Reform Rodeo

1. HRW’s Frank Pasquale’s post on reciprocal transparency — the idea that companies and other entities should be more transparent with respect to their data collection practices as patients become more transparent — is featured on The Health Care Blog.

2. On KevinMD.com, Maggie Mahar discusses what she thinks would happen if health reform is killed.

3. At the New England Journal of Medicine, Timothy Jost discusses recent rules governing the controversial restrictions on medical loss ratios.

4. Kaiser Health News has a short video up of their interview with the AMA’s president, Cecil B. Wilson, where they discuss the AMA’s new strategy regarding the “doc fix” that is set to cut physician reimbursement by up to 30 percent by Dec. 1st.

5. Chris Fleming at the Health Affairs Blog describes a new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation that covers the new process of “grandfathering” insurance plans under the health reform statute.

CPI Says CMS Got RUC-rolled

Earlier this month, Ian Ayres questioned Medicare’s procurement auction rules. The Center for Public Integrity recently released an article that suggests Medicare’s process for deciding physician payments may also need a second look. Just as critics have charged that HHS relied excessively on a physician-allied group (the Council on Graduate Medical Education) in determining future health care work force needs, the CPI report makes a case that too much responsibility has been devolved from governmental decisionmakers to a private sector group, the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC). RUC’s dominant role in suggesting payment levels raises hard questions about price-setting in the health care sector.

Administered pricing can be a important tool of health care cost containment. However, the process of setting prices for various health care services is always at risk of capture by those who would profit from overpayments. By way of background, here is an excerpt on the resource-based relative-value scale [RB-RVS] that gave rise to committees like the RUC:
Read more

AMA President Rohack Responds to Recent Health Reform Watch Blog on Public Plan

On July 4th, we wrote about what seemed an abrupt change in AMA policy regarding the Public Plan as voiced by AMA President, Dr. J. James Rohack in an interview with CNN –and about the organization’s declining membership: “AMA About Face on Public Plan?” President Rohack responded to this blog. In the interest of fairness, and because people sometimes do not read comments from older posts, below is AMA President Rohack’s comment, complete and without edit or comment:

J. James Rohack, M.D., AMA President says:

AMA policy is formed by the AMA’s voting House of Delegates – the nation’s only democratic assembly of physicians and medical students representing all state and specialty medical societies. I shared with CNN the AMA’s new policy – which was created and voted on by our physician delegates at our annual meeting in June - that the AMA supports health system reform alternatives consistent with AMA principles of pluralism, freedom of choice, freedom of practice, and universal access for patients.

This evolution in policy is consistent with the AMA’s strong support for health reform this year that provides high-quality health care coverage for all Americans. Our commitment is clear. Over the last few years we’ve spent $15 million dollars to call attention to the uninsured crisis and lay the groundwork for health reform that gets all Americans covered through our Voice for the Uninsured campaign.

We don’t yet know what form a final bill will take, which is why we will carefully study all options that make the system better for America’s patients and allow physicians to provide high-quality care. The AMA will stay actively engaged to get reform this year that improves the system for patients and physicians.

AMA About Face on Public Plan?

CNN reports that Dr. J. James Rohack, the “new president of the American Medical Association, which represents the interests of the nation’s doctors, said Wednesday the group is open to a government-funded health insurance option for people without coverage.”

And that

“Dr. J. James Rohack told CNN the AMA supports an ‘American model’ that includes both ‘a private system and a public system, working together.’”

As we posted back on June 11, 2009 the AMA had announced the day prior that it would “lobby against the inclusion of a Public Plan in health care reform legislation.”

At that time, many people made note of the AMA’s long history of opposition to “public” health measures such as Medicare and Medicaid, and as we noted in our post, “AMA to Oppose Public Plan–Again,” “at least one physician, Dr. Chris McCoy, Policy Chair for the National Physicians Alliance…publicly quit the AMA in response.”

But that was way back on June 11^th , a full twenty days ago. Apparently something has changed since then? Although Dr. Rohack became president of the AMA on June 16^th, under the circumstances that alone seems insufficient to account for the purported change.

