"The Battle over Obamacare is over," ABC news host Diane Sawyer pronounced Tuesday night, shortly after President Obama won re-election. For all the disgruntled docs out there, the not-so-close victory over former Massachusetts Gov. Mitt Romney sealed it.
For physicians unhappy with the President's healthcare policies, the battle may be over on the outside, but they may be seething on the inside.
Throughout the presidential campaign, many older physicians, in particular, expressed displeasure with regulations and financial cutbacks. Some talked privately about considering early retirement and others vowed to outright quit in the event of an Obama victory.
A month before the election, a survey of more than 4,600 physicians in the U.S. favored Romney by a 53%-to-33% margin, with 12% undecided and others supporting third party candidates, according to MDLinx, the healthcare information firm.
But like the rest of the country, physician specialists were extremely divided among themselves over who should win the presidency.
Hospital-based physicians preferred President Obama by a 47%-to-37% margin, with 12% undecided and the remainder preferring other candidates, MDLinx said. On the other hand, likely voters among solo practitioners expressed a two-to-one preference for Romney.
As physician practices got smaller, "each step down in size showed an additional shift toward the Republican candidate," Stephen Smith, the CMO for MDLinx said in a statement.
Now with the Obama re-election, a greater number of older physicians in particular, may consider exercising their options, such as quitting. But it certainly is a time to pause and a time to begin healing a divided country, and a divided profession.
It is time to get beyond the politics and into improved care and efficiencies of care, in spite of—if not because of—healthcare reform.
In that spirit, a Health Affairs report released this week shows the importance of the attitudes of older physicians in providing cost-cutting care that, as healthcare reform evolves, the country certainly needs.
In a study of health plans and Medicare use, Ateev Mehrotra, MD, a RAND policy analyst, and his colleagues found that physicians with fewer than 10 years experience had 13.2% higher overall costs than physicians with 40 or more years of experience.
The study results "raise the possibility that more costly practice styles of newly trained physicians may be a driver of rising healthcare costs overall," Mehrotra, wrote. He is an associate professor of medicine, division of general internal medicine at the University of Pittsburgh School of Medicine.
The cost-cutting ability of physicians is coming under increasing scrutiny. Health plans and Medicare are beginning to identify the costliest physicians, in hopes of crafting policy interventions to reduce overall spending, Mehrotra says. That is being done through physician "cost profiles," which provide a picture of the interventions performed by different physicians.
Not only that, but the cost profiles may be used as a basis for adjusting a physician's reimbursement via Medicare's new value based payment modifier under the Affordable Care Act, Mehrotra adds.
Surely, nearly everyone in the medical field agrees that in younger physicians, many see hope that more are technologically advanced, and more in tune with the multidisciplinary teams so desperately needed for improved quality and efficiencies. But don't count the older physicians out when it comes to saving money for delivery of care, says Mehrotra.
The study focused on physicians included in the Massachusetts Health Quality Partners database - some 12,704 physicians involved in 27 specialties. The physician performance scores were used from insurance claims from 1.13 million patients who were enrolled in four health plans in Massachusetts from 2004 to 2005.
Specifically, the study found that mean per-capita patient costs were $14,906 for physicians with fewer than 10 years of experience. Those with more than 40 years of experience had costs of $10,104. "When you think of the $2 billion spent overall for healthcare, those figures for each physician are significant," Mehrotra says. There was no association between the care costs and malpractice claims or the size of the physician group, he adds.
"The results raise the possibility that (the) more costly practice style of newly trained physicians may be a driver of rising healthcare costs overall," says Mehrotra in the report. "We found a large association between physician experience and lower cost profiles," he adds.
So what about that "costly practice style" of newly trained physicians? For one thing, physicians with less experience may spend more on patients who may need more costly care to begin with, and add to it.
"The higher mean patient costs observed among physicians with less experience appears to be driven by high-cost outlier patients," Mehrotra's report states.
When I interviewed him, Mehrotra theorized several possibilities of why younger physicians spent more than older doctors. "There may have been a situation that reflects clinical uncertainty (among the younger physicians), with them saying, ‘Let's get this test just in case," he says. "A physician who has experience and faced similar clinical situations previously may feel more comfortable just being conservative and watching things through."
Less experienced physicians may follow "costlier practice patterns" than more experienced physicians because recently trained physicians may be "more familiar with and therefore more likely to use newer and more expensive treatment modalities," Mehrotra says in the report. "It is also possible that lack of experience and uncertainty translates into more aggressive care.
As the government moves toward value-based care, physicians with higher costs may sustain reduced reimbursement. In addition, "less experienced physicians will, on average, be negatively affected by policies that use physician cost profiles unless they modify their practice patterns," he adds.
Mehrotra says that the study is significant because previous studies on the relationship between practice patterns and physician experience are mixed. Several studies have found lower rates of diagnostic testing among more experienced physicians, but other studies have found the opposite relationship between experience and services, such as electrocardiograms, Mehrotra says.
"Although winners and losers are inevitable in any cost profiling effort, physicians with less experience are likely to be negatively affected by policies that use cost profiles unless they change their practice patterns," Mehrotra wrote.
He says that physician-training programs should focus more attention on cost-efficiencies. "Postgraduate training programs and specialty boards need to educate physicians on their responsibility to be good stewards of healthcare resources."
"It is conceivable that as they gain more experience these same physicians may develop less costly practice patterns," he adds. One of the ways they can do that is through multi-disciplinary approaches that many hospital systems are embarking on—true partnerships focusing on quality and efficiency, Mehrotra told me.
Like this week's elections, he adds, "winners and losers" are inevitable in any cost profiling effort. And, coordinated care is needed among young and older physicians because, for one thing, healthcare reform is well on its way, with Romney's vision of it being erased, gone with his defeat.
This article appears in the October 2012 issue of HealthLeaders magazine.
Fiscal changes in healthcare delivery over the years have driven a continuous evolution of physician-hospital relationships. Physicians have joined groups, left groups, and become independent again, spurred by alterations in payment models and competition.
As the nation moves from pay-for-performance to value-based care, there has been a rush of independent physician practices joining larger groups and hospital systems for security and reimbursement.
Indeed, physicians and hospitals have been effectively shuffling a deck of healthcare affiliation cards, looking for a handsome payoff through the creation of primary care physician networks.
With physicians eager for hospital positions, and hospitals trying to align their clinical care with an eye toward medical homes and accountable care organizations, the two sides are increasingly joining forces in primary care physician networks. These networks are seen as providing a significant foundation for improving care and efficiency, while bolstering programs that include employed physicians and independent providers.
But as hospitals integrate physicians into their systems, managing such networks is both fiscally challenging and an intricate dance requiring precise coordination. Hospitals are carrying out primary care acquisition strategies that include a focus on patient demographics while seeking improved market share. For greater efficiency, hospitals are also partnering with other healthcare organizations to enhance IT development, considered crucial to buttress physician networks.
With the uncertainty of new payment models, the stakes are higher than ever. In running a business, there's always the part that is a gamble, and physician networked hospitals are taking a calculated risk with money-losing initial investments and counting on an eventual payoff, in profits and medical outcomes, when all the cards are dealt and the players show their hands.
Developing or expanding physician networks is not instant made-money for hospitals. Hospital officials concede that initially there are often financial losses, but despite that, such networks may become a boon not only for improved patient care but also for developing programs such as medical homes.
