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WITH ECONOMIC WOES that the country hasn’t seen since the ’30s, it’s possible that there just isn’t any money for a massive healthcare overhaul. But there are plenty of reasons that a downturn would increase the chance of reform. for one thing, the ranks of the uninsured and the underinsured will continue to grow as the jobless rate grows. add to these factors the ascension of u.s. rep. henry waxman, a Democrat from santa monica, to chair of the house energy and commerce committee, which oversees medicaid and likely any new health insurance programs. he will play a big role in healthcare legislation. not only has waxman been active in healthcare issues since his days in the california assembly, he cited healthcare reform as one of his reasons for wanting the post.
Tom Daschle, a former senator, was picked by obama in mid-november as u.s. Dept. of health and human services secretary, and he will also serve as director of the new white house office of health reform. Daschle has long been active in healthcare, and published a book on the subject, “critical: what we can Do about the health-care crisis.”
Support for reform extends into the U.S. Senate, too, and influential senators from both major parties have signed on. After Obama selected tom Daschle in mid-November, a group of powerful senators held closed-door meetings on healthcare reform convened by Senate Finance Committee Chairman Sen. Max Baucus of Montana and Sen. Edward Kennedy of Massachusetts, Chair of the Senate Health, Education, Labor and Pensions Committee. The meetings are a sign that Democrats are serious about pursuing healthcare reform, and attendees included Republican Sens. Michael Enzi of Wyoming, Charles Grassley of Iowa and Orrin Hatch of Utah, as well as Democratic Sens. Christopher Dodd of Connecticut and John Rockefeller IV of West Virginia. Grassley is ranking member of the Senate Finance Committee, while Rockefeller is Chair of its Health Care Subcommittee.
And of course, some lawmakers have pushed their own plans. Two full months before the new administration could take power, Sen. Baucus issued a white paper on healthcare reform similar to Obama’s plan, with the exception that Americans would be required to carry coverage. Senate Banking Committee Chairman Sen. Dodd issued a similar plan while running a primary campaign for the Democratic presidential nomination. During the presidential campaign, Republican Sen. John McCain issued a plan focused on taking the healthcare burden off of employers, although republicans have yet to rally behind a clear competing plan.
The insurance industry seems to be taking Obama’s plan seriously, too—the trade group America’s health insurance plans introduced its own plan in early December that resembles Democratic plans in several important details. It goes further than Obama’s on the sticking point of health-insurance mandates for citizens—the group calls for mandates on Americans to carry health insurance, which would expand business.
Obama will likely draw from leading reform plans, which share several factors that affect doctors and their practices. A centerpiece of all major reform efforts—expanded health insurance coverage—will introduce a deluge of previously uninsured patients whose visits will suddenly be paid for. While these patients may bring rural doctors new revenues, the overall impact on the profession’s income is unclear. Primary care doctors take heed: These new patients will stampede your already beleaguered specialty. Next, prepare yourself ahead of time for the taxes that will pay for reform, and start thinking seriously about how to integrate health information technology.
Flooded With the Insured
A big rush in newly insured patients is the major upshot doctors can expect from Capitol Hill healthcare haggling. Obama and other leading reformers call for employers to either provide coverage for employees or pay a tax that buys insurance for them through a “purchasing pool.” The reform plan also introduces public and private insurance options that compete with current offerings. Ascending policymakers favor an expansion to insurance programs such as Medicaid and the State Children’s Health Insurance Program, while subsidies would help low-income Americans buy insurance, and small businesses would get a tax credit to cover their employees. Eligibility for insurance would be guaranteed.
All in all, about 25 million to 30 million uninsured Americans would get insurance. There were about 45.7 million uninsured Americans in 2007, says the U.S. Census Bureau, so their numbers would drop by as much as 65 percent.
Doctors in low-income and immigrant communities would benefit the most, because fewer of their patients qualify for existing public insurance programs. Notoriously bad areas for medical business, low-income and immigrant communities might become financially viable for practices, improving patient access. “Financial viability is very important for getting doctors to set up practices in an area and stay there,” says Janet Coffman, assistant adjunct professor at the Philip R. Lee Institute for Health Policy Studies at UC San Francisco. “You can’t expect individual physicians or community clinics to stick around if they can’t pay the bills.”
Doctors in low-income and immigrant communities would benefit the most, because fewer of their patients qualify for existing public insurance programs. Notoriously bad areas for medical business, low-income and immigrant communities might become financially viable for practices, improving patient access. “Financial viability is very important for getting doctors to set up practices in an area and stay there,” says Janet Coffman, assistant adjunct professor at the Philip R. Lee Institute for Health Policy Studies at UC San Francisco. “You can’t expect individual physicians or community clinics to stick around if they can’t pay the bills.”
