Enter the late Senator Ted Kennedy who advocated for a government run long term care insurance program and thus CLASS (Community Living Assistance Services and Supports program) was born as part of the mega health care reform of 2009. Except it was stillborn.

Basically, liberals looked at the long term care of rich retirees or at least those who had the foresight to purchase a long term care policy and decided that this is a new entitlement that everyone should be able to get regardless of financial ability! So they decided that they could perform a magic trick and create a government sponsored and run long term care insurance program with monthly premiums as low as $5, a short 5 year purchase period before becoming eligible for benefits, no apparent age or time limits for benefits, and no underwriting in the selection of beneficiaries. Basically it was an insurance plan without any of the rational limits and restrictions that real insurance companies use to prevent themselves from going bankrupt.

CLASS didn’t even provide all that great a benefit compared to most private policies which usually provide $200-400 per day coverage. But even a $50 a day in-home care assistant to help with cooking, cleaning, and bathing would cost over $18,000 a year.  Nursing home care would cost even more. And with no signup restrictions and no increased premiums based on overall health and age at the time of signup, the possibility that the vast majority of beneficiaries in this program would be the sickest and most infirm was too much to be able to assure that the program would be solvent in 75 years. Thankfully, an amendment was added to the act that required the department of Health and Human Services to prove to Congress that they could perform magic and create a stable and self sustaining program.

They couldn’t. And perhaps for the first time in history, a disastrous social program that would have cost the tax payers an additional $75 Billion per year was stopped before it could join the phalanx of entrenched entitlements. Once again, liberals have proven that you can’t pull water from a stone, create gold from lead, have your cake and eat it too, or buy something without paying for it.

CLASS failed for the same reason that Medicare is failing. The amounts that people pay into the system are falling short of matching the actual costs. Like CLASS, Medicare has few restrictions on the amount and types of care that beneficiaries receive. Liberal egalitarianism (“health care is a right”) demands that a severely demented 99 year old nursing home patient with terminal cancer receive the same life extending care as a 65 year old with no medical problems.

In a way, CLASS was even worse. It tried to create a new social entitlement where it’s debatable if there even is one. Despite hysterical claims otherwise, long term care boils down to one single benefit. Comfort. There is no proof that nursing home care or home assistance care or assisted living or adult day care increase life expectancy or prevents such old age maladies as falls, hip fractures, pneumonia, or strokes.

Severe cost over-runs raise the issue of whether Medicare should continue to provide for such aggressive care in those over 80 and CLASS raised the question of whether long term care is even the way to approach caring for our elders. Only about 50% of the population needs a nursing home stay at any point in their lives and the average nursing home stay is usually less than a year. The majority of elderly patients who do need assistance are cared for at home by family members or in some community care setting. Home and community care is far less expensive than facility care or having daily private assistance. More attention should be paid to assisting those families who do make the time and effort to care for an elderly loved one at home.

Then there is the rational approach to caring for the elderly. Statistically, a patient who has deteriorated in their ability to care for themselves and live independently as a result of advanced age and/or progressive medical conditions has a far shorter expected survivability than one who is relatively healthy regardless of aggressive medical care. The CLASS act does not appear to concentrate or particularly promote the option of hospice care (even for patients without a specific terminal illness) nor is there a provision to promote comfort over continued aggressive medical care. I can guarantee you that the vast majority of patients in a long term care situation continue to receive aggressive health care including blood pressure medications, statin medications to lower cholesterol, mammograms, colonoscopies, frequent testing and office visits, and frequent trips to the ER for any cough or fever or issue other than one strictly of comfort. Aggressive medical care accounts for a big part of the cost of caring for the elderly.

The Medicare lunacy of continuing to treat elderly patients in the last few weeks, months, or year or two of their lives with aggressive medical care designed more to extend lifespans rather than to promote comfort is a big part of what sank the CLASS act. Rather than concentrate on keeping the elderly alive and warehoused in facilities or with expensive home services indefinitely for the benefit of the working poor, the CLASS act might be still viable with a change in philosophy. The same goes for Medicare.

At some point (probably just before complete economic collapse becomes inevitable) the deficit will need to be paid back and right now that amounts of almost $50,000 per every single American.  Of course, this only applies to tax payers and inevitably those with higher incomes will be “called upon” to shoulder more of the debt burden. But beneficiaries will also have to pay the price of decades of deficit spending as social programs and entitlement benefits are slashed to bring spending under control. Essentially, everyone will pay in one way or another.

