Pay primary care more: Kennedy may be getting this one right!

I have recently written strong criticisms of Secretary of Health and Human Services Robert F. Kennedy, Jr. and his positions on a number of issues, including most importantly vaccines (see RFK, Jr.: The Secretary of Health and Human Services is Dangerous to Your Health!). Not only is he wrong about vaccines being dangerous, he is in fact creating major danger by discouraging their use. The polio vaccine essentially eliminated a disease that was a major scourge in the US as well as the rest of the world, as did the measles vaccine. Many other vaccines protect our children – and adults – from other serious viral diseases like influenza, COVID, mumps, chicken pox, rubella, shingles, and human papillomavirus (HPV) which causes cervical cancer, as well as bacterial diseases including diphtheria, tetanus, pertussis, and Hemophilus influenza b. The last is something most people have not heard of, but early in my career was a major cause of morbidity and death in infants and young children from meningitis, pneumonia, and epiglottitis, which caused their throats to swell rapidly and choke off their breathing. Many others have articulately expressed this concern, including the pediatrician Perri Klass in the New York Times. While these diseases affected people of all social classes, they were more prevalent among the poor and minority groups such as the people I cared for at Chicago’s Cook County Hospital. Indeed, research has demonstrated tremendous benefits from vaccines on the health of children and other populations that go far beyond just the decrease in the specific diseases that they target to decreasing all-cause mortality!

Kennedy is wrong about many other things, if not all of as of such immediate potential danger as urging people to not get vaccinated. These include nonsense like suggesting that people who eat right and exercise won’t get disease, that raw (unpasteurized) milk is better for you, and that “natural” is always better (which, even if we could agree on a definition of “natural”, it isn’t). One recent example is his arguing for Coke to use “natural” cane sugar rather that high-fructose corn syrup, both of which are sugar and have calories and in large amounts are bad for you.

But there turns out to be one area where Kennedy and I seem to agree, which is the need to take concrete action to increase the number of primary care physicians. Lots of people, including politicians, healthcare providers, and health policy experts, express concern about the shortage of primary care, but have done nothing to address the real cause of this problem – that primary care physicians (and the nurse practitioners and physician’s assistants working with them) get paid a lot less than do physicians in other specialties. Kennedy appears to be doing something other than wringing his hands. On several occasions I have written about the RUC, the AMA committee that decides how to divide up the pie of Medicare dollars among specialists by deciding how much each thing doctors do is worth relative to other things that they do. (Changes in the RUC: None.. How come we let a bunch of self-interested doctors decide what they get paid? July 21, 2013, Doctors' incomes and patient coverage: both need to be more equal July 26, 2014, and most recently, Not enough primary physicians OR Nurse Practitioners: It's the money, stupid!, June 27, 2024).

Not to get too technical, there is a set amount of Medicare dollars and the RUC decides (or recommends to CMS, which almost always accepts those recommendations) how many physical exams, say, are equivalent to one gall bladder surgery, considering (theoretically) both difficulty and time. This makes a tremendous difference in physician income and, I would argue, specialty choice by medical students. And, over the years, the amount of time it takes for doctors to do some things, particularly procedures, changes. Colonoscopies used to be estimated to take an hour and a quarter, but now are routinely done in 30 minutes. Cataract surgeries take a fraction of the time that they once did. This can result in physicians billing for more procedures than the model assesses as possible in a day. In contrast, the time it takes for a physical exam, or to listen to an interpret a person’s story, hasn’t changed significantly. The composition of the RUC, according to the AMA, represents all specialties, but its membership has a low proportion of primary care doctors – five of the 32 seats. Unsurprisingly, then, specialist-performed procedures are valued more highly than cognitive work. And, very important, these rates (relative value units) do not affect only Medicare payments – virtually all insurers pay based upon Medicare rates, so it is the whole health system! Prior to this new regulation, alternative models for allocating payment have been developed, such as this 2025 publication from the National Academies of Science, Engineering, and Medicine (NASEM).

So, now, maybe, a change. The NY Times reports that, buried in an 1800-page HHS regulation, are proposed changes in the RUC methodology that would benefit primary care. This would be real action! In addition to reassessing these relative values, the action would also look at the current practice of reimbursing more for the same procedures done in a hospital than in a doctor’s office, a major way that hospitals make money. And, for those who think “of course it costs more to do something in a hospital”, this is a technicality; it simply means that the hospital owns the practice or clinic. So two, say, skin biopsies performed in similar doctor’s offices across the street from each other are now reimbursed at very different rates if one is owned by a hospital. This is absurd and inequitable, and getting rid of it makes terrific sense!

