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!

Not enough primary physicians OR Nurse Practitioners: It's the money, stupid!

“Like doctors, more nurse practitioners are heading into specialty care”, a recent article in the Washington Post (June 17, 2024) by Michelle Andrews, a contributing writer for KFF News, and McKenzie Beard, makes the point that

Nurse practitioners have long been a reliable backstop for the primary-care-physician shortfall, which is estimated at nearly 21,000 doctors this year and projected to get worse. But easy access to NPs could be tested in coming years. Even though nearly 90 percent of nurse practitioners are certified to work in primary care, only about a third choose the field, according to a recent study.

That study, called ‘No One Can See You Now: Five Reasons Why Access to Primary Care Is Getting Worse (and What Needs to Change)’ was published by the Millbank Memorial Fund, and goes on at length to explain those reasons, and what needs to change.

Spoiler Alert: Like physicians, primary care nurse practitioners make less money, often for more work, and far less restricted scope of practice. Or, borrowing from an old political mantra, “It’s the money, stupid!” Or, as the WaPo article quotes Candice Chen, an associate professor of health policy and management at George Washington University, “We get what we pay for.”

It is, of course, more than just the raw amount of money. It is also how much NPs – and physicians – are paid for the amount of work that they do. This work is undervalued for primary care, based upon the notion that, somehow, being expert in a narrow specialty and knowing a lot about a little, is worth more than having a broad knowledge and being able to help a lot of people, most people, a great deal. Thus, subspecialists dramatically limit their practices to what they feel most expert at and expect the primary care clinician to do everything else. This often includes preparing people for a procedure and following them up after, which are both completely the responsibility of the person doing the procedure. Subspecialists particularly like to send paperwork back to primary care. “Your primary care doctor (or NP) will have to take care of this.” Implication: ‘Unlike primary care clinicians, I do important things.’

I would argue that managing people’s health is doing important things. Which is what the primary care clinician (family physician, general internist, general pediatrician, or the NPs that work in these fields) does. Managing the actual person, you, not just one of your diseases, or one aspect of one of your diseases; being knowledgeable about you, your life, and the interactions of all your conditions and the impact that they have on the rest of your life.

How might this manifest? Let’s say you have knee pain. You go to your family physician, who examines it, and decides that you need an x-ray. They review the x-ray and the report, and decide that you might benefit from seeing an orthopedist. They fill out the referral. Then, after the consultation and recommendation from the orthopedist, they review it, and decide how to implement the treatment. That is a lot of work. The orthopedist was done in a few minutes. Guess who gets paid, altogether, more?

Like the physicians that employ them, NPs are often very expert in their limited area (say, heart failure management), but often do not know how to manage that problem in the context of a person whose other diseases or medications may complicate that. This is where the (underpaid) primary care clinician, physician or NP, has to come in. It is a lot of responsibility, a lot of work, and often a lot of extra hours. One NP profiled in the WaPo article is taking training to become a dermatological NP. This is one of the medical fields with the highest pay/work ratios. Most of its work is not emergent and can conveniently be scheduled during the day during the week, and is less likely than many other specialties’ work to interfere with treatment for other conditions. And it is very highly reimbursed.

Should people be paid based upon the amount and difficulty of their work? If we did, people doing the most difficult work that everyone agrees needs to be done but that most people do not want to do (e.g., picking up the garbage, doing farm work in the hot sun) would be paid more than those who get fancy offices and lots of perks and boss folks around (e.g., CEOs). But difficult can have other definitions; this is really a separate discussion. In health care, for physicians (and now NPs) it should be how they contribute to the system. Currently the usual measure is money, that is, how much a given practitioner brings into the practice, or more commonly now, to their employer (often a health system), which is based on how much payors (insurers) pay for different things. That amount is not God-given, but a matter of policies that could be changed. Two mechanisms through which the amount of reimbursement is set are the RUC and the facility fee. The RUC is a group of non-governmental physicians appointed by the AMA that makes recommendations on how Medicare money should be divided up between specialists – like “one gallbladder removal is worth 6 complete examinations”, or whatever. Medicare is not required to accept their recommendations, but they usually do. And – surprise – the RUC is mostly made up of subspecialists, not primary care clinicians!