"The reality is when you recruit new providers and are building a vibrant network of primary care physicians and you try to grow those networks, you will have operating losses," says Donald Martin, vice president of physician enterprises for St. Peter's Health Partners, which runs the 432-staffed-bed St. Peter's Hospital in Albany, N.Y.
Although they may stumble over low fiscal returns early in the game, hospital officials say improving and initiating primary care physician networks is a crucial piece of any proposed innovation, such as an ACO or a medical home. "It's like a house of cards, and you require every card to stand up," Martin says of the fiscal issues facing healthcare leaders. "The reality is you need a vibrant network of primary care physicians, especially as the government ratchets down what it pays physicians. Survival is in partnership."
At the University of Pennsylvania Health System, whose flagship hospital is the 772-bed Hospital of the University of Pennsylvania in Philadelphia, leaders agree. "Very few people start physician networks looking for a profit," says Ronald Barg, MD, executive director for Clinical Care Associates of the University of Pennsylvania Health System. "It is estimated that the average healthcare delivery system that employs physicians loses about $50,000 to $70,000 a year per doc when they start out. These are not profit centers, but they make strategic sense. You can't take care of patients if you don't have docs. If you don't develop a physician network, you are unable to recruit and your options are limited." Successful networks need to have broad coverage, include a wide array of specialists, and have a "plethora of formal contractual relationships" with physician groups, employing physicians, or both, he says.
The University of Pennsylvania Health System, with a 2011 operating revenue of $4.3 billion, has been ahead of the curve regarding physician alignment. Twenty years ago, the system launched a physician network and not only stuck with it, but expanded. Other physicians and organizations around the country shuffled in and out of such arrangements, often in uncertain directions, depending on healthcare financing, Barg says. "A lot of health systems developed these networks, and they found they had a gap in terms of ability to manage those networks. Healthcare didn't move in the direction that everybody anticipated. And most of them wound up divesting themselves of networking. We were one of the few groups that really maintained a significant place in that market."
As a result, the network was expanded "to make it geographically diverse" Barg says, referring to physician groups and specialties. "No doubt, it's important with the hiring of primary care that has heated up in the past year."
Success key No. 1: Geographic strategies
Over the past decade, Metro Health Hospital has invested heavily in developing its network of primary care sites, integrating physicians and implementing IT, says Mike Faas, president and CEO of the 208-staffed-bed facility in Wyoming, Mich. It has worked to find the right balance of primary care and specialists, with recruitment of geographically distributed practices being key for physician coordination, he says.
Metro Health has a 50% share in a physician hospital organization that represents both employed and independent physicians. Like many hospitals, Metro Health is considering an ACO plan, but developing its physician networks is paramount. "No matter what happens with an ACO, physician groups will be responsible for a population of patients, either by default or having patients assigned to them," Faas says. "More people will have coverage of care, and hospitals will be responsible for managing that care. If you don't get your arms around managing that care, it's not sustainable financially."
Gradually, the hospital has been adding to its physician network with an eye on spreading its demographic base, Faas says.
Metro has been developing its physician network, now known as Metro Health Medical Group, since the 1990s, Faas says. "We got into that curve and were able to build a solid foundation, with a conscious effort to grow primary care access and keep that focus. It has helped recruiting and garnering referrals, building our relationships with primary care docs, other providers, physician assistants, and nurse clinicians. We started and never stopped."
Metro owns and operates 12 ambulatory care facilities, neighborhood outpatient centers with dozens of primary care providers distributed across its service area. Physicians employed by Metro Health Medical Group staff
10 sites.
According to a 2011 American Hospital Association–sponsored report that examined hospitals suitable for ACOs, for the fiscal year ending in 2010, Metro Health's revenues were $286 million and operating income was $7.3 million, with a 3% operating margin. The Metro Health revenues were reduced by investments in Metro Health Medical Group, the physician group, as well as a startup ambulatory center. Metro Health invests roughly $30,000 per year per physician in the Metro Health Medical Group physician group, the AHA report states. Overall, "Metro Health leaders believed the employed physician group has been a very positive investment that positions the organization for a future of accountable care," it adds.
To maintain its ROI and clinical scale, Metro has consistently pursued alliances with other hospitals and medical practices to manage larger, more geographically dispersed populations.
"There's no doubt that working with a tightly aligned physician group is essential and not a roadblock. Networks will only be more important with the rolling out of healthcare reform," Faas says.
As part of its alliance to bolster its physician networks, Metro Health has joined with Trinity Health and the 880-licensed-bed University of Michigan Health System, based in Ann Arbor, to form the Pennant Health Alliance to improve primary care acquisition strategies as well as revenue cycle management programs. Trinity Health, based in Novi, Mich., operates 49 acute care hospitals in 10 states. Under the organization plan, Pennant is expected to coordinate and provide "high-quality" physician groups for the member hospitals. It also is expected to be a support network for quality and cost improvements overall, according to Faas, who also serves as CEO of the Pennant Health Alliance. An integrated IT strategy is built into the plan to spread and reduce costs. The arrangement calls for Trinity Health's supply chain and support network to provide for a more favorable cost structure for independent medical practices.
Success key No. 2: Governing the physician network
When the Henry Ford Health System—a Detroit-based integrated system with revenue of $4.2 billion and net income of $21.5 million—began its physician alignment with regional physician groups, it considered metrics and governance to improve clinical outcomes. But it was important that the program was essentially "physician directed," according to Charles E. Kelly, DO, president and CEO of the Henry Ford Physician Network, which was formed in 2010.
The Henry Ford Physician Network includes the Henry Ford Medical Group of 1,300 employed physicians, as well as approximately 550 regional physicians in private practice. Overall, Henry Ford includes 2,000 physicians within the system's six hospitals and 32 primary care centers.
Hospital officials are reaching out to physicians, telling them they can maintain their existing business models as private, employed or medical group physicians, but also have access to the Henry Ford services and resources when joining the network, according to Kelly. They work with payers on value-based contracting to improve outcomes under proposed ACO structures, he says. The network also offers physicians a malpractice insurance program, discounted group purchasing rates, as well as electronic health records to support the practices and connectivity to the Henry Ford Health Information Exchange, a secure platform that shares clinical information and results through the system.
By coordinating care, Henry Ford has been able to "break down the silos on the farms," he says, referring almost satirically to the oft-used phrase about separation of work environments. The physician network has improved communication among the Henry Ford Medical Group, the self-funded insurance plan, as well as the continuing care and home health agencies. "None of them were talking to each other satisfactorily," Kelly says. "If you are going to be successful, you've got to get these supportive functions coordinated."
Among the important elements are the committee structures that the Henry Ford group has established to maintain cooperation with physician networks, Kelly says. A 15-member board of trustees, which includes equal representation from independent physician groups and Henry Ford's own medical practices, oversees
the committees.
Those committees include areas that focus on finance and payer relations, as well as clinical integration and informatics. Each committee also has balanced representation from independent and hospital physicians, including primary care physicians and various specialists.
The groups are "equally populated by employed docs and independent groups and very much engaged in clinical integration and quality," he says. The journey toward coordination is not easy, Kelly acknowledges. When hospital officials initially talked with doctors about joining the network, some physicians had their arms stiffly folded and scoffed at the idea. But through effective persuasion and collaboration, they have won over 500 independent physicians, including one group practice with 52 family internal medicine physicians who signed up two years ago, he says.
