richard e. anderson, m.d. chairman and chief executive officer
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Healthcare Reform and the Practice of Medicine. Richard E. Anderson, M.D. Chairman and Chief Executive Officer. Richard E. Anderson, MD Chairman and Chief Executive Officer January 25, 2011. Introduction. Context of contemporary practice Health reform timeline Potential impacts - PowerPoint PPT PresentationTRANSCRIPT
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Richard E. Anderson, M.D.Chairman and Chief Executive Officer
Richard E. Anderson, MDChairman and Chief Executive OfficerJanuary 25, 2011
Healthcare Reform and the Practice of Medicine
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Introduction
• Context of contemporary practice• Health reform timeline• Potential impacts• Conclusions
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On Being a Doctor Today…
• 5 forces Excessive business and legal complexity in the provision
of medical care Decreased medical spending without reduced demand
for medical services The increasing role of for-profit corporations in changing
the traditional emphasis on patient care into concern for shareholder equity
A growing population of uninsured patients adding to the financial stresses on physicians and healthcare institutions
Provider demoralization (Washburn)
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On Being a Patient….
• “Patients, nominally the designated beneficiaries of these changes, seem the unhappiest of all. They have lost the unquestioned assurance that the physician is their advocate. Shifts in the marketplace may force them to find new doctors without warning or cause. Medical costs are again rising rapidly, and patients are being asked to pay an increasing share of their own medical bills. Only 44% of Americans express ‘a great deal of confidence’ in medicine.”
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By The Way –The Reality of Medical Student Debt
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008
Tota
l Stu
den
t D
ebt
(%)
> $200,000
$100,000 - $199,000
$1 - $99,999
No debt
> $200,000
Robert Steinbrook, NEJM Dec. 18, 2008
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Medical-Legal Context of Practice
Arguable standard of care is best imaginable outcome• Practice guidelines: endless proliferation renders them
practically meaningless, often in conflict, and not infrequently wrong
• Virtually all medicine is defensive medicine– Patients bear risk and cost
• Devalues physician judgment• Economic pressures compete with clinical imperatives
– Need for through-put is not a defense• More than one-third of doctors would not choose a career in
medicine a second time, nor for their children
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TDC Frequency
Frequency
8.0% 7.7% 7.4% 7.6% 8.0%
9.6%
13.0%12.4%12.5%12.5% 12.9%
13.4%13.6%14.1%14.4%
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Report Year
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
42%
61%
All Physicians Age 55 & Over
Source: AMA’s 2007 – 2008 Physician Practice Information Survey
Medical Liability Claim Frequency
Number of Claims per 100 Physicians
95 161
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Medical Liability: Frequency by Specialty
Source: AMA’s 2007 – 2008 Physician Practice Information Survey
General & family practice
39%
Emergency Medicine50%
Ob/Gynecology69%
General internal medicine
34%
General surgery69%
Anesthesiology42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
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TDC Severity
* Compound Annual Growth Rate
$59 $58
$65
$74
$67
$80
$72$75
$83$87
$93 $94
$40
$60
$80
$100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Report Year
Sev
erit
y ($
000'
s)
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Impact of Legal Reforms in PPACA
• Grants to states to develop liability reforms that– Allow for dispute resolution over injuries
caused by healthcare providers or organizations
– Promote reduction of healthcare errors through enhanced patient safety
– But, ineligible if that law “limits attorneys’ fees or imposes caps on damages”
– And plaintiffs may opt out at any time in the process
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Future Prospects
• Most Democrats opposed• Most Republicans would rather have the
issue• Focus will be elsewhere• Battleground shifts back to states
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Healthcare Reform: Mechanisms of Action
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The Trick
• Fast, Cheap, or Good, pick any two Cost, Coverage, Quality
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Accountable Care Organizations
•Entities that accept responsibility for: Cost and quality of care To a given population of patients and Provide data on their performance
Typically includes physicians and hospital(s), possibly nursing home, home health agency, etc.
Can we get there from here?
