Patients feel "Medicare is my benefit!"

TMA President Dr. Bruce Malone tells a patient story describing that "Medicare is my benefit!" His testimony was before a reference committee at the interim meeting of the American Medical Association in New Orleans, Louisiana. Dr. Malone was speaking in favor of direct contracting -- allowing patients a choice to see any physician they want regardless if that physician participates in the Medicare plan or not.

The "Calendar of Doom": hear my presentation on fraud and abuse/RAC audits as part of a seminar at the Texas Medical Association Winter Conference in Austin, Texas

How a dying child tells his parents he's ready to die

My good friend and Fort Worth pediatrician Gary Floyd relates this telling story about working with a family through the death of their child from cystic fibrosis.  Gary's story is compelling, really...downright tear jerking.  This video is part of a series from the Texas Medical Association that began as project from their creative social media guru Steve Levine.  Check out other videos from that series here.

Conversation with a Health Care Leader: the past and future of health reform with Dr. Susan Rudd Bailey

Today we talked with Susan Rudd Bailey, MD who is the President of the nation's largest state medical society about the genesis of federal health reform and what she expects for the future.  This nationally known leader of the Texas Medical Association is candid in her discussion of the role that physicians and patients play in determining the ultimate outcome of the recent federal health regulation.  She also discusses the implications of the flawed funding mechanism for Medicare -- the so called "SGR".

The Health Care Cold War: Will ACO's Bring Down The Wall?

Although there are no sounds of B-52's flying at low altitudes above the hospital, there are salvos nonetheless between the partners in health care as the positioning of providers in the ACO marketplace starts to crystallize.

ACO's, or accountable care organizations, are the product of one of the Obamacare beta solutions for controlling health care costs and improving outcomes.

My friend Dan Finch at the Texas Medical Association compared them to unicorns: no one's ever seen one but you'll recognize it when you do.

I'm not sure he's completely correct, there are a few of these organizations forming around the country. One in Chicago offers to produce great data on the utility of the delivery mechanism though the jury is still out on whether it will net positive results for patients.

These new entities can be formed really by anyone -- that is, anyone brave enough to pioneer the business model. The risks are great because of the capital requirements to protect the integrity of the captitated payment system which is really the heart of the organization.

Capitation is an ugly word in health care financing probably because of the almost unanimous negative consequences of the insurance models funded in this manner in the 90's.

Everyone then left with a bad taste in their mouth.

Insurance companies couldn't rein in physicians and hospitals to control costs and patients never bought into the model that prevented them from using a infinite amount of resources in their own health care.

So why would it be different now?

The argument is mostly supported not by the change in patient expectations or the robust IT infrastructure that we have in this century, but rather by the necessity to control costs. That argument unfortunately will drive the business principles that formulate these new organizations.

The definition of a "cold war" must include the word "protectionism." Certainly the world saw the escalation in missile batteries and nuclear warheads until Reagan was successful in "tearing down that wall."

But, pardon the reckless use of the 1988-presidential-debate line: Mr. Obama you are no Reagan.

Why am I so pessimistic these ACO's will find a place in this market space?

First is the lack of a unified national standard concerning our information technology infrastructure. There is currently no data sharing among providers outside of their own controlled groups (you can thank another federal stature for the difficulty here: read HIPPA).

And although a standard can be created and implemented, there is still the fact that many of the ground war health care practitioners (the primary care physicians) are still not active users of this technology. Current estimates put this at somewhere around 30% tops.

And with the cost of implementation of an electronic health record setup in a physician's office near $40K it will be some time before we see widespread adoption of EMR's.

Then there is the issue of exactly what we will measure to insure that quality care is being delivered. These so called "measures" of quality are still undergoing national debate and peer review. They're close to getting the numbers right. The question is whether physicians and patients will buy in.

And finally there is the nasty issue of "gain sharing." This is where you reward the parties for achieving the goals of delivering high quality care in an efficient manner.

Paying physicians is particularly difficult because of a myriad of other federal statues relating to anti-trust and kick back regulations.

Some groups, particularly hospitals, believe that the answer to this issue is direct employment of physicians. But this business model is challenging in that not only must a hospital control the diverse interests of a multi-specialty group of physicians, but it also has to morph the health care of individual patients to fit a cost savings model.

