Projecting future healthcare workforce demand is a backward-looking process that doesn't account for new technologies and other changes that greatly impact labor forecasts, according to a study from the Bipartisan Policy Center's Health Professional Workforce Initiative.
"It's a pretty simple formula. You take population growth times aging times prevalence of disease. How may are diabetic? How many have heart disease? Then we figure based on history that we need 2.2 visits per primary care doctor per year per capita. Then we add those up and come up to a shortage of 28,000 to 91,000 doctors."
New and immediate technologies that could greatly reduce in-person visits to the doctors' offices are not factored into this equation. "That assumes that all of those 2.2 visits were necessary and there were no other options that were either more attractive or affordable to consumers, like an e-visit," Keckley says.
"About 40% of visits to primary care physicians do not require physical examinations. You don't need to go to a doctor's office to get a script refilled, so we shouldn't be calculating the number of visits to doctors historically as the basis for determining how many we are going to need in the future when we have technologies that will replace some of that demand," he explains.
Improving healthcare workforce planning and development is a critical component of the Accountable Care Act, and Keckley says it's needed because labor costs are a huge driver of healthcare inflation.
One out of three respondents in the HealthLeaders Industry 2011 Survey cited labor costs as the top driver healthcare costs.
"The simple reason is that with 60% of the healthcare spend on payroll, compensation, labor costs, and with healthcare growing at 6% a year, you have to find better ways of reducing costs and the single biggest factor in healthcare is labor," he says.
"We have to find different ways to organized and train the workforce. We have to leverage technology to do things that technology does that today people might be doing. We have to recognize that the system, its incentives, its regulatory framework, the information we now have tells us there are better ways of doing things than having people show up in doctors' offices or have tests or procedures. The future is not a repeat of the past."
While identifying the problem may be relatively easy, Keckley says that fixing it could prove nettlesome. "Each profession has developed over the years its own methodology for determining supply and calculating demand," he explains. "Unfortunately those are not consistent across the professions. So we are finding it challenging to arrive at a common methodology for calculating demand."
Keckley adds that one of the biggest roadblocks toward determining healthcare workforce supply and demand may be the physicians themselves. He notes the dust up that ensued earlier this month after studies suggested that many prostate cancer screenings were not cost effective. "We have to get down to what is evidence-based and we need to build demand based on the evidence of what works instead of on what doctors say the evidence says. That is huge. That is a big deal," he says.
Organizations such as the Association of American Medical Colleges are already on board with the idea of healthcare workforce planning by exploring new concepts like team-based healthcare delivery and the use of technology and hard data. "Academic medicine seems to be already aligning its training programs with this new normal," Keckley says.
For any sort of workforce coordination and development to take hold, Keckley says, they will need the input and support of major medical trade groups. In addition, he says, any workforce development guidelines that develop should not be presented to healthcare providers as government mandates. "It has to become a set of tools, rather than rules. You can't regulate a workforce. You have to create tools so that market migrates to that model," he says.
He says that may prove to be a tough sell for many practicing physicians. "This is not being accepted quite as well is in Anytown, USA, where every one of these guilds likes to make its own rules and have no one else be a part of that discussion," he says. "How many doctors do you need on the staff at Anytown USA Community Hospital? Well, the medical staff wants to vote on that. They don't want to base that decision on input from anyone but the medical staff. So, if the government was to set out standards for the right demand of the workforce in your market and it was inconsistent with what a group of doctors said they wanted you'll have tension."
Earlier this month, senior leaders in the American Hospital Association descended on Capitol Hill to do their job -- lobby Congress to protect hospital funding from budget cuts.
Unfortunately, the hospital executives made a tactical error when they suggested that raising the Medicare eligibility age would be preferable to foisting more reimbursement cuts on hospitals.
That idea, one of 40 or so alternatives proffered by the hospitals, did not originate with AHA. That didn't matter. As soon as AHA aired it, they owned it.
Critics didn't see the three dozen or so other suggestions. The fact that the nation's hospitals would endorse cutting services for the elderly in the name of "shared sacrifice" and as an alternative to their own budget cuts immediately created bad will and adversaries both within Congress, and the public.
Stung by the backlash, the AHA now is pursuing a different, smarter tack.
In an Oct. 17 joint letter to the 12 members of the Joint Select Committee on Deficit Reduction Congressional – aka the "Super Committee" – AHA President Rich Umbdenstock, AHA Chairman John W. Bluford, American Nurses Association President Karen Daley, and CEO Marla Weston played up the financial stability that the nation's 5,000 or so hospitals provide in their communities. The two trade groups then warned the Super Committee that any significant cuts to Medicare or Medicaid "could create devastating job losses in our communities."
"While we recognize the serious fiscal pressures facing our nation, we feel it is counterproductive to target hospitals and the healthcare field for significant spending reductions at a time when we are providing economic stability and job growth in a sluggish economy," the ANA/AHA letter said.
