Tuesday, June 30, 2009

Obama Health Reform Lacks Innovation

The two most significant aspects of the healthcare reform being proposed by President Barack Obama are:

A) The plan offers nothing that has not been rejected already.
B) It fails to address two major cost issues.

During his June 24 ABC television appearance, Mr. Obama gave a glimpse of what his cost containment strategies will be. Responding to a question from the audience he said, “…we can let doctors know …Maybe this isn't going to help. Maybe (the patient is) better off not having the surgery, but taking the painkiller.”

Unsaid was who would be the “we” who was going to “let doctors know.”

However, what Mr. Obama did say, albeit inadvertently, was what used to be called in the early and mid 1990’s - when I was a managed care executive – medical management using “clinical practice guidelines.”

Then, an actuarial company established an extensive database of medical procedures that were the most effective and efficient. These were used by HMO’s to manage what treatments patients received.

This approach was soundly rejected by Americans. The public, politicians and providers loathed this derisively referring to it as “cookbook” medicine.

Obama has merely recycled this using a new name – evidence-based practice. The liberal think tank, the Brookings Institution, recently published a paper about healthcare reform which made several recommendations. One was, “Use comparative effectiveness results to support innovative coverage and payment policies… help support novel payment policies that will be more effective at rewarding evidence-based practice.” (Emphasis added)

“Evidence based medicine” is the au courant term,” said Dr. Celeste Mruk, of Bala Cynwyd Medical Associates. She is a clinical assistant professor of medicine the University of Pennsylvania. She is well versed in the problems with financing medical services. She began her career in the early 1980’s, with an inner city practice. Later, she was on the board of directors of one of the largest HMO’s in Pennsylvania.

Another recycled provision of the Obama proposal is increasing the role of “primary care physicians” (i.e. internists, family practitioners, & pediatricians).

“This is not the first time this has been proposed,” said Peter R. Kongstvedt, M.D. He is a highly regarded authority on the health care industry. He said his own career as a PCP was the result of incentives.

The Obama plan includes another staple of the HMO field. As he mentioned during his speech at the American Medical Association, the current system is one where there are incentives to do more. He said that what is needed is to reform “the way we compensate our providers -- doctors and hospitals. We need to bundle payments so you aren't paid for every single treatment you offer a patient.”

Rewarding physicians for doing less was one of the concepts of the HMO Act of 1973, which established “prepaid” medicine. Furthermore, in the early 1990’s in the Philadelphia area insurers started paying for “episodes of care” or for ‘diagnostically related groups.”

This was widely criticized as discouraging treatment. It is one of the reasons that HMO’s and medical management are now nearly nonexistent.

They may call it something else, yet, a rose by any other name as they say.

Another item that President Obama alluded to yet did not address directly was the cost of medical education. This system creates an enormous burden and discourages talented people from entering the field.

A reform plan hatched in 1989, by ardent advocates for socialized medicine, acknowledged that the single-payer system they wanted did nothing to address medical school costs.

The total cost of a medical education in the U.S. is close to $200,000 on the average. It is much more after including accrued interest on that debt.

New physicians cannot be expected to recoup this cost while compensation for their services is being reduced. They will go into more lucrative specialties that add to the cost of the healthcare system or they will enter other occupations that provide less work for more compensation.

President Obama’s healthcare reform plan promises to increase coverage, decrease costs and increase or maintain the same quality of medicine as we currently have. No one else has been able to do this – neither will he.

The solutions he offers are not new. They have been tried and rejected or they have been attempted and failed. Impartial, knowledgeable observers of the issue know this.

The only question they have is if Mr. Obama can succeed in selling the American public old wine in a new bottle.