Medicaid expansion or not: everyone needs coverage

In an echo of my blog post of November 17, 2013, “Dead Man Walking: People still die from lack of health insurance”, the New York Times’ lead article on November 29, 2013 was “Medicaid growth could aggravate doctor shortage”. The main point in my blog was that, to the degree that there is a doctor shortage exacerbated by increasing the number of people who have health insurance (from Medicaid expansion or insurance exchanges or any other reason), the shortage was already there. If the reason that it was not felt earlier was because people, not having health insurance, did not seek care, does not change the fact that these people were here and were as sick as they were or are. To the extent that they were not getting health care because they were uninsured is a scandal. If anything, that people will now have coverage and thus seek care is an unmasking of an extant but unmet need.

The Times article looks particularly at Medicaid because many doctors will not see Medicaid patients since the payments do not cover their costs (or, in many cases, because they can fill their schedules with people who have better-paying health insurance). Those physicians who do accept Medicaid often feel that they will not be able to take more Medicaid patients for the same reason, and it is unlikely that those who are already not accepting Medicaid will begin to. The problem is significant for primary care, even for institutions like Los Angeles’ White Memorial Hospital that already care for large numbers of Medicaid patients. In the NY Times article, my friend Dr. Hector Flores, Chair of the Family Medicine Department at White Memorial, notes that his group’s practice already has 26,000 Medicaid patients and simply does not have capacity to absorb a potential 10,000 more that they anticipate will obtain coverage in their area.

The problem for access to specialists may be even greater. There are already limited numbers of specialists caring for Medicaid patients in California and elsewhere, for the reasons described above: they have enough well-insured patients, and Medicaid (Medi-Cal in California) pays poorly. It is also possible that some specialists have less of a sense of social responsibility (even to care for a small proportion of patients who have Medicaid or are uninsured), and their expectations for income are may be higher. The San Diego ENT physician featured at the start of the Times article, Dr. Ted Mazer, is one of the relatively small number of subspecialists who do take Medicaid, but indicates that he will not be able to take more because of the low reimbursement.

Clearly, Dr. Mazer and Dr. Flores’ group are not the problem, although it is likely that they will bear a great deal of the pressure under Medicaid expansion; if their practices have been accepting of Medicaid up until now, they are likely to get more people coming. The Beverly Hills subspecialists (see: ads in any airline magazine!) who have never seen Medicaid, uninsured, or poor people up until now are unlikely to find them walking into their offices. And, if they call, will not schedule them. So what, in fact, is the real problem?

That depends a bit upon where you sit and how narrow or holistic your viewpoint is. From the point of view of doctors, or the health systems in which they work, the problem is inadequate reimbursement. As a director of a family medicine practice, I know that you have to pay the physicians and the staff. For providers working for salaries, it is the system they work for that needs to make money to pay them. The article notes that community clinics may be able to provide primary care, but does not note that many of them are Federally-Qualified Health Centers (FQHCs) which receive much higher reimbursement for Medicaid and Medicare patients than do other providers. The Affordable Care Act (ACA) will reimburse primary care providers an enhanced amount for Medicaid for two years, through 2014, and yet not only is there no assurance that this will continue, but in many cases has yet to be put into place. And the specialists are not receiving this enhanced reimbursement (although the truth is that many of them already received significantly higher reimbursement for their work than primary care physicians).

From a larger system point of view, Medicaid pays poorly because the federal and state governments that pay for it (although the federal government will pay 100% of the expansion for 4 years and 90% after that) want to spend less. However, they do not want to be perceived as allowing lower quality of care for the patients covered by Medicaid, so they often put in requirements for quality that increase costs to providers which increases the resistance of those already reluctant to accept it. Another factor to be considered is that Medicaid has historically not covered all poor people; rather it mainly covers young children and their mothers, a generally low-risk group. (It also covers nursing home expenses for poor people, which generally consumes a higher percent of the budget.) Expansion of Medicaid to everyone who makes 133% of poverty means that childless adults, including middle-aged people under 65 who have chronic diseases but have been uninsured, will now have coverage.

