In the past 10 years I have been to a physician three times. Twice for my every 5-year “annual” and “routine physical” and once for a minor outpatient surgery after years of neglect and laziness to schedule the surgery. Since the ice fishing was slow a few Januaries ago, I took care of it.
All the visits were coordinated with separate physicians employed by large hospitals or larger “integrated health care delivery systems” that employed the physicians. You start with a call to a “nurse physician scheduler hotline” who gives you some options of who you can see when. It comes down to “Dr. Smith is accepting new patients and can see you at 10:00 AM next Tuesday” or “Dr. Jones is accepting new patients with your kind of insurance and you can be seen the third Monday of next month at 9:00 AM or be put on a list for cancellations if you would like to be seen sooner”. Once you get through this, despite registering online initially, someone recollects your demographic and billing information which inevitably gets input incorrectly, setting the wheels in motion for a “Denial of Services” because they wrote down the date of birth with a “1” rather than an “11” or the birth days are only off by a few decades compared with what the insurance company has on file.
A few faxes and phone calls later and you are 20 years younger than what skilled health care providers clocked you in at.
Now you see your physician. Only he/she is only at that office on Mondays and Fridays during Lent and full moons. The other times of the year or month you can be seen at one of six other convenient locations within the integrated health care delivery system. And they can access your medical records (with a misspelled name and incorrect date of birth) from anywhere in the system so you don’t have to bring your medical records with you. Which is good because what your “medical record” consists of at that point that you actually see (beyond labs in the “patient portal”) is a handout on how to prevent sunburn.
And now for the good news. With 100s or 1000s of doctors employed within the large integrated healthcare delivery system complete with EMR, patient portals and 66 convenient locations to serve you throughout your metropolitan area, your doctor won’t actually be your doctor when you are really sick and can’t help the technician place the EKG leads for them. With so many people in the group, they take call every other full moon from 7 PM to 7 AM. And if you need to be admitted, hospitalists and “inpatient doctors” will manage your care and you can follow up with your doctor as an outpatient at a location potentially closer than the ER you were admitted to.
And I can navigate the system. I know how to get through phone trees and know it is “1-1-5-#” to speak to someone. And I can point a browser to my patient portal and interpret my labs. And I see the hospitalists come and go and hand off at 7 AM or 7 PM.
But what if I really was born in 1890 rather than 1980?
Apparently it is not going to get any better anytime soon. Likely, this fragmented, transactional, episodic, periodic, shift-like continuum of care is in place with loss of independent physicians, primary care and specialists alike, exploiting physicians services and patient’s access to care continuity.
A version of this article appeared March 15, 2013, on page A13 in the U.S. edition of The Wall Street Journal, with the headline:
Big government likes big providers. That’s why ObamaCare is gradually making the local doctor-owned medical practice a relic. In the not too distant future, most physicians will be hourly wage earners, likely employed by a hospital chain.
Why? Because when doctors practice in small offices, it is hard for Washington to regulate what they do. There are too many of them, and the government is too remote. It is far easier for federal agencies to regulate physicians if they work for big hospitals. So ObamaCare shifts money to favor the delivery of outpatient care through hospital-owned networks.
The irony is that in the name of lowering costs, ObamaCare will almost certainly make the practice of medicine more expensive. It turns out that when doctors become salaried hospital employees, their overall productivity falls.
ObamaCare’s main vehicle for ending the autonomous, private delivery of medicine is the hospital-owned “accountable care organization.” The idea is to turn doctors into hospital employees and pay them flat rates that uncouple their income from how much care they deliver. (Ending the fee-for-service payment model is supposed to eliminate doctors’ financial incentives to perform extraneous procedures.) The Obama administration also imposes new costs on physicians who remain independent—for example, mandating that all medical offices install expensive information-technology systems.
The result? It is estimated that by next year, about 50% of U.S. doctors will be working for a hospital or hospital-owned health system. A recent survey by the Medical Group Management Association shows a nearly 75% increase in the number of active doctors employed by hospitals or hospital systems since 2000, reflecting a trend that sharply accelerated around the time that ObamaCare was enacted. The biggest shifts are in specialties such as cardiology and oncology.
Estimates by hospitals that acquire medical practices and institutions that track these trends such as the Medical Group Management Association show that physician productivity falls under these arrangements, sometimes by more than 25% (more on this below). The lost productivity isn’t just a measure of the fewer back surgeries or cardiac catheterizations performed once physicians are no longer paid per procedure, as ObamaCare envisions. Rather, the lost productivity is a consequence of the more fragmented, less accountable care that results from these schemes.
Once they work for hospitals, physicians change their behavior in two principal ways. Often they see fewer patients and perform fewer timely procedures. Continuity of care also declines, since a physician’s responsibilities end when his shift is over. This means reduced incentives for doctors to cover weekend calls, see patients in the ER, squeeze in an office visit, or take phone calls rather than turfing them to nurses. It also means physicians no longer take the time to give detailed sign-offs as they pass care of patients to other doctors who cover for them on nights, weekends and days off.
Most hospitals exacerbate these strains by measuring the productivity of the physician practices they purchase in “Relative Value Units.” This is a formula that Medicare already uses to set doctor-payment rates. RVUs are supposed to measure how much time and physical effort a doctor requires to perform different clinical endeavors.
Medicare assigns each clinical procedure a different RVU and then multiplies this figure by a fixed amount of money to arrive at how much it will pay a doctor for a given task. A routine office visit has an RVU of about 1.68, while removing earwax has one of 1.26. Setting a finger fracture rates a 3.48.
This system misses all of the intangible factors that help gauge the quality and efficiency of the care being delivered. It focuses physicians on the wrong goals for promoting health, such as how well they code charts to capture higher-value “units.”
Hospitals are beholden to the RVU system only because that is how they get paid by the government. Data from the Medical Group Management Association shows that physician productivity in these employed relationships, measured simply by RVUs, declines up to 25% compared with independent practices. The Advisory Board Company, a health-care consulting firm, estimates that when hospitals last went on a physician-acquisition binge in the late 1990s, productivity fell by as much as 35%. Those arrangements mostly failed, and the hospitals divested the stakes they had in individual doctor practices. The physicians went back to practicing out of their own offices.
All of this reduced productivity translates into the loss of what should be a critical factor in the effort to offer more health care while containing costs. Yet hospitals aren’t buying doctors’ practices because they want to reform the delivery of medical care. They are making these purchases to gain local market share and develop monopolies. They are also exploiting an arbitrage opportunity presented by Medicare’s billing schemes, which pay more for many services when they are delivered at a hospital instead of an outpatient doctor’s office.
This billing structure exists because hospitals are politically favored in Washington. Their mostly unionized workforces give them political power, as does their status as big employers in congressional districts.
ObamaCare pushes this folly largely based on a naive assumption that models that worked well in one community can be made to work everywhere. President Obama has touted “staff models” like the Geisinger Health System in Pennsylvania and the Mayo Clinic in Minnesota that employ doctors and then succeed in reducing costs by closely managing what they do. When integrated delivery networks succeed, they are rarely led by a hospital. ObamaCare seeks to replicate these institutions nationwide, even though their successes had more to do with local traditions and superior management. That’s hard to engineer through legislation.
Dr. Gottlieb is a physician and resident fellow at the American Enterprise Institute.