In the first two installments in this series, which were posted concurrently on October 22, I compared and contrasted basic features of the Affordable Care Act, generally referred to as Obamacare, and the Romney/Ryan alternative for health care reform.
I believe that the Affordable Care Act offers many positive benefits to our nation’s people and moves us in the right direction for fixing our broken health care system. At the same time I am aware that the act in its present form presents significant problems that must be resolved in implementation. This installment addresses two of the most daunting issues – fears of overwhelming our system through extending coverage to an estimated 30 million additional Americans, and fears concerning adverse repercussions to seniors that may result from alleged cutbacks in Medicare outlays over the next 10 years.
Fear of overwhelming the system
Many doctors and health care administrators fear that our health care system will be overwhelmed with extension of insurance coverage to an estimated 30 million additional citizens, beginning in 2014. As a public health professional I believe our nation has a moral responsibility to provide coverage for all Americans; this is particularly true as we are the only developed country that does not provide universal health care coverage. At the same time I am keenly aware that the newly covered persons must be brought on board in a manner that does not unduly burden doctors, hospitals and other providers, and does not impose an inordinate disruption of care to the over 255 million Americans who are currently insured
Obviously this will require careful planning involving all stakeholders, working in concert to ensure a smooth transition in the most effective and efficient manner. As discussed below, this will require unprecedented levels of cooperation among widely disparate factions, together with implementation of boldly innovative approaches to improve health care access while focusing on skillful provision of that care which is truly needed. Effective implementation of the Affordable Care Act will also require dramatically increased use of preventive services while both enabling and encouraging doctors, nurses and other providers to empower their patients to take charge of their health.
To gain a perspective on the problem, let’s look at the composition of the 30 million new health insurance enrollees to be brought on board beginning in 2014. Over the past several decades our country has undergone a serious erosion in provision of health coverage by employers. As a result, we now have large numbers of working people, self-employed people and their dependents who are uninsured, together with historically high ranks of unemployed Americans who in most cases are uninsured.
Many of the projected 30 million new enrollees are currently in the system, while lacking any form of coverage. Instead, they tend to defer care until it is absolutely necessary and then either pay for services out of pocket, until their resources become exhausted, or use hospital emergency rooms, public clinics and public or charitable hospitals as their primary source of care. Of course when these people can no longer pay for care the government steps in, in one form or another and we all pick up the tab as taxpayers.
These Americans are either wholly or partially medically disenfranchised, and are often forced to either forego early treatment of their conditions, or utilize highly expensive portals of care, particularly hospital emergency services. This forced use of emergency services as a primary care resource poses a considerable cost burden on our nation’s hospitals, privately insured patients and taxpayers, as hospitals are forced to engage in “cost-shifting” in an effort to cover costs of uncompensated care that they are legally obligated to provide.
This non-system of providing care for uninsured patients is impractical, highly inefficient and inhumane. Our de facto policy of forcing millions of Americans to repeatedly visit hospital emergency rooms for primary care is highly inefficient, and the resultant fractionated care results in both duplication of services and astronomical increases in overall costs of care. It also imposes a heavy burden of economic and human costs in the form of unnecessary suffering, avoidable disability and premature death.
In reality, making affordable health care coverage available to 30 million additional Americans offers unprecedented potential for cost containment and cost reduction by granting these people access to appropriate care, provided in the right place at reasonable costs. Furthermore, by requiring presently uninsured Americans to purchase health insurance at affordable prices, the Act will reduce out-of-pocket costs for the majority of Americans. This will be accomplished by reducing cost-shifting through spreading the overall cost burden of providing care on a more equitable basis.
It is imperative that policy makers be fully aware that minimizing the disruption of service that may result from extending coverage to 30 million more Americans will require diligent cooperative efforts and decisive action on the part of all parties.
On the plus side, the Affordable Care Act contains positive incentives to increase the supply of primary care providers and to incentivize more doctors to provide primary care for both Medicare and Medicaid patients through providing more equitable reimbursement for these essential services.
As a nation, we must waste no time in eliminating our shortage of primary care resources. We need to dramatically increase our supply of primary care providers, particularly nurse practitioners and physicians assistants.
As a stopgap measure, serious consideration should be given to establishing an entry level category for nurse practitioners who would be able to provide a wide range of primary care services, provided that they concurrently adhered to pre-established requirements for completing their training and certification as full-fledged nurse practitioners within a designated time frame. Likewise, we must give serious consideration to fast-tracking certification of former military medical corps-men and corps-women as primary care providers. Given our pressing shortage of these front line providers, requiring these veterans to go back to square one in completing training for advanced health care occupations is both wasteful and counterproductive.
Problems in ensuring access for Medicare patients
Theoretically, traditional Medicare assures that patients are given free choice in accessing qualified physicians and other providers. In actuality millions of seniors, my wife and myself included, experience serious difficulty in finding a doctor they want to see who will accept Medicare patients. This is especially true in retirement meccas such as Tucson where Medicare enrollees make up a large part of the population. In Tucson trying to find a well qualified primary care doctor who accepts Medicare can be extremely frustrating. The same holds true for many medical specialties.