This is a great tactic for several reasons –the best reason of which is that it's true. Now, instead of throwing other healthcare constituencies under the budget cut express, AHA/ANA are making a strong case for why they should be left unharmed.
And the fact is, the healthcare sector is an incredible job-creating machine. Any town with a doctor's office, a critical-access hospital, or a level-3 trauma center has a stake in this game. AHA and ANA are wise to bring this to the attention of lawmakers, all of whom have any number of respected and influential healthcare providers in their districts who will be hurt by Medicaid or Medicare cuts.
A little perspective: President Obama went to Detroit last week to tout the auto industry bailout, which by some estimates saved about 1 million jobs. Hospitals employ 5.4 million people. The healthcare sector employs more than 14 million people. That does not include the millions of "ripple effect" workers whose jobs are affected by the healthcare sector.
As I wrote earlier this month, U.S. Bureau of Labor Statistics data show that healthcare is creating jobs at a pace not seen in four years and is responsible for nearly one in four new jobs in the overall economy so far in 2011, and is on a pace to create 344,000 new jobs by year's end.
In September, I noted, healthcare employment rose by 43,800 jobs, representing roughly 42% of the 103,000 payroll additions in the overall economy. The 258,000 new healthcare jobs represent 24% of the slightly more than 1 million non-farm jobs created in 2011.
The case for healthcare job creation gets stronger if you consider that much of the September growth outside of healthcare was credited to the end of a two-week strike in August affecting about 45,000 telecommunications workers at Verizon. If those returning Verizon workers were factored out of the September growth, then healthcare would be responsible for 75% of the 58,000 new jobs in the economy for the month.
Those are jobs -- and voters -- in 50 states, in every city, in every town. With an election year looming, and at a when Republicans and Democrats say they are making job creation a top priority, AHA/ANA is making sure these lawmakers – and the public -- understand who is creating the jobs, and why their success shouldn't be messed with.
The AHA has estimated that the 2% reduction in Medicare payments that would be imposed automatically on Jan. 1, 2012 if the Super Committee can't come up with mandated budget cuts would cost hospitals about $41 billion through 2021. With labor consuming more than two-thirds of hospital spending, AHA says its calculations show that Medicare cuts would cost nearly 200,000 hospital jobs over the next decade.
You can argue whether or not the growth in healthcare sector jobs is good for everyone outside of healthcare. That job growth, after all, plays a part in fueling the nation's runaway and unsustainable healthcare expenditures, which now account for about 18% of gross domestic product.
That is a legitimate argument. But that is policy. This is politics. This is about defending your turf. This is about protecting your interests. It's a fight that hospitals and nurses can take to every home district in Congress. It's smart.
The average per capita cost of healthcare services covered by commercial insurance and Medicare grew 5.73% over the 12 months ending in August, representing a fourth straight month of modest acceleration of cost growth, Standard & Poor's Healthcare Economic Indices show.
The index posted its lowest annual growth rate in its six-year history -- +5.37% in April 2011. Since then, the rate of growth accelerated slightly each month. Healthcare costs easily outpaced the 3.8% growth in overall inflation as measured by the Consumer Price Index for the same 12-month period ending in August, Bureau of Labor Statistics data show.
A further breakdown of the S&P data show that for the year ending August 2011, healthcare costs covered by commercial insurance increased by 7.89%, as measured by the S&P Healthcare Economic Commercial Index.
During the same period, Medicare claim costs rose at an annual rate of 2.16%, as measured by the S&P Healthcare Economic Medicare Index. This was the lowest annual growth rate recorded for the Medicare Index in its six-year history. The Medicare index reported its highest annual growth rate of +8.02% in November, 2009, but has consistently and sharply decelerated by about 5.86 percentage points since then, S&P said.
"As the summer of 2011 ended, we continued to observe the recent trend of a deceleration in the annual growth rates of Medicare costs and a sustained acceleration in the annual rates of commercial healthcare costs," David M. Blitzer, chairman of the Index Committee at S&P Indices, said in the report. "With this month's data, the Medicare index is almost one-fourth of its peak annual rate of +8.02% recorded in November 2009. This is a very sharp deceleration."
The Hospital and Professional Services Indices reported increases of 5.43% and 5.84%, respectively, from their August 2010 levels. For the Hospital Index, this rate is slightly higher than the + 5.31% posted in July 2011. The Professional Services Index is marginally lower than its +5.89% rate posted in July.
"The increasing growth rate for hospitals is primarily due to rising rates of employment and wages," Blitzer said. "Professional services wages have also seen increasing rates during 2011; however, employment trends have declined over the same period."
The S&P Healthcare Economic Indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs. The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year, S&P said.
"As we caution every month, these indices represent total costs not just prices, so increased costs could be due to prices going up, increased utilization, or some combination of the two," Blitzer said.
The highest annual growth rate for the S&P Composite index in the past six years was during the 12 months ending May 2010, when it posted +8.74%.