The facility fee is an amount that Medicare (and other insurers, see below) tack on to the physician fee if the practice is owned by a health system rather than a physician, and is often several times the fee for the procedure. To be clear, this means that if I receive a procedure today from a physician in their office and you get the same procedure in the same office by the same physician next week, but in the interim that practice has been acquired by a health system, the charge will be MUCH more. Medicare or your insurance may pay it, or most of it, but your co-pay will be much higher, and all of our premiums go up. This practice is hardly ever made apparent or explained in advance to patients (“Hi, thanks for calling. Just to let you know, Dr. Smith’s practice was just acquired by the MuchProfit Health System, so you will be charged three times as much for your procedure as you would have been last week.”) This is so insidious (not to say evil, but it is evil) that even doctors are often surprised, as revealed in the essay by Dr. Danielle Ofri in the New York Times (June 17, 2024) ‘Even Doctors Like Me Are Falling Into This Medical Bill Trap’ and the follow-up letters and comments from other physicians.

The fact that facility fees and the RUC are about Medicare does not mean that they do not affect the fees, cost, and reimbursement from other insurers. Almost all insurers payment rates are set as multiples of Medicare. That is, if Medicare pays $100 for something, they may pay $150 or $200 (and, more recently, those multiples are lower, with patient responsibility higher). Changing these two factors, facility fees and RUC allocations, for Medicare will affect all insurers and make a real difference in income (which is why most subspecialists and hospitals oppose them).

Should primary care clinicians be paid more, or subspecialists less, or somewhere in between? Whichever, by decreasing the difference more clinicians are likely to enter primary care specialties. And, whichever, the raking off of facility fees to increase the wealth of hospitals, not to mention the pocketing of huge profits by insurers, has to stop.

Primary Care, Private Equity, and Profit: How to ensure poor quality care for the American people

 I -- and many others -- have written (frequently and recently) about the abuses of for-profit companies, and especially private equity companies, and “non-profits” that act like for-profits in health care (Private equity, private profit, Medicare and your health: They are incompatible, May 11, 2023; Privatizing Medicare through "Medicare Advantage" and REACH: The Wrong Way to Go!, Jan 20, 2023; "Private Equity": Profiteers in nursing homes, Medicare Advantage, DCEs, and all of healthcare, Sept 16, 2022). But despite our efforts, it doesn’t get any better. Indeed it gets worse.

Drs. David Himmelstein, Steffie Woolhandler, Adam Gaffney, Don McCanne, and John Geyman, have been leaders in the campaign for a national health insurance plan (e.g., Medicare for All), published an article 18 months ago in ‘The Nation’ (March 31, 2022) titled ‘Medicare for All is Not Enough’. They go through the ways in which the ownership of our health system has changed, particularly over the last decade, to focus on profit for the private owners rather than “health care”. That is to say, while a single-payer Medicare for All program would be a great thing and would limit the negative impact that for-profit insurance companies wreak on our collective health – which is considerable – as long as for-profit companies continue to own, and to increase their share of, our actual health delivery systems (hospitals, nursing homes, pharmacies, and physician practices) there will be terrible consequences, with those single-payer dollars flooding into investors’ pockets rather than patient care.

Insurance companies like United Health and giant pharmacy firms like CVS own large portions of our practice and health delivery sector. And the role of private equity companies and investors, with their “buy ‘em and burn ‘em” approach to acquisition and profit, in taking over our delivery system is at least as terrifying. As the authors state:

At least UnitedHealth and CVS plan to stay in business for the foreseeable future, and may be constrained by the worry that substandard care will damage their reputation. Private equity companies face no such constraints. They promise investors quick profits, and often sell off the businesses they’ve bought within five years, often after stripping their assets and loading them with debts that hobble future operations.