But if Americans do ditch their private coverage for new public products, California’s doctors won’t suffer as much as their colleagues elsewhere, since the state’s highly competitive private insurance market keeps reimbursement pretty low already, Shields says. Everything depends on reimbursement rates under new public insurance: “If [new public plans] somehow use private-payer payment levels, then that whole problem melts away,” he adds.
California doctors can also take heart that the low-reimbursing Medi-Cal program is likely to become less popular. Once the dust settles, after Medicaid and SCHIP expand and competition takes hold, 3.2 million people on those programs nationwide will move to one of the new public or private options, according to Lewin Group figures. If that estimate is accurate for California patients then doctors will see about 6 percent fewer Medi-Cal and SCHIP patients. But that assumes that the state will provide its half of Medi-Cal funding, and in the state’s current budget crisis, that is not a given.
Asked what expanded coverage would do to the practice of medicine, American Medical Association President-Elect James Rohack, MD, launches straight into a bird’s-eye view: Suddenly U.S. doctors won’t have 40 million uninsured people to worry about, who live sicker and die younger. “The impact of the uninsured is huge, not only in physicians’ offices, but in emergency rooms,” says Rohack. “The concept of expanding health insurance coverage and choice through incomerelated federal subsidies is one of the hallmarks of [the AMA’s] solution to the uninsured. Give individuals federal subsidies inversely related to their income, so they can purchase and own their own health insurance.”
If doctors want to inf luence reimbursement under any new public and private plans, the time to start lobbying U.S. senators and representatives is now, while plans are taking shape. Once the new system is set up, a government agency may set payment rates for public plans, and it may take cues from the medical profession for help. Obama’s proposed National Health Insurance Exchange could serve that purpose, says Gerald Kaminiski, a professor in the UCLA Department of Health Services and the university’s Center for Health Policy Research.
The Insurance Exchange is described as a marketplace for private and public insurance, and the new administration aims for it to set quality and efficiency standards, among other things. Kaminski thinks the Insurance Exchange can serve a role similar to the Medicare Payment Advisory Commission, which advises Congress on reimbursement, with input from the medical profession.
Is There a Doctor in the House?
Supply and demand will respond to millions of newly insured patients, and it could be unpleasant. Long waits to see primary care physicians—family physicians and internists—will result from a patient deluge. Policymakers in the new administration will make good on pledges to support primary care and prevention by improving reimbursement for the physicians and loan repayment for medical students.
There’s a precedent for the ugly side of reform to hurt access. Massachusetts’ 2-year-old state healthcare system resembles most of the leading national healthcare reform proposals, and it makes insurance coverage mandatory for state residents. Family physician and internist shortages “have been running in the severe level for some time, but we believe the reason that they both popped up as critical this year has been largely facilitated by the fact that we have 440,000 more insured people, as a result of our health reform initiative,” explains Bruce Auerbach, MD, Massachusetts Medical Society president. “Many physicians who had already closed their practices because they were at capacity, feeling empathy for some of the newly insured people, actually transiently opened their practices and went over capacity in order to accommodate them,” says Dr. Auerbach. Unfortunately, those kindhearted physicians couldn’t stem the tide, and there are long waits for these specialties in many places within the state.
Has the new system in Massachusetts caused reimbursement to drop so much that it’s pushing primary care physicians out of practice or out of the state? No, says Dr. Auerbach, that’s not the case. The news is actually pretty good. “Chapter 58 was associated with a bump in our Medicaid rates, and that was one of the carrots that they included in the bill to ensure that physicians would continue to take Medicaid patients, [as well as] some of these newly insured Medicaid patients, as coverage was expanded,” he says. Asked whether doctors could refuse to take Medicaid patients, he says they can, but that option’s only available for “closed” practices.
If health reform becomes a reality, primary care physicians would be wise to find ways to increase capacity and efficiency, for example, by hiring physician assistants. At the national policy level, it’s definitely a good idea to continue the AMA push for better Medicare and Medicaid reimbursement. Also, every state could use grants and loan-repayment programs that encourage medical students to enter primary care or to serve in medically underserved areas.
California’s Steven M. Thompson Loan Repayment Program is a good example of these efforts, as is its Song-Brown program, which supports training and education for family practice physicians and physician extenders. In mid-December, Gov. Arnold Schwarzenegger awarded $1.5 million of Song- Brown funds to 13 training programs for family-practice nurse practitioners and physician assistants.