The hospital system is focusing on population management tools that "identify areas we need to prioritize and focus on, with medical management and direction of strategy and tactics to address those issues." Those areas include heart failure, constrictive lung disease, diabetes, and end-stage renal disease. "We're looking at a centralized system for delivering medical management and case management and analytics" to make inroads in the care continuum, he says.
Preliminary data shows the Henry Ford Physician Network is "bending the cost curve," Kelly says. Early results show costs decreased as much as 15%, he says, although he did not disclose exact figures. Kelly also cites clinical care improvements that he attributes, in part, to the physician network.
Success key No. 3: The medical home
The Memorial Hermann Physician Network is a clinically integrated physician organization composed of more than 3,500 doctors throughout the Houston area. It has contracted with Memorial Hermann Healthcare System to carry out a medical home program involving independent and employed physicians representing a variety of specialties, which led to Memorial Herrmann's receiving its ACO designation in July.
The doctors are not employed by a single entity, but encompass various practices. In addition, only physicians who agree to the medical home concept are brought into the ACO, according to Shawn P. Griffin, MD, chief quality and informatics officer at the Memorial Hermann Physician Network, associated with the 3,514-bed Memorial Hermann Healthcare System.
In effect, under the Memorial Hermann medical home initiative, known as Advanced Primary Care Practices, physicians must practice evidence-based medicine and report their performance on nationally accepted and validated clinical and satisfaction metrics, Griffin says.
Memorial Hermann is selective about the physicians who join the network, but also provides incentives for those who do, Griffin says. "We're a physician-led organization, and when we look at physicians who want to participate we're willing to subsidize some of the practices to get on the [electronic medical records]" for instance, he says.
"The group of doctors will have incentive metrics that they share and organize, and look at quality and finances," he adds. "We'll provide doctors with some reporting tools for them to track how they are doing. We also supplement whatever we can legally provide in their practice to facilitate and track referrals."
Memorial Hermann collects data from its provider network, effectively acting as "our own type of health information exchange," Griffin says. Within a few years, more than 200 medical practices are expected to be involved in medical home programs, he adds. The network will be initially focusing on specific disease types, such as diabetes and colorectal cancer, to improve coordination of patient care.
Primary care physician networks showing greater efficiency may attain better contracts with payers, he adds. At Memorial Hermann, most primary care physicians requested the hospital system's Advanced Primary Care Practices program, says Griffin, with most doctors saying "it was important for their future."
Memorial Hermann's medical home program includes a team of physicians, nurses, and other caregivers who treat acute and chronic medical conditions and oversee wellness programs. A key element is the embedding of an innovative information technology into the care registry exchange, which is designed to enable physicians in the Advanced Primary Care Practices program to share clinical data with each other in a privacy-protected manner that will help avoid unnecessary duplication of medical services, according to the hospital system.
Physicians can be prompted to order and schedule needed tests and vaccinations, or be alerted to changes in medications made by other physicians. They also can be notified of abnormal lab values and prompted to intervene appropriately.
"Primary care is the future," Griffin says. "They are critical to the success of the medical home and coordination of care; it's giving patients the right care and access to care."
Success key No. 4: Overcoming conflicts
As hospitals establish relationships with physician groups to bolster physician networks, they must overcome the obstacle of potential conflicts and competition among the physician groups themselves, says Julie Manas, CEO of the 344-licensed-bed Sacred Heart Hospital and president of the HSHS Western Wisconsin Division.
In its highly integrated managed care market, Eau Claire, Wis.–based Sacred Heart has negotiated with two physician groups, a medical network, and independent and employed physicians. There are complicating factors that must be overcome to ensure a smooth working environment, including an overlap of specialties, competing interests, and direct competition, she says.
Sacred Heart Hospital is an affiliate of the Hospital Sisters Health System, a 13-hospital system based in Springfield, Ill. It is associated with the Marshfield Clinic, an organization of 730 physicians in 80 medical specialties and subspecialties located in 40 centers throughout Wisconsin. It is also affiliated with the OakLeaf Medical Network, a physician-directed health services network that includes 150 medical professionals in 41 physician offices.
Manas, who joined the hospital system within the past year, noticed early on that improved relations among physician groups were essential. Depending on the area of care, such as cardiology, "they are competitors against each other" in the hospital, Manas says. "I spend a lot of time meeting with executives and physicians. They see me as Canada or Switzerland, someone who is neutral. The point is developing integrated care," she says. These professionals work through any conflicting issues they may have with each other. "It has to be put aside, and they are doing that. It's about the patient, and when they are with the patients at the bedside, it's about all of us. That's what I have discussed with them, and it's working," Manas says.
A primary care physician network plays an essential role in improving those relationships and cooperation among groups, she adds. It was only in the past few years that the hospital expanded its network by adding independent physicians to employed doctors, according to Manas. "We now have employed physicians as well as independent doctors in the network, called the Physician Integration Network LLC." At least 200 physicians were involved in the program.
Earlier this year, the Sacred Heart Hospital and the Marshfield Clinic announced plans to jointly purchase and operate a local hospital and nursing home, with a local entity operating the nursing home for cost-cutting and overall quality improvements, Manas says. That plan could be traced to improved coordination established through the physician network, she adds.
"With primary care as the driver of care integration in our system, it is our belief we can do a better job," Manas adds. "We're not satisfied with just doing a good job. We want stellar."
Reprint HLR1012-7
This article appears in the October 2012 issue of HealthLeaders magazine.
The head of a national physician recruiting firm characterizes the overall recruiting environment for physicians as challenging—to say the least—because of a "paradigm shift in the way we hire and recruit" in the wake of healthcare reform and the move toward Accountable Care Organizations.
In a recent survey of 200 healthcare employers and health systems related to recruiting of docs under an ACO model, an overwhelming number said they are focusing on more team-oriented physicians, more technologically-savvy docs, and physicians who are committed to quality initiatives, says Jim Stone, president of The Medicus Firm, a national physician research firm based in Dallas, TX, that released the survey this month.
No surprise there.
But what did surprise Stone is the fact that only 35% of respondents believed physician recruiting would be difficult or challenging in a move to an ACO. He is also president-elect of the National Association of Physician Recruiters.
Stone expected the figure would be much higher. With hospitals seeking physicians whose attitudes may be more in line with the change from fee-for-service to value-based care, there's no question that more difficulties are ahead in recruiting, Stone predicted in an interview.
"We're seeing increasing retirements, aging physicians and not enough physicians coming into the health care system," Stone says. "I don't think there's any way you can look at it and say it's not going to be more difficult. I think most people have come to terms with the fact that recruiting doctors is hard. Every year it takes us longer on average to fill the searches that we're engaged to work in."
Whether it's difficult or not, most execs—at least 70%—say there will be changes in goals and processes for recruitment in developing ACOs, according to the Medicus survey. Of the respondents, 66% worked at not-for-profit community hospitals, and 19% were in office-based physician practice groups.
An overwhelming majority—80%—led their organization's recruitment department or team.
At least 46% of top healthcare officials who are currently or soon to be involved in ACOs believe recruiting volume will increase slightly. Overall, 48% say the volume of recruits will increase, with 56.1% saying they will recruit more primary care physicians.
