HEALTH CARE PROFESSIONAL SUPPLY ISSUE
Anyone who has read my past blogs knows that I have commented that too many health care reform advocates focus too much on universal health insurance coverage, and insufficiently on improving health, the supply of health care professionals, and the quality of health care. While many proponents of universal health care pay lip service to the value of prevention, those who advocate universal health care clearly want to address the visible and important issue of affordable coverage independently of, and prior to, the issues I have identified.
Unfortunately, they have it backwards. To solve the universality and affordability problem, the others have to be addressed. A compelling story appeared on the front page of the national edition of the April 5 New York Times, entitled “Universal Coverage Strains Massachusetts Care: Influx of Patients and Shortage of Doctors Create Long Waits.”
This is not surprising. When a state or a region adds several hundred thousand patients by expanding health insurance coverage, but adds no doctors or nurses, and makes no productivity improvements to the provider community already in place, shortages will be inevitable. If we are to tackle the health care crisis in this country, we clearly need to make four tough decisions:
- To put a serious effort into improving the health of our citizens. We cannot operate on the assumption that every person should be completely free to behave however he or she wants and pay the same rates for health care as those who take care of themselves. Community rating for health insurance, which is designed to have the healthy subsidize the sick, is flawed because it usually does not distinguish between rating differences for medical conditions (which should not be allowed), and rating differences for unhealthy behaviors (which are essential to bringing costs under control).
- To figure out how to close the gap between the demand for health care professionals and the supply. Training new doctors takes almost a decade, and also requires staffing and facilities to increase at our medical schools. (This blog post discusses medical schools’ role in the primary care shortage.) In the long term, we will need to do that, but, in the nearer term, we will probably have to work more on the supply of nurses and nurse practitioners, which is a gap that can be closed more rapidly. We will also need to do two other things. First, we will need to enable nurses to perform tasks which, in some states, because of antiquated laws and regulations, are reserved to doctors. Second, we need to promote more self-management tools and technologies to conserve health care professional resources for situations in which individuals cannot take care of themselves. For example, when first introduced, testing blood pressure was an activity that was only performed by physicians. Now, there are devices that allow patients to check their own blood pressure at home. Technology has provided many advances to free doctors to be more effective and productive. A thoughtful redesign of the healthcare industry will allow us to determine what activities should be in the realm of the physician and what can be done by others. The Health Business blog recommends and evaluates some additional alternatives.
- To design all health plans to promote good medical treatment and to penalize inappropriate treatment. Not all health care spending is good, and refraining from certain spending, such as preventive care, is usually bad. Traditional plan designs need to be overhauled to create value-based health plan designs. This topic has been covered in length in different blogs, including this post in the WSJ Health Blog. Meanwhile, the Healthcare Economist advocates paternalism.
- To reward high-quality providers and penalize poor providers. I was pleased the Federal Centers for Medicare and Medicaid Services (CMS), the administrator of these two massive programs, is introducing the concept of refusing to reimburse doctors and hospitals for obviously bad medical care, but we need to do a great deal more to develop evaluation tools on which providers, experts, and the public can agree.
This Health Care Blog post reviews additional important points related to the health care supply issue.
Unfortunately, to increase coverage and make it affordable without addressing the supply problem is to make false promises to our citizens. One of the reasons why this crisis exists, aside from the artificially low number of medical school admissions we have had over the last two decades, is the ridiculously low level of Medicare and Medicaid reimbursement rates, which have driven out primary care providers, and has discouraged doctors from becoming primary care physicians. This is further illustrated by the inadequacy of the Medicare Hospital Insurance (HI) Trust Fund, which falls far below the short-range test of financial adequacy. The full report on the financial condition of the Medicare program can be found here.
The best evidence of how stingy Medicare has become is that active physicians are increasingly declining to take on more Medicare and Medicaid patients. In speaking with executives whose companies manage health plans, I hear stories like the Medicaid patient who could get a physician to see her, but had to travel over 100 miles to find another specialist when the first physician needed to make a referral.
In Connecticut, already-stingy Medicare reimbursement rates are cut back for Medicaid patients. The average reimbursement rate for a physician for Medicaid patients is 57% of the allowable Medicare maximum, and for hospitals is 70%. With these kinds of rates, it is not surprising that physicians are declining to take on more Medicare and Medicaid patients. With a decrease in the number physicians willing to participate in the Medicare and Medicaid programs, the delivery of quality health care is jeopardized for program enrollees. Less physicians could result in patients experiencing less choice in selecting a primary care physician, delays in treatment due to wait times for an appointment or may miss appointments, also delaying treatment, due to travel logistics. In the end, delayed treatment could result in higher costs to the system if a patient’s condition worsens over time.
I do not believe any system, single-payer or otherwise, that is subject to annual budget reviews by federal or state governments will give health care professionals, especially physicians, the confidence in their income-earning capability that will encourage them to stay in a practice heavily dependent on such a system. Before we embark on major structural change in health insurance, we had better decide what level of care we want to deliver, what level of health care professional resources needs to be in place, and what model of health care we want to adopt.
April 9th, 2008 at 12:48 pm
Mike thank you for continuing to blog on the need for a comprehensive approach to health care reform that includes both incenting life style changes to reduce incidents of preventable cronic diseases and expanding access to quality care. Today’s Harvard Crimson (www.crimson.com) has a lead editorial on shortage of primary care doctors and offers ideas for incenting more medical students to pursue those careers. But, it misses the point that you made about the critical role that more nurses and nurse practioners can play in providing quality care.
April 14th, 2008 at 11:28 am
Dear Mike, Your prescription for fixing the healthcare system is right on, provided it is accompanied by the need to find out what the system is actually paying for its mistakes. Our data suggests the cost of one revision of a hospital-acquired infection can run as high as $50,000. Apparently insurers are baulking at reimbursing these costs, on the grounds that it was the hospital that caused the infection, why should the insurer have to pay for that? It is this type of financial pressure that could bring about a sea change in healthcare system behaviour, as the costs finally start to become more inured to the benefits. Some examples: Wellness is a bad spend for insurers because the benefits inure to another time period (maybe 30 or 40 or 50 years removed) and, in all likelihood, serve to reduce another insurer’s medical loss while at the same time increasing their own. A hospital spends money to prevent infection, but is paid no more for doing so in a market where prices are federally set and all others peg to it; to the extent any readmission is cash positive, there are few economic or fiduciary incentives (there are moral incentives) to aggressively invest. (If infection rates were public, the argument goes, then there would be economic benefit for having lower rates since it would presumably give rise to higher market share.) Another example is in surgery, where it is known that surgeons in physician-owned centers will not have the same supply costs (it’s their own money) as they impose on hospitals (where it’s not their money).
Keep up the good work, Mike.