Insurance & Financial Advisor Webnews describes the situation thus:

The new president of the American Medical Association appears to have confused or complicated the organization’s position on a public health insurance option during a CNN interview.

Dr. J. James Rohack, a physician in Texas who became president of the largest doctors’ group in the nation June 16, said in a live interview Wednesday (July 1) with CNN’s Tony Harris and Medical Correspondent Elizabeth Cohen that the group wants people who lack health insurance to be put into the Federal Employee Health Benefits Plan, the insurance program for federal employees and members of Congress.

“If it’s good enough for Congress, why shouldn’t it be good enough for individuals who don’t have health insurance provided by their employers,” Rohack said in the nine-minute interview.

A call for comment from the AMA was not returned.

One of the more interesting things about this apparent change of heart is that Dr. Rohack’s ascendancy to the post was preordained , so to speak . The AMA chooses it’s “president-elects” a full year in advance (the present AMA president-elect is Dr. Cecil B. Wilson, named on June 15, 2009, will take office in June, 2010 ).

According to this Reuters Press Release from June 17, 2008 announcing Dr. Rohack as the president-elect, Dr. Rohack was certainly no stranger to the inner sanctum of AMA policy decisions prior to becoming president. He did not just jump upon the scene:

“Taking a leadership role with the AMA in 2001 when he was first elected to theAMA Board of Trustees, Dr. Rohack served a one-year term as chair of the AMA Board of Trustees in 2004-2005.  He was reelected to a final four year term in 2005.”

Presumably, as one in “a leadership role” this year as both a Board of Trustees Member and as president-elect, Dr. Rohack was privy to, and part of, the AMA’s announcement (five days before he assumed the presidency) that they would “lobby against the inclusion of a Public Plan in health care reform legislation.” Therefore, his ascendancy seems insufficient to account for the change .

The question then is what could have changed in those twenty days between proclamations besides the ascendancy of Dr. Rohack? New research? A close reading of Profs Cortez, Greaney, Jost, Jacobi and Pasquale? I think not. Although reluctant to criticize for a reasoned and responsive change in direction (to reconsider carefully in the face of conflicting data is a good thing), this sudden (and unexplained) shift of direction smacks of politics and P.R. from an organization which is no stranger to either. I can’t help but find myself thinking of Tess of the d’Urbervilles when faced with her “converted” malefactor Alec:

“Don’t go on with it!” she cried passionately, as she turned away from him to a stile by the wayside, on which she bent herself. “I can’t believe in such sudden things! I feel indignant with you for talking to me like this when you know–when you know what harm you’ve done me!

I’m not sure what harm the AMA has actually done, but their repeated opposition to public options such as Medicare, Medicaid, early forms of HMO’s which sprung up in the Great Depression era, and the present Public Plan have not helped.

Keep your eyes on the spin.

Having said all that, a final note. CNN reported on

“the American Medical Association, which represents the interests of the nation’s doctors…”

Whether or not the AMA can be said to actually “represent the interests of the nation’s doctors,” is, perhaps, subject for debate. A quick google search on the AMA brings up some interesting figures: “the percentage of doctors who belonged to the organization declined from the mid-1960s on. At the height of the group’s campaign against Medicare, the AMA claimed at least 70 percent of American doctors as members. By the mid-1990s, the AMA represented only about 40 percent of American doctors.”

The 40% number of the mid-1990’s is a fond memory for the AMA. The present number for American doctor membership is closer to 22 ½ % — and that’s counting students and interns (who pay reduced yearly dues of only $20 and $45 respectively).

On June 14, 2009, Emily P. Walker, Washington Correspondent, MedPage Today reported on the present status of the AMA:

Although the group boasts close to 240,000 members, 29% are students or residents, who pay sharply discounted dues. Still more of the members are retirees, whose dues are also cut.

The AMA’s Council on Long Range Planning and Development had more specificity. It reported that there are 1,060,333 physicians and medical students in the United States and 238,977 of them AMA members.

Of those members, 20.5% are medical students, 9% are residents, and 36.5% are 56 or older. As one delegate put it, “we have a lot of students and a lot of old docs, but not a lot of practicing physicians.”