The diffusion of medical services to people and communities is primarily driven not by the health needs of the populations in different areas but by the potential to make the most money for health care providers. These are largely, and increasingly, hospitals and health systems, as well as enormous insurance-company and private-equity owned practices rather than individual or small group physician-owned practices. So, we get enormous hospital campuses and medical facilities in major cities and wealthy suburbs and little or nothing in poor neighborhoods and rural areas. This should change. The only reason for decisions about what healthcare services to provide and where to provide them should be the health needs of people, and not on how much profit can be made.

The new HHS regulation will be a big step in this direction if it redirects Medicare (and thus all insurer) funds to primary care, and does not preferentially favor hospital-owned practices. To the extent that he is responsible for it, Kennedy should be congratulated. However, while it is a big step, it is not a solution. The next, necessary, step is a universal health insurance program where every single person is covered and covered by the same system, and where establishment (and closure) of health facilities, and the services that they provide or do not, is entirely based on the health needs of the people. Of course, there will be a lot of resistance – highly paid specialists will resist the proposed HHS reimbursement changes, and the institutionalized powerful insurance companies and other big players who are making lots of money from “healthcare” will oppose more comprehensive changes. Indeed, they already are, with highly funded social media campaigns against universal health care.

We are glad for this first step, but we need to keep fighting to get a comprehensive health program – like those of every other wealthy country!

Raw milk, vaccines, and RFK, Jr: Some dates worth remembering

Some dates worth remembering:

1862: Louis Pasteur discovers the eponymous process of pasteurization (based on work done by Lazzaro Spallanzani 100 years earlier), first used in beer and wine, but most importantly in milk. As the process is gradually introduced (the first US state required it in 1947, the federal government for interstate commerce in 1973). It took a while, but with its introduction the frequency of serious and often life-threatening infections coming from unpasteurized (= “raw”) milk, including streptococcus, typhoid, typhus, and TB, among others, dramatically decreased. Health was improved.

2024: The US President-elect, Donald Trump, announces that he will nominate Robert F. Kennedy, Jr., who advocates the drinking of unpasteurized milk, to the cabinet post of Secretary of Health and Human Services.

1952: During the last major polio epidemic in the US, a friend comes to visit our family on a Saturday to see my new baby sister. On Monday, she comes down with polio and spends the rest of her life in a wheelchair. My parents are worried about their children having been infected, more about the greater risk to 3-year-old me than the baby, as polio in infants was uncommon. I do not get clinical polio (see * below) and soon thereafter receive both the Salk (injection) and later the Sabin (oral) polio vaccines. During this decade I also come down with clinical cases of measles, mumps, German measles (rubella), and chicken pox. The last was quite unpleasant, but I didn’t die and had no significant after-effects. The vaccine against measles (and mumps and rubella) were released in 1963. The rates of these diseases, especially measles which caused the most deaths, plummet. Most measles outbreaks since have been in populations in which people did not immunize their children, notably in 2019 among Hasidic Jews in Brooklyn.

As a young doctor at a public hospital in the 1970s, one of the common and feared infections we saw in the pediatric emergency room was that caused by the bacteria Hemophilus influenza b (not the same as the virus influenza). It commonly caused ear infections, but also very serious meningitis, and, most scary to us, epiglottitis, in which the epiglottis, the piece of tissue in your throat that prevents you from breathing in food, swells very large very fast and can completely cut off a child’s breathing unless a breathing tube can be placed in time (and it is difficult with the swelling). In 1985, the vaccine against H flu b was introduced, and these infections and deaths almost disappeared. Varicella (chicken pox) vaccine was not released until 1995, and the rate of those infected (and then later infected with shingles, a resurgence of the same virus, known as Varicella-Zoster) plummeted. Before the vaccine was released, about 4 million cases of chicken pox, with over 10,000 hospitalizations and 100 deaths, occurred (mostly among children) annually in the US.

2024: The US President-elect, Donald Trump, announces that he will nominate Robert F. Kennedy, Jr., who believes all vaccines are bad and should be avoided, to the cabinet post of Secretary of Health and Human Services.

