursement decisions whenever possible. In my opinion this is the responsibility of the various medical societies (who better?) and individual physicians. We doctors must contribute to the overall good by continually improving what we do based on evidence. Effectiveness, safety and cost are all factors we should consider. Treatments and procedures that are ineffective, dangerous and/or expensive should be the first to go!

12) Some form of tort reform is necessary. From a cost perspective, reform must decrease the perceived need to practice defensive medicine. If evidence-based guidelines were being followed, cases should be arbitrated and not go to trial. Patients who experience bad outcomes (nobody at fault) or true malpractice should be compensated fairly, but not excessively. The need for lawyers in the system should go down.

13) Finally, we must figure out a way to realign incentives throughout the system. Insurers should win if they do a good job of insuring (not denying care). Physicians should win if they do a good job of helping people maintain their health, managing chronic conditions, and curing disease. Patients should win if they behave responsibly with regard to their health. We should harness the self-interest of each sector and make it a force for positive change!

Richard Rathe, MD