On top of who will own our care provision, there also is the issue of who will provide the care. Most developed countries, with more rational health delivery systems, rely on primary care physicians and other clinicians far more than the US does. In those other countries primary care is at least 30-40% of the physician workforce, while here it is closer to 20% and dropping, an issue I have written about often (see, for example, What is the problem with Primary Care? The US health system!, March 22, 2022).  Primary care clinicians – family physicians, pediatricians, and general internists, and the NPs and PAs who work with them – can provide not only cost-effective care but care that is comprehensive, continuous, and reassuring to people and families because they know the person who is providing it and have a relationship with them. And the cost-effectiveness is not (only) about the fact that they earn less money (see below) but because they are in a position, as a result of taking care of the “whole person” and having a long term relationship, to more wisely utilize resources when necessary. Nonetheless, there is a definite shortage of primary care clinicians, as anyone who has tried to find one recently, because they moved, or their physicians retired or had their practice bought out by a large company like Optum (a subsidiary of United Health Care, which has become UHC’s major profit center as documented by former insurance executive Wendell Potter in his “Health Care Un-covered” substack) or, sometimes in response, went into a “concierge” or “boutique” practice, can testify. Elisabeth Rosenthal, editor of Kaiser Health News, documents this in a recent piece in the Washington Post, “The Shrinking Number of Primary Care Physicians is Reaching a Tipping Point”. She notes that “fewer medical students are choosing a field that once attracted some of the best and brightest because of its diagnostic challenges and the emotional gratification of deep relationships with patients.” And she makes the important point that

One explanation for the disappearing primary-care doctor is financial. The payment structure in the U.S. health system has long rewarded surgeries and procedures while shortchanging the diagnostic, prescriptive and preventive work that is the province of primary care.

Don’t forget that one. Rosenthal discusses the terrible experience of colleague Bob Morrow, MD, who, under financial pressure, finally had to sell his decades-old practice, and then, watching how the new owner ran it (suffice it to say, not in the best interests of the patients), leave medicine. Morrow is not a depressed person, but reading about what has happened to him and thousand of other primary care doctors is enough to make you depressed.

In a data-driven “Report Card” on primary care in the US, the Milbank Memorial Fund ranks it poorly on all front, although not on the quality of the physicians:

This first national primary care scorecard finds a chronic lack of adequate support for the implementation of high-quality primary care in the United States across all measures, although performance varies across states. The scorecard finds:

1.      Financing: The United States is systemically underinvesting in primary care.

2.      Workforce: The primary care physician workforce is shrinking and gaps in access to care appear to be growing.

3.      Access: The percentage of adults reporting they do not have a usual source of care is increasing.

4.      Training: Too few physicians are being trained in community settings, where most primary care takes place.

5.      Research: There is almost no federal funding available for primary care research.

The  report card, created for Milbank by the Robert Graham Center (the policy arm of the American Academy of Family Physicians, AAFP), not only identifies these deficits, but also the importance of solving them for the health of the American people. 100,000,000 people without a primary care doctor, only able to see a physician (if they can see any physician) who has a narrowly focused, disease-based practice is a real problem. We need those specialists for when we are diagnosed with a particular condition that requires their expertise, but they are often not knowledgeable about conditions outside it. Moreover, the primary care clinician does not only care for many conditions; much more important is that they care for the person who has those conditions.

The report also endorses the conclusions from the National Academy of Science, Engineering, and Medicine (NASEM) from 2021, recommending that the US:

1. Pay for primary care teams to care for people, not doctors to deliver services.
2. Ensure that high-quality primary care is available to every individual and family in every community.
3. Train primary care teams where people live and work.
4. Design information technology that serves the patient, family, and interprofessional care team.
5. Ensure that high-quality primary care is implemented in the United States.