Even with approving nods for the changes announced last week in the final rules for Medicare accountable care organizations, observers who spoke with HealthLeaders Media say the program will remain a tough sell for most healthcare providers.
"I'm still not optimistic we are going to see a rush to the ACO door," said Michael Regier, general counsel and senior vice president of legal and corporate affairs for VHA Inc., the hospital purchasing group. "For organizations that today are not quite far along the clinical integration route there is still an enormous investment required in infrastructure. Even with the improvement in rules, I don't know that the opportunity for return of capital is going to be sufficient enough to entice folks into this care model."
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Nathan Kaufman, managing director of San Diego, CA-based Kaufman Strategic Advisors, LLC, is blunt. "My advice is to be a fast follower. Let somebody else do this," he says. "If they figure out how to make it work, these people will quit their jobs and become consultants and you can learn quickly from them how to do it."
On Thursday, the Centers for Medicare & Medicaid Services issued the long-awaited final rule for ACOs under the Medicare Shared Savings Program. After facing a barrage of criticism last spring when the proposed rules were made public, CMS backed down on several key points in the final product.
For example, CMS reduced from 65 to 33 the number of performance measures that providers would have to meet, removed the electronic health records requirement, eliminated financial risk for some providers, and switched from retrospective to prospective identification of the ACO patient population.
John Kelly, MD, managing director of Chicago-based Huron Healthcare, says that still won't be enough to lure many providers off the sidelines.
"They made a number of changes. They made a number of modifications. But nonetheless, the overall governance and reporting structure, the participation requirements, those remain largely unchanged," Kelly says. "As a result, for a hospital or system to put together an organization that would meet those requirements where the potential return would be greater than the cost, we think many will do the calculation and determine that, at least for now, this is not the direction they want to go down."
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Even with the concessions, Kaufman says ACOs remain fundamentally flawed because patients have "no skin in the game," and are free to go to other healthcare providers, which could bust an ACO's budget because they're held accountable for containing costs.
"The history of HMOs is if the patients don't have skin in the game, even though they know they are a member of the HMO and their primary care gatekeeper is a member of the HMO, if they don't have penalties for leaving the network, 20% to 30% of their care seems to get provided by out-of-network providers," he said.
In addition, he noted, hospitals that try to establish ACOs could risk alienating their specialists, who stand to lose when ACOs succeed in reducing hospital admissions.
"My advice to my clients is the best thing that could happen to them would be that their competitors do an ACO," he said. "Because the upfront investment in infrastructure will deplete their capital and then the political capital that they will have to invest to convince their specialists to participate in a program that potentially could reduce the specialists' revenue is going to drive the competitor's specialists to your hospitals."
Another problem, many observers say, is the sheer number of healthcare reform initiatives already underway, or soon to be launched. These include bundled payments, ICD-10, meaningful use, and value-based purchasing. All of this change is coming during a weak economy, with gridlock in Washington, DC, and with the possibility that the Affordable Care Act could be repealed if a Republican wins the White House in 2012.
Chris Van Gorder, CEO and president of San Diego's Scripps Health, says attempting to launch something as complicated as an ACO in such uncertain times is going to intimidate a lot of healthcare executives "who already have a lot on their plate."
"Don Berwick and CMS talked about eight new programs they just rolled out in the last few weeks, with more coming. They are very excited about it. From my perspective I'm saying 'Good God. Let us absorb some of this,'" Van Gorder said.
"Every time they come out with a new program we have to take the resources to analyze it, figure out how they interface with each other, which ones we want to participate in, he added. "While I applaud their innovation and creativity, it is actually calling a lot of administrative stress and cost as we are sitting there trying to analyze which direction we should take our healthcare system."
With so much to contemplate, Kaufman says ACOs will fall to the bottom of the priority list for a lot of providers.
"I sent a letter to CMS and told them 'You are inundating us with innovation,'" he says. "The same hospitals that are contemplating this are implementing meaningful use IT systems, for both inpatient and outpatient, and having to prepare for ICD-10, and having to prepare miracles and cure people, all at the same time. You have to pick and chose which one of these is going to have legs over the long term and which has the greatest potential for downside, and I think the ACO is that."
Not everyone is down on the prospects for ACOs. David Spahlinger, MD, an internist and senior associate dean at the University of Michigan Medical School, called removing the downside risk in the final rule "a game changer" that should be well received by physicians.
"My first selling point is there is a non-risk option for you to gain some experience without significant downside," he says. "Yes, you might have to make some significant investments. But the world is heading in this direction and we are going to be more accountable for the quality and the cost of the care we deliver."
"Here they are saying 'we will look at your current costs and if you can improve on them you will get some shared savings back. And by the way we will even do it in a non-risk fashion. Over three years if you get more savings you get 50% of that back," he said.