While the main impact of Medicaid expansion is in states like California that actually have expanded the program, even in states like mine (Kansas), which have not, Medicaid enrollment has gone up because of all the publicity, which has led people already eligible but not enrolled to become aware of their eligibility (called, by experts, the “woodwork effect”). The Kansas Hospital Association has lobbied very hard for Medicaid expansion, but this has not occurred because the state has prioritized its political opposition to “Obamacare”. The problem for hospitals is that the structure of ACA relies on the concurrent implementation of a number of different programs. Medicare reimbursements have been cut, as have “disproportionate share” (DSH) payments to hospitals providing a larger than average portion of unreimbursed care. This was supposed to have been made up for because now formerly uninsured people would be covered by Medicaid (that is hospitals would get something); however, with the requirement that piece removed (thanks to the Supreme Court decision and the political beliefs of governors and state legislatures), the whole operation is unstable. That is, the Medicare and DSH payments are down without increases in Medicaid.

From a larger point of view, of course, the problem is that the whole system is flawed, and while the ACA will help a lot more people, it is incomplete and is dependent on a lot of parts to work correctly and complementarily – and this does not always happen, as with lack of Medicaid expansion. A rational system would be one in which everyone was covered, and at the same rates, so that lower reimbursement for some patients did not discourage their being seen. These are not innovative ideas; these systems exist, in one form or another in every developed country (single payer in Canada, National Health Service in Britain, multi-payer private insurance with set costs and benefits provided by private non-profit insurance companies in Switzerland, and a variety of others in France, Germany, Taiwan, Scandanavia, etc.). If payment were the same for everyone, empowered people would ensure that it was adequate. Payment should be either averaged over the population or tied to the complexity of disease and treatment (rather than what you could do, helpful or not). We would have doctors putting most of their work into the people whose needs were greatest, rather than those whose reimbursement/difficulty of care ratio was highest. There are other alternatives coming from what is often called “the right”, but as summarized in a recent blog post (“You think Obamacare is bad…”) by my colleague Dr. Allen Perkins, they are mostly, on their face, absurd.

Our country can act nobly and often has. ACA was a nice start, but now we need to move to a system that treats people, not “insurees”.

Doctor shortage or shortage of the right doctors?

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The lead article in the New York Times (right column, front page, by Annie Lowrey and Robert Pear) on Sunday, July 29, 2012, has the provocative headline “Doctor shortage likely to worsen with health law.” My first instinctive reaction was “What? I don’t know of any part of the new health law, the ACA, that will reduce the number of doctors!” Then, reading the first sub-head, I realized what they meant. “Primary care is scarce”, something I well know and have written a lot about, and then, in smaller type, “Expanded coverage, but a greater strain on a burdened system.”

What they are saying is that the shortage of physicians, especially primary care physicians, will effectively increase (get worse) as millions more people gain insurance coverage under ACA. This will happen both through expansion of Medicaid coverage or through health insurance exchanges that will permit both individuals and small companies that have not previously had or offered health insurance to buy it at much lower rates. The expansion of health insurance coverage to these groups is a good thing; it will eliminate a major barrier to quality health care, itself a component of good health. Unfortunately, phrasing the problem in the way that the NYT headline does is likely to inflame displeasure with the law among those who, through ignorance or selfishness or both, are happy to draw up the bridge behind themselves, not wishing to share their, often limited, access to doctors with the newly insured. Surely, this is not an acceptable reaction.

The problem is that there are too few doctors to provide each person with full access to care, especially in an aging population because, as noted in a quote from Dr. Darrell G. Kirch, president of the Association of American Medical Colleges (AAMC) “Older Americans require significantly more health care…Older individuals are more likely to have multiple chronic conditions, requiring more intensive, coordinated care.” It is, however, much more about the poor distribution of doctors by specialty (too few primary care physicians, too many of many varieties of subspecialists), by geography (too few in rural and poorer areas, too many in more affluent and suburban areas), and by the insurance status of the patients that they care for (too few who take Medicaid, and even Medicare, and too many willing to care for only those with insurance that reimburses more). And, relevant to the cost of care, too many whose business model is built upon doing high-cost, high-profit procedures even when they are marginally (or not at all) beneficial to the patient, rather than providing the comprehensive care needs of people.

Sadly, and for the wrong reasons, some of this may not come true, so some of the fears of the already-insured may be mitigated. Many states have indicated their plans to not participate in Medicaid expansion despite the financial incentives to do so (the federal government will pay 100% for the next several years, and 90% thereafter). These same states, as well as others, also pay so little under Medicaid that many doctors won’t see Medicaid patients. Unfortunately for that ignorant-or-selfish-or-both minority of seniors who say “keep the government’s hands off my Medicare!”, many of those same doctors are now refusing to accept Medicare patients. Hey, if they can make a big living without it, why should they take care of your mother? So if you are not on Medicaid OR Medicare maybe you’re safe – if you live in a relatively affluent part of an urban area, and have private insurance, and especially if you are in an integrated health system such as Kaiser that provides a strong primary care base.