Fortunately, deficit spending can probably continue for many more years before the bottom falls out and we all end up taking night classes in Chinese. This is just what the current bunch of drunken sailors on a Tijuana spending binge that passes for the US Congress is counting on.  Re-election is more likely as long as members can continue the spending insanity and delay the inevitable hang-over until well after they have left office.

The health care industry and physicians in particular are doing almost exactly the same thing.

The current reimbursement system (as directed by Medicare) rewards volume over quality and invasive procedures over good medical management. Therefore and in the face of shrinking reimbursements, physicians have continued a pattern of high volume and high utilization of health care resources.

Currently there are absolutely no good incentives and fewer reasons for physicians to practice good resource utilization and try to contain health care costs.  A few managed health plans will “reward” their participating primary care providers by “sharing” a little of the savings from their efforts to reduce costs. But these kick-backs are usually a very small percentage of the over-all savings.  What about passing savings on to their patients? In my experience, patients infrequently ask their providers to help them out with less costly tests and treatments and any concerns are usually limited to medications. This is what happens in an insurance system. Costs are separated from the source. This disconnect impairs how both providers and patients understand and react to costs.

But not truly understanding and being separated from the economic consequences of their practice is only the background of how physicians are contributing to the escalating cost crisis.  There are so many other factors that “reward” physicians to totally ignore resource utilization and order more expensive tests and treatments for their patients. There’s ignorance among doctors that more expensive tests and treatments are better. There is fear of litigation and other reprisals and having to explain why they didn’t get the test instead of why they did. And then there is outright greed either to see a ton of patients a day (on the part of primary care docs) or to perform a ton of procedures (among specialists). There is even institutionalized greed among health care facilities to admit and treat the most patients and to perform the most expensive procedures which simply enables those aggressive, high cost physicians.

If you’re not part of the solution then you are certainly part of the problem. Unless physicians take responsibility and assume (or rather, re-assume) some leadership in our health care system the consequences of ever increasing health care costs will be ever drastic and larger funding cuts.  If physicians don’t stop responding to decreasing reimbursement rates by exploiting new revenue sources or simply increasing volume then the system will bring back managed care . . with a vengeance.

Our wild spending spree will have consequences. The problem is that no one knows when the tipping point will come. I’ve tried to talk to other physicians about this. The blank stare or shrugged shoulders they give me is similar to the responses I get when I talk to 20 somethings about the dangers of smoking.  The threat is currently too abstract. Like Congressmen, the hope is that they will be long retired and out of the profession before the proverbial excrement hits the fan. At that point, it will be someone else’s problem.

I’m not advocating for socialized medicine or some universal health care government scheme. I’m certainly not an anti-capitalist. The problem is that the current health care system is not so much capitalist as it is a gigantic privatized government program. As such, there are few  classic capitalist mechanisms as cost transparency and free markets in this system, which is great for recipients of the funding. It’s great, until the bottom falls out.

In concert with such actual and true reforms such as malpractice tort reforms and reimbursement reforms and stabilization, physicians need to convert from simple “consumers” of the health care system and start acting more like advocates, reformers, and preservationists of the good things about our system (freedom of choice, efficiency, advanced care) before the US gets it’s own National Health Service nightmare.

The reasons for this are varied and complex but in an article that spotlights several lows in the career of a software programmer, Scott  Reynolds writes about one experience with coding software for the next generation of electronic health records and what happened after it was finished, shipped to the customer, and went live.

You didn’t know what to do with yourself so you sat there all day refreshing a view on the database to spy on what [the first few customers were] doing. Answer: not much. The things they did do, they did wrong. They found bugs. They found ways to circumvent all of your carefully constructed system rules and validations. Not because they were master hackers or brilliant technicians…but because they were just stupid.

They clicked on things they shouldn’t click on. They typed things in that they shouldn’t type in. They didn’t read simple instructions. They didn’t listen in training. They were personally insulting you by being terrible at using your software.

In a field labeled “Enter the number of specimens:” they typed “five specimens.”

In a field labeled “Social Security Number:” they typed “he doesn’t have one because he is an illegal.”

Instead of using the button labeled “Create New Patient Record:” they kept changing the information in a single patient record over and over and saving it.

Then the calls came in from the sales team demanding to know why the system was broken and why you had taken so long to develop something that clearly didn’t work.