While many healthcare organizations are still uncertain whether they are heading toward Accountable Care Organizations, these medical groups and hospitals are emphatically doing one thing: recruiting non-physician providers to take over physician functions in what the head of a national physician recruiting firm calls a difficult recruiting environment, Stone says.
More than 80% of executives expect to increase recruitment of non-physician providers such as nurse practitioners and physician assistants under the ACO care model.
"I don't think there's any question that mid-levels—premium mid-levels, nurse practitioners, physician assistants—are going to have to play a vital role in this process," Stone adds. "You already have too few doctors. A lot of doctors do things that mid-level (nurses) are perfectly capable of doing. Just as I wouldn't hire a super-talented physician recruiter and pay them a lot of money to have them do data entry, it's the same concept. We are starting already to see the volume pick up of mid-levels being hired in anticipation of those changes."
When asked how physicians will be brought into the ACO, 75% of executives replied that most incoming physicians are likely to become employees of health systems. Only slightly more than half—51%—say that their current staff has all of the characteristics to be successful in an ACO model.
Of those participating in the survey, whether they actually will be joining an ACO is still a major question mark. Of the 244 participating hospital and healthcare-hiring executives, about 57% indicated they have no plans to become an ACO to their knowledge.
"I was surprised to see that number, I thought it was high. I think there continues to be hesitation, a kind of wait and see," Stone says. "Is Romney going to repeal the whole thing, or isn't he?"
"At this point, the ACO model is still a very new development in healthcare, and much of what people are telling us are simply projections and estimates," says Stone.
The survey also shows that healthcare systems are seeking a "different" kind of physician than years past.
Of those systems embarking on ACOs, 78% of those surveyed say they are seeking physicians with more team-oriented approaches; 65.9% want doctors who are more technologically savvy with EMR experience and mobile devices, and 68.3% are looking for physicians motivated by quality incentives.
"The high-volume admitters, high volume procedure (physicians) that have been very attractive to hospitals over the years," Stone says, "that's got to change. And these healthcare officials are not necessarily going to look for people just to cut first, and ask questions later. We end up with more team-oriented physicians."
"There is also an expectation today that physicians are technologically savvy. There is an expectation now that didn't exist before. It's a complete paradigm shift the way you interview, recruit and hire physicians, and compensate them. It's a huge step and without question the process is going to be more difficult for hospitals."
"The biggest challenge is that hospitals and physician groups are going to have to become better at behavioral interviewing," he adds. Years ago, hospitals may have hired an orthopedic surgeon, for instance, who was likely to deliver $2 million in patient revenues, despite a "prickly" demeanor, he says. Nowadays, that demeanor may be costly in terms of patient attitudes and overall future reimbursements. That's changing. A hospital or physician group may think twice before hiring such a doctor, and instead opt for a "team" physician whose outward credentials may not have been as stellar, Stone says.
For physicians, the anticipation in earnings in an ACO environment is a mixed bag. Regarding physician income levels,executives overwhelmingly predict that there won't be one directional trend across the board in physician income as a result of ACOs: 62% say some physicians will earn more, while others will earn less as providers for an ACO.
Only about 10% of respondents feel that physicians will earn more money under an ACO model, while about 20% say less money. Still, base compensation and incentive models will change to be more quality-focused, according to Stone.
About 5% of the respondents indicate they anticipate no change in the type of physicians they are recruiting.
That statistic also has Stone raising his eyebrows. "I think they have either already looked for the type of physicians they are going to have in the future," says Stone, "or they are completely naïve related to the way healthcare is going to be delivered in the new model."
It looks like any other outdoor recreation program in America. Kids are playing in a Baltimore, MD park, running around and enjoying some fresh air. But this isn't the usual playground scenario. Hanging out with the kids are also physicians.
They're having fun, too—but with an eye toward preventing future chronic conditions or obesity in their charges, according to Bernadette Loftus, MD, associate executive director of Kaiser Permanente's Mid-Atlantic Medical Group.
Hundreds of doctors have devoted time within the past year to the Kaiser Permanente Docs in the Park program. It's an effort to help kids lose weight and get healthy, Loftus said during a HealthLeaders Media Rounds this month in Washington D.C. Kaiser Permanent wants to get the message across that physicians can influence healthy behavior outside the confines of their offices.
The physicians aren't just observers. They run around with the kids, too, and find "teachable moments" to talk about food and weight, Loftus says. "You can have some of those conversations in the park. It's a little more intimidating with an exam room. When you think about kids today, just getting them out to play is a challenge," Loftus says."
While fingers fly to text on cell phones or in video gaming, whole body movement suffers. And kids aren't the only slackers.
Adults are too sedentary, as well. Getting physicians outside their offices to engage in the community encourages their patients' behaviors toward better health, whether it's children or adults, says William H. Dietz, MD, PhD, former director of the division of nutrition, physical activity and obesity for the Centers for Disease Control and Prevention.
"We have not done a good job of equipping anyone in the health care field—physicians or nurses—with a set of tools to be available outside of the doctor's office," Ditz said during the Rounds event.
Kaiser Permanente officials want to change that dynamic. Docs In the Park is one of the ways that Kaiser Permanente's model for "total health" is attempting to bend back healthcare costs and keep the population healthy.
An integrated system, Kaiser has the nation's largest nonprofit health plan, runs 37 hospitals and serves 9 million members in nine states and the District of Columbia. KP includes 16,658 physicians.
"There's no way to tackle all these problems [diabetes, hypertension, obesity and inactivity] with one-to-one, doctors' face-to-face office visits," Loftus adds. "You reach people where they live and work and go to school. We ostensibly need to find partners that can help us access our population in a different way and a different place so we can get at behaviors most of us agree on."
Enlisting physician involvement "has not been a challenge, whatsoever," Loftus says. And the numbers prove it: After a call for physician volunteers to partner with schools, 130 doctors agreed to participate in a 10-day period, Loftus says.
"This resonates with our doctors," she adds. They have organized games, "dodge ball; red light, green light. And we usually get a little bit of healthy eating there; we don't go to the ice cream stand. We say, ‘Here's some fruit.'"
Kaiser Permanente wants its patients to lose weight, exercise, and eat better. After all, it referenced studies that more than 33% of children and adolescents and about 65% of all adults are overweight or obese.
Despite its efforts, KP acknowledges that there are demographic, educational, and poverty issues within the communities it serves. Kaiser Permanente found it was important to coordinate programs with the community because, well, that's in fact where the people live, to open the possibility for recreational opportunities," Loftus says.
Kaiser Permanente's Mid-Atlantic States region includes a variety of programs to engage people and community around improving health. Nearly $40 million is directed to charitable care and coverage, including a medical care for children program that impacts 8,500 vulnerable residents.
Indeed, it is important for physicians to engage patients for preventative treatment, says Loftus. It's not only about being outside, on the turf, but it's about technology, too.
Using social media such as Twitter feeds, downloadable apps, and secure messaging, Kaiser Permanente officials say they are creating critical links to patients and their families that allow physicians to influence behaviors for better health.