The NYT article indicates that “Physician compensation is also an issue. The proportion of medical students choosing to enter primary care has declined in the past 15 years, as average earnings for primary care doctors and specialists, like orthopedic surgeons and radiologists, have diverged. A study by the Medical Group Management Association found that in 2010, primary care doctors made about $200,000 a year. Specialists often made twice as much.” In fact the gap is much greater than that between primary care physicians and specialists “like orthopedic surgeons and radiologists”; it can be several times greater. (This is because “specialists” includes, in addition, doctors like psychiatrists and some pediatric and medical subspecialists who earn much closer to what primary care doctors do, and thus bring down the “specialist” average.) A recent estimate was that an anesthesiologist can anticipate earning $7 million more in a career than a family physician!

I woke the other day to NPR to hear Republican senator Orrin Hatch saying “To be clear, it is a disgrace that so many American families go without health insurance coverage.” I was nearly ecstatic; to agree that something is a problem is the first step to getting together to solve it. And, surely, that something is “a disgrace” is even worse than being a problem. I turned up the radio to find out how Sen. Hatch and the Republicans were going to solve it. Unfortunately, that was not to be. It was a sound bite in a story by Julie Rovner titled “GOP Says Coverage For The Uninsured Is No Longer The Priority” (July 27, 2012). I hadn’t known it ever was a priority for the GOP, but this piece laid any doubts to rest. Worse than the double-talk from Hatch was Senate majority leader Mitch McConnell, in this excerpt:

McConnell: "Let me tell you what we're not going to do. We're not going to turn the American health care system into a Western European system. That is exactly what is at the heart of Obamacare. They want to have the federal government take over all of American health care."

By "Western European," McConnell means government-run or primarily government-run. Western European countries also pretty much don't have people who don't have health insurance. And by the way, there are closer to 50 million Americans without health insurance; 30 million is the number the health law is estimated likely to cover.

McConnell never says what the GOP is going to do, but you can be sure it will not have anything to do with covering everyone. This is too bad; there are possible solutions, and many of them are even based in the marketplace. Step one is for Medicare to completely revamp its reimbursement policies. This is because, to a large degree, Medicare reimbursement is the basis for all insurance reimbursement; while they may pay more (say, 1.5x Medicare) the ratios are the same, so if Medicare changes what it reimburses for primary care relative to subspecialty care, other insurers will follow.

In biological systems, the normal situation is to have “negative feedback loops.” For example, if the thyroid gland is producing enough thyroid hormone, it shuts down production in the pituitary gland of another hormone that stimulates the thyroid. When there is not enough thyroid hormone in the blood stream, the low levels stimulate the pituitary to become active, activating the thyroid gland. This is functional. Imagine how dysfunctional a “positive feedback loop” would be – the more the thyroid produced thyroid hormone, the more the pituitary would produce its stimulant, creating yet more thyroid hormone, and soon we’d all be hyper-thyroid and dead!

This is like the current medical reimbursement system. We pay doctors more to do procedures, pay them more to take care of only a few diagnoses in a limited organ system, pay them more if they live in an expensive area, and even more if they refuse to care for those on government insurance. This is a positive feedback loop where you economically do the best being a medical “partialist” in a nice suburban area taking care of relatively well-off people, and worst being a generalist in a rural area taking care of people who need it. Or, if you choose, work less than full time and still make a good living.

Medicare should immediately begin reimbursing primary care at a higher rate, including for the effort and cost of managing chronic disease, so that the income differential between generalists and specialists largely disappears. Then it should increase payments for doctors working in more rural and remote areas, not for “desirable” urban and suburban areas. Doctors practicing in urban underserved areas should get smaller incremental payments (after all, they can live in a “good” neighborhood and commute).

We will still have a shortage of doctors until the pipeline fills, but such a system will decrease the financial impetus to be yet another subspecialist in a metropolitan area that already has enough, and increase the impetus to become a generalist in an underserved area. If we are to depend on the market, this is the kind of market-based approach we need.