Healthy Competition? How a Competitive Health Insurance Market Influences Cost

With the Obama administration’s brisk movement on health care reform in recent weeks, there is an increasing  amount of dialogue about the administration’s desire for a government-based public insurance option. Advocates of the “public plan” argue that a government option would force private insurers to compete on price and quality.  A common refrain from those opposing a public plan is that such a plan would leverage government capital and regulatory power to bargain down prices, which would  decrease competition and consumer choice by overpowering private insurers. Since market competition is a resonating theme throughout the current discussion of health care reform, it would be constructive to discuss what we currently know about the role of  competition in the health insurance market.

The American Medical Association found that, in 2008, 94% of the markets for health insurance were highly concentrated. By itself, this figure may not be troubling. However, in that same year, a survey by the Kaiser Family Foundation found that wages had grown by 29% whereas the average insurance premiums had grown by 120%.

Two questions arise. First, how does consolidation in health care markets affect consumer cost? Second, how does increased consolidation in health care markets affect the quality of care? This post will focus on the first question. A subsequent post will concern the role of competition on the quality of care delivered.

With regards to cost, a widely cited study by Wholey et al. found that a larger number of HMOs is related to lower HMO premiums. Specifically, Wholey found that highly competitive markets with 17 competitors and 45 percent HMO market penetration had 11% lower premiums than those with average competition. For additional findings see also this study. In their 2008 testimony regarding the potential Highmark BCBS and Independence BCBS merger, the University of Pittsburgh Medical Center analyzed data from the AMA and the Department of Justice, finding that states possessing a greater diversity of market participants have, on average, 12% cheaper premiums.

However, it would be incorrect to presume a simple relationship between cost and competition.  For instance, one  study found that there is a competitive influence of increased HMO penetration on non-HMO premiums, and that increased HMO penetration can slow the rate of growth in addition to simply decreasing costs.

Moreover,  the ability of a competitive marketplace to lower costs can be explained by factors other than the increased leverage of insurers in concentrated markets. Read more

AMA to Lobby Against Public Plan– Again

The New York Times reports that the AMA has announced that it will lobby against the inclusion of a Public Plan in health care reform legislation.  Merril Goozner over at GoozNews has posted an interesting Real Politik analysis worth a view, and at least one physician, Dr. Chris McCoy, Policy Chair for the National Physicians Alliance, has publicly quit the AMA in response. In his post over at the Huffington Post, “Dear AMA: I Quit!,” Dr. McCoy points out the inconsistencies in the AMA’s position in regard to its own research, and the group’s less than progressive history when it comes to health reform. The piece is well worth quoting at length:

But this should not have surprised me: when health care reform has been necessary, the AMA has always stood on the wrong side of history. The AMA opposed the creation of Medicare in the 1930s, when it was first proposed as part of Social Security. The AMA opposed Medicare again in the 1960s, going as far as to hire an actor named Ronald Reagan to read a script to the AMA Auxiliary declaring Medicare as the first step toward socialism, and concluding with the statement that if Medicare were to become law, “One day, we will awake to find that we have socialism…. One of these days, you and I will to spend our sunset years telling our children, and our children’s children, what it was once like in America when men were free.”

That was 50 years ago … and none of that has come to pass. And yet this year, the AMA argues that a public health insurance plan will destroy the private insurance market. I challenge the AMA leadership to cite a single example of an industry where involvement by the government has lead to the elimination of private enterprise. This has not been the case with the creation of public police forces in the second half of the 1800’s (private security companies still exist), we have a robust system of public and private colleges existing the same market, and bookstores still sell books despite the presence of public libraries. A mix of public and private enterprises in the market is a truly American solution to ensuring equal access, as well as competition to drive quality improvement. In fact, the creation of the public health insurance option will *increase* competition, as demonstrated by the AMA’s own studies showing that 94% of health insurance markets only have 1 or 2 providers in the market.

It would appear that the AMA’s position against the public health insurance market is driven by out-dated political ideology that blindly supports private industry rather than a careful examination of the facts of the current situation.