There was nothing you could do but respond to the bug reports and issue system patches that added no value other than handholding people through the software. You wondered aloud how these people had managed to survive this long without drinking bleach by accident.

Sad but very true. Like many industries, the medical business is loaded with tons of paper pushers, unmotivated mid-level managers, mindless bureaucrats, poorly trained ancillary staff, and lucky professionals who slipped through the cracks and managed to get a degree despite being borderline bleach drinkers.  It’s far easier to conceal stupidity, laziness, and incompetence while utilizing a paper based documentation system than an electronic one.  Paper documents are regularly loaded with errors, inaccuracies, and out-right crap. Lucky, very little of this has any impact on patient care or is discovered until the chart is audited by insurance companies, Federal agencies, or malpractice attorneys.

It’s not until the paper form is replaced by a computer that can fact check and give instant feedback that the massive scope of all this crap documentation becomes known. It’s not just that people are “computer illiterate”. At the hospital where I work, forms are regularly incorrectly filed under the wrong tab in the paper chart, medications are misspelled, illegible test results printed long after the printer toner has run out, daily weights randomly documented using lbs or Kgs, blood sugar levels written in the blood pressure column, etc. etc.

Combine this fact that the health care industry is not immune to employing bleach drinkers with the fact that it’s inherently a very complex information system and we start to get an idea of just how daunting a task it is to design a software system for health care documentation.

But, then again. As the article makes obvious, why is a software programmer designing AND coding  a computer system for health care? Isn’t that like an oil company executive designing a formula one racing car or lawyers writing health care legislation? Yea. That.

Likewise,

The happiest days in a doctor’s life are the day he get his license and the day he figures our how to make a good living without it.

I.e. This profession is rapidly going to shit in hand basket and everybody is pretending not to notice.

The process for making rules is long and rigorous, and new rules often have to go through multiple agencies and departments. It will also take many more people with specific expertise to carry out the various parts of the law, and hiring in itself can be a slow process in the federal government.

“The average rule takes 18 months, which means that there are many of those that take two or three years to do, because they have controversy or they require integration with some other rulemaking process. So this is a tsunami of rulemaking that has tipped the Department of Health and Human Services,” said Michael Leavitt, HHS secretary under former President George W. Bush.

I like to think of the new health reform law – which, if anything, is more of an insurance reform law – as being similar to the creation of the Department of Homeland Security. Both laws are attempts to address and correct significant institutional problems with massive amounts of money and additional layers of government bureaucracy. Both are more accurately thought of as massive spending bills that take advantage of a “crisis” to funnel billions towards specific private sector industries while the benefit to the greater population is dubious and difficult to verify.

Let me put this another way.

If the Federal government were a small town council then their response to a crime spree would be to spend tens of millions of tax payer funds to purchase an M1 Abrams tank and parade it in front of city hall. This after salesmen from General Dynamics spent millions of dollars taking various city council members on exotic vacations and to fancy dinners and conferences where they were given presentations on the crime fighting and deterrent effects of the M1.  Town citizens who haven’t been a victim of crime since the tank arrived are more than happy to give credit to the high spending council.

Americans generally support massive spending bills – like a big, expensive tank that sits in front of city hall – because the perception is that anything that is expensive must work. The economic reality is that everything else being unchanged, the prices for goods and services in a system will invariably increase in response to any massive infusion of cash. This is already beginning to happen to health insurance premiums and the funding hasn’t even started.

The political reality is that most Americans wanted secure affordable health insurance – hence, the name of the new law.

The reality is that most Americans are not going to get it.

Pediatricians’ pay took a tumble. Hospital nurses questioned why we took on so much responsibility and worked such long hours for paychecks significantly smaller than theirs. Insurance companies kept ratcheting back both on our reimbursements and on the level of patient care until there was little left.Patients naturally became disgruntled. They got angry about the insurance denials and took out their frustration on our office staff. We needed to see more patients to make ends meet, so the waiting room became more crowded and waiting times increased. I had nightmares about running hours behind, patients yelling at us to “hurry up!” There were days when we would skip basic necessities like eating lunch or going to the bathroom; we didn’t want patients to wait. Days “off” were often spent seeing patients, catching up on paperwork, and calling back families who had questions too lengthy for regular office hours. Lunch was typically spent tackling the accumulated stacks of charts and callbacks to patients from the morning, in addition to holding office staff meetings or attending meetings at the hospital. A typical call night would entail the beeper going off every five to 10 minutes throughout dinner, and my often spending a good part of the night at the hospital. In the morning we’d arrive at the office and try to smile through another full day of patients.