In a program known as My Health Manager, physicians essentially make agreements with patients who vow to lose weight. The doctor and patient email each other, and the physicians build in reminder emails to patients who haven't met their weight goals. A flowchart is set up on a Kaiser Permanente website to track the information, according to Debra Carlton, MD, associate medical director of primary care, behavioral health, informatics, coding and documentation for the Southwest Permanente Medical Group.
"We want to transcend the office visit" Carlton says.
Physicians offer their personal bios online, and it's not the usual curriculum vitae. They write about their families, or even their personal issues, such as their own encounters with the health system as patients.
"Patients are feeling they can engage with this person, and that's how our clinicians are beginning to think, too," Carlton says.
A time of "massive flux" from payment uncertainty leaves physician practices in a reductionist mode these days, according to Medical Group Management Association - American College of Medical Practice Executives President Susan Turney, MD. She shared her observations with attendees at the MGMA-ACMPE conference in San Antonio, Texas this week.
Doctors are trying to avoid red ink by significantly delaying delivery on new equipment, reducing charity care, and trimming clinical staff, Turney says.
The grumbling about federal regulations and reimbursement cuts reverberated through San Antonio's Henry B. Gonzalez Convention Center as physicians crowded into sessions about how they could "save time, see more patients and improve practice revenue" or get to the bottom line: "How much is my practice worth?"
One of the big concerns is a perennial: the "fiscal instability" created by what MGMA officials call the "decade" of Congressional reprieves from sustainable growth rate formula cuts.
Once again, MGMA-ACMPE officials are calling for the Obama Administration and Congress to repeal the SGR, which would impose a 27% cut in Medicare reimbursements to physicians. These cuts have been postponed repeatedly by Congress, but the funding needed for future payments will only increase dramatically over the years, as far as doctors see it.
But that's only part of the story, physician, hospital, and insurance leaders said at the three-day MGMA-ACMPE conference, which opened Sunday and ends Wednesday.
There are not only payment uncertainties, but also complicated questions as more physicians find hospital employment, and scurry to innovate their practices to stay in business, or rush to unload their practices, or try to get on with their lives. In the backdrop is peaking uncertainty over the presidential election.
"Everybody is clearly in massive flux," Turney says. "No matter what happens with the elections, we know the care model is going to change. We don't know what it's going to look like." One thing she's certain of: Care will be more "consumer-directed."
Sharing the stage Tuesday, Michael Funk, director of National Network Operations for Humana, Inc., based in Louisville, KY, reiterated what many in healthcare are observing across the country: "We have doctors buying doctors' practices, hospitals buying practices, health plans buying practices. There's a tremendous amount of chaos going on."
One of the major causes of chaos has been the SGR problem. During the conference, MGMA–ACMPE released a study that shows how physicians have been impacted by the uncertainty over SGR. Not only are physicians making changes to their individual practices, but they also are contemplating becoming involved in new Medicare payment and care delivery models outside of the fee-for-service model.
Physicians are fundamentally uncertain what to do next because of congressional inaction on the SGR, according to Turney. And because of this doubt, 60% of physicians have delayed the purchase of new clinical equipment or facilities; another 45% have reduced charity care, and 38% have reduced clinical staff, says Anders Gilberg, MGMA, senior VP for Government Affairs.
Physicians have made some "tough decisions' due to payment uncertainty, he adds.
As physicians look ahead, they are certainly willing to embrace new payment models or demonstrations, says Turney. The survey of 1,000 doctors shows that 18% of respondents indicated that they are currently participating in any of the Medicare new payment models and or demonstrations.
The 82% of physician practices not participating in a new model said they would be more likely to participate if they had five years of Medicare payment stability. To succeed, physicians need "stability through the transition" and "simple and relevant opportunities to participate and innovate," Gilberg told a group of journalists.
"Because the Medicare reimbursement cuts have been averted so many times in the past, practices aren't worried," Gilberg said. "It's not like the cuts will actually happen, right?"
And, he says, there are other "clouds on the horizon," including issues over ICD-10, privacy and security concerns, compliance questions over heightened government scrutiny, and ongoing healthcare reform implementation, he said.
But still, there's some reason for optimism. "There's more care coordination and better communication and data sharing," Gilberg says.
In a separate panel discussion, Richard Umbdenstock, FACHE, president and CEO of the American Hospital Association agreed. "We're seeing collaboration on a variety of levels and it's only going to continue to grow," he said, referring to providers and payers teaming up on cost-cutting and innovative programs.
Philip K. Howard, JD, founder and chair of a Washington D.C.-based government reform organization named Common Good, and whose trustees espouse the spectrum of political views, from conservative Newt Gingrich to liberal Bill Bradley, is convinced that the government can make a major push to curtail the high cost of malpractice litigation.
He's not joking.
The creation of health courts would erode this bane of physicians' practices, and make a major dent in the costly toll malpractice has on healthcare, he argues. Health courts—specialized, fast-paced, administrative courts—would speed the resolution of malpractice suits, which are currently mired in the slow, plodding "regular" courts where litigation drags on for years.
These specialty courts for healthcare matters also could help establish standards that would thwart the use of costly "defensive medicine" that physicians enlist to offset litigation in the first place, Howard says.
"Health courts are aimed not at stopping lawsuits, but at making medical justice reliably distinguish between good care and bad," Howard wrote this month in the Health Affairs blog. "They, therefore, hold the key to eliminating the staggering waste of defensive medicine better than any other proposed reform."
Howard, a partner in the Covington & Burling Washington D.C. law firm, founded Common Good in 2002, which, he says, is "advising federal, state, and local officials on government overhaul, regulatory reform and elimination of obsolete laws."
A veteran advocate for government reform, Howard now embraces the challenge of changing the face of healthcare. He insists that healthcare has little choice but to move toward health courts—possibly modeled after similar programs in Europe—to reduce costs estimated at $45 billion at the very least.
"The whole point of health courts is to abandon the ad-hoc jury-by-jury approach and create a system of justice predicable from case to case," Howard tells me. "That's the only way you get rid of defensive medicine: Have written rulings by judges."
Howard says Common Good is working with the Harvard School of Public Health and has received funding from the Robert Wood Johnson Foundation to advance the project. He also says the concept is increasingly drawing attention because of the necessity to deal with "out-of-control costs."
Despite their differences over healthcare reform, both President Obama and his GOP challenger, Massachusetts Governor Mitt Romney have endorsed such proposals, the first presidential candidates to do so, according to Howard.
In a letter to bipartisan leadership of the House in 2010, Obama wrote that his healthcare reforms included a provision "that authorizes funding to states for demonstrations of alternatives to resolving medical malpractice disputes, including health courts." Obama said bills were sponsored in the House and Senate for demonstration projects of the proposals.
In a commentary this year in USA Today, Romney stressed the need for malpractice reforms. "We need to address out-of-control medical malpractice litigation, which is costly not only in direct terms but also in its distortion of the way patient care is administered," the presidential candidate wrote. "We can start by capping non-economic damages, but the federal government should also encourage states to pursue additional reforms such as specialized health care courts."
There is widespread public acceptance of the proposal: Of 1,000 registered voters, 66% supported the idea of creating health courts to decide medical claims, according to a nationwide poll in April by Clarus Research Group.
At least 75% believed that lawsuits and legal fees are a major cause of high medical insurance rates. Another 68% said "plenty of good doctors are leaving the practice of medicine because of the number of lawsuits and cost of liability insurance."