Finally, for the moment, an effort is actually being made in Congress to try to increase the number of primary care clinicians.  In an uncommon bipartisan effort, the bill is cosponsored by Bernie Sanders (I, VT), chair of the Senate HELP Committee and Roger Marshall, MD, an OB/GYN and conservative Republican from Kansas, as reported by Jake Johnson in Common Dreams, Sept 14, 2023. It’s a good thing to have bipartisan support, but it is, sadly, unlikely to have a major effect on increasing the primary care physician supply. Funding in the bill – about $6 billion -- goes mainly to Community Health Centers (CHCs), especially Federally-Qualified Health Centers (FQHCs). These centers can be, and usually are, good. They provide care to lower-income people and communities where access to other clinicians is difficult. Republicans like them because they are not actually “government” programs, but responsible only to their boards of directors. But, while they often rely heavily on primary care, and expanding them will increase the number of jobs for primary care clinicians, it does nothing to increase the supply of those clinicians, to convince medical students to enter family medicine, pediatrics, and general internal medicine instead of much higher-paying subspecialties.

I mention money, the Milbank report mentions money. It is a lot about money. It is increasingly difficult to convince students to enter fields where their income is likely to be a fraction of that of subspecialists (even if much better than that of most Americans), especially in the context of huge educational debt (frequently over $250K), and the lack of respect given by the medical profession and often the society at large to primary care. And, not at all to be minimized, the takeover of so many practices by for-profit corporations and private equity, with situations like Dr. Morrow’s becoming the norm rather than the exception. Some subspecialties make 2-3 or more times that of primary care doctors, which makes it increasingly difficult for students to decide to enter primary care. And while some of these subspecialties have grueling work hours (e.g., general surgery) others have much more circumscribed work hours, often shift work and little call.

There IS certainly something the federal government could do. The Center for Medicare and Medicaid Services (CMS) sets the relative reimbursement for physician services (office visits, procedures, etc.) and virtually all private insurance companies reimburse based on multiples of the Medicare rate (traditionally more, but now often less). So all CMS has to do is to revise its fee schedule, increasing the relative value of primary care visits relative to procedures. Of course, there will be great opposition from other specialists; indeed the “RUC”, a non-government committee that advises CMS on this ratio is completely dominated by subspecialists (Changes in the RUC: None.. How come we let a bunch of self-interested doctors decide what they get paid?, July 21, 2013). CMS is not required to follow the recommendations of the RUC although it usually does; CMS could ignore or adjust what the RUC recommends, or reconstitute the membership of the RUC to have more primary care doctors. Primary care physicians do not need to make as much as the highest-paid subspecialists (indeed neither do those subspecialists!) but the difference needs to be decreased. Studies have indicated that if primary care doctors earned 70% of what subspecialists do, income would no longer be a significant factor in specialty choice.

Addressing this income gap is critical for increasing the number of primary care clinicians. Then there is a lot else to do, like getting for-profit corporations and private equity out of healthcare altogether.

 

For a “humorous” depiction of the takeover of primary care by for-profit companies like Optum, check out this short piece by the brilliant Dr. Glaucomflecken: https://twitter.com/i/status/1706339952857149895

Doctors' incomes and patient coverage: both need to be more equal

On Sunday, January 18, 2014, the New York Times ran another stellar front-page piece by Elisabeth Rosenthal addressing the fact that, as the title states clearly, Patients’ Costs Skyrocket; Specialists’ Incomes Soar. It continues, with detailed documentation, her explanation of how providers – in this case doctors, and in particular the most highly paid subspecialists -- game the system of insurance reimbursement to maximize their income, and how patients pay the price. She focuses particularly on dermatologists, whose combination of high income and low workload makes them the exemplar of what medical students call the “ROAD”, the specialties of radiology, ophthalmology, anesthesiology, and dermatology, all of which are known for having high income/work-hours ratios.

Rosenthal addresses in particular a kind of dermatologic surgery called Mohs surgery, which commands a high price. Mohs surgery is very good for its ability to identify margins of a skin cancer and leave less of a scar, but it can be, and often is, overused at high cost. She cites a particular case of a woman who had a small basal cell cancer (the kind that almost never metastasizes and is often simply excised) removed from over her cheekbone and had a bill of over $25,000. “Her bills included $1,833 for the Mohs surgery, $14,407 for the plastic surgeon, $1,000 for the anesthesiologist, and $8,774 for the hospital charges.” The plastic surgeon, by the way, was called in – along with the anesthesiologist – to close the small lesion from the excision that the dermatologist was unwilling to do.