The difference between individual and public health is important, and bears repeating.  For the individual, getting a disease (infectious or not) is 0% or 100%. If something happens to “one in a million” people it is very rare (including serious reactions to vaccines, which do not, incidentally, include autism) but if you are the one, it is 100% for you. On the other hand, if something affects 99% of people, but you are in the 1%, you are lucky. Public health looks at trying to prevent (or contain, if they are infectious) diseases by looking at the impact of disease, or preventive measure (e.g., vaccines, pasteurization) on the population**. Pointing to individual exceptions (“my grandfather drank a quart of whisky and smoked two packs of cigarettes a day and lived to be 100”, or “we drank raw milk all the time and we’re healthy”) does not change that unless an subgroup that is not susceptible can be identified (e.g., biological males do not get cervical cancer – although they still should be immunized against HPV as they can transmit it). Some things may decrease the risk; those drinking raw milk direct from the cow on their farm are at lower risk of infections than those who consume it after it has been shipped and had days, or longer, to become infected. Folks who are skeptical of modern medicine often emphasize “prevention”, but this is not a magic incantation. Vaccines are one of the few things we have that actually prevent serious disease. Also avoiding foods that have a significant likelihood of being infected – tainted meat, shellfish, water infected with sewage (water remains the largest cause of death, through infant diarrhea; the main reason commercial campaigns to replace safe breastfeeding with formula that needs to be rehydrated are terrible), or raw milk.

Human progress is not unidirectional. There are often steps backwards, motivated by misinformation, financial gain, fantasies, (some people’s interpretation of) religious beliefs, political gain, and others. The appointment and confirmation of Kennedy would be a big step backward. The implementation of the policies he advocates will take us back more than a century.

There is a – very important – place for evidence and truth.

 

*Even though poliovirus infects almost everyone exposed who is susceptible, not everyone who is infected with poliovirus gets clinical polio; it is about 10%. Measles, on the other hand, also infects almost 100% of susceptible people, and virtually everyone infected gets clinical disease.

**It is worth noting that even the practice of one-on-one clinical medicine is based on applied epidemiology, the science of studying disease in populations. Why we may suspect a certain condition in a person with certain symptoms is because, in a population of people who are similar and who have these symptoms, these are the common causes. Same for treatments: we don’t say “well, the last person I saw with diabetes responded well to insulin, but you’re a different person, so let’s try digitalis.”

 

Requiring TV drug ads to post list prices: a good step from HHS -- but not enough!

"What I say to the companies is if you think the cost of your drug will scare people from buying your drugs, then lower your prices."

Terrific quote from the not-always-terrific Health and Human Services Secretary, Alex Azar. The Department of HHS will require TV ads for drugs to disclose the list price for the drugs they advertise. Sure, they will be at the end in the small print along with the side effects (‘nausea, vomiting, headache, baldness, serious infections, death, etc.’), and thus far there are no plans to require it in print ads, but it is a big step forward. There is so much evil being done by the Trump Administration that it is nice, every once in a (long) while to be able to point out something that is good. The #Trumpenik himself tweeted something very similar to Azar’s quote.

This has been one effort by the Administration to try and control drug prices by a very indirect route that, tellingly, does not include actually controlling drug prices. It does not even include allowing Medicare (the nation’s biggest drug purchaser) to negotiate drug prices with pharmaceutical manufacturers (that ban was built into the GW Bush era legislation that created the Medicare drug requirement, Medicare “Part D”). Still, it is something and something that is not insignificant. You can tell this from the reaction of the drug manufacturers, represented by PhRMA (the Pharmaceutical Research and Manufacturers of America), which said “We are concerned that the administration's rule requiring list prices in direct-to-consumer television advertising could be confusing for patients and may discourage them from seeking needed medical care." It takes some chutzpah to say such a thing; what PhRMA wants is for patients to demand these drugs (some of which cost upwards of $30,000 a year. Or, for some, a month!) from their doctors, and then the doctors to put pressure on insurers to cover them.