As for alienating specialists, Spahlinger says that the push to keep people out of the hospital is going to go forward with or without ACOs. "CMS is going to pull a bunch of levers over the next five years to try to reduce readmissions and inappropriate care and they are going to micromanage it even if you don't go into this ACO model," he says. "This model allows you to say what our current costs are, we improve upon it and we get 50% of it back."
The federal government's efforts to promote Medicare's new and highly toutedStar Quality Ratings for health plans is so far not reaching most of its target audience.
A survey released by Kaiser Permanente during the Medicare open enrollment period this month found that only 18% of Medicare-eligible seniors were familiar with the star quality ratings, and that less than one-third of those seniors used the ratings to pick their health plan. Further, only 2% of 483 Medicare respondents in the Harris Interactive poll said they knew the star rating for their plan.
Jed Weissberg, MD, senior vice president, Hospitals, Quality and Care Delivery Excellence, Kaiser Permanente, told HealthLeaders Media that the low levels of usage aren't that surprising because the Medicare Star Quality Ratings System is fairly new.
"That speaks to (the Centers for Medicare and Medicaid Services') challenge in communicating vital information to 44 million beneficiaries," Weissberg says. "CMS has just put together this very complicated composite measure system over the last year or so. They are starting to call more attention to the rankings, and they are getting experienced with it themselves still."
The star quality rankings compile 50 care quality measures, including preventive screenings, the management of chronic conditions, and customer service. The measures are put into a format that allows Medicare beneficiaries to shop and compare prices and services before buying a plan.
Kaiser Permanente was one of only 12 plans nationally that earned the coveted five-star rating. That select dozen are eligible for about $3 billion in incentive bonuses, and can market their plans throughout the year, and not just in the designated enrollment period. The quality ranking also includes a health outcomes survey which examines temporal changes in overall member health.
Although the KP survey shows most Medicare beneficiaries aren't using the quality rankings, Weissberg says it's probably not practical to expect that physicians or other clinician could help Medicare beneficiaries wade through the quality report. "That is not a task that too many physicians like to entertain because it is almost as confusing for the physicians as it is for the beneficiaries. I am hoping this will be as much a value to them as to the beneficiaries," he says.
And even though usage is low, Weissberg says "CMS has done its best to blend all of these multiple dimensions of quality and service and plan performance into one measure.
"They have taken advantage of prior consumer research looking at how consumers understand rankings and ratings and thus they chose the star system. So it is really a question of how do you get that star ranking in front of the consumer," he says. "I am hoping media and other public services will themselves go to the Website and make that information more available to members in a readily digestible form."
Kaiser Permanente's survey shows that less than 30% of respondents know where to find information about Medicare Star Quality Ratings. CMS offers details on its website. Kaiser Permanente introduced a websitefor the rating system and designed to provide easy answers to frequently asked questions about the system.
This phone survey of 483 Medicare-eligible seniors was conducted Sept. 21-25 by Harris Interactive on behalf of Kaiser Permanente, and has a sampling error of +/- 4 percent
Physician recruiters Merritt Hawkins this month issued a survey that found that more than 75% of new doctors received at least 50 job offers during their training. Nearly half of those new docs got 100 or more new job offers.
This is not surprising. Even in the worst economic stagnation since the Great Depression, doctors are in high demand for any number of reasons that we're all familiar with.
What is surprising, however, is that more than one-in-four of these young doctors – 28% of about 300 physicians in their final year of training say that if they had to do it all over again they'd choose another profession.
The new docs identify the usual suspects -- declining reimbursements, rising costs, malpractice concerns, and the changing landscape in the medical profession -- as the source of their dissatisfaction.
Well, cry me a river!
The fact that more than one-in-four young doctors regrets his or her career path is not alarming. It's maddening. My ire, however, is directed not at the Centers for Medicare & Medicaid Services or at trial lawyers, but at this bunch of soon-to-be-earning-six-figures whiners.
What exactly did you expect? What or who was the source of those expectations you embraced in your impressionable youth when you decided to dedicate your life to healing? What exactly were they telling you in medical school? More importantly, if your dedication to this noble profession is so fleeting that you're ready to quit before you've really even started, why did they admit you to medical school the first place? Isn't there a process to weed out people like you?
Katie Imborek, MD, a family physician who recently completed her residency at the University of Iowa Hospitals & Clinics, is emphatically not one of those young physicians who wishes she'd picked another career. However, she is not unsympathetic to the concerns of her disgruntled colleagues.
Imborek reminded me that the new physicians were surveyed by Merritt Hawkins during their last year of residency – a time of great stress, mental exhaustion, and uncertainty, during which young physicians are hugely in debt, have worked harder than they ever have in their lives, and have yet to see the financial rewards for their hard work.
"Even though it should seem like a tremendous time of optimism because they have a lot of job offers and then salaries will be better, it has still been a difficult journey for them," Imborek says. "They are finishing a time where they had absolutely no control over [their] time for three to seven years. Residency is very hard. They cut the work hours at 80 hours per week. They are working double a full-time job and most residents get paid $50,000. If you would make that an hourly wage it is pretty darn cheap labor where you are told when and where to be and it is a stressful situation for a long time," she says.