The cases that Rosenthal documents are typical enough that they cannot be  called “abuses” because they are the norm; it is, of course, the entire system that is the abuse. It would be absurd if it were not so real, if it didn’t skew the entire health care system away from primary care and toward specialties where enormous incomes are made by billing – and collecting – for each single activity. Rosenthal describes the RUC, the AMA-convened body that makes “recommendations” to Medicare about the relative value (and thus payment) for procedures, as well as for other forms of patient care -- such as listening to you, examining you, thinking about your problem, making a diagnosis, and recommending treatment -- which are well undervalued compared to procedures. I discussed the RUC, and what I consider its outrageous behavior, in Changes in the RUC: None.. How come we let a bunch of self-interested doctors decide what they get paid?, July 21, 2013, and earlier in  Outing the RUC: Medicare reimbursement and Primary Care, February 2, 2011, but Rosenthal does an excellent job of describing its perverse incentives. Given that Medicare takes the RUC’s recommendations 95% of the time, and that most insurers base their payments on Medicare’s, the RUC, which is heavily stacked against primary care, essentially sets doctors’ reimbursement. And this is not to the benefit of patients, either financially or medically.

In another article, Rules for Equal Coverage by Employers Remain Elusive Under Health Law, buried much farther inside the paper but also very important, Robert Pear describes the fact that the Obama administration has chosen to not (yet) enforce rules which allow companies to offer discriminatory levels of coverage to some employees than to others; generally, “better” coverage to executives than to line workers. There is already a ban on such discrimination in companies that are self-insured, but the Affordable Care Act (ACA) extended this to those who purchase coverage from insurance companies. The possibilities for discrimination are illustrated by the things that are forbidden; for example, covering only executives and not others, paying the full cost of executives’ premiums while making lower-paid workers pay for a portion of their benefits, or offering different terms for coverage of the dependents of executives and other workers.

Of course, the companies (read: the executives who run the companies and stand to benefit from discriminatory practices) disagree. Pear quotes Kathryn Wilber, from the American Benefits Council “which represents many Fortune 500 companies” as saying “Employers should be permitted to provide lower-cost coverage to employees who may not be able to afford the comprehensive coverage being provided to other employee groups,” which, of course, would not be an issue if the company paid for comprehensive coverage for all employees. The one “benefit” that may be excluded from the non-discrimination rules are “certain types of executive physicals”, which is ironic because there is no data that these benefit most people, including executives, but rather increase both the cost of care and the risk (in follow-up tests for false positives) to the patient. Certainly there are some occupations where the risk of something going wrong is high enough that it exceeds the risk of harm, changing the harm/benefit ratio -- airplane pilots for example, or possibly those who drive buses full of school children. But virtually no corporate executives are in this group.

The reason companies want differential benefits is primarily to save money by not offering good coverage to the majority of their employees, and also as a “perk” that they can offer to their executives. It is presented as parallel to other market goods, the difference between “serviceable” and “excellent”. This is even carried over in the metaphor to describe the low-copay plans that the ACA was going to tax, “Cadillac” plans, when everyone knows that a Chevy is just as good at getting you where you want to go, just not in such luxurious circumstances. But this is a lousy metaphor for health care, and confuses two benefits. One, which is the intent of the “Cadillac policy” tax, is whether individuals have to make co-pays or have co-insurance, or have limits on their benefits, or not. This is financial, and is very important. The other, however, is whether some people have coverage that gets them better health care. This is not OK. Obviously, they come together at some point since health care that is unaffordable to a person is unavailable to them, even when it is necessary. Conversely, for those executive physicals, providing a “benefit” that the individual does not have to pay for encourages them to seek unnecessary, and sometimes potentially harmful, care.