Despite the Obama and Romney endorsements, Howard says, the issue of health courts has not been discussed in the debates by either the president or his challenger, and that is not surprising, since the "big picture" issues of Medicare costs and health insurance are so dominant.
Under the Common Good plan, health court judges would be dedicated full-time to resolving health care disputes, he says. "So instead of (a litigant) going to a general trial court that would take five years to settle, [he or she] would go to an administrative court, like a workers' administration tribunal, and it would be much quicker, " he says. A lot of cases would be resolved long before trial, Howard adds.
"A whole standard from the health care courts would create a predictable string of jurisprudence based on standards of medical practice" and further reduce time-consuming litigation, Howard says. There is precedence for judicial specialization. There are currently administrative courts that address taxation, immigration decisions, and child custody.
While tort reform has been initiated in several states to reduce damages stemming from civil suits, Howard contends that those efforts do not erase the patchwork of various legal standards where a jury could find liability in one case, while a separate jury—dealing with same general facts—could find no liability. An administrative court for healthcare could set the stage for more efficient practices, he says.
Trial lawyers have opposed the concept, which Howard says is not surprising, since those lawsuits put plenty of money in their pockets. The lawyers say it's not just about the money, however.
In a 2007 study professors Maxwell Mehlman and Dale Nance of Case Western Reserve University in Cleveland, Ohio characterized the health courts idea as an attempt to eliminate or reduce the rights of injured patients. Among other things, they wrote that "many valid claims would be arbitrarily limited or barred altogether" and "wrongdoers would not be held accountable."
Indeed, Howard says that while some Democrats and Republicans in Congress have initiated legislation for health courts, those efforts have stalled on Capitol Hill.
"There were a number of provisions for health care courts and they all got killed (by Democratic leadership) because the trial lawyers used their influence to block them," he says. "The political environment has to be such that there is an imperative to control costs, and that will have to trump the political influence of the trial lawyers. It's really that simple."
Within the next four years, either Obama or Romney will have no choice but to work on bending the healthcare cost curve, and health courts are a big step in that direction, Howard says. "The next Congress or next president is going to have to deal with those issues," he predicts.
When Gianrico Farrugia, medical director of the Mayo Clinic Center for Individualized Medicine, thinks of where personalized, or individualized medicine, is today, he harkens to the early days of Bluetooth back in the 1990s, when the wireless technology was just about to take off.
"It was at the point of being past the first phase, like high-risk ventures that were more likely to fail. That's where we are with individualized medicine. We are past that point, and into the implementation phase," Farrugia told me. "We find ourselves designing the future of medicine through personalized medicine."
The focus of personalized medicine is to tailor a patient's medical care based on his or her individual genetic makeup. The evolving technology that has thrust genetic sequencing into the forefront of patient care has moved quickly, and there doesn't seem to be an "insurmountable barrier" to beginning its implementation in a few years, according to Farrugia.
The Mayo Clinic is a major player in that unfolding scenario. Last month, it opened its Individualized Medicine Clinic at three of its locations: in Minnesota, Florida, and Arizona. There, clinical trials are beginning to focus on diseases that have eluded traditional diagnosis, or in treating intractable cancers.
Patients enrolled at Mayo Clinic Florida are diagnostic odyssey cases, people whose symptoms are suspected of having an underlying genetic condition or heritable cause. At Mayo Clinic Arizona, researchers have been using whole genome sequencing to look for novel treatments for incurable cancers.
Patients who have exhausted traditional treatments will have their tumor genomes sequenced to identify pathways that would make them suitable candidates for therapeutic drugs.
"We are absolutely at a critical juncture in medicine. Medicine will be fundamentally different than [it is] today," Farrugia says. "We don't fall into the pitfalls that other exciting technologies have run into. We can do that by being very systematic, and project-approach oriented."
While Mayo is among a handful of systems developing specialized institutions to roll out personalized medicine, others are combing research and clinical work for personalized medicine, with some dubbing it "individualized" medicine, or "precision" medicine.
Still other hospitals aren't going that far. Even though they may publicize that they offer "personalized" medicine, what they are doing is a far cry from what Mayo has launched.
The term "personalized medicine" itself has become the subject of internal disputes over what it means, and over the veracity of some institutions' claims about offering it.
"It's a real form of contention," Farrugia says. "If you talk to caring physicians, [they'll say] that's why they went into medicine in the first place, personalized medicine. You sit down with a physician who asks, ‘ Are you sensitive to medication?' That's personalized. It's not the greatest of terms."
Mayo officials didn't get caught up in quibbling over the term. The imperative was to establish the center now, to move ahead in personalized medicine—or whatever it will come to be known as in the future. "It really came to one thing … how do we take it into practice?" Farrugia explained.
"If you are a cardiologist in the institution, how do you see [personalized] medicine working? The Mayo leadership truly believes that if we are going to make an impact on our patients, we need a place to drive it into routine clinical practice."
A significant Mayo Clinic undertaking in personalized medicine includes its Breast Cancer Genome-Guided Therapy Study, in which 200 patients have been identified and will participate in a clinical trial involving whole genome sequencing.
Women diagnosed with "high-risk" cancers scheduled to receive standard chemotherapy surgery will have their healthy genome and their breast cancer tumor cells sequenced before treatment, and then will receive chemotherapy to shrink the tumor.
To those patients with high-risk recurrence of cancer, personalized medicine may represent a breakthrough. "Say you went through standard therapy and relapsed, and then into a second drug and were resistant. Now that tumor has spread and you are looking for something. By doing genome sequencing earlier, you can find that first line therapy and second line therapy sooner," Farrugia says.
Although he is an enthusiast and believer in the prospect of individualized medicine, Farrugia has the heart of a scientist, a questioning heart. While patients will be seen in clinical trials and their genetic makeups will be used to determine treatments, the Mayo Clinic isn't ready yet to open its doors to all patients seeking such treatment.
"If you are a person worried about [your] health and want to know what the future holds, and you want to find out your risk for high blood pressure, we think the strength of the data isn't there yet," Farrugia says.
Referring to Mayo's individualized medicine about breast cancer, known as the Beauty Project, Farrugia says he has high hopes, but is also realistic. "That is a research protocol. We have phase one and phase two and we are all excited, but we are also scientists," Farrugia says. "You do research … and you may not be right, but you've got to do it."
Aside from outcomes, the journey toward personalized medicine includes ethical complications.
Because of these concerns, Mayo has initiated a bioethical program "whose only job is to think about the ethical implications of what we are doing," Farrugia says. Within the bioethical program is a community advisory board, as well as a separate individualized medicine working group.
"We are bringing everybody together under an individualized medicine working group," he says. That would include medical genetics professionals, counselors, oncologists, ethics specialists, sequencing specialists and pathologists. The group meets once a week "and systematically goes through all the issues," Farrugia says.
Among those issues: the impacts of the data: "Do you want to tell someone about the risk of a gene that may impact a relative? We're going to be upfront and deal with it."
So Farrugia tells me, Mayo is weighing its options. "We not only see the market's promise, but we also see the realities."
"We're trying to have a holistic approach to individualized medicine," he says. "It's very much what physicians had to deal with 30 years ago, asking the same personal questions, but they didn't have the data to back it up. More information from the whole genome sequencing can back up the intuition that the physician originally had."
