The Physician's "Squeeze"

As a person outside the medical community, I want to mention a couple of scenarios I've read about that are emerging in this country affecting physicians.  Much of this information is based on a report by Dr. Sandeep Jauhar (author of Intern: A Doctor's Initiation, 2009) in SaturdayEveningPost.com (Jan.-Feb.'15, pgs. 34-38, 78).

Let's start with where the U.S. ranks in life expectancy among developed nations - #45 - according to a report by The Commonwealth Fund, a healthcare research group.

If you live in Miami, Medicare will spend $8414/person/year versus $3341/person/year in Minneapolis. Why?  A large supply of doctors in Miami means more per capita utilization of services and testing, hospitalizations, and intensive care stays.

Doctors in this country are reimbursed for whatever they bill.  They're paid separately by insurers for patient visits.  As long as their patients are in the hospital, doctors can bill and be paid for each visit. In our healthcare system, "if you have a slew of physicians and a willing patient, almost any sort of terrible excess can occur."
(SaturdayEveningPost.com, Jan.-Feb., '15, p. 36).

Volume counts.  Fear of lawsuits creates volume in terms of services (some unnecessary) and referrals.  Better-informed patients might be the most potent restraint for over-utilization.

Here's the other side of the coin.  According to Dr. Jauhar, he was under pressure
at Long Island Jewish Medical Center to reduce the length of stay of patients
hospitalized with heart failure.  The shorter the patient's stay, the more the hospital's costs were reduced (associated with less use of hospital resources during a shorter stay).

It's a physician's squeeze.

The result?

Doctors are trying to sell their practices; uncompensated care is growing; admissions and elective procedures (money makers) are declining; and hospitals are cutting costs, staff, and services.

Dr. Jauhar suggests several options:
          - Hire doctors as employees and put them on salary, removing incentives to
            overtest
          - Use bundled payments for packages (an entire hospitalization, for example),
            rather than discrete services
          - Move to an "accountable care organization" in which teams of doctors would
             be responsible (and paid) for patients' clinical outcomes.  Most doctors have
             performed poorly in such situations. (pg. 38)

A recent Time magazine article by Steven Brill  (Jan. 19, 2015) suggests another option:
          - The University of Pittsburgh Medical Center's model (Brill also cites the
            Cleveland Clinic's model, a 75-facility enterprise)
             in which hospitals, doctors, clinics, AND INSURANCE COMPANY would be
             under one roof.  Tight regulations for these conglomerates, mostly through
             use of
             federal anti-trust laws and state regulatory authority, would ensure their
             accountability.  The in-house insurance company
             would have the incentive to control the doctors' and hospitals' costs
             AS WELL AS the means to do so. There would be less incentive to
             inflate costs or overtreat, because the in-house "boss" would get the bill
             through the insurance company.





 
       

Elderly Healthcare News

According to Jennifer Smith's article in The Wall Street Journal on October 3, 2014, lawyers have discovered a get-rich scheme as America ages:  suing for-profit nursing home chains.

As defined in the appendix of my book, ELDERLY PARENTS WITH ALL THEIR MARBLES: A SURVIVAL GUIDE FOR THE KIDS, skilled nursing facilities (nursing homes) may be for-profit or non-profit and are licensed by each state. Professional nurses, social workers, psychologists, physical and occupational therapists, doctors, and clergy are on staff.

Attorneys are now filing neglect and abuse cases which allege, typically, that "patients were harmed not just by neglect or medical errors but because the corporate owners skimped on patient care to boost profits" in large chains of for-profit nursing homes.

Operators of the facilities are already grappling with falling reimbursement rates from the government.  The increase in litigation is prompting some chains to abandon certain states where there are limited or nonexistent curbs on non-economic damages.  Lawsuits that elsewhere might be settled for $50,000 can generate much larger settlements or verdicts.

Large for-profit facilities are more likely to be cited for severe health deficiencies, despite beefing up staff and making other improvements, according to data from Centers for Medicare and Medicare Services.

The lawyers take the cases on a contingency basis, paying upfront costs in exchange for a cut - up to 45% - of any settlement or award, plus expenses.

"If you have a good case," attorney Brian Reddick said, "jurors are very sympathetic."

The October 3, 2014, Wall Street Journal also reported that Medicare will cut payments to 2610 hospitals across the country, because too many patients were readmitted within thirty days, according to an analysis by Kaiser Health News.

The hospitals selected will see Medicare reimbursements reduced from .01% to 3% for every beneficiary they treat from October 1, '14, to September 30, '15.

The penalties will save Medicare an estimated $428 million, a spokesman for Centers for Medicare and Medicaid Services said.

The Obama Administration has emphasized reducing readmission to hospitals to reduce Medicare spending and spur hospitals to pay more attention to patients who are being discharged "quicker and sicker."