Sounds like a dream job. Yep, and a great investment: spending 7 years of medical training to make less than what an RN makes with 2 years of training (kudos to the happy RNs who figured this out before it was too late).

Dr. Li encountered the paradox of traditional high volume primary care. Insurance reimbursement rates fall so the provider sees more patients but higher volume means higher overhead costs and more non-reimbursable obligations (phone calls, medication refills, paperwork) and therefore less take home pay. Too bad Dr. Li didn’t consider changing to a concierge medical practice model.

From 1999 to 2007,  35 medical facilities of Kaiser Permanente in Northern California, were given financial incentives  for ensuring that their patients got regular screening for diabetic retinopathy and screening for cervical cancer – eye exams and PAP smears*.

The results were less than stellar. In eligible patients (i.e. diabetics and sexually active women without hysterectomies) over 4 years, the rate of screening for diabetic retinopathy increased a little over 3 percentage points from 84.9 to 88.1% and over one year the rate for screening for cervical cancer increased by a paltry 0.6 percentage points. And then it got worse.

After these financial incentives were stopped, the screening rates for these tests fell dramatically to levels that were significantly lower than they were before the bonuses were started. After the incentives were stopped, screening rates for diabetic retinopathy dropped to 80.5% over 4 years and the screening rates for cervical cancer dropped to 74.3% over 5 years. What is going on?

This is yet another example of how economic motivation theory can be very counter-intuitive. One would assume that performance would increase linearly with increased rewards but in many contexts researchers have found the opposite effect. The mechanism is thought to work this way; an external reward or punishment (apart from base compensation) has the effect of decreasing  internal motivators (based on autonomy, mastery, and purpose) so much so that this negates or even reverses the positive effects of a person’s external motivators (the drive to earn more) such that their total motivational drive and hence, their work performance, is decreased. Economists say that the internal motivators are “crowded out” in these cases.

The financial incentives in this study were given to be distributed throughout each facility rather than to each physician and as part of this program regular reminders for screening exams were sent out to staff. The modest but statistically significant increases in the rates for these two screening tests were likely as a results of the regular reminders rather than any financial incentives (unfortunately there was no control group without incentives to test this).

But the negative effects of monetary incentives on performance can clearly be seen after the incentives are discontinued. This is what economists call “motivational spillover.” This is what happens when you start giving someone an external or financial motivation to do something that they were already doing as part of the internal motivators of their job (mastery and purpose). Take, for example, the economic parable of the man and his lawn.

The story goes that a man was upset that his neighbor kids would always play on his lawn and damage it. So he decided to pay each child to play on his lawn. The surprised kids gladly accepted. After a few days the man told them that he could only afford to  pay them half of the initial rate. The kids accepted this reduced rate but were less then enthusiastic. After a few more days the man cut his pay to almost nothing and the children were so upset that they left, vowing never to play on his lawn again unless he increased their pay. Problem solved.

In this case, the man’s pay “crowded out” the kid’s internal motivators (autonomy, and fun as the purpose) for playing on his lawn and the dominance of the external motivator spilled over into further activity. In the case of the medical incentives, regular screening exams are supposed to be part of what the staff at the clinic does and involves internal motivators as part of their autonomy, mastery, and purpose (taking care of patients) and it is these internal motivators that were impaired by the incentives. Clearly the clinic lost far more than they gained by instituting incentives and then discontinuing them. Interestingly the screening rates increased slightly after incentives were reinstated but did not get back to the original levels. Thus there was a net loss in performance even after restarting the incentives.

This is likely the reason why small monetary or other incentives for performance rarely work in socialized medical systems.

This study is consistent with a growing body of evidence that pay-for-performance does not work and can reduce overall care, continuity of care, and impair further efforts to improve care. So what is to be done?

The first thing is to try and get policy makers to understand that efforts to increase overall compensation by relatively small incremental increases tied to performance are very unlikely to work and as in the case above, will lead to minimal gain for money spent and may lead to a net loss in performance.

To properly compensate primary care practitioner’s level of education, effort, and time, a significant net increase in base pay should be provided and performance should be enhanced or maintained by efforts that maintain or improve the staff’s perceptions of autonomy, mastery, and purpose. For example, money is probably much better spent on regular educational activities for the staff that enhances their intrinsic motivators. I.e. education for staff members about the importance of and new methods of preventative care is much more likely to be effective than rewarding and/or punishing them for specific outcome indicators.