Adding a medical director to a hospital's staff is costing some healthcare institutions about $1 million each year, while creating a lucrative career path for the physicians who are hired in that role.
This year, nearly 35% of medical directors are getting bonuses, 8% more than last year, a compensation survey shows.
These medical directors aren't in the C-suite, but they are running service lines or filling other administrative roles. For the most part, they are not also considered chief medical officers.
The findings were revealed in the 2012 Medical Director Compensation Survey published by Integrated Healthcare Strategies, a healthcare human resource and compensation consulting firm headquartered in Dallas. The survey included data on 179 organizations and more than 3,000 medical directors. For the most part, CMOs were excluded from the survey, which examined 94 medical director positions.
At least 60% of hospitals reported spending at least $500,000 in medical director compensation in 2011. Psychiatry, general, emergency medicine and family medicine were among the most common medical director positions, the survey showed.
The report stated that there is an "explosion of physicians in medical directorship and being involved in leadership positions." Independent contractors accounted for 54% of the medical directorships, while 46% were employed physicians.
Generally, hospitals are "putting much more time and money into medical leadership positions," Chad Stutelberg, executive vice president and practice leader for physician services at HIS, told HealthLeaders Media. "Twenty years ago, all of these guys would have been independent contractors, because physicians weren't employed by hospitals."
Over time, as hospitals move from fee-for-service toward value-based care, Stutelberg anticipates increasingly advantageous medical director contracts for physicians, especially in the form of bonuses.
While 34.7% of the organizations offered a medical director performance bonuses this year, 65.3% did not. But more than 25% reported they are considering implementing a bonus for medical directors, an increase from 19.4% last year, according to the survey. It would not be surprising if the actual bonuses climb the next year, Stutelberg said.
About a decade ago, only 5% to 10% of employed physicians were paid bonuses. "You've seen an expansion of bonuses in contracts, with the concept of incentives filtering down to these physicians, and the number of overall organizations that use incentives are increasing," Stutelberg explained.
While most executives in the C-suite may get bonuses of 10% to 30% of their salaries, medical directors may reach 10%, whether they are employed or independent, he continued.
Hospitals have been "selective" on the bonuses, the survey states, focusing more on larger programs and "those positions associated with a larger management system."
Hospitals with less than $100 million in net revenue averaged at least 10 medical director positions, while hospitals with more than $500 million averaged 30 positions, according to the report. The scope and hours of a medical director vary, but the majority of positions are part-time and from the medical staff.
The survey results showed that median hourly rates increased by 2% from 2011 to 2012 for medical directors who worked as independent contractors. But some specialties far exceeded that percentage, according to the survey.
Cardiology and nuclear/echo increased the most, at nearly 35%. Orthopedic spine surgery showed the greatest decline in median hourly rate at 28.8%. The survey data shows that on average, independent contractors received an hourly rate that is 2.8% higher than employed physicians at the market median.
The IHS survey found that it is not uncommon for a hospital or other healthcare entity to provide a premium on the pay provided to an independent contractor for assuming a medical director role. Stutelberg foresees hospitals employing more medical directors, particularly with specialty-based service lines, such as cardiology. In some instances, hospitals may offer less money for each physician, but may have more medical directors in their systems, "like having medical directors on steroids, instead of paying one physician, I'm going to pay five or six, working actively," he says.
The survey results confirmed that 77% of organizations use formal contracts for their medical directors, with one year the most common length. Stutelberg says IHS recommends that every medical director should have a contract that specifies qualifications, job duties, responsibilities and hours.
One in four, (23%) of the hospitals surveyed do not maintain a time log for independent physicians or specify the number of hours that should be worked. As a result, the hospitals may be unable to prove that their compensation arrangement is reasonable and representative of fair market value, the survey states.
Hospitals should review their medical director contracts on an annual basis to determine if job duties are still appropriate or require changes, according to IHS.
So, six out of 10 of you docs want to quit. Turn out the lights. Lock the door. Goodbye.
Walker Ray, MD, remembers his feelings when he shut down his Georgia pediatric practice, for good, after 35 years, and why he had to leave it behind: The 60-hour work weeks. The rolling tide of reduced reimbursements. The missed family gatherings, "the ballet recitals, the swim meets, even the funerals." Then the questions from his kids: "Dad, how long are you going to keep doing this?"
"You look in the mirror…" Ray told me, recalling that moment of self-realization. "I packed it in."
Ray blames an oppressive regulatory and business climate. "At first, I thought it was only me having this problem. It wasn't," he says. Now, Ray takes doctors' pulse, trying to gauge their feelings about their practices.
Their professional heart rates are elevated. It seems they are feeling the same way he did. Now, Ray is vice president of the Physicians Foundation, which commissioned an extensive survey of nearly 13,575 physicians. The result? Six out of 10 want out. Meritt Hawkins, the physician search and consulting firm, conducted the survey.
The survey found that 60% of physicians would retire today, if given the opportunity—an increase from 45% in 2008. And it's not just disgruntled and tired Baby Boomers who want to abandon their healing work. At least 47% of physicians under 40 also said they would retire today, if given the opportunity.
The numbers tell the story: Physicians in droves want to leave their practices. We keep hearing that. Now what are we doing about it?
The key is to start by focusing on the major problem areas. Ray says the survey points to two specific issues above all others–malpractice concerns, and the lack of a cohesive voice among all physician groups.
Defensive Medicine The survey is certainly the latest, and—by sheer numbers—one of the more telling reports on physician attitudes about defensive medicine and malpractice concerns. It also reveals what doctors see as a major cost driver of healthcare. When asked what two factors "do you find least satisfying about the medical practice," 40.3% said it was "liability/defensive medicine pressures." Other reasons lagged much further behind. Other "least satisfying" aspects included dealing with Medicare/Medicaid/government regulations (27.4%) and reimbursement issues (27.3%).
In the meantime, 69.1% of physicians said defensive medicine is the "number one ranked factor" driving up healthcare costs. The survey described the ordering of tests, prescribing of drugs, and conducting of procedures done "partly or solely to drive a wedge against potential malpractice lawsuits."
Defensive medicine costs approximately $45.6 billion a year in the U.S., according to The Physicians Foundation survey.
"Physicians understand to some degree that's the cost of doing business, but the defensive medicine goes deeper than that, in the ordering of extra tests, doing the extra procedures, and extra scans to protect [oneself] against a malpractice suit. It's that four-legged stool, the liability that [prompts] defensive medicine."
The survey notes that while many policy makers, academics, and others identify fee-for-service reimbursement as a key driver of health care costs, physicians believe that "defensive medicine is a far more important cost driver."
"Medical malpractice lawsuits, a rarity prior to the era of medical specialization, now are common, adding an additional layer of paperwork, expense, and stress in virtually every physician's work day," the report adds.
While states have enacted tort reform, it has been sporadic nationwide, with no clear national focus, Ray says. "Individual states have taken their own strides," Ray says. "Some states have never gotten tort reform going."
Medical malpractice goes to the heart of overspending in American healthcare, yet has not been fully addressed either by states, the federal government, or in healthcare reform, Ray says. "It is ironic that part of the Patient Protection and Affordable Care Act was to bend the cost curve, to prevent unnecessary testing," he says.