Dr. Imborek makes some excellent points, and it was cheering and reassuring to speak with her.
Perhaps these young physicians with second thoughts have been so deep into training that they haven't had the time to understand the reality that this nation has been facing for the last few years. If that is the case, it's time they caught up on current events.
Do you want to talk about changing landscapes, or uncertainty? Talk to the 6 million people who've been out of a job for 27 weeks or longer. You shouldn't have a hard time finding them. Check your local unemployment office, or just walk down to the ED. Losing your job and your home certainly changes the landscape.
Now, let's talk about what young physicians face when they enter practice. For starters, U.S. physicians are the highest-paid class of workers in the nation, if not the world, and they are in very high demand. Merritt Hawkins' annual physician compensation surveys show that, depending upon the specialty and experience, physicians can earn anywhere from $130,000 to $650,000 or more, plus other benefits.
Yes, most young docs are saddled with huge debts. That is a legitimate complaint. The Association of American Medical Colleges says that the average medical school student graduated with about $160,000 in student loans. However, because the demand for physicians is so great, not only are physicians highly compensated, job offers can include debt forgiveness incentives, most notably through the National Health Service Corp.
Meanwhile, outside of medicine, the average wage for all occupations is $44,410, roughly $16.27 an hour. But hey, wages increased 32 cents an hour from 2009, according the Bureau of Labor Statistics. I'm not sure how much that increase went towards health insurance premium hikes. That, of course, assumes that those workers have health insurance.
Here are some career alternatives for young docs who want out.
Convenience store cashier, third shift: Now, I'm a little uncertain what these folks earn, but it has to be close to $10 or $12 an hour, although I'm not sure if they offer any benefits. You get a colorful smock and nametag, all the Slim Jims and Slushies you can stomach, smoking breaks are a few steps away, and you may get the chance to practice emergency medicine when the place gets robbed or a drunk slips on the tiled floor.
Roof bolter in a coal mine: These are the guys who go into the coal mine before the other miners to make sure the roof is safe. If it's not safe, they drill a bunch of bolts into the rock to secure it. This usually works, except when it doesn't. In which case, tons of rock from the mile of earth above their heads comes tumbling down. They earn $23.97 an hour.
If you still want to be in the hospital setting but just not deal with the oppressive rigors of practicing medicine, you're in luck! Janitors can make about $12-$14 an hour, security guards earn about $10 to $12 an hour, and clerical help earns about $14 an hour, all according to the Bureau of Labor Statistics.
Yes, there are a lot of negatives associated with practicing medicine these days. But that holds true for just about every occupation. Times are hard. Everybody is hurting. Relatively speaking, physicians hold a privileged status in this country, which is reflected in their high compensation and the high esteem in which they are held by their communities.
Frankly, it's selfish and unseemly to complain about your career choices in a field that provides six-figure compensation for new hires, while millions of your fellow citizens -- through no fault of their own -- don't have a career.
Thankfully the Merritt Hawkins survey reminds us that 72% of new physicians -- such as Katie Imborek – are satisfied with the choice they made.
"I know that I am supposed to be doing this, which is exactly what I want to do with my life," she says. "I love the relationships I have with my patients and colleagues and I feel so very privileged and humbled by the experiences I get to share with families in times of great need. I do feel like I am lucky that I will be getting to make more money than I ever would have imagined doing a job that I love."
Medical liability caps enacted in Texas in 2003 have not reduced rising medical costs in the Lone Star State, and expose as false claims that malpractice expenses are a key driver for medical inflation, according to a study from Public Citizen.
"Despite the sales campaign to promote Texas as an exhibit of the merits of limiting doctors' liability for mistakes, the real-world data tell the opposite story," Taylor Lincoln, research director of Public Citizen's Congress Watch division and author of the report, said in a media release. "Healthcare in Texas has become more expensive and less accessible since the state's malpractice caps took effect."
"This contradicts the 'defensive medicine' theory, which holds that fear of litigation is to blame for stark increases healthcare costs. Also, since the caps were instituted in Texas, health insurance costs have outpaced the national average and the percentage of residents lacking health insurance has risen,'" the report says.
However, Jon Opelt, executive director of the Texas Alliance for Patient Access, an advocacy group for malpractice reforms whose members include the Texas Medical Association and the Texas Hospital Association, said in an interview with HealthLeaders that the Public Citizen report is fundamentally flawed, and that it misstates the original intent of the malpractice reforms.
"When proponents argued for a cap it was a discussion about stabilizing insurance rates paid by healthcare providers and attracting new doctors to the state, and that has been overwhelmingly successful," Opelt says. "Never was it stated that passing these reforms would reduce the health insurance premiums for consumers."