It may be that there are certain kinds of “health care” that are in fact reasonable to treat as elective consumer goods which a company might offer to some employees and not others; cosmetic surgery is the classic example (or non-medically-necessary contact lenses or radial keratotomy [Lasik®]; see Rand Paul on health policy: small brain and no heart, September 1, 2013). There also may be some employees for whom the harm/benefit ratio makes certain services of value when it does not for others (the comprehensive exams, “physicals”, for pilots, or Pap smears for women but not men). But, overall, coverage that does not include all necessary care for everyone is inappropriate. In addition, coverage of unnecessary care is as well. It is not Cadillacs vs. Chevies, or Volkwagens vs. Mercedes; it is making sure that everyone is covered for their health care needs. Like every other OECD country does. Like we could do if everyone was in Medicare.

Then instead of buying their executives “Cadillac health plans” to demonstrate how important they are, these companies can just buy them Cadillacs. 

Changes in the RUC: None.. How come we let a bunch of self-interested doctors decide what they get paid?

On February 2, 2011, I posted a piece titled Outing the RUC: Medicare reimbursement and Primary Care, describing the activities of this group, officially the “Specialty Society Relative Value Scale Update Committee” but known as the RUC, which is convened annually by the American Medical Association (AMA) to set the relative value of different kinds of work done by doctors. I included the accompanying graph, from the Robert Graham Policy Research Center of the American Academy of Family Physicians (AAFP). It shows the relative income of different specialists over time (FPs are the line at the bottom) and suggested that this might well impact specialty choice by students. I noted that the reason for the income disparities was the different weight given the work done by different specialists, and that the RUC was dominated by subspecialty societies. I pointed out that the real problem is that this encourages expensive procedures (by making them expensive) and that this skews the entire health care system.

I did not, however, call the RUC “The shadowy cartel that controls Medicare”. No, that is the title of a lengthy recent investigative piece in the Washington Monthly by Haley Sweetland Edwards that documents, in detail, the creation, formation, function, and results of the RUC’s activities that justifies this sobriquet. The problems documented are profound. Medicare has to pay for the work that doctors do, and it is pretty obvious that performing heart surgery should be paid more than freezing a wart. But how much more? And how does that relate to your doctor’s office visit or doing and interpreting a CT scan? And that doctor’s visit; is it for a cold or to manage 5 different chronic diseases? It’s complicated stuff. So the Center for Medicare and Medicaid Services (CMS) relies (90% of the time or more) on the recommendations of the AMA-convened RUC.

Note, above, that in the full name of the RUC the term “specialty society” is included; the members of the RUC are appointed by medical specialty societies, but are then told to then be completely objective and not look out for the interests of those societies, the specialists, or themselves! “Put your RUC hat on,” Edwards describes the chair of the committee telling its members, But even if you believe that this is possible, the outcome of RUC decisions would demonstrate that it is not in fact the case (“…in talking to a half-dozen current and former RUC members, including both generalists and specialists, the image of the committee that emerges is less a gathering of angels, cloaked by some Rawlsian Veil of Ignorance, and more akin to a health care-themed Game of Thrones.”) While the RUC only makes recommendations for Medicare, because all other payers base their payment rates upon Medicare, it is essentially controlling the cost of the entire health care system.

Medicare spending is like a pie, a fixed amount of dollars divided up based upon RUC recommendations. The original basis for this division, the Resource Based Relative Value Scale (RBRVS), developed by William Hsiao, may not have been equitable for primary care, but the modifications since then have been a disaster. When the first Bush administration gave the task of making these decisions to the AMA, “…the most powerful interest group in the industry,” Hsaio says “…that was the point where I knew the system had been co-opted….It had become a political process, not a scientific process.”