Yes, often the price paid by the insurance company will be much less than the list price that the new regulations will require them to put on their TV ads. But there will still be those, the poorly insured and uninsured, the most needy, who will have to go without, who, even if they are not discouraged from seeking needed medical care will find out that it is not really available to them. While PhRMA is the trade group for the most profitable industry in the US, their objection to posting list prices is mirrored by health providers, especially health systems, who argue that posting their prices from their “chargemaster” is deceptive because insurance companies often (usually) pay less. Yeah, so? Why not charge less and let them pay the charge? This is how it is in most other industries, and in healthcare in most other countries.

The pharmaceutical industry has a well-deserved reputation as an evil cabal, and it is not only the “outliers”. Yes, we have the fantastic extremes of Heather Bresch’s Mylan and its Epi-Pen®, and Martin Shkreli and colchicine, but we also have the “mainstream” pharmaceutical companies who have unconscionably raised their predatory pricing on key life-saving drugs, like insulin. NBC reports a doubling of the price of insulin from 2012-2016, and stories on people who are affected abound. In 2017, the pharmaceutical companies were accused of fixing the price of insulin. They deny it, but their actions belie that denial; in March, Eli Lilly agreed to sell a “generic” version of its Humalog® for half price and ExpressScripts, a pharmacy benefit manager (PBM, read either facilitator or middleman, but however you read it, it is “moneymaker”) said it would offer to cap insulin costs at $25/month. Interesting for a drug whose discoverers refused to patent it because they wanted it freely available to the public. (And, interestingly, insulin still does not require a prescription, although the needles and syringes do…) The NY Times recently reported that “Lawmakers in Both Parties Vow to Rein In Insulin Costs”, but we shall see.

Of course, while its reputation as evil is well-deserved, the pharmaceutical industry is not alone in making rapacious profits from our health needs. The entire “industry” is not about making people healthier, or even curing the sick, but on making money. This includes, of course, insurers, but also health providers, hospitals, health systems, nursing homes, doctors, etc. Ever try to get a price on any health care you need, besides drugs? Ever try to figure out a bill? Two stories from my own life I have written about before but will re-tell here:

Some years ago I had outpatient hernia surgery. I arrived about 6:30am and was back home in my bed by noon. Later I got the bill from the hospital for its charges (not including the doctors’): $10,000. Then my insurance company told me that I would pay $400, they would pay $1,600, and the hospital would write off the other $8,000 as a contractual adjustment.

Of course, if I had been uninsured, I would have not been billed for the $2,000 the hospital actually received, but for the whole $10,000! This is why they don’t want to list their charges. This obfuscation is motivated by insurance companies looking to show what a good deal they provide their customers (look! We saved you $8,000!). Of course, this is baloney; since the hospital was willing to settle for $2,000, that is what they should have charged, everyone.

And price lists? Time for the other story.

I live an hour from the border, and, with Medicare but no dental coverage, I go to Mexico to get my teeth cleaned. It costs $35; a lot less that in the US and is done quickly and thoroughly by a dentist. It costs everyone $35. If you have dental insurance (they take it), it costs $35. But say you need more – a filling, a crown, implants. Not only is it a lot cheaper than in the US but they can tell you exactly how much it is going to cost! A friend had several implants, and this cost thousands (but a fraction of the US cost); the point is they told her exactly what the cost would be up front. This, it turns out, is actually possible!

The article I cited at the beginning, from the Associated Press (and read by me in the Arizona Star, shout-out), quotes

‘Leigh Purvis, a pharma expert with AARP's research division, [who] said disclosure will help dispel a "cloak of darkness" around prices and encourage more informed discussions between patients and their doctors. But she cautioned against expecting too much.

‘"The overall idea of reducing drug prices is something for which there is no silver bullet," said Purvis. "This is just one step, one tool in what will have to be a very big arsenal."’]

She is right. I said it was a good step, worthy of praise, but it will not alone be enough to bring down drug prices. Or the cost of any of the health care we are regularly ripped off for. While the burden will continue, as always, to fall heaviest on those who can least afford it and have the greatest need, it is impacting everyone. Let’s start with letting Medicare negotiate drug prices. Let’s regulate insurance company profits. Let’s make everyone in the health industry post their prices.

Indeed, let’s have a universal, single-payer health system. #MedicareforAll!