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Barriers to ACOs
• Even today, most physicians remain in small practices Lack of:
• capital• infrastructure• leadership
• Challenge to (remaining) physician autonomy• Incentives for each component not aligned
Income redistribution Authority/responsibility mismatch
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Barriers to ACOs (2)
• Patients No incentives to cooperate or even join Even less to help reduce cost
• Legal and regulatory Anti-trust Corporate practice of medicine laws
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Independent Payment Advisory Board
2015• Purpose: control Medicare spending
Target growth rate If target rate exceeded
• Board makes proposals that reduce Medicare spending each year until target must be met in 2018
BUT…
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Independent Payment Advisory Board (2015)
• Proposals must be directed at providers NOT beneficiaries i.e. may not “ration healthcare”
• Proposals go to President who forwards to Congress Inaction is not an option If Congress does not adopt substitute
provisions, HHS automatically implements Board’s proposal
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Daunting Math
• Historically, healthcare spending exceeds GDP growth by 2.5 percentage points
• Collision course for 2018 If targets not met, the only alternatives would be:
• Cuts• Increased taxes • More borrowing• Global budget – set rates for all payers
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Potential Impacts
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Healthcare Leadership Council Survey: Impact of PPACA After 2017
Improve(1) (2)
Stay relatively unchanged
(3) (4)Deteriorate
(5)
The nation’s healthcare efficiency 14% 25% 23% 19% 19%
The nation’s healthcare quality 15% 30% 25% 14% 15%
The nation’s access to healthcare services
23% 27% 18% 15% 18%
My organization’s delivery of efficient healthcare services
14% 26% 31% 17% 12%
My organization’s delivery of quality healthcare services
15% 25% 39% 13% 8%
My community’s access to healthcare services
18% 26% 26% 16% 13%
Base = 289
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Do you consider your organization part of an accountable care organization?
No59%
Yes41%
HLC Survey: Do you expect your organization will become part of an accountable care organization in the future?
No31%
Yes69%
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HLC Survey: Which of the following strategies does your organization currently have in place?
10%
42%
32%
24%
39%
57%
0% 10% 20% 30% 40% 50% 60%
Gainsharing
Paid directorships
Acquiring medical groups
Clinical co-management
Other contractingrelationships
Physician employment
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HLC Survey: Which of the following strategies do you expect your organization to increase due to the enactment of PPACA?
23%
26%
33%
43%
43%
52%
0% 10% 20% 30% 40% 50% 60%
Gainsharing
Paid directorships
Acquiring medical groups
Clinical co-management
Other contractingrelationships
Physician employment
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Uncertainty
• The ambiguity of the legislation itself • Unknowns surrounding implementation
even as written• Multiplied by the political uncertainty
As you look ahead, what are the advantages of remaining small?
If national reform were actually repealed, what would happen?
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Extrapolate Current Trends
• Medical student debt• Gender balance• Gen X, Gen Y• Disappearance of solo practice• Physician demoralization• Increasing demand for more, and better, services• Bureaucracy of practice• Litigation pressure
Conclusion• Uncertainty drives the same trends driven
by the reform itself
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One Example Specific Impact: EHR
• How good is the old system? Paper charts X-ray films Relied on direct communication among physicians
• EHR could be (have been) a Holy Grail Better (still imperfect) match of investment and return Standardization of platform and infrastructure Clinical optimization
• Integrated communication across the system
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Potential Medical-Liability Risks of EMRs
• During initial implementation Transition from paper to electronic record may create
documentation gaps Inadequate training on EMR systems may create new
error pathways Failure of clinicians to use EMRs consistently may
lead to gaps in documentation and communication System-wide EHR “bugs” or outages could adversely
affect clinical care• “Too err is human…”
Source: NEJM – Medical Malpractice Liability in the Age of Electronic Health Records, 363:21 November 18, 2010
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Potential Medical-Liability Risks of EMRs (Cont’d)
• As systems mature • Email advice:
Facilitates response without thorough investigation and examination of the patient
Multiplies the number of clinical encounters that can give rise to claims
• Temptation to copy and paste Risks missing new information and perpetuates previous mistakes Bright audit trail
• Information overload may cause clinicians to miss important pieces of information
• Departures from clinical-decision support guidelines are obvious
Source: NEJM – Medical Malpractice Liability in the Age of Electronic Health Records, 363:21 November 18, 2010
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2005 RAND Study: Impact of National EHR
• Annual savings of $80 billion• Is this still true today?
Can Electronic Medical Records Transform Health Care? Potential Health Benefits, Savings and Costs,
Health Affairs, v.24, no. 5, 2005
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Observation
“… The one truly scary thing about health reform: Far from being a government takeover, it counts on local communities and clinicians for success. We are the ones to determine whether costs are controlled and healthcare improves…”
Atul Gawande M.D.
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Another Observation
“Relatively little of healthcare reform will make our nation healthier. The bigger impact will still come from addressing the underlying physical, social, and behavioral determinants of health.”
Dr. Stephen Shortell
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Conclusion
The next decade of medical practice will see a collision of massive economic interests, social concerns, and unintended consequences. This will occur in an extraordinarily polarized nation with inadequate resources and limited vision.
It will not be smooth, and it is unlikely to be pretty