Edwards goes on, in great detail, to show the ways that the AMA maintains power – and makes lots of money – by controlling the RUC and the charge codes that are associated with it. And also describes, in detail, how it has a negative impact on primary care (“These manipulated prices are also a major reason why specialists are in oversupply in many parts of the country, while a worsening shortage of primary care providers threatens the whole health care delivery system. It’s precisely because the RUC has overvalued certain procedures and undervalued others that radiologists now make twice what primary care docs do in a year—that’s an average of $1.5 million more in a lifetime”) and why (“While the primary care docs make up roughly 40 percent of physicians nationwide, they have only 14 percent of the votes on the RUC.”). I would argue with the math, though; over a 30-year career every $100,000 of additional annual income results in an additional $3 million in lifetime income, and many sub-specialists earn several times $100,000 more than primary care doctors.

The idea of having independent, non-governmental, groups advise on policy is not necessarily a bad one. An excellent example of this is the US Preventive Services Task Force (USPSTF), which makes recommendations, based on the scientific evidence, about which preventive tests are effective and which are not. In Guidelines, bias, and your health, June 30, 2013, I cite an article by 2 USPSTF members who are concerned that by tying payment for services to positive recommendations by USPSTF, the Affordable Care Act (ACA, “Obamacare”) could politicize their work. The RUC has no such compunctions. While USPSTF is intentionally composed mostly of primary care physicians and examines only the scientific evidence, the RUC is dominated by specialists, who are appointed by specialty societies, who have a great financial stake in its decisions. And if the cartoons attached depict the doctors as poker players, the AMA is the “house”, which not only takes a cut of all decisions, but owns them and sells them back to anyone who wants to use them.

Edwards’ article is full of quotes from important – especially those who were formerly important in public life, both Republican (e.g., Gail Wilensky and Thomas Scully, heads of CMS during the GHW Bush and GW Bush administrations respectively) and Democratic (e.g., Bruce Vladeck, who headed CMS under Clinton), who are extremely critical of the entire process behind the RUC, see it as corrupt, and see it as a major contributor to a US health system that spends incredible amounts of money in a wrong-headed, upside-down way to reach mediocre health outcomes. Unfortunately, none of them changed it when they had government power (if they even tried to).

I would like to add two notes:

1. All specialists are not paid the same. Some (e.g, psychiatrists, some subspecialty pediatricians, some neurologists) are earn much the same as primary care doctors. Some (e.g., radiologists, orthopedic surgeons, neurosurgeons, anesthesiologists) earn several times more. Much of this is built into the RBRVS, which vastly overvalues procedures compared to cognitive care, and exacerbated by the RUC.
2. The last time I wrote about the RUC, I received a response from the AMA (AMA response to "Outing the RUC", February 5, 2011). It said "The entire premise of this column is false.” If you wish, you can read my reply in that blog piece. Nice to know they read it.

In summary, the flaw is not just the RUC, but the entire nonsensical non-system of medical care we have in the US. Medical care should be paid for by a single payer, and rates determined by an independent body without a financial stake in the outcome. Health care should be a lot more than simply medical care. And the health of our people will be most impacted by investment in the core functions of society: housing, food, education and jobs.

AMA response to "Outing the RUC"

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In general, I do not post comments regarding "Comments" posted to my blog. I appreciate them, would encourage you to post them and will reply personally if asked and given an email address, but the nature of a blog does not really encourage dialogue among readers. This is because once you have read a post, you are unlikely to come back and check to see if there are any "comments" posted that you might wish to comment further on.

I am making an exception in this case to call attention to the comment from the American Medical Association.
They indicate that "The entire premise of this column is false." They note that "The RUC often recommends increases for primary care services; RUC recommendations have resulted in $4 billion in annual increased payments for office and hospital visits – the most common services performed by a primary care physician." I note that this is not entirely responsive; while the "office and hospital visits" are the most common services provided by primary care physicians, they are also provided by many subspecialists, and we don't know what % has gone to PCPs vs. subspecialists, nor do they indicate what % of Medicare physician payments $4billion is. The sources of my information are cited; also the data in the graphic showing that the ratio of subspecialists to PCPs is INCREASING, not DECREASING, is the important point. Indeed, the graphic here, from the recently-released 20th report of the Council on Graduate Medical Education (COGME) shows that this definitely affects entry into primary care.

Please add your comments if you wish.

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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