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Breaking News: 

Lawsuit by 44 States Accuses Pharma Giants of 'Multi-Year Conspiracy' to Hike Drug Prices by Over 1,000%

Fake news, fake facts, and fake science: making stuff up to justify hurting people and the planet

The flood of “fake news” threatens serious damage to our society as surely as floods have recently destroyed much of the Caribbean and coastal US or fires have burned up much of Northern California. While it is President Trump (whom I call the #Trumpenik, from the Yiddish “trombenik”, a lazy person or ne'er-do-well; a boastful loudmouth) who uses the term most often, in fact it is he and his allies who create most of the falsehoods. A central and terrifying one is the denial by the President and his EPA of global warming, certainly linked to the increase in horrific storms and fires, and the counter-scientific efforts of his administration to make it worse by increasing the burning of fossil fuels and refusing efforts to contain climate change despite the fact that it is “Trump country” that is supplying much of our nation’s alternative energy. 

Key to this fake news is the use of “fake facts” to support reactionary political agendas. While these agendas are mostly about making more money for the richest people and corporations rather than the middle and working-class Americans who support them, they also exploit a bizarre antipathy toward science among a good hunk of our population. (One explanation is that science sometimes reveals facts that are incompatible with pre-existing beliefs, so we reject them. However, the Catholic Church finally got over its opposition to Galileo, so maybe there is, eventually, hope.) Indeed, these people don't oppose all scientific facts, but rather those that make them uncomfortable despite being true. This is suggested by the efforts to manufacture false “scientific” facts to buttress social agendas. A prominent example is the use of “fetal pain syndrome” to justify efforts to limit access to abortion, particularly in the second trimester. The flaw here, of course, is that the evidence for fetal pain is slim to none, certainly before the third trimester, as shown is several reviews of the literature, and discussed at length in this article in Popular Science. LiveScience.com notes that “The American College of Obstetricians and Gynecologists (ACOG) said it considers the case to be closed as to whether a fetus can feel pain at that stage [20 weeks] in development.” Of course, while the number of people who would change their positions on the availability of second-trimester abortion if they believed that the fetus experienced pain during the procedure would be small to minimal, it provides a convenient, if false, cover for efforts to restrict access, including a House bill that passed just this month in Congress.

This use of fake facts and junk science has recently been expanded beyond restricting abortion to efforts to limit access to contraception for women. Let’s get this completely straight: access to contraception has been a terrific thing. It has given women – and men – much greater control of their reproduction, dramatically reduced the incidence of unintentional pregnancy (although this still remains far too high), and, duh!, even reduced the incidence of abortion. While the decision to use contraception should and does remain up to the individuals involved, it needs to be easily available to them. Thus access is critical. For many – including but not limited to teens – access is, instead, very limited, and there are ongoing efforts in Congress and in many states to further restrict it. Particularly onerous and vile is the effort of the Trump administration to roll back the ACA’s mandate for insurers to cover birth control, pandering to the religious right.

A terrific piece by Aaron Carroll on October 10, 2017 in the NY Times, “Doubtful science behind arguments to restrict birth control access”, details and refutes the bogus claims made by those who want, bizarrely, to do so. These include the idea that access to contraception has not reduced unintended pregnancy (it absolutely and most assuredly has, and greater availability would further reduce it). The Trump (and at the time, Tom Price-led) Department of Health and Human Services used cherry-picked and archaic data to support its tortured argument. Carroll notes that “In 2011, the unintended pregnancy rate hit a 30-year low. And the teenage pregnancy rate and teenage birthrate right now are at record lows in the United States. This is largely explained by the use of reliable and highly effective contraception.”

HHS also argues that there are health risks, especially from hormonal contraceptives. There are, of course, but there are health risks and side effects from any drug treatment, and the risk of harm from the treatment has to be weighed against the probability of benefit. Ironically, in the care of hormonal contraception, the most significant side effects (both symptoms and even blood clots) are similar to (if generally less severe than) those from the condition contraception is designed to prevent – pregnancy. That is, not using contraception because of concern about these side effects and then getting pregnant increases the risk of these adverse events!

