Medicare and Medicaid at 50: Time to include “US” all

On Thursday, July 30, Medicare and Medicaid turned 50 years old. The anniversary was marked by an event held at the Truman Library in Independence, MO, which I attended. Why there? In 1965, President Lyndon Johnson signed those bills (officially Titles XVIII and XIX of the Social Security Act) there, in the presence of former President Truman and his wife Bess, who received cards #1 and #2. The location was chosen for its symbolism even in 1965, because Truman had fought for a national health insurance system and lost. Nearly 20 years later, Johnson honored his legacy by signing these two major bills (also opposed by the AMA) in his library. Both presidents thought that this was a down-payment on the national health insurance system that was sure to come soon. But it took another 45 years to pass the Affordable Care Act (ACA), and we still don’t have universal health insurance, and ACA and even Medicare are under constant attack. At least now it is not the AMA that is the active opposition.

This event was not the first held at the Truman Library to remember that day. Seven years ago, a group of single-payer activists organized a 43^rd anniversary celebration there, both to commemorate the signing and to call for a universal health insurance system. That event was less “official” but more passionate, with talks by both local KC Congressman Emanuel Cleaver II and Rep. John Conyers of Michigan. Rep. Conyers’ first year in Congress was 1965, the year Medicare and Medicaid passed, and all those years later he was still vital and still in Congress and was the sponsor of HR 676, the national single payer bill. This year’s event had more of the feel of an administration press conference with several federal and Missouri bureaucrats speaking. Some of talks, including those by Truman’s grandson Clifton Truman Daniel and former Missouri state rep and insurance commissioner Scott Lakin, were good, but only one had any real passion. That was given by Bridget McCandless, MD, the CEO of the Health Care Foundation of Greater Kansas City (HCFGKC), which sponsored the event.

There is a reason for that. Before taking the reins of HCF, a “conversion” foundation established with the money that came from the sale of a group of not-for-profit hospitals to for-profit HCA, Dr. McCandless, a self-described “Independence girl”, was the medical director of the Jackson County Free Health Clinic in Independence, caring for the many people in that area who could not otherwise access excellent health service. She cared for people who had little, whose lives, in Dr. Camara Jones’ metaphor (most recently discussed in Racism and the Social Determinants of Equity: Camara Jones at Beyond Flexner 2015, April 19, 2015), were lived on the edge of the cliff before they even got sick. Dr. McCandless’ clinic provided a safety net that prevented many people from falling to the ground below. The “lucky” ones were those who were old enough (or disabled enough) to qualify for Medicare, and poor-plus-something enough to qualify for Medicaid. For those people, these federal programs, which now cover about 30% of Americans were indeed life savers.

Dr. McCandless, whose foundation is committed to funding programs that help the underserved and uninsured (the exceptional founding CEO, Steve Roling, was in the audience), talked, as did other speakers, about the difference that Medicare had made in the lives of seniors; before it they (and their families) lived their retirement years in financial fear of sickness. But her passion really showed when talking about Medicaid, originally seen as a means of providing access to health care for the poor. You certainly have to be poor to receive Medicaid, very poor in many states including Missouri, but that is not sufficient. She told us that you have to be “poor and”. Poor and pregnant, poor and the mother of small children, poor and disabled, poor and in a nursing home, poor and – and the tears rolled down her cheeks – a child. ACA was intended to expand this federal-state collaboration to encompass all the “just” poor (with the exception of those who are undocumented), but Missouri, and Kansas, the other state in the Kansas City metropolitan area, are among the states that have not done so.  Dr. McCandless eloquently expressed her hope that our states would rise to the need, that our legislators and leaders would rise to the decency, to remove the “and” by expanding Medicaid.

While it is possible that Missouri, and Kansas, and the other states that have taken advantage of the 2012 Supreme Court decision (National Federation of Independent Business v. Sebelius), that otherwise upheld the ACA, to not expand Medicaid will still do so, it is unconscionable that they have not yet, that they have left so many people who could now be accessing health care uncovered. It is a land-office business for the safety net clinics in the area, like Dr. McCandless’ former practice, but it is a volume that they can barely care for. When people get very sick, and show up in the Emergency Department and get admitted to the hospital, those hospitals bear the brunt of care without payment, but even their usually powerful lobbies have so far not been successful.

