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ACA 'Myths' Fail to Link Poverty to Growth in Healthcare Spending

Analysis  |  By Philip Betbeze  
   September 15, 2016

Healthcare can't fix poverty, but with the right focus, it can fix some of the challenges that can be attributed to poverty, claims a new book.

Social determinants can add greatly to healthcare costs, but focusing on waste and inefficiency in healthcare will only go so far, says Joe Valenti, MD.

In fact, he says, the current focus on ferreting out waste and inefficiency amount to tinkering around the edges of the real problem: poverty. It's a big cause for healthcare cost growth, and much of the ACA doesn't address it.

More concerning is that it appears to disincentivize many physicians and hospitals from treating poor patients more comprehensively.

Perhaps an introduction is in order.

Valenti is one of six physicians at a small obstetrics and gynecologic group practice in Denton TX, and he's supporting a bold book by a fellow physician who can't promote it himself.

The author of Poverty and the Myths of Health Care Reform, oncologist Richard "Buz" Cooper, passed away earlier this year at 79 from complications from pancreatic cancer. Valenti helped edit the book and shares a background in cancer research with Cooper.

Valenti is also a board member of the Physicians Foundation, a nonprofit founded in 2003 from the proceeds of class action lawsuit against third-party payers brought by physicians and 19 state medical societies.

He says Cooper's new book should be required reading for those who think overutilization is what's making healthcare unaffordable. Instead, he contends, as does Cooper in the new book, that the most important determinant of healthcare spending is poverty. Overutilization is one symptom.

Of course, healthcare can't fix poverty, but with the right focus, it can fix some of the challenges that can be attributed to poverty, Valenti claims. He says poverty is ignored in the ACA. That means the incentives aren't right within its regulatory constructs to address the heart of healthcare's cost problem.

Much of his argument, and that of the book, stems from the idea that the ACA, through its myriad regulatory hurdles, encourages physicians who might most be willing to treat low-income populations to abandon small practices and join ever larger organizations that might not share their commitment to caring for the vulnerable population.

Number of Hospital-Employed Physicians Up 50% Since 2012

Once they join those organizations, which he says include nonprofit health systems that are increasingly moving their facilities farther away from poor populations, physicians may no longer be able to treat the vulnerable. Further problems are exacerbated, he says, by the vastly different reimbursement rates depending on payer.

Finally, well-intentioned regulations aimed at creating better accountability add to the red tape small physician practices must contend with while actively encouraging physicians to neglect poverty and the social determinants of health.

"How are we supposed to incentivize docs to see Medicaid patients when in some states it pays less than half what Medicare pays, and Medicare pays only 70% of what commercial plans pay?" he says. "We need incentives, not penalties, to help docs who take care of those patients."

Poverty Contributes to Noncompliance

Valenti says doctors who treat poor populations generally do worse on quality and other accountability measures at least in part because their patients are noncompliant.

But, says Cooper in the book and Valenti in an interview, such patients are largely noncompliant not because they want to be, but because factors associated with poverty make compliance practically impossible for some patients.

"Often noncompliant patients have everyday problems that prevent them from being compliant, such as transportation, shelter, food and prescriptions," says Valenti.

"You may have a patient who's 20 years old, has 400 blood sugar, and he insists he's taking his insulin. But what comes out is he doesn't have a place to refrigerate it and insulin becomes inactive in high heat. So a college dorm refrigerator might solve that problem."

But who's willing to do things like buy refrigerators for insulin, or add a ramp to a disabled person's home, or any number of other simple and inexpensive improvements that might help patients be more compliant?

I know of several organizations that already do, but in the context of the nationwide healthcare picture, which is the scale upon with the ACA operates, it's a scattershot approach.

Hospitals and health systems need to at least dedicate resources to solve what is an obvious and under-addressed problem. Those can help tremendously, even if those resources are limited to a dedicated employee or two staffing a clearinghouse-type effort to connect patients with assets that already exist in a community to help with such challenges.

"Poverty makes people sick," says Valenti. "But approaching healthcare based on the whole person can be a savings for the hospital and savings for the community. There can be some win-wins."

Philip Betbeze is the senior leadership editor at HealthLeaders.

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