Both of these groups are not historically responsive to direction by a third party.

Then you have the difficult problem that hospitals are funded by actually admitting patients and providing care. In the ACO model the profits only come from keeping patient's healthy and OUT OF THE HOSPITAL.

Now sure, business models can change. But hospitals will have to recognize and be able to adapt to this change in a swift and controlled manner to insure that they remain profitable and can continue their mission.

Oh lest I forget one other very important party to the ACO equation: the people who pay for health care services.

Whether these ACO's are created as a hospital-based entity or along the traditional insurance model, at the end of the day both the government and American business expect to pay less for health care services in the future.

So for the ACO model to be successful it actually has to have a declining net revenue line.

It is this money line that has everyone so concerned and lining up to protect their own interests.

Hospitals are arguing for a hospital-centric model so they can control the dollar at the end of the day. Physicians are either jumping on board with the hospital groups or they are lobbying for measures to protect their private practice.

Patient groups are seeing that there could be limitations on both who they can see for care and where they can go. This loss of autonomy in the doctor-patient relationship will be very hard for most patients to swallow.

Insurance companies and business groups don't trust hospitals, physicians, or patients to work to control costs in the health care economy. So they are lobbying for strong protective measures to insure that ACO's don't get out of the normal reserve requirements to sell an insurance product.

ACO's hold the promise of ending the cold war.

If all of the parties could work together on a fair and balanced model that puts the patient first in the decision making process, it could offer an opportunity for success.

But for now all of the parties are building up their arms to protect their own interests, or they are being overwhelmed by a well funded adversary.

Virtually every hospital is "creating an ACO" and physician's practices are being gobbled up health care systems.

I applaud the idea of collaboration and use of IT to improve the health experience for patients. Today, though, I'm not too confident that the current attempt at tearing down the wall will work.


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Location:Quito, Ecuador

Mortgage meltdown or medicine meltdown?

As we enter the final phases of the election cycle you can get a good idea of the spoils of big government just by looking at the rhetoric in the campaign.

Clearly, one issue is dominating the election this fall: the economy, and more specifically the lack of jobs.

So I would like to pose a few questions and ideas on just how government actually performs in creating economic growth and in kick starting job growth. I don't necessarily have the answers, but I'm real good at asking questions.

Did government assisted mortgages help the economy? Certainly by artificially lowering mortgage rates and the creation of investor owned, government back sub-prime mortgage equities, the federal system of assistance in home buying has become the norm.

But given the meltdown in the mortgage industry, did we do a service to Americans by putting people in homes they couldn't afford? Flipping houses became the source for a evening cable television show and the folly of many particularly young home buyers.

As liquidity in the mortgage market disappeared so did the dreams and savings of many Americans -- including those that had invested in the "government" back equities of Fannie Mae and Freddie Mac.

Is government funded healthcare going to be beneficial for our country in the long term? Just like mortgages, are we going to put our country into a health system they can't afford?

Out current federal health legislation creates "coverage" for 85% of our citizens, but does nothing to promote access to care or an improvement in health care choices.

The latter is particularly concerning.

Regardless of the life style choices one makes, there is a guarantee of coverage. There certainly needed to be an improvement in health care services for the uninsured, and there needed to be some limitations on the growth in spending, but wouldn't it have been better to put incentives on the user?

The real question becomes: will we be facing a health care meltdown just like the mortgage industry? As the requirements for health care services rise, there being no limitations on cost, and no impediments to limiting health care decisions, can the system continue to function?

The biggest concern here is whether physicians and other health care industry providers (pharmaceutical companies, insurance companies, hospitals) can continue to function in an economic environment of continued declining reimbursement for services.

This is especially true given the proposed 23%+ cut in Medicare rates next month with more to follow in January.

Will there be a decline in health care liquidity?

Physicians and other health care providers may find themselves in a situation much like the mortgage industry: servicing consumers with health care services they and the government really can't afford.

I guess the real question is will there be a foreclosure on your new sub-prime health coverage?



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My interview with Dr. Michael Burgess, Congressman from Texas, on some provisions of the new federal health plan