An Object Once In Motion…
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I gave a talk recently to the Maine Medical Association. They asked me to speak about health care in 2020. They did not want my view on clinical issues (thankfully!), but instead, wanted some perspectives on public policy and financing. Since I’m not exactly sure about where the future will go, I tried to keep it very simple, and focused on two factoids of life. First, objects once in motion tend to stay in motion (someone famous developed a theory of some kind based on this principle). And second, health care is always about incremental reform, not fundamental reform, because people can’t stand too much change too fast on this issue.
The first factoid leads to a pretty simple conclusion — the next ten years could (and probably will) look a lot like the last ten years, only more so. The trends are all there. The population is aging (see my previous post on New England demographics), Medicare is going to continue to be underfunded — especially as the baby-boomers start to hit 65 and their parents live way past people’s original assumptions about when they would pass away — new technology will continue to open new avenues for care and treatment (and more demand), and Medicaid will continue to expand (despite the current foodfight over SCHIP — which is, after all, a shouting match about how much expansion, not whether or not to expand). This means private insurance will continue to absorb shortfalls in Medicare and Medicaid rates of payment in their payment rates to providers, which means private insurance costs will continue to go up — which means more and more employed people — and employers — will either skinny down their benefit plans, or drop coverage. Indeed, people who make over $50,000 made up over 90% of the increase in the uninsured from 45 MM to 47 MM in the latest US census. Lack of insurance among those with less than $25,000 in income actually went DOWN — by 4%!
The second factoid explains why I think we’re headed for more of the same. Incremental reforms to a system that’s running the way ours is now merely change the trajectory — but not the direction — of the move toward the future. Incremental reforms like individual and small group market reforms are not unimportant, but they have limited impact on the fundamentals that are driving the system in a particular direction.
And hence, the conundrum. People want “reform” of the health care system, if you put it to them like that. They even like “fundamental reform.” But the minute someone starts to fundamentally change the way the system works for THEM — as the provider, employer, consumer, health plan, broker, supplier, etc. — they get up out of their chair and fight for the status quo.
Here’s a third factoid — If nothing changes, then nothing will change.
I beleive the worst part about the current system is the cynicism that it provokes in the very people it should inspire…I spreak mostly as a family doctor. Health care COULD be a venue to consider a common welfare, not just what’s in it for me…..
I believe the current incentives are too perverse. There will either be a slow progression toward a misery tipping point (resulting in a sea change) or the cynicism and perversity will undermine the validity of the medical/insurance establishment. There will be less influence of status quo and alternative therapies will prevail for the myriad of things that are poorly treated by the medical model anyway. And the value of insurance will diminish. That is why less are insured. Because the people in the $50K income braket are wise consumers and just don’t see the value in $1000/month health insurance….
Sorry for the lack of focus. You see why I do verse, not prose.
http://poemd.blogspot.com/2007/02/rant.html
Charlie, I remain upset at the degree to which private insurers and Medicare underpay primary care doctors. By forcing PCPs to quickly see many patients (in order to make a living), this has forced these doctors into a triage function. If they had the time to spend with patients, they could otherwise be comprehensive caregivers — focusing on preventative care, early diagnoses, and reducing the need for specialty services and more advanced and more expensive care. I think if you look at other countries that do better on health care, it is because they have invested in primary care. Maybe someday you could explain why this situation doesn’t change here.
The primary care physician compensation issue is a real concern - driven, I believe, by two factors. First, Medicare - as Paul notes above - doesn’t value time spent with a patient in its reimbursement methodology (instead, it values technology, procedures, and transactions - which makes it a very good payor for things like surgery), and the private plans build their fee schedules off of Medicare. Secondly, in Academic Medicine - the big bucks in research - also driven by federal policy - are spent on bio-science and medical specialties. This makes someone studying advancements in cardiology or cancer care or non-invasive surgical techniques more valuable to the health care delivery system generally than a primary care provider.
These trends, of course, affect the medical schools and the medical education process, too - as young, asipiring physicians think about where they want to go with their careers, and medical schools think about how to organize their faculty.
Other countries don’t put so much emphasis on “specialists,” and as a result, have a better balance between primary and specialty care providers. But they still have trouble managing the growth in health care spending - which is driven by other factors as well.
I think the only way to go at this in MA (or any other state, for that matter) would be to pursue a federal waiver from the traditional FFS Medicare program and replace it with a demonstration program that would re-work physican and hospital reimbursements for all payors. It could be done by region, by category, or some other category - and would give people a chance to see if changing some of these rules affects outcomes, spending, behavior, etc.
Pursuing this would be a lot of work - and someone (and some organization) would have to own it. It’s a full-time job. But it might be worth doing.
Clearly, incrementalism is where it’s at, for a variety of reasons including the ones you touch on.
I’d also agree with your suggestion that we need a statewide waiver to realign physician and hospital reimbursement on the Medicare front, though I’d be interested to learn how pervasive such an approach has been on the commercial front (where no waiver is required).
This exchange brings to mind Deb Geihsler’s post over at CommonHealth on coordinated care a couple months ago. I wonder if you’d care to comment.
David Harlow
HealthBlawg
I think the discussion concerning Medicare does not fully take into account the magnitude of the coming fiscal crisis specific to that program. If you use the Concord Coalition figures from CMS trust fund documents, the unfunded future liability of Medicare is nearly $62 TRILLION dollars (and nearly $30 TRILLION if you consider a closed group liability). We can talk about waivers and change in PCP pay but the size of the Medicare shortfall is so huge that solutions are almost impossible to comprehend. Seriously, how do you come up with an additional $30-$60 TRILLION dollars if all you can do is raise taxes, cut payments or close enrollment?
Sean - the future of Medicare is a problem - but I’m not sure it’s size or shape is a sure thing. I always wonder about these kinds of precise predictions about things that have zillions of moving parts. I know nothing about the study you reference, but presume it makes assumptions about length of life over time, the average annual health care spend for Medicare beneficiaries, runs this data out of some period of time, and then net present values the answer back to the present to calculate an unfunded liability. I’m sure Medicare has a big unfunded liability. I’m also quite sure that adjustments made on the margin NOW can have a big impact on that deficit - because the deficit extrapolates the current state of affairs out over some really long length of time. For example, I wonder what happens to the Medicare deficit in this analysis if Medicare spending goes up by 5% instead of 7% over time. Or if the age of eligibility moves from 65 to 70. Or if people live longer - and don’t begin to incur significant expenses until later in life as well?
Is Medicare funding a problem? Yes. Is it a solveable problem? Perhaps. It really depends on timing, approach and commitment.
David - I actually sent Deb G. an email after her piece ran in the Globe and told her how much I liked it. But I don’t have a snappy answer to the issue raised by her piece.
As observed by Herbert Stein, noted economist and Ben Stein’s father, “Unsustainable trends do not continue.”
We can be sure that the unfunded liability will not be realized simply because it can’t be met. Something will change. The unthinkable will become thinkable and will displace the liability enough that it is affordable. It is like the social security retirement age advancing to 67, that too was once unthinkable but is now actually occuring without dramatic controversy. I think most young people expect the retirement age to be delayed further, so when it happens, as it must, it will be no big deal.