According to the Public Citizen report, since Texas instituted its liability limits:
Per-enrollee Medicare spending has risen 13% faster than the national average;
Medicare spending specifically for outpatient services has risen 31% faster than the national average;
Medicare diagnostic testing expenditures have risen 26% faster than the national average;
Premiums for private health insurance have risen faster (52%) than the national average (50%);
The percentage of Texans who lack health insurance has risen to 25%, solidifying the state's dubious distinction of having the highest uninsured rate in the country;
The per capita increase in the number of doctors practicing has slowed to less than half its rate in the years leading up to the caps;
The per capita number of primary care physicians practicing in Texas has remained flat, compared to a sharp increase in the years leading up to the caps; and
The prevalence of physicians in non-metropolitan areas has declined.
Opelt says he cannot repudiate every statistic highlighted in the study, but he says he doesn't have to, because most of the claims – for example, rising Medicare costs, or the percentage of Texans who are uninsured -- have nothing to do with medical malpractice.
He asserts, however, that any claims that Texas has seen a decline in the numbers of practicing physicians since 2003 are simply untrue. "By any objective measurement what we have seen is the end of the exodus of doctors from our state. We have seen a substantial increase in doctors coming to Texas and practicing, especially in the high-risk fields. What that means is more care for more people and closer to their homes. That is not reflected in their study," he says.
Opelt says the report also gives a false impression that patients' rights to legal redress have been gutted in Texas when, in fact, only non-economic damages have been capped.
"Even with these new reforms in place one could still receive a multimillion dollar judgment," he says. "What it has done is reduced the number of lawsuits filed in this state. It has reduced the number of outlier awards. It has allowed doctors hospitals and nursing homes to find and afford liability coverage so they can treat patients."
Opelt also objected to the study's contention that Texas physicians face less accountability for errors since the imposition of the caps. "There is nothing in the peer review studies that draw a correlation between lawsuits or the threat of lawsuits to the improved quality of care," he said. "Since the passage of reforms we have seen some significant improvements in Texas, but they are not totally related to the cap. Although it can be stated that dollars that used to go to lawyers and lawsuits are now going to charity care and patient care."
The American Medical Association has launched a national media campaign urging the public and physicians to tell Congress to repeal the sustainable growth rate Medicare payment formula before 30% cuts go into effect on Jan. 1.
"We believe Congress needs to come forward with honest accounting at this point and really clear the books on the SGR," AMA Chairman Robert M. Wah, MD, told HealthLeaders Media. "This has been with us for a decade and the problem is that the cost of what they have done so far has just gotten bigger.
Five years ago this problem could have been solved at a cost of about $48 billion. Now to fix it they say it will cost $300 billion. But if they don't deal with it and it goes another five years, the costs will go up to $600 billion."
AMA also rejected a nonbinding recommendation to Congress this month from the Medicare Payment Advisory Commission to kill the SGR and replace it with an equally contentious plan that would include reimbursement cuts to specialists and pay freezes for primary care physicians.
If no action is taken on the SGR and other budget deficit issues by Jan. 1, automatic 30% Medicare reimbursement cuts to physicians are supposed to be implemented, but it's not clear if Congress will allow that to happen.
Instead of cuts or freezes, AMA wants the 12-member budget deficit reduction "super committee" in Congress to provide physicians with a five-year "stability period" on Medicare reimbursements that would include modest inflation adjustments.
"That is what we seek to do with our three-prong plan, which is to repeal the SGR, get five years of stable Medicare payments with inflationary updates, and during those five years work on delivery system improvement and reform that delivers cost effective care for patients in a more coordinated fashion," Wah says. "Then we can fashion a payment system that would facilitate that new deliver system."
Also this week, AMA said in a letter the Centers for Medicare and Medicaid Services that it wants Medicare to start paying doctors for four types of coordination services because they avoid more expensive patient care in the hospital down the line.
The services include responding to telephone calls seven days or more after a patient sees the doctor, education and training to enable patients to better manage their own health, better management of anticoagulation drugs such as warfarin, and time spent coordinating team-based care when the patient is not present.
Wah says physicians are already paid about 20% below cost for their Medicare patients, and taking further reductions could gravely impact patient access.
That is the theme of an ad campaign that AMA unveiled this month. The two-week long media campaign, which was launched Friday, features 30-second television ads on cable and broadcast television in select markets, along with 60-second radio spots.
The television ads – clearly aimed at Medicare beneficiaries -- show an elderly man floating through the sky hanging on to a few dozen balloons that are popped one-by-one. As he sinks helplessly toward the tree line, his face more alarmed with the descent, a voiceover says: "Medicare keeps many seniors afloat. But Medicare payments to doctors are scheduled to be cut by 30% in January. It means doctors may have to limit the number of Medicare patients they see, or even stop seeing them all together to keep their doors open. Tell your representatives in Washington to stop the cuts and find a permanent solution for Medicare that safeguards healthcare access for America's seniors now and forever."
