Friday, January 21, 2011

Potential Impact of Healthcare Reform on the Private Practice of Medicine

As the fight to repeal Obamacare rages, let's take a look at the potential effect of various provisions on the delivery of medical services.  By the way, anyone who thinks that Obamacare will bring rationed medical care can take comfort.  Well sort of.  Rationed care exists throughout rural communities across the country.  Rural Mississippi is critically underserved with regard to medical doctors and waits to see a doctor for Medicare and Medicaid patients can be weeks.  The upshot is that Obamacare could exacerbate this problem.

Americans pay more per capita for healthcare than any other people on earth.  Period.  What do we get out of this enormous cost? We rank 30th in life expectancy among developed, high-income nations. Regardless of your political disposition, this is a problem of gigantic proportion that needs to be addressed.  Your philosophical bent will affect the way you view correcting these statistics.

There are two inputs into the equation.  First, and obviously, there is the hopelessly interlocked systems of the provision and financing of healthcare.  Are these systems to blame for the cost and failure of improving / maintaining our health?  Many would say so.  However, people often overlook the second component of the equation.  It is often assumed, and incorrectly, that we are as healthy as any other group of people on the earth.  When you get down to it, the average American is as healthy as, for sake of discussion, the average Japanese.  Hmm.  Not so fast my friends.  America ranks first in this statistic - Obesity! The second component in this conundrum is the patient.  And we, as patients, are unbelievably unhealthy and it isn't even close.  On average, we are 10 times as obese as Japan and South Korea.  You read that right.  10 times.  Almost one in three Americans is obese.

Unfortunately, it is politically unsavory or incorrect to attack obesity, despite its miriad of side effects and diseases it causes or intensifies.

With no further ado, these factors will adversely affect private practitioners.

1. Continued decline in reimbursement for services rendered.  For the last decade or longer, physicians have been getting paid less for doing the same amount of work.  Almost a quarter of primary care physicians are uncertain if they can keep their doors open now.  The factors which follow will likely redue reimbursements further.

2.  Physician Quality Reporting Initiative - Physicians will be measured using various metrics, some of which are arbitrary and of questionable value.  This will require more intensive IT and track much more data, expanding the operating cost of medical practices.  Non-participation and poor scores will result in reduced reimbursements beginning in 2015.

3. Accountable Care Organizations - Groups various suppliers and providers in a geographic region in order to manage and coordinate care, meet specific quality performance guides, promote certain initiatives.  Good results and lower costs will have a positive effect on reimbursements.

4.  Independent Payment Advisory Board - Appointees of the President who are commissioned to reduce Medicare's per capita spending.  However, they are constrained from redcucing benefits, rationing care, increasing premiums, and raising taxes.  Hmm, who is left holding the bag?  Healthcare providers.  By the way, their proposals must be implemented unless Congress intervenes.

As a final note, prior attempts to manage physicians and enhance their efficiency have failed.  Most recently, refer to the now defunct physician practice management company (PPMC) movement.  Implicitly, the PPMC wave made sense, consolidate medical practices, reduce physician management time and maximize time to practice medicine.  Economies of scale and efficient management to boot.  Sadly, it did not work out.  Physicians do not always make good employees.