Avik Roy, an adviser to the Romney campaign on health care issues, correctly points out that the problem boils down to doctors’ frustration with Medicare reimbursement levels. This issue has been festering for decades, as Medicare has repeatedly cut back on reimbursement to physicians and other providers. This is a key reason why reform is necessary!
According to the Congressional Budget Office, the Affordable Care Act will cut $716 billion from Medicare over the next 10 years. It is reported that the largest chunk – $415 billion – will come from slashing reimbursement rates to hospitals, doctors and nursing homes.
In actuality, as I have previously discussed, the act increases Medicare reimbursement for primary care doctors in recognition of their vital role as both a point of entry and a coordinating hub for the health care system. This provision will definitely alleviate the accessibility problem for Medicare patients.
Getting back to the projected $716 billion dollar reduction in Medicare outlays, will this deter our nation’s seniors from accessing their doctors of choice and the care they need? The answer depends on who you’re talking to. The Romney campaign adamantly asserts that the Affordable Care Act will saddle Medicare patients with enormous barriers to accessing care. On the other hand Kathleen Sebelius, Secretary of Health and Human Services, states that the near term reduction in Medicare outlays will serve to strengthen Medicare by extending the Trust Fund’s solvency for eight more years.
In attempting to ascertain the impact of the near term reduction in Medicare outlays, we must pursue two specific lines of questioning:
- Will the projected reduction result in substantially reduced reimbursement to specialists and other providers? If that turns out to be the case, then these reductions would do a gross disservice to Medicare patients by further exacerbating their difficulty in accessing their doctors of choice. Ensuring that this does not happen will require both earnest dialoging and concerted action on the part of government officials, working in concert with power brokers representing physicians, hospitals and other health care providers. As I will discuss below, I am confident that this highly undesirable outcome can be avoided. I must emphatically add, however, that earnest bipartisan dialoging and concerted action by all stakeholders must begin NOW to ensure that Medicare patients will not penalized by the near term cost reduction.
- The corollary question – Is there excessive fat in the system that can be eliminated without compromising quality of care or access to providers? Given the estimated 2011 spending of slightly over $11,640 per Medicare enrollee – a rather hefty amount – there are indeed a number of viable options that would collectively achieve the necessary cost reductions without penalizing either Medicare patients or providers. Again, I must emphasize that resolving this issue will require immediate good faith dialoging and action on the part of all stakeholders. We cannot afford the luxury of partisan bickering in resolving this issue! As a bonus, if we are able to reach agreement on responsible cost-cutting measures, then we will be well on the way toward accomplishing HHS Secretary Kathleen Sebelius’ stated objective of extending Medicare’s solvency for eight more years!
The following are some of the options that need to be actively explored in achieving the necessary cost reductions to extend the solvency of the Medicare trust fund for eight more years:
- Follow recommendadtions of the Institute of Medicine: On September 6 the prestigious Institute of Medicine released a consensus report titled “Best Care at Lower Cost”. This blockbuster report attests that the American medical system squanders 30 cents of every dollar spent on health care! The report, developed by a panel of 18 world class clinicians, policy experts and business leaders, details how our health care system wastes an estimated $750 billion a year while failing to deliver reliable top-notch care. Some 210 billion dollars are wasted on repeated tests and unnecessary services, $130 billion are spent on inefficiently delivered services, $75 billion is eaten up by fraud, $55 is lost on missed prevention opportunities, and an astronomical $190 is spent of unnecessary paperwork and administrative costs. By way of reference, the projected reduction in Medicare outlays over the next 10 years under the Affordable Care Act totals $716 billion. Quoting from the report’s authors, the bottom line is that “Money should not be spent on unnecessary administrative costs, inefficiencies and care that does not improve health (and may actually harm the patient)”. Highlights of the Institute of Medicine report include:
- Doctors need to partner with patients – Less than half of patients surveyed receive clear information on benefits and trade-offs associated with treatment for their conditions – and less than half of patients are satisfied with their level of participation and control in medical decision making.
- Hospital care is alarmingly unsafe – An estimated one-third of patients are harmed during their hospital stay, and 30 percent of Medicare patients are rehospitalized within 30 days of discharge. Underlying these frightening statistics are untold suffering and thousands of unnecessary deaths among patients, accompanied by the generation of billions of dollars in unnecessary costs as a result of these avoidable errors and inefficient practices.
- Inefficient transfer of medical records and duplication of tests is rampant throughout the system – Twenty percent of patients report that their test results and records are not transferred from one place to another in time for their appointment. Twenty five percent report that their doctors have had to reorder tests and procedures to obtain needed diagnostic information.
- Improved transparency of information is needed – Patients and clinicians should have easy access to prices of tests and procedures, and to reliable information concerning outcomes and quality of care from one provider to another.
- Improved teamwork, communication and coordination of care must be aggressively promoted – Fifty percent of adults report serious problems with coordination of their care, notification of test results and communication with their doctors.