*The BMJ study did find that diabetic control and blood pressure control did improve significantly over the time span of the study however, there were no internal or external controls for these measures nor any way to differentiate them from other variables such as notifications and increased staff awareness of these measures that may had significant influence and so these measures were not included in the results of this study.

The socioeconomic study of what motivates people is a fascinating field of study, not the least of which is because of how counter-intuitive it is. For example, it seems normal to assume that the more someone is rewarded for their efforts, the more effort they will put forth toward those rewards. These rewards (increasing salary, bonuses, benefits, status, etc) are known as “extrinsic” motivators and for  menial and/or repetitive jobs that have little need for regular complex planning, evaluation, or creative problem solving like unskilled manufacturing, manual labor, or GOP membership, the system works as expected with bigger monetary rewards leading to bigger efforts.

However, this simple linear model of economic motivation begins to break down as “intrinsic” motivators start to dominate the picture. Intrinsic motivators are such psychological variables as the perception of autonomy, mastery of the task or role, and purpose. It turns out that not only do extrinsic variables not work as predicted for motivating a worker tasked with performing complex work that requires thought and problem solving skills but this kind of motivation actually reduces job performance (particularly time spent per task).

This counter-intuitive result is what economists refer to as “crowding out” of the intrinsic values with the extrinsic values. The offer of an extrinsic reward tends to cheapen or dampen the intrinsic rewards and the negative effect on your intrinsic motivations is enough to negate and even reverse any positive extrinsic motivators. External motivators tend to come with conditions that hamper autonomy, mastery, and purpose. A job that was once “fun” has now become burdened with the demands of higher expectations even though a reward is bundled in there somewhere. Extrinsic rewards also impair creativity and thinking by narrowing down the focus of the task (i.e. getting it done faster or more efficiently).

The key to having a happy employee who’s job involves cognitive skills, creative thinking, and problem solving is to 1.) ensure that they are paid enough to close the gap between what they are paid and what they think they should be paid based on their education, training, and experience so that base pay is no longer an issue and 2.) allow the intrinsic motivators of autonomy, mastery and learning, and purpose to flourish. There is a great “whiteboard” animation of a presentation on this by Daniel Pink for those who think I’m crazy. This is not neo-hippy, socialistic, Montessori style, feel-good new management methods. This is real world and is already yielding benefits for companies like Google.

This got me thinking about physicians and motivation. We like to say that what motivates us is the chance and desire to save lives and improve lives. That’s purpose. We like to be our own boss and work on our own schedule. That’s autonomy. And we like what we do. We find it interesting and strive to learn more and improve our skills. That’s mastery.

With so many intrinsic motivators for doctors, why then, do many appear to defy the evidence for the establishment of motivations stated above and simply increase their work loads to obtain the higher salary or bonus or base income? I have seen physicians who round on 15-20 complex hospitalized patients in an hour and others who see a complex medical patient in the span of a 3 minute office visit. Then there are those who push the boundaries of the vast gray area of test and procedure indications (like ordering expensive nerve studies on every diabetic patient regareless of symptoms) and then there are those who commit outright fraud.

Many doctors are employees but the type of excessive extrinsic motivated behavior I’ve seen comes from physicians who are self-employed, while the studies for the effects of extrinsic and intrinsic motivators were done mostly in the context of employee-management relationships. Is this the reason for the discrepancy? I don’t think so. Self-employed doctors function as employee-owners, doing the brunt of the work for their practices while being beholden to insurance companies and the government for their compensation. It’s still very much of an employee-like relationship with the promises of increased compensation for increased work. The same basic motivator mechanisms should still apply.

I believe that the problem starts with insufficient compensation which in of itself is an extrinsic motivator that compels the worker/doctor to try and close the gap between effort and proper compensation. This seem to help explain why higher paid specialists, though they work hard, tend not to follow a pure profit motive pattern. Surveys have found that specialists are more satisfied with their jobs than their lower paid colleges in primary care. Specialists are also more likely to be self-employed (autonomy) and in my experience, they tend to express more interest in and a desire for mastery of their field and skills than many primary care docs.

I believe that the second culprit is the per-patient or per-procedure way that doctors are compensated. This a system that already has multiple levels of bonus and reward built into it just like the unskilled laborer who gets paid more to move more rocks, so to do physicians get paid more to see more patients. So how does a physician with a high level of intrinsic motivators convert to a profit driven machine with the extrinsic motivation profile that is on par with an unskilled rock mover?

The key concept is that they convert the essence of their job from creative problem solving of multiple complex tasks to following more linear basic rule sets. In short, they go from practicing medicine to practicing “cookie-cutter” medicine. You would think that this would apply more for specialists who often deal with more linear decision making for their many technical skills and procedures they perform but I’ve seen profit driven “cookie-cutter” medical practice behavior more often in primary care docs and I think that it is their lower compensation that is to blame.

“Cookie-cutter” physicians try to minimize risk while maximizing profits. One way to do this is to minimize the time spent with the patient and on complex problem solving. It is more efficient and profitable to perform a very basic linear diagnostic and treatment evaluation. If knee pain then –> MRI. If nervousness then –> prescribe sedatives. If fever –> antibiotics. If chest pain then –> cardiologist referral. If vomiting then –> gastroenterologist referral. Most of the complexities and nuances of medical care are tossed aside in favor of a rote if-then decision tree that can be done by any couch potato who’s watched too many episodes of “er”.

Usually, this type of medical care increases overall utilization of resources. Expensive tests and procedures are more likely to be ordered both because the physician believes that they reduce their liability risk  which they have acquired from spending too little time with too many patients and/or because they  increase profit. Medications are more likely to be ordered for each and every symptom because it takes less time to explain to and convince a patient – who is usually expecting some type of medication – why they need the medication than why they don’t.

Needless to say, this type of medical practice does NOT improve overall care quality or patient satisfaction and may very well  decrease  care quality in many circumstances. This apparent paradox in decreasing health care quality in areas of high health care resource utilization has been extensively studied using natural  geographic variations in Medicare spending.  These physicians tend to prescribe too many referrals, tests, procedures, and medications and they all come with risks. Physicians who practice this way are likely to be too aggressive with diagnostic modalities and treatments for certain subsets of patients. For example,  in patients with mild conditions in whom the side effects may outweigh the benefits or those with advanced disease for whom aggressive treatment is more likely to hasten death than to prolong life.

The study of economic motivation models may help to explain and predict that inadequate compensation is more likely to change physician motivation and practice patterns from an intrinsic system to an extrinsic profit driven system which increased health care utilization and ultimately higher costs for no quality benefits. This is particularly true for primary care practitioners and does not bode well for Obama’s new-American health care mecca.

There are some obvious solutions. First, pay primary care physicians an increased amount so that they are adequately compensated for their time, effort, and level of training and that this issue is “taken off the table.” Next, change the per-patient, per-procedure scheme to an annual fixed amount based on a set panel of patients.

Greed is “good” in that it leads to capital investment in macroeconomic systems but in the microeconomic context of skilled health care worker, greed – external profit motives – suppress intrinsic motivators and invariably leads to sub-par performance, increased costs, and decreased care quality and decreased satisfaction values among patients and physicians.

There are the endless medication refill requests, the phone calls for everything from emergencies, to medication effects, to insurance issues, dealing with pre-authorizations and arranging referrals and imaging tests, coordinating care with specialists and allied health services such as home health and physical therapy, filling out forms for insurance, disability, medical excuse, and durable medical equipment, and review of medical literature for conditions that we are unfamiliar with. We are inundated with more of this “extra-visit” work than specialists and very little of it is reimbursable.

Primary care providers should NOT be reimbursed on a per visit basis. Our duties extend well beyond the exam room but unlike specialists we don’t have many expensive procedures that we can perform in excess and make a lot of money. We have to squeeze in more and more patient visits per day in order to keep up with declining reimbursement and raising overhead costs.

This results in spotty care, patient dissatisfaction, long wait times, physician dissatisfaction in practicing “conveyor belt” medicine, and doctor burn-out. There needs to be a better way. Dr. Fournier of the University of Miami Leonard Miller School of Medicine has suggested one such method.

Why not simply mandate that all payers, public or private, pay a capitation fee or salary designed to assure that primary care doctors can achieve a professional standard of living? In exchange, primary care doctors would provide continuing, comprehensive primary care (including night call and preventive services) for a reasonably sized panel of patients. For the sake of discussion, I would suggest a salary and fringe benefit package of about $300,000 per year (in 2009 dollars) to care for 2000 patients, ($150 per patient), with incentives for special circumstances (e.g., working in underserved communities) or special services (e.g., delivering babies). All other fees, deductibles, and copayments would be waived. The problem of physician-generated demand would be eliminated, which would radically reduce costs to insurers. Billing would disappear. Patients would have open access to their primary care physicians. Freed from the constraints of billing for the traditional encounter, primary care doctors could employ innovative methods to deliver primary care, including the Internet and group encounters.

Dr. Fournier hits the key concepts:

• End primary care compensation based on patient visits.
• Base compensation primarily on providing comprehensive care for a set number in the patient panel.
• Eliminate co-pays and other financial disincentives for patients.
• End per visit billing and CPT coding which adds lots to expensive paperwork and very little to patient care.
• Eliminate the need (and greed) of primary care providers to tack on excessive numbers of in office services to make up for poor per visit reimbursement rates.

Yes, insurance companies and Medicare could actually save money by spending more on primary care. What a concept.

But I disagree with Dr. Fournier about the numbers. A patient panel of 2,000 is very large and this requires a sizable office size and office staff to be able to deliver all of this care since 2,000 patients usually generate a lot of daily visits, phone calls, refill requests, etc. The overhead costs for primary care are the largest of any medical specialty and they can consume 50- 60% or more of a physician’s billing. This would mean that a physician who gets paid $300,000 per year to care for 2,000 patients at $150 per patient would actually bring home only $120,000 which is very close to the average pay for family practice and internal medicine docs. In this case, physicians are better off working the 9-5 shift in the “zero-incentive” socialistic VA system.

I’m hoping that Dr. Fournier is talking about a per patient compensation of $300 for a true annual salary closer to $300,000 after overhead costs.  Yet even at this seemingly high rate, the fact remains that  $300 per year is only about 1/3 of what hundreds of millions of Americans pay per year for cable TV.

The question is how to get the government and private insurance companies to change to this compensation model. What we need is data that this service will actually improve care AND save money!

Without an adequate supply of primary care physicians, however, the plan cannot guarantee timely access to care, creating a gap between coverage and actual provision of services. As a result, waiting times to see a primary care physician can amount to weeks and even months in some instances.

It’s ironic since the health care reform bill in Massachusetts was supposed to stress the importance of preventative care but because of the relative shortage of doctors to deliver preventative care, many patients are seeking primary care from specialists. Unfortunately, specialists also specialize in expensive care. Thus, health reform in Massachusetts has resulted in decreased access to primary care and higher costs.

This is what happens when you call an expansion of government health care spending,  health care “reform” instead of legislation that actually reforms a broken system. This may be a bad harbinger of what is to come for the rest of the nation.

What can Massachusetts do to actually reform their primary care system? Well, they can improve primary care reimbursement or revamp the reimbursement system to reward overall care and good outcomes rather then only rewarding physicians for visits (quantity over quality) or medical school debt repayment. But why pay doctors more for better care when you can just force them to accept lower reimbursement rates (as low as 110% of Medicare rates) “as a condition of their licesnure” that would effectively make these physicians employees of the state?

[Senate bill 2170 and house bill 4452] would require physicians and all other health care providers to accept 110% of Medicare rates for health insurance for small businesses. For physicians, acceptance of set rates would be as a condition of licensure!  Moreover, physicians would have to accept all such patients – and such rates – if they participate in any other plan offered by that insurer.

The stated purpose of such a misguided bill is to try to decrease health care costs for small businesses but all it does is show how little the sponsors of these bills understand medical economics. These bills make no distinction between primary care providers who are in the best position to decrease costs and specialists who tend to increase costs. Both are penalized equally. Nor do these bills require private insurers to pass on savings to employers. The end result is likely to be a net loss of physicians to nearby states and many who join the increasing ranks of physicians who have cash only practices.

Even from a practical standpoint, these bills are confusing. What does “as a condition of their licensure” mean? Does this apply only to new applicants or to re-applicants? Are physicians who refuse to accept lower rates going to be stripped of their licenses? What about physicians who are employees of private health clinics who do not have control over the rates that are accepted? Will they be forced to quit or risk losing their licenses? Aren’t people in the Northeast supposed to be generally smarter or does that not apply to their state legislators? Is this the beginning of the nationalization of health care in this country? Is this a good time to get out of the profession of medical care?