Wah says the super committee could actually provide the impetus for change that has been lacking in Congress in the 10-year battle over the SGR. "One thing that is different now is that the super committee has some things in its favor to expedite getting things done that we don't normally see in the standard process that Congress follows," Wah said.
"The fact that they don't have to be under the cloture rules or the filibuster or that business means that things can get done through the super committee process that we had not see get done in the regular process. This is a unique opportunity for Congress to fix what both parties have said they need to fix and finally fix permanently the SGR. This is an opportunity with the structure that is in place to get this done."
Wah acknowledges that eliminating the SGR would create a $300 billion hole in the budget. However, unlike the American Hospital Association, which last month suggested that Congress raise taxes or the Medicare eligibility age before it cuts hospital Medicare reimbursements, Wah says AMA is steering clear of any specific recommendations. "There is a list of options that have been identified by those groups that the super committee can look at to reduce the deficit and repeal the SGR," he says.
"As a physician I am interested in telling Congress what is best for my patients and my practice and I leave the decisions for how to accomplish that up to Congress. That's part of what they're elected to do."
The American Hospital Association is calling for “shared sacrifice” from the greater society – even if it means higher taxes or raising the Medicare eligibility age – if that would help the nation’s hospitals avoid further reimbursement cuts over the next decade.
“It’s the theme of shared sacrifice,” AHA Executive Vice President Rick Pollack told HealthLeaders Media. “If we are going to tackle these major problems, you can’t keep going back to the same well. It is everybody’s responsibility to step up to the plate in the name of shared sacrifice.”
“Cutting providers and rationing the provider payments doesn’t represent reform. It represents the same old, same old. Cutting providers eventually does harm beneficiaries,” he says. “If we have this big national problem, shouldn’t everyone be part of solving it?”
AHA last month compiled for Congress and the Medicare Payment Advisory Commission (MedPAC) more than 40 recommendations amounting to $2 trillion in either cuts or new revenues that have been proposed by Republicans, Democrats, and special interest groups.
Pollack says AHA leaders attended a “fly-in” last week on Capitol Hill “to make the case that, from our perspective, not only have we already stepped up to the plate in the name of shared sacrifice, but our sector is absorbing more change than virtually any other sector in society.”
Pollack says most anything on the list would be preferable to imposing more cuts on hospitals, which he says have already agreed to take a $155 billion cut in Medicare reimbursements over 10 years under the Affordable Care Act, and have also seen huge cuts in state Medicaid programs.
“A lot of people might not like the recommendations, but our membership has felt that we have to be responsible in suggesting alternative solutions to address the problems and it needs to be done in the framework of shared sacrifice, which we have already done a lot of on our own,” he says.
Last week, MedPAC ignored the AHA’s pleas and instead approved its plan to repeal the ineffective sustainable growth rate (SGR) formula. In its place will be an equally controversial plan that will include, among other steps, cuts in reimbursement payments to specialists and frozen payments for primary care physicians.
The MedPAC proposal calls for a total of $335 billion in reimbursement reductions over 10 years. The plan’s “doc fix” would account for $100 billion. Specialists’ reimbursement rates would fall 5.9% each year for three years and then freeze for the following seven years. PCP reimbursements would be unchanged for the 10 years.
The remaining $235 billion would come from:
Cuts to Medicare Part D drug plans (32%)
Post–acute care facilities (21%)
Medicare beneficiaries (14%)
Hospitals (11%), labs (9%)
Durable medical equipment (6%)
Medicare Advantage plans (5%)
Other providers (2%)
The Medicare commission has no authority beyond the recommendation, and Congress is free to ignore the findings, as it has for the last decade.
However, as the budget deficit has become a huge political issue, the six lawmakers on the bipartisan “super Committee” charged with finding a budget resolution are likely to give the proposal more consideration. Unless some action is taken on Jan. 1, 2012, Medicare payment rates for physicians will drop by 29.4%.
Pollack says AHA has supported the repeal of the SGR, but not if it meant reimbursement cuts to hospitals to make up the difference. “From our perspective, this is robbing Peter to pay Paul,” Pollack says. “We employ a lot of physicians and we want to see this fee problem fixed, but we don’t think it is productive to cut one provider to fix another provider’s problem. We have a stake in this as well.”
As for raising the Medicare eligibility age, Pollack says he is not overly concerned with any blowback for hospitals because that idea has already been floated by House Republicans and, however briefly, by President Obama.
“On the retirement age, things get boiled down into sound bites,” he says. “If you look at that option in particular, from our perspective you have to be thoughtful about it. We always assumed that if you looked at this option you had to have health exchanges in place so that those people who are between the new Medicare eligibility age and the old one would get access to coverage through exchanges. For those of limited means, that would be subsidized.”