The bugbear for religious conservatives in this debate is their fear that contraceptive availability will increase people – especially teens -- having sex, but for the rest of us the concern is how this would impact the unintended pregnancy rate. Carroll cites a “2016 study in The New England Journal of Medicine showed that the unintended pregnancy rate among women who earn less than the federal poverty line was two to three times the national average in 2011. An earlier study showed that in the years before, that rate was up to five times higher.” From a cost point of view, the study’s author, Jeffrey Peipert, notes that “Every dollar of public funding invested in family planning saves taxpayers at least $3.74 in pregnancy-related costs.” For women (and their partners), especially those who are low-income or teens, the direct cost for contraception is sometimes prohibitive, especially for the most effect type of contraception, long-acting reversible contraception (LARC), IUDs and hormonal implants, that have a high one-time up-front cost. It is the programs to make these more affordable and available are exactly the ones being targeted for major cuts. And, in the “adding insult to injury” department, the justification for cutting some programs is sometimes the existence of other programs, which are also being targeted for cuts!

The use of junk science, sadly but unsurprisingly, is not limited to contraception, abortion and even climate change. In a Viewpoint piece published in JAMA, October 10, 2017, “Flawed theories to explain child physical abuse”, John Leventhal documents a new trend in legal cases of child abuse. Defense attorneys bring in “medical experts” who testify that something else could have caused the child’s injuries. These include real diseases that could cause the findings but are both uncommon and can be ruled out with proper workup, real diseases that are very uncommon and unlikely to cause the findings, and essentially made-up conditions to explain the findings. Since child abuse is generally not a controversial area (nobody claims to be in favor of it!) the reasons for this seem to be mainly personal gain – such “experts” make big money for this testimony. There are not that many real experts in child trauma willing to offer absurd pseud-explanations for the injury, so there will be fewer of you willing to testify in defense of the perpetrators, so you again stand to make a lot more money.

In any case, the use of fake or fraudulent science and fake facts to support political agendas is one of the many bad things growing in the fertile “don’t try to tell me the facts” environment in Trumpian politics. The administration is now allied with “traditional” Republicans to facilitate rape of the planet in pursuit of gains for the wealthiest, and with “populists” in pursuit of social repression. There is some irony in that these advocates for “freedom” (e.g., from gun control) are so intent on denying it to others (e.g., gays, women, poor people, children), but apparently this is a long-standing US tradition (see: slavery), which inspired Abraham Lincoln’s famous quote “Those who deny freedom to others deserve it not for themselves,” There is also irony in the pursuit of the cloak of (fake) scientific facts to facilitate an anti-scientific agenda.

But the irony is not nearly sufficient satisfaction to mitigate the terror.  

Gaming the system: Integration of healthcare services can just raise costs, not quality

My last blog post addressed the promises, and challenges, posed by the creation of integrated health care plans (or their new incarnation,Accountable Care Organizations, or ACOs, as defined by the Affordable Care Act, ACA), I summarized some of the good and the bad aspects of health care integration. The good often relate to the efficiency that can arise from a single organization which, in theory, can result in financial savings to both individuals and the health “system” as a whole. Unfortunately, this does not always happen, as demonstrated in the article “A hospital war reflects a bind for US doctors”, New York Times, December 1, 2012 (Nov 30 “online”; while in the “Business Pages” online, it is front page, even continued in the first section, in the print edition).

The article, by Julie Creswell and Reed Abelson, begins by focusing on the “picturesque” city of Boise, ID, where the two hospital systems in town have been buying up physician practices in order to more effectively “compete” with each other. St. Luke’s Health System, the larger, has been doing much more of the buying, so much so that the other, St. Alphonsus Regional Medical Center, is suing to prevent them “…from buying another physician practice group, arguing that the hospital’s dominance in the market was enabling it to drive up prices and to demand exclusive or preferential agreements with insurers.” Yes, driving up prices. They noted that the charge for colonoscopy has quadrupled and the charge for laboratory services is much higher. 

The CEO of St. Luke’s argues that not all prices have gone up, and, anyway, the ones that did were “underpriced” previously. This, of course, is hard to demonstrate in an industry where pricing is largely a fiction, where there are no “posted” prices and the charge to different payers varies enormously.  It is not like buying a car, where the dealer pays a certain amount to the manufacturer and you, as a customer, try to get them to charge you as close to what they paid as possible. Nor is it like buying a video game online as described in another Times article (“Retail frenzy: prices on the web change hourly”) in which you can find out if, for example, Target will respond to Amazon’s price cut by dropping its price even lower.