"Why do many physicians move ahead with all those unnecessary procedures? Because of the fear of malpractice. And one of the things that stood out in the PPACA was its failure to address tort reform. It's really ironic to physicians what's going on."
Lack of a Cohesive Voice
Another major problem for physicians, as Ray sees it, is that they are not represented by a forceful organization. "There is a systematic, endemic series of problems," Ray says. "Everywhere there [are] defensive medicine, regulation issues, reimbursement issues. We are all in the same boat. But physician representation is balkanized. There is not a national organization that represents a majority of physicians."
One of the largest organizations, the American Medical Association (AMA), only represents 15% of physicians, according to the Physician Foundation report. That's in sharp contrast to the early 1950s, when about 75% of physicians were members of the AMA.
A coalition of state medical societies has coalesced, and groups of activist physicians have formed organizations, Ray says, but that hasn't been nearly enough to prompt change. "It's pretty hard to counter the full force of the federal government and the huge insurance companies," he says.
No wonder the survey finds that physicians are "at a tipping point" as they seek ways to "further disengage from today's medical practice environment, reducing their hours, decreasing the number of patients they see and accepting the status of salaried employees–trends that should be of urgent concern to both policy makers and the public."
Ray can relate, and if this report is a bellwether, soon others will recognize the ramifications, too.
Physicians and insurers are pitted against each other in litigation being played out in Los Angeles over questions of what constitutes proper treatment, and a conflict over the definition of a medical necessity. The outcome of this dispute may have a rippling impact nationwide.
The tension is over what Rocky Delgadillo, CEO of the Los Angeles County Medical Association tells HealthLeaders Media is the "next frontier of patient rights." His organization represents more than 6,500 physicians, and has joined in a patient lawsuit against the California-based insurer, Health Net.
Among the questions being posed: What if the doctor rejects the procedure an insurer believes should be used for a rare surgery, opting instead for a more technically advanced procedure? What if doctors insist, 'This must be done to save a life,' but the insurers still say, "No"?
The LA story starts out simply enough: Two patients sued the insurer Health Net over procedures the company would not pay for. That doesn't seem unusual. Patients have battled insurers for years over reimbursement for procedures. But with the backing of the physician organization, this case takes on a slightly different tenor.
LACMA says that Health Net and other insurers are undermining medically necessary care by denying payments for technologically advanced, life-saving procedures. The lawsuit seeks injunctive relief to end what the LACMA describes as unlawful business practices by Health Net, and damages for the patients.
While Health Net is the focus of the litigation, LACMA says it aims to end wrongful conduct of "all California health insurers" that prevents doctors from providing proper treatment for patients. Thousands of health insurance claims are routinely denied every year based on insurers' definition of medical necessity that conflicts with California law, according to Delgadillo.
"Health Net is dictating medical care from the boardroom," Delgadillo said in a press statement. "Patient care should be decided by doctors, not business suits."
In a conversation the other day, he elaborated: "We can no longer sit back and wait for other people to solve problems where patients don't have the economic might to solve them, and neither do physicians. But collectively we can. We have to stand up for the rights of patients and that's what physicians have taken an oath to do."
The issue of patient needs for innovative, life-saving procedures is at the heart of the LA case, Delgadillo says.
One of the plaintiffs, Robert Mendoza, 59, was diagnosed with a rare form of prostate cancer, adenocarcinoma with signet ring cells, and his chances of survival were deemed very low. His was one of some 50 cases in the world, Delgadillo says.
Mendoza's physician advised minimally invasive, robotic-assisted surgery that Health Net was willing to cover, a $14,000 cost, Delgadillo says. Mendoza received a second opinion from Gary Lieskovsky, MD, former head of the University of Southern California Norris Cancer Hospital, who recommended that Delgadillo needed a radical procedure, not robotic surgery, to save his life.
Mendoza worked with Dr. Lieskovsky to obtain a pre-authorization from Health Net for the procedure, which would have cost twice as much as the robotic surgery. Health Net denied the claim, stating the procedure was not medically necessary, according to the lawsuit.
Mendoza paid for the $30,000 surgery out-of-pocket because he believed it gave him the best chance for survival, according to the court papers. To pay his medical bills, he said he cashed in his wife's life insurance policy and used money he had set aside to pay his income taxes as a self-employed court interpreter. Eventually, Lieskovsky performed the surgery, and Mendoza now has a good prognosis, Delgadillo said.
"All this was done very quickly, from when the insurance was denied to when the surgery had taken place," Delgadillo says.
"My life was at stake with months to live. I had no time to fight the bureaucratic red tape with Health Net," Mendoza said in statement. "It's a shame and inhumane that it wouldn't even approve a procedure that could have saved my life. A procedure that cost a fraction of the premiums I paid."
Another California plaintiff, Kalana Penner, suffered from occipital neuralgia, a medical condition characterized by intense chronic pain in the upper neck, back of the head and behind the eyes. Over time, her condition deteriorated, despite at least 30 treatments and 60 medications, according to the lawsuit.
Penner was referred to Jamie Henderson, MD, director of neurosurgery at Stanford Hospital for a trial procedure—which was approved by Health Net—to deal with her pain. The company, however then rejected a proposed surgical procedure, although the physician claimed it was safe and effective. Six months later, The California Department of Insurance ruled that Health Net's denial was improper and overturned the insurer. The surgery was carried out, and now Penne says she is pain free, according to the lawsuit. She is seeking damages from the insurer for stress, anxiety and trauma.
Delgadillo says the success of the procedures, in the midst of patients and physicians' wrangling with insurers, raises questions about differing definitions of medical necessity in the state statute. He indicates that the lawsuit may have national implications over the meaning of "medical necessity," which is written interpreted differently by different health plans.
In court papers, the LCMA says that Health Net "crafted a definition of medical necessity, which does not comply with California law and ensures denials of valid medical insurance claims."
In a statement, Health Net has denied LCMA's assertions. "Medical care is complex and sometimes there are differing medical opinions as to what consists of medically necessary care," Health Net said in a statement. "In these instances, Health Net carefully follows the guidelines established by the state of California's two regulators, the Department of Managed Care and the Department of Insurance."
The regulatory procedures allow Health Net members to "seek review of Health Net decisions by medical professionals who are not affiliated with Health Net," according to the statement, provided by Health Net spokesman Brad Kieffer.
Health Net, through its subsidiaries, provides and administers health benefits to approximately 5.5 million individuals across the country, including 2.3 million members in California. Based in Woodland Hills, Health Net reported $11.9 billion in revenues last year.
This isn't the first time that Delgadillo has initiated a significant lawsuit against insures. Delgadillo reminded me that as Los Angeles city attorney a few years ago, he started litigation that upended several of the procedures that now have an impact on insurers.
In late 2011, Blue Shield of California agreed to pay $2 million to the city and county of Los Angeles to settle claims that the company improperly rescinded coverage from hundreds of sick members before 2008. Degadillo's Los Angeles City Attorney's Office sued Blue Shield and other insurers in 2008.
The Patient Protection and Affordable Care Act has made it illegal for insurers to rescind coverage except in cases of internal fraud, Delgadillo says.
The inevitable impact of the latest lawsuit against insurers remains to be seen.
"All I can hope is that history repeats itself," Delgadillo says, referring to the Blue Shield case that ended in his favor. "It's like Margaret Mead said, 'a small group can change the world'."