Pollack says AHA also has acknowledged that some exceptions would have to be built into raising the Medicare eligibility age. “Not everyone can work past 65. For people that have physical limitations by virtue of the work they have done as opposed to people who do desk work, you have to have exceptions,” he says. “None of that is really fleshed out. That is the way we would view that option.”
On Sunday, May 22, a category EF5 tornado ripped like a buzz saw through Joplin, MO. Within minutes, at least 142 people were killed, hundreds were injured, and much of the town was destroyed, including the 367-bed St. John’s Mercy Regional Medical Center.
And just as quickly, the 2,200 employees at the gutted hospital faced the prospect of losing their jobs. That’s when Mercy Health System CEO Lynn Britton made the decision that may come to define his leadership at the system, which operates 30 hospitals in four states. Britton launched a talent-sharing program designed to keep as many Mercy workers as possible employed through the rebuilding effort.
Britton spoke with HealthLeaders Media recently about the decision, and the nearly $1 billion commitment that Mercy has made towards rebuilding Joplin’s healthcare infrastructure.
HLM: The decision to keep staff on the payroll was made just hours after the tornado struck. Why was that a priority?
Britton: “For a variety of reasons. With Hurricane Katrina, a lot of healthcare professionals who didn’t have a place to work tended to leave New Orleans to find work, and once the healthcare organizations were thinking through how to get back on their feet, there wasn’t a professional medical community to support them. So I absolutely didn’t want that to happen in Southwest Missouri. We felt it was critical that we kept everybody employed – but not just sitting on a sofa collecting a paycheck. They needed to be using their clinical skills and keeping them sharp to make sure the medical community was going to be there when the new hospital opened.”
“Then there is the economic side of it. One government agency said that if those 2,200 people had not kept their jobs, about 13,000 (other people in the community) would have lost their jobs because it takes that much in support for the healthcare system. It made sense from an economic perspective, for the community it made sense, from the continuity of healthcare services into the future it made sense.”
HLM: Would it not have been cheaper to lay off employees?
Britton: “Not in the long run. Those people would have had no choice but to go somewhere else to find a job. We are building a new hospital and when we open it back up we would have been spending enormous amounts of money to recruit that very talent back into the community. I would much rather have a resident professional medical community stay there and continue to deliver care and evolve with us and be part of dreaming the dream for the new community. So no, I’m not going to say that it would have cost less.”
HLM: How were you able to find that many jobs in such a short time?
Britton: “We started a program called talent sharing. We had enough Mercy facilities in the surrounding area that I’d hoped that many of [the employees] could find work there. I was also hoping that other hospitals in the area that were going to see some temporary growth in volume because of the displaced patients from St. John’s – that they wouldn’t want to staff up and recruit a workforce knowing that volume was eventually going to go back to St. John’s, and that they might be willing to use some of those resources to meet that temporary growth in demand, and they were.”
HLM: How does talent sharing work?
Britton: “The organization [that temporarily hires the Mercy employee] pays the hourly rate that they would for that position, and the Mercy coworker still keeps their original rate and benefits on our nickel and we bill and collect on the hourly rate at the other organizations. It helps offset but it doesn’t cover all the costs for that coworker.”
HLM: You’ve found work for about 95% of your St. John’s employees. Are you surprised by the success?
Britton: “I was pleased. We knew it would be a big challenge. It sounded daunting. I am a firm believer that you have to have big goals and dream a little, especially in moments like this that are crises situations. You can’t just accept it. You have got to get busy and work your way through it. So, giving people big goals like we did was important in the recovery, in the community, and in the professional recovery as well. Because you’ve lost everything, the place that you went to work every day and socialized with 2,200 people is gone. You have to have a focus and a way to bring yourself back to a new reality. Big goals that seem audacious or daunting are just what it takes.”
HLM: How has this affected employee engagement at St. John’s?
Britton: “It’s off the charts. They’re actively participating in designing the new hospital, and their work in the temporary facility is extraordinary. All the indicators show they are a very engaged workforce and very appreciative of what has been done to help them through this.”
HLM: Mercy has committed about $950 million towards the rebuilding effort in Joplin that will include a new 327-bed hospital. Did you have any concerns about the level of the investment in such uncertain economic times?
Britton: “I have had people say to me, ‘Those were terrible business decisions. Were you worried about your job? What did the board think about that?’ The short answer is if I had gone back to the board and said, ‘Let’s take the insurance money and run,’ that would have been a termination reason right there. Because we did the right thing, I never worried that the board would view it as a bad business decision. I knew they would view it as the right thing to do, and that is exactly what they did.”
HLM: What advice would you give other healthcare leaders facing similar crises?
Britton: “Clearly understand the situation and make some quick, appropriate decisions. Don’t be ambiguous ever about what you are going to do and how you are going to do it, and be bold when you face those moments. People will not remember if you didn’t get a decision just quite perfect during a moment like this, but they will absolutely remember if you don’t do anything or you are just in a state of inaction. That is far worse and does far more damage than being slightly off on one or two decisions at some critical moment.”