This is not reform

UPDATE: If you needed more information about why this is not reform, here it is.

Reporting from Washington – Acupuncturists, dietary-supplement makers and other alternative health practitioners, some of whose treatments are considered unproven by the medical establishment, would be brought more squarely into the mainstream of American medicine under the health legislation now before the Senate.

The feeding frenzy, once health care decisions are political, would resemble the California legislature. The politicians also regard these remedies as cost effective because the providers will tell them they charge less than an MD. Of course, an ineffective treatment is never cost effective, no matter how cheap it is. What we find is that the alternative remedies have no limit on frequency since it is difficult to measure the effect of something that doesn’t have a scientific explanation. I personally have seen a workers’ comp case who received 900 chiropractic sessions in one year. The California law has now been changed to limit chiropractic to 24 sessions per year.

Here we go.

A good piece today from a Johns Hopkins program for the poor, points out that the present legislation will do nothing to improve care. In my concept of health reform, there are two tracks for health care delivery. One is free choice based on a private fund that pays a basic flat rate for doctor and hospital care. It would apply to ambulance service and other ancillary services like durable medical equipment. Anyone who has seen the constant TV commercials for scooters should understand what a huge cost center this is for Medicare.

The second thread would be HMO care, especially for the poor where case management and cost control is imperative. Poverty often coexists with poor health choices and chronic disease, both good targets for case management. What I mean by case management is the supervision of care delivery by a manager, usually a nurse with physician backup. This is often done by insurance companies with major illness. Medicare does little.

Here is what Johns Hopkins thinks of the legislation:

We at Johns Hopkins Medicine (JHM) endorse efforts to improve the quality and reduce the cost of health care. But we also understand all too well the impact a dramatic expansion of Medicaid will have on us and our state—and likely the country as a whole.

A flood of new patients will be seeking health services, many of whom have never seen a doctor on more than a sporadic basis. Some will also have multiple and costly chronic conditions. And almost all of them will come from poor or disadvantaged backgrounds.

We know this because we've been caring for Medicaid patients in a managed-care setting for 14 years, as well as providing world-class care to people from all over the country and the world. Our experience provides a glimpse of the acute cost bubble that the health-care system will suffer with the reforms now being proposed.

This is a large organization that provides care in a city, Baltimore, with more than its share of poor inner city residents. It is also one of the most famous medical centers in the world.

Priority Partners operates under a capitated system—that is, it receives a set payment per individual per month from the state. Over time, we've developed the ability to manage the care of these individuals in a way that is both cost effective and that provides them with quality care. We've done it by tapping into our extensive delivery system, which includes four hospitals, a nursing home, the largest community-based primary care group in Maryland, and much more.

They know how to do this because they have been doing it. You cannot put the poor into a fee-for-service system, as Medicaid did in 1965, and avoid massive fraud and abuse. The volume of services being provided causes the system to reduce reimbursement. That is why good quality care under Medicaid requires large institutions like John Hopkins or Los Angeles County General Hospital. In 1965, I was at LA County, "Big County" as we called it. I saw what happened. Lyndon Johnson thought he could wave a wand and turn the poor into middle class with money. I actually knew residents who quit their residency program to open a Medicaid mill. They knew there was big money to be made. The big city hospitals, called "charity hospitals," were stiffed by the system in the expectation that private care would take over. The poor would become middle class with the same behavior patterns as middle class people. Instead, the Medicaid system became an arcade for fast money hustlers. I knew a few of them. Some went to jail but not enough.

Now, Obama plans to expand Medicaid eligibility to 140% of the poverty line. This has been done before by states. What happened ?

The key fact is that for years the state did not cover all the costs our Medicaid program incurred. As a result of new patients whose costs were not completely covered by the state, Priority Partners lost $57.2 million from 1997 to 2005.

We stanched the losses by ensuring that the payment from the state was appropriately risk adjusted to match the health conditions of our members, and by investing heavily in primary-care and care-management and disease-management programs.

Yet this past year the losses began again, because the state expanded the program's eligibility to 116% of the federal poverty level up from 40%.

They never learn. I was at the Post Office this morning standing in line to buy stamps. There was one automatic machine with a line waiting to use it. Soon it will be healthcare.

Congress can help, or at least learn from our experience to use the reform legislation to bend the cost curve if it encourages other states to institute and appropriately fund capitated systems that allow capable providers to adjust payments based on risk. There is nothing in the House or Senate legislation that does that now, even as both bills will expand Medicaid.

They never learn.

One Response to “This is not reform”

  1. [...] This is not reform « A Brief History… &#10&#10&#10 share: [...]