Nothing Is Certain Except Death And…
It’s well and good to talk about mandating coverage for the uninsured, subsidizing insurance for the poor and establishing standards for all insurers—but in a nation of 300 million, this stuff costs money. The Obama campaign estimated its plan could cost $50 billion to $65 billion annually, and outside estimates have ranged as high as the $100 billion estimate from Robert Laszewski, president of Health Policy & Strategy Associates in Washington, D.C. Stratospheric piles of money have to come from somewhere, and no one wants to talk about that part.
Well, except for financial planners. Bruce Heymont, president of Heymont & Co. in Los Angeles, and a former administrator at Cedars-Sinai Medical Center, generally likes the healthcare reform plans that are grabbing the spotlight, although he believes it’s not a great idea to introduce a big program in such bad economic times. He has a strong feeling that a lot of the money is going to come from taxes, and it’s true that Obama has pledged to let George W. Bush’s tax cuts expire.
So Heymont has some advice for physicians. They should take advantage of various retirement programs, making sure to put away as much money as possible on a tax-deferred basis to minimize exposure to new taxes. On the income side of the equation, Heymont is optimistic that doctors’ incomes won’t change much from where they are today.
Hit Me with Technology
Wide implementation of health information technology has been on the horizon for a long time, but like a mirage in the desert, it never seems to get any closer. Healthcare reform will bring HIT into small practices and other facilities, according to the major Democratic plans, which rely on it as a major element of healthcare cost-savings. It’s a big part of Obama’s plan, as well as policies offered by Sen. Max Baucus of Montana, the Democratic chair of the Senate Finance Committee, and Tom Daschle, incoming secretary of the U.S. Dept. of Health and Human Services.
That kind of technological boost would help physicians with two big problems in running a practice. “In terms of billing, if you have the technology in your office that can, in essence, bill an insurance carrier directly and get paid relatively quickly, then number one, it would help cash f low,” says Heymont, the financial planning company president. “Number two, if you can, through technology, ask for approvals for radiology exams or any type of other expensive exam, and get responses relatively quickly, that would also be an advantage.”
That kind of technological boost would help physicians with two big problems in running a practice. “In terms of billing, if you have the technology in your office that can, in essence, bill an insurance carrier directly and get paid relatively quickly, then number one, it would help cash f low,” says Heymont, the financial planning company president. “Number two, if you can, through technology, ask for approvals for radiology exams or any type of other expensive exam, and get responses relatively quickly, that would also be an advantage.”
A healthcare reform white paper introduced in November by Sen. Baucus openly suggests grants, loans and financial incentives for HIT through Medicare pay-for-performance initiatives, especially for smaller primary practices. Baucus even mentions replicating the carrot-and-stick approach that is used to encourage doctors to adopt e-prescribing. Under that system, early adopting physicians get a small Medicare reimbursement bonus for e-prescribing, while those using paper prescriptions years into the game are penalized a small amount. HIT adoption would work the same way.
In fact, AMA officials are hoping for exactly those kinds of federal incentives, specifically bonuses for HIT adoption and low-interest loans to help physicians with costs that can run from about $10,000 to $50,000 annually, says Dr. Rohack, the AMA president-elect. But while the association applauds the Obama Administration’s HIT spending ideas, it is still cautious. It’s just as important to make sure coverage approval rules are clear, so that the insurers don’t just use HIT as “a faster way to say no,” Dr. Rohack says.
Time to Jump In
Surely, doctors need to be on the lookout for a way to be heard by a big new system. But by no means have any of the health plans under discussion come anywhere close to specifying how doctors can be heard, nor how much they are going to pay, nor where to apply for that HIT implementation grant.
That’s probably intentional. It’s an open secret that healthcare reform proponents are keeping the fine details out of the discussion, and it’s possible they will leave them for a future regulatory agency. “From everything that I’ve read, the Obama health advisors wanted to avoid what they perceived as a major mistake by President Clinton,” says Kaminski, the UCLA researcher. Talking about fine detail “essentially precluded much input from Congress, but created the appearance that this was basically a fait accompli.” And that irritates stakeholders, who feel shut out. So, they set about opposing reform.
Considering the way campaign promises are translated into policy, perhaps predictions and guesses work best as signs of what not to prepare for. As Californians know better than most, healthcare reform is always coming, it’s always going to change everything, and it’s always the very best innovation or the very worst imposition, depending on whom you ask. But the political climate right now favors major reform, which is certainly worth something.
Doctors are both front-row spectators and key players in a national political opera that’s going to get louder and more serious. It’s not a bad place to be, but they need to keep up with the plot. No one wants to mourn the death of good medicine.