The opposition to this expansion, the opposition to ACA, and even threats to Medicare are often said to be politically driven, but they are ideologically driven. They are driven by the agendas of billionaire elitists, most of whom have never known any hardship. They have been able to further expand their already-considerable influence as a result of the Supreme Court’s Citizens United decision, and blithely fund the election of their minions to state houses and legislatures.  The New York Times on Aug 2, 2015 documents that fewer than 400 families have contributed the almost half the money in this election cycle. Former Oklahoma football coach Barry Switzer once said that many of the privileged were “born on third base and think they’ve hit a triple” (although most of these billionaires were actually born within arm’s length of home plate!). Indeed, they have no empathy; they are selfish and mean. Their minions, who enjoy the power their sponsors’ money provides for them, must be (if they are not truly stupid) also mean, but actually are not fiscally prudent; not funding health care for our people costs us a lot. Medicare already covers our most costly ill (they are old; this is why raising the age for Medicare eligibility to 67 or 68 will save little money). It is way past time for it to cover the rest of us.

Rep Jim McDermott of Washington, a physician and long-time single-payer advocate, has introduced the American Health Security Act of 2015, which will authorize and provide federal funds to support single-payer programs developed by states. It should be passed, but it probably won’t be while we have a Congress bought and paid for by the rich mean selfish people. We have had single-payer bills in Congress before, Rep. Conyers’ and before that Rep. Ron Dellums’. It is time to pass them. We need to go beyond the ACA, we need to make sure states expand Medicaid and take the “and” out of the “poor and” for eligibility. But we need to go farther.

For 50 years Medicare has been literally a life-saver for our seniors. Now we need to expand it to include everyone. Everybody in, nobody out!

Outing the RUC: Medicare reimbursement and Primary Care

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Along with many others, I have written extensively about the need for more primary care physicians in the US. I have also addressed the various disincentives that exist for medical students to enter primary care specialties, such as family medicine, rather than narrower subspecialties or procedural specialties. One of these is the lower income earned by doctors in primary care; this is felt by many to be one of the major issues in specialty selection, and is increasing in importance as students graduate from medical school with larger and larger debt burdens, often exceeding $200,000. A study by the Robert Graham Center of the American Academy of Family Physicians (AAFP), “Income disparities shape medical student choice”, finds that the difference in income between primary care on subspecialists has been increasing since 1981, and that by now there is a difference of $3.5 million in the lifetime income of the average subspecialist (not even the most highly paid) and the average primary care physician.


So why is there such great variation in the reimbursement of different specialists? It is not on hours worked; many studies have taken this into account and found that on an hourly basis there is a great variation. The Wall St. Journal’s Anna Wilde Matthews and Tom McGinty, in “Physician panel prescribes the fees paid by Medicare”, describe a study done for the Medicare Payment Advisory Commission, MedPAC, that found a wide-range in per-hour reimbursement, from $101 for primary care physicians to $161 for surgeons to $193 for radiologists and $214 for dermatologists. It is not on the basis of length of training; all physicians go to medical school and the training, for example, for surgeons is considerably longer than that for dermatologists. Is it how hard the work is? After all, not everything is brain surgery. Well, to an extent, but there is considerable latitude in how “hard” is valued. What about “necessary to the health of a person” or “necessary to the health of the population”? Hardly. Let’s discuss this some more.


First, it is important to understand that the reimbursement paid to physicians by Medicare is essentially the basis for payment from all payers; contracts and reimbursements are almost always based upon multiples of what Medicare pays. Depending upon the size of the physician group negotiating with an insurance company, the particular multiplier may be greater or smaller, but Medicare reimbursement is the yardstick. Medicare payment itself is based on a formula that is primarily based upon the work that a certain activity involves, with several smaller modifications (regional variation, malpractice cost, etc.). This formula is described by health economist Uwe Reinhardt in his December 10, 2010 Economix blog for the NY Times, “The little-known decision makers for Medicare physicians fees”. Based on complex (or not) scenarios constructed for this purpose, the amount of “work” involved in over 7,000 “procedures” (for this purpose, “procedure” includes things like office visits of varying length and complexity) are assigned relative value; indeed they are assigned “relative value units” (RVUs).