The Health Reform Dialogue Group Recommends Health Care Overhaul

Throughout the country, newspapers are reporting on the meeting of the Health Reform Dialogue Group (the “Group”).  The diverse group has been meeting to discuss the overhaul of the current national health care system.

The Associated Press reports:

Eighteen groups representing consumers, business, insurers, doctors and hospitals say they have reached agreement on how they would like to see the nation’s health care system overhauled.

The groups, calling themselves the Health Reform Dialogue, say the uninsured should be covered through a combination of expanded government programs and subsidies to purchase private health coverage.

The 18 organizations in the group have been meeting for six months. While they failed to resolve several major issues, their agreement could serve as a starting point for lawmakers trying to craft a plan this year that can win broad support.

Some of the major health care players within this 18-organization group includes: AARP, American’s Health Insurance Plans, American Hospital Association, American Medical Association, Blue Cross and Blue Shield Association, and U.S. Chamber of Commerce.  This group represents both private and public interest groups.

As a result of the Group’s meetings, the Group issued a Report (PDF) containing multiple recommendations.  The Report states that the meetings have been productive: Read more

Physician Compensation II

Yesterday’s post displayed recent Bureau of Labor Statistic figures concerning physician compensation, and offered a link to recent median physician compensation data approved for use by Centers for Medicare and Medicaid Services (CMS) for calculations regarding direct graduate medical education under 42 CFR 413.78(f). The producer of this data, AMGA, also offers an interactive physician compensation survey which shows “average” and “starting” compensation for various specialties. A click on the arrow underneath “average” will sort from lowest to highest.

Here below is a list of a few of the CMS approved median physician compensation figures for a number of different specialties. The numbers are taken from the 2008 report.

The median compensation for a practitioner:

• Pediatric & Adolescent, Internal 161,444
• Pediatric & Adolescent, Infect. Disease 174,154
• Family Medicine, w/out Obstetrics 176,280
• Family Med., w/out Obst., Branch* 190,182
• Geriatrics 179,344
• Podiatry: 180,080
• Transplant Surgery, Kidney 368,750
• Dermatology, Branch* 301,111
• Dermatology, Mohs 423,848
• Not neural, Non-Interventionist, Radiology 420,858
• Mammography 540,028
• Orthopedic Surgery, Spine 611,670

*Branch is defined by AMGA as: These specialties have the same basic definition as the main specialty. These physicians located in small satellite or branch offices at least five miles from the main campus. The branch office practices primarily as its own separate entity, and often has different compensation and/or performance expectations than its main campus colleagues, there would be no teaching responsibilities at these locations.

With these numbers, over the course of ten career years, if calculated at a constant rate without regard to future increases in compensation, the median paid “Family Doctor, Branch” will have earned $1,900,182. During those same static ten years, a “Mammographer” will have earned $5,400,280. If the Family Doctor were to consult with the Mammographer at the end of those ten years, she would be doing so with someone who had made $3,500,098 more than she–nearly 3 times as much. If that same Family Doctor were to then consult with someone from the lowest paid of the three categories of Radiologist, Not neural, Non-Interventionist, she would be doing so with someone who had made $4,208,580 during that time-which would be $2,308,398 more than she–or more than twice as much.

Perhaps by way of consolation for the PCP, the Geriatrics specialist and the Pediatric Infectious Disease specialist would have fared worse, and even the Kidney transplant specialist who consults with the radiologist would be speaking with someone who had made a half of a million dollars more than he did.

But perhaps it is not consolation enough; the AMA has reported that the nation faces a shortage of 35,000 to 40,000 Primary Care Physicians.

Primary Physician Shortage Predicted

Students at the Harvard Business School’s Economic Policy Review point out in a recent article that “A universal health care system may provide insurance to the millions of uninsured, but it will not provide doctors for the uninsured.”

The article states: “The aging US population is driving a need for an increase in primary care professionals; unfortunately, the number of primary care professionals has been declining at dramatic rates over the past decade. The American Medical Association (AMA) predicted a shortage of 35,000 to 40,000 primary care physicians at its 2008 annual meeting.” Read full Economic Policy Review article here.