In health care, the “cost” to a provider (hospital or health system) includes both the “marginal cost” (what it actually costs to run that one more lab test or do that one more colonoscopy) and some percentage of their “fixed cost” for running the entire operation. Thus, ironically, by integrating and consolidating into a larger organization with a larger fixed cost, that overhead built into the price increases. The single lab test done by the health system lab has to pay part of the cost of that new MRI scanner and the technician that runs it and the super new invasive radiologist, while the price charged by the independent laboratory does not. Of course, the overall actual cost, in total, to all organizations may be going down, but the amount that the patient or their insurer pays for a low-cost test goes up!

This, as should be obvious, is not an issue limited to Boise. The Federal Trade Commission (FTC) has also gotten involved in investigations of pricing at St. Luke’s and other hospitals and health systems. The Times article quotes Jeffrey Perry, an assistant director in the FTC’s Bureau of Competition: “We’re seeing a lot more consolidation than we did 10 years ago….Historically, what we’ve seen with the consolidation in the health care industry is that prices go up, but quality does not improve.” Higher prices and the same (or lower) quality. Not exactly what we want to hear.

“Hospitals,” says Steve Messinger, president of ECG Management Consultants, an organization the Times indicated advises on physician acquisitions, “are constructing compensation in ways that are based on productivity and performance.”  Sadly, the “performance” piece only sometimes is tied to either quality of care for the patient or cost-effectiveness for the payer, but much more often to “productivity”, and particularly in how it increases revenues for the hospital. One of the ways that this can happen is by “churning” patient – increasing the number of admissions, for which hospitals get paid, but not keeping them too long because (since hospitals are paid by Medicare, at least, a fixed amount for a given diagnosis, based on a system called “DRGs”) shorter stays cost less and thus make the hospital more money. On the front end, the Office of the Inspector General of the Department of Health and Human Services is investigating whether hospitals are tying reimbursement of emergency physicians to how many patients they see per hour and the increasing the percent of ER patients who are admitted. Regarding “productivity”, one hospital noted that patients expect to be seen in a timely manner; of course, patients also expect to get appropriate and thorough care once seen, which can be inhibited by having to increase throughput. On the back end, there are several lawsuits from physicians charging that they receive bonuses if their patients are out of the hospital in less than 3 days. Now, no one wants to be in the hospital longer than necessary, and in fee-for-service payment structures there is financial incentive for doctors to keep their patients in longer as they can bill for each day, but no one wants to be rushed out of the hospital before they are well enough in order to meet a certain target length of admission.

Many of the worst “abuses” come from for-profit hospital or health care companies, such as some of those mentioned in the Times article. This is obvious; their incentive is to make money for shareholders, not to provide quality care except to the extent that it is necessary to make profits, and given the arcane nature of health care reimbursement, the association is not all that strong. Integrated health systems that have done a better job of decreasing costs and increasing quality, such as Kaiser, are usually not-for-profit. However, not-for-profit status is not a guarantee; especially when such hospitals have to compete with for-profits, they end up playing by the same rules. In addition, the Boards of Directors of non-profits are still looking at the bottom line, and are certainly not interested in losing money.

The key problem is the patchwork of rules and reimbursement systems that govern healthcare, and the opportunity for healthcare providers (hospitals, health systems, and even doctors – although they are, as the article points out, increasingly employees of those hospitals) to “game” the system, to find the holes, legal (or sometimes not) that permit them to make the most money. More admissions? Fewer readmissions? Shorter stays? More procedures? Higher prices for colonoscopies and lab tests? Whatever works for the bottom line, not for the highest quality of care of individual patients or communities.

This is nonsense. The goal should be to provide excellent health care, that which is needed by the patient and not more, at a reasonable price – and a price that can be identified. Our current payment system discourages that, and this is not right. The big, arguably necessary, step to a solution, is a single-payer (or highly regulated multi-payer) health system that provides hospitals with global budgets, not reimbursing per service item, while holding them responsible for providing quality health care to the patients in a particular community. Similarly, global (capitation) payments to physicians can permit them to rationally assign their time, staff, and resources to meeting patient needs in the most appropriate and effective manner. If a telephone call is all that is needed, why should someone take off a half-day of work to come in? Well, because that’s the only way doctors get paid, the current answer, goes away. If these global payments are combined into an integrated health system, perhaps we can have more results like Kaiser’s.

This would not solve all problems but it is the necessary if not sufficient starting point. And certainly, the profit driver is a major negative toward enhancing quality and limiting cost in healthcare.

Just thought I'd add this picture: