The Practicing Physician and Medicare’s Planned Changes

 
            The Secretary of Health and Human Services has laid out the changes CMS is planning to “improve U. S. health care.”[1] The stated goal is to have at least 50% of Medicare’s payments tied to the quality of care by the end of fiscal year 2018. Now it is not my intention to examine the proposals  or to argue the merits of the case, since I see this as a public announcement of a course of action already determined. Instead, I want to focus on the implications for practicing physicians.

            I had not been in practice too long when I chanced to sit next to a much older physician in my town who had begun practice before World War II. He told a story that I thought was significant.

 

      When I came back from the War, I was still making house calls. I remember one morning being called out at 5AM to see two children who were not really all that sick. As I was leaving, I asked the mother why she had called me out at that hour of the morning for $5 when she could have brought them into the office during the day for $2. She said, “I wasn’t planning to pay the bill anyway.”

 

            Of course Medicare had been established before I went into practice, but my group was not routinely “accepting assignment” in those days, and the Clinic’s associate administrator had recently informed me we were suing one of my patients to collect the bill. She had gotten the check from the insurance company and bought a new refrigerator, instead of paying what she owed.

            In 1993, the Governor of Tennessee decided the State needed to convert its Medicaid program into “managed care.” For various reasons, the Clinic, which according to the Governor’s own data was the second largest provider of Medicaid services in the state, had not entered into a contract with either of the two “insurance companies” that had obtained managed care contracts. He called for a meeting, and as medical director at the time, I was one of the Clinic’s representatives. When he asked us why we were not vying for a contract, I chose to tell him the story of the house call. He understood, but decided to arrange a meeting at the Governor’s mansion between us and the insurance company. We eventually entered into contracts with both of the companies. One of them went broke owing us more than $1 million dollars for care already provided.

            Those were the years of the managed care experiment, which never really took off, but we got into and out of managed care without seriously disrupting the care of patients. Now we are into “accountable care organizations” and “primary care medical homes,” and we are trying to do this in a way that does not disrupt the care to patients. I suggest the same approach is needed to deal with the looming changes in CMS payments.

            Don’t misunderstand, we did make some changes in the way we provided care with each of these turns in the payment systems, but the fundamentals did not change. People still showed up looking for us to “comfort the afflicted and heal the lame.” I expect they will continue to do so with each new change in the payment system.

            Did these changes away from vanilla “fee for service” payments make any difference? I suggest they did, although in ways that are not particularly measurable. One constant complaint in medical circles relates to the deterioration in the nature of office visits. The mantra goes something like this:  “The (EMR, administrator, etc.) are making it impossible for me to spend time getting to know my patients.” While possibly true, the mantra pre-supposes that doctors ever got paid for getting to know their patients. What I have found with all of the various payment changes that de-couple payment from piece work is that it makes it possible to be compensated for the “soft” side of medicine.

            In my particular specialty, nephrology, payments for the care of dialysis patients was originally based on the office call, and was set at $15 per treatment, of which Medicare paid $12. CMS eventually decided that many nephrologists were simply billing the fees and providing no service, so they decided to go with a “monthly capitation payment” (MCP) that provided a flat fee to cover all dialysis related services. In practice this meant I was being paid for all the phone calls and routine medical interventions, such as antibiotic prescriptions, without having to generate a full office note to justify a bill.

            In due time, though, CMS decided nephrologists were not providing the services the MCP was designed to cover, so they changed the system to reflect the number of visits in the dialysis unit. This was based on some (weak) evidence that the number of visits correlated with the probability of hospitalization. This change has the effect, though, of making it difficult to get paid for the non-compliant patient who skips a lot of his treatments—the very patient most likely to need intervention.

            Of course, they still find nephrologists who aren’t doing the work, and are still trying to refine the system.

            The bottom line for me, though, is that I have always tried to see my patients regularly and to stay on top of their problems and intervene in a timely fashion. And I have always been paid for it. The things I have had to document to prove the first point and justify the payment have changed and evolved, but the real “work” that I have done these last 32 years has really not.  I still see sick people and try to keep them functional and at home. I don’t see that changing anytime soon.

            So what is the issue? Perhaps it depends on your goal. I once told a hospital administrator there have always been two groups of physicians—those who took care of patients to make a living and those who made a living by taking care of patients. Either of these approaches works, because both groups feel obliged to provide what patients need. Now we have a third group that want to make a living by not taking care of patients. Frankly, I don’t know how that works out. Do you?

 

30 March 2015


[1] Burwell SM. Setting Value-Based Payment Goals—HHS Efforts to Improve U. S. Health Care. N Engl J Med 2015;372(10):897-899. doi:10.1056/NEJMp1500445.

Further Reading

Clinical Integration 2015:  A Hospital Perspective
 Health care organizations now assume "clinical integration" is necessary for economic survival, but the FTC continues to enforce antitrust actions blocking mergers and acquisitions.  Furthermore, clinical integration usually means different things to hospitals and physicians.  In this article I consider some immediate steps that can be done without legal complications to improve patient care and save money.  All that is really required is a change in our mental models.

Challenges to Achieving the IOM Attributes of a High-Quality Healthcare System
Most people agree the Institute of Medicine's (IOM) description of the attributes of a high quality healthcare system are appropriate and worthy of trying to achieve.  But it has turned out to be quite difficult to make progress.

What Hospitals Are Doing
How are hospitals and health systems responding to change? An AHA survey provides some insights, but suggests few are really working to improve the function and resiliency of their teams, and are thus likely to fail in attaining their strategic objectives.