- Implement and effectively administer Affordable Care Organizations – In previous postings in this series I have referred to provisions of the Affordable Care Act that incentivize providers to band together to create Affordable Care Organizations (ACOs) to promote better coordination of care for Medicare patients across care settings. The Medicare Shared Savings Program will reward ACOs that lower growth in health care costs while putting patients first and meeting performance standards on quality of care.
- Drastically reduce medical malpractice costs – Medical malpractice litigation makes a substantial contribution to unnecessary medical costs by forcing doctors to practice defensive medicine. By definition, defensive medicine is a deviation from sound medical practice to avoid the threat of malpractice litigation. The American Medical Association reports that over 90 percent of physicians admit to practicing defensive medicine. This ranges from “positive” defensive medicine, like ordering unnecessary tests, performing unnecessary procedures and making unnecessary referrals to consultants; to “negative” defensive medicine in which doctors avoid treating high risk patients or performing high risk procedures out of fear of being sued. A post by a physician addressing this topic claims that defensive medicine is expensive, has no basis in evidence-based research, and exposes patients to risks of complications. Costs of defensive medicine are difficult to quantity as for obvious reasons doctors to not keep their records on this basis. One study which attempted to arrive at a “ballpark” estimate was conducted by Kessler and McClellan, who analyzed the effects of malpractice liability reforms using data on Medicare patients who were treated for serious heart disease. The researchers concluded that liability reforms could reduce defensive medicine practices, leading to a five to nine percent reduction in medical expenditures without any adverse effect on mortality or medical complications. If one were to extrapolate these findings to total U.S. health care spending in 2005, the year on which the study focused, one could surmise that total defensive medical costs ranged between $100 billion and $178 billion for that one year. One physician writing on this topic advocates that standard clinical evidence-based guidelines be globally applied to malpractice cases, thus lessening the impact of “hired gun” experts whose testimony can be used to support whatever standard of care is convenient to the lawyers. At any rate, concerted efforts to curb unnecessary malpractice litigation and exorbitant settlements need to be applied in achieving responsible cost reduction under the Affordable Care Act.
- Negotiate discounts for pharmaceutical products – The pharmaceutical industry in this country is highly profitable. Despite the economic downturn, many pharmaceutical companies rack up profits in the neighborhood of 20 percent per year, and stock prices are riding high, with price to earnings ratios often running twice the average for the S&P 500. When the Bush administration initiated the Medicare drug benefits a number of years back, to my knowledge no attempt was made to apply the government’s purchasing power to negotiate discounts with the drug companies. It is also technically illegal for U.S. citizens to purchase prescription drugs by mail from Canada and other off-shore sources, which are often available at a fraction of the cost of domestic pharmaceuticals. If the government is serious about reducing Medicare costs while preserving full benefits for Medicare enrollees, then it needs to exercise its muscle in negotiating discounts with big pharma. In addition, while I am generally a staunch supporter of “buy American”, if our pharmaceutical companies refuse to make their products available to consumers at a reasonable price, then I believe that Americans should be able to order prescription drugs from Canada and other off-shore suppliers without fear of being penalized.
- Making the system work smarter - To its credit, the Affordable Care Act requires insurance to plans cover a number of preventive benefits at no out-of-pocket costs to patients. It also provides entitles Medicare enrollees, for the first time, to schedule annual wellness visits with their doctors. While these represent impressive breakthroughs, they barely scratch the surface in terms of realizing the cost saving potential inherent in incentivizing physicians and other health care providers to place a major emphasis on wellness and prevention – empowering patients to take charge of their health! I am confident that this shift in emphasis would be welcomed by the vast majority of patients as well as by many health professionals – particularly members of the nursing profession and primary care physicians. This topic will be the focus of the final installment in this series, “A New Paradigm for Health Care Reform”.
While I firmly believe that the Affordable Care Act provides a sound basis for beginning to reform our broken health care system, I am also aware that the Act as it presently stands poses some significant problems that need to be resolved in implementation. This installment has addressed two key issues – fear of overwhelming the system by bringing on board 30 million insured patients, and the need to ensure that Medicare patients have timely access to care provided by their doctors of choice. While I strongly believe that the projected $716 billion in cutbacks to Medicare outlays can be dealt with in a manner that will ensure timely access to needed services while actually effecting significant improvements in overall quality of care, I also believe that achieving this outcome will require immediate good faith dialoging and decisive action on the part of all stakeholders. I also believe that, if our nation’s leaders set their minds to it, that we can use the Affordable Care Act as a springboard for effecting truly positive and revolutionary changes in the manner in which health care is delivered in this country. This will be the topic of my final installment in this series, “A New Paradigm for Health Care Reform”. Stay tuned!
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John Newport holds doctorates in public health and psychology and has spent the past 40 years working in various capacities in health services policy analysis, health care administration and wellness promotion. He is a former commissioned officer with the U.S. Public Health Service, and has served as a senior level research associate in health policy analysis at the UCLA School of Public Health and as a senior planning associate with a major metropolitan hospital/health services planning agency. He is author of “The Wellness-Recovery Connection”, published by Health Communications, Inc. and has published well over 200 articles focusing on health care issues, wellness promotion and the role of wellness in recovery from addictive disorders.