But over time things change. A surgical procedure that might have taken a long time and required a hospital stay may now be done quickly in an outpatient setting. Counseling and managing several complex diseases in a primary care setting may take a lot more work and time. So the relative values may change, and reimbursement could go up or down for any of these “procedures”.


Except that, in order to keep Medicare spending from spiraling even more out of control than it has, the total number of RVUs has to stay constant. So when the number of RVUs (specifically, work-RVUs, or wRVUs) for one procedure goes up, those for others have to go down. Enter the RUC.


Several recent articles, included the Matthews and McGinty and the Reinhardt pieces cited above, have addressed the role played American Medical Association’s (AMA) Relative Value Scale Update Committee, or RUC, an organization most physicians, not to mention most other Americans, have never heard of. This group of appointed doctors makes recommendations to the Center for Medicare and Medicaid Services (CMS) about the relative amount that Medicare should pay for different physician activities. While not required to do so, CMS takes the recommendations of the RUC more than 95% of the time. While about half the services provided by physicians are in primary care, primary care doctors, according to an article in the New England Journal of Medicine by Washington state Congressman and physician Jim McDermott, “Harnessing our opportunity to make primary care sustainable”, only 6% to 13% of the 29 physicians on the RUC are in primary care. While they are supposed to be unbiased toward their own specialties, this does not seem to be what happens. Psychologically, even when they are trying to be fair, they know more about what they do and how “hard” it is than they do about what others do. Concretely, it may be easier to measure the work involved in “1 colonoscopy” or “1 gall bladder surgery” or “reading one chest x-ray” than the complex variation in primary care visits. In any case, the record demonstrates that RVU assignment, and thus reimbursement, has continued to go up for specialist procedures and thus down for primary care.


So we have a bunch of physicians, appointed essentially by their specialty societies, making recommendations on how much physicians should get paid, and a bunch of specialists deciding how to value what they do compared to what others do (certainly a conflict of interest, as defined by Howard Brody and discussed by me in The AAFP, Coca-Cola, and Ethics: Serving the public interest?, August 20, 2010), and a tremendous dominance of non-primary care over primary care physicians among this group. Why should we be surprised that we get the results that we get?


More important, for the health of the American people, the decisions made about reimbursement drive what procedures are done and what activities physicians pursue. Since reimbursement is based on “work”, not “benefit” – to the individual or certainly to the population – we get the bizarre mix of health care services that we have. Writing in Kaiser Health News, Brian Klepper and David C. Kibbe, in an article titled “Quit the RUC”, note this:


“But there is a more insidious and destructive issue at hand. The perverse incentives that are embedded in fee-for-service physician payments influence care decisions and are a principal driver of the health system's immense excesses. Encouraged by the RUC, sometimes unnecessary specialty procedures may appear more valuable and appropriate than primary care services. The system pays more for invasive approaches, so conservative treatment choices that are lower cost and lower risk to the patient may be passed over, especially near the end of life. The resulting waste, half or more of all health care dollars, has fueled a cost explosion that has led the industry and the larger economy to the brink of instability.”



Different solutions have been proposed. Klepper and Kibbe suggest that the primary care professional groups drop out of participation in the RUC altogether (“Quit the RUC”). Reinhardt feels that there is value in getting advice from this independent group, but that CMS should be much more cautious about taking its recommendations. McDermott agrees, or suggests that at least the number of RUC members be adjusted or increased to include a much larger percentage of primary care physicians.

One or more of these solutions needs to occur. Most importantly, the solution needs to look at overall benefit when assigning reimbursement value. I considered titling this piece “Wreck the RUC” (alliterative and less offensive than the other obvious, rhyming, option). If we are interested in improving the health of the American people, we need more primary care doctors, and we need to address all the open and hidden factors that are in place to work against such change. The RUC is a good place to start.
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