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A Voice for Private Physicians Since 1943

How Obamacare is hurting the patient-physician relationship – Statement By Jane Orient, MD

Presented at AAPS Briefing
Cannon House Office Building Rm 340
May 26, 2011


I’m a former VA and academic doctor, and I’d like to tell you why I will only practice private medicine now.


Upon completing my residency in general internal medicine at the University of Arizona College of Medicine, I was offered job in the ambulatory care section at the Tucson VA and an instructor in medicine. I was on the tenure track, and participated in clinical research with the dean of the college of medicine in collaboration with Stanford.

I had an excellent job: Salary of around $50,000 (in 1976), weekends and federal holidays off except when on the teaching service, no need for malpractice insurance. I liked my veterans and my coworkers, and loved making rounds with students and residents.

When I had an opportunity to open a private practice, after 4.5 years, I took my $10,000 in retirement benefits and bought equipment and furniture. I took a substantial pay cut, acquired a lot more financial responsibilities, and had to be on call all the time. No more 2 hour lunches at a restaurant; I ate bagels and peanut butter in my office. I have never looked back.

The VA is single payer system. I dread that the whole U.S. could become a giant VA. I did not want to continue there because I could not take proper care of my patients without violating rules. I wanted to follow up sick patients I had treated for an acute illness myself, promptly, not send them to somebody else 3 months later. An individual cannot earn more or get ahead in the VA system by working harder, and those who do more just because they enjoy it or are especially conscientious may be resented or blamed. After all, the more you do, the greater the chance for making a mistake. One gets ahead, or gets along, by not rocking the boat, and by working the system. There are constraints on what you can say (criticism of government is not allowed) and what drugs you can prescribe, what treatments you can offer, and what consultations you can obtain. There was a monthly administrative meeting to discuss problems. A nurse practitioner suggested that we play the tape recording of the last meeting in an empty conference room while we all went to the canteen for coffee, as the effect would be the same. I found that people coped by acquiring the VA attitude, and I fled when an opportunity presented itself, before I got tied down by the golden handcuffs.

Private Medicine Versus Third-Party Medicine

Private medicine is very different from third-party medicine, which might also be called “private practice.” In practicing private medicine, I don’t “take insurance”; my patients’ insurance benefits, if any, belong to them, not to me. If I sign a contract with a third party, I am working for the insurer. My care is part of the medical loss ratio: that is the part of the insurer’s payouts—loss, as opposed to retained earnings or profits—that goes to medical care. The insurer profits by paying less in benefits on behalf of subscribers. And so does the doctor if there is capitation, or a “withhold,” or “gainsharing,” or performance evaluation based on “efficiency” in utilization (i.e. less utilization). That is a conflict of interest.

With third-party medicine, the doctor has no more power over the system than a VA doctor does. Advocacy for the patient involves the same type of bureaucracy, and is a threat to the physician’s own position. Managed care is worse than the VA in that the physician may actually be subsidizing the insurer if it goes bankrupt. Both managed care and Medicare/Medicaid are worse than the VA in that instead of an automatic paycheck, one has to fight the system to get paid. And the penalties for what used to be considered a coding error or billing dispute are draconian, possibly a virtual life sentence in prison along with loss of one’s assets and livelihood.

Dealing directly with patients eliminates layers of overhead and bureaucracy, and makes the doctor accountable to the patient, not to faceless functionaries whose own interests may actually be inimical to the patient’s. Payment is payment for value—according to the patient’s values—and payment for performance—as assessed by the patient.

Most medical encounters should NOT be covered by insurance. It is wasteful and corrupting. The cost of filing and processing the claim may exceed the value of the service, so involving the third party may double or triple the cost of care. Insurance is for catastrophes only, not for predictable events. Most of what we have now is not insurance, but collectivized prepayment. The doctor gets paid for a “clean claim,” not for attending a patient. Since the funds come from a huge collective pot, neither patient nor physician benefits from economizing, but instead has every incentive to “get his fair share.”

Direct payment, patient to doctor, is the ultimate administrative simplification. Patients examine their bills closely, and fraud is self-revealing.

Prices are determined by the free market, and that means voluntary decisions by buyer and seller. Many physicians post prices, which are the same for all, without discrimination by age, income level, or insurance company. Allowances can be made for patients who are having hard times. Post-payment is generally far more economical than pre-payment. The interest on a medical loan is probably far less than the cost of transferring risk to an insurer.

Having a patient-physician relationship is the key both to efficiency and to caring about the patient. I know my patients and how to find things quickly in my own charts. My patient is not the same thing as a covered life who belongs to the VA, the health plan, or the ACO, and who gets assigned to whatever provider happens to be available. An “interoperable” electronic record is more often a detriment than a help for such unknown patients as well as my own. Information in the EHR doesn’t get into my brain automatically, and much of it is either irrelevant or inaccurate. Physicians cannot treat a patient well without interviewing and laying on hands personally, and this takes longer for every patient who is new to that doctor.

If a doctor knows there is no ongoing relationship with an individual, then it is much easier to abdicate responsibility to the next provider than to assume the risk and burden of patient advocacy. Thus continuity of care improves quality as well as efficiency.

“Healthcare Reform” Versus Private Medicine

“Healthcare reform” attempts to control costs in two ways that destroy private medicine: emphasizing population health in accountable care organizations (ACOs)—accountable to the system, and changing payment method to “payment for outcome instead of activity.”

ACOs will fragment patients into parts, subdivide them into politically recognized groups, and subject them to a rigid regimen carried out by a “team” of nonphysician “providers,” centered on 65 “quality metrics” developed by CMS. The assumption is that if everybody ‘s “numbers” (Hgb A1C—a form of hemoglobin that reflects long-term blood sugar control, cholesterol, and blood pressure) were kept within a tight range, there would eventually be much better population health. There would theoretically be fewer heart attacks, strokes, or complications of diabetes, decades in the future. There is no evidence that this will save money in the long run—it will cost a lot in the short run (for all those blood tests and “preventive” prescription drugs)—and a doctor cannot both treat population numbers and attend to patients’ existing illnesses (with real symptoms, not theoretical “risk factors”). It has also been shown that too aggressive efforts to lower Hgb A1C kill people by lowering blood sugar too much. All medical interventions have side effects, many not discovered for quite a long time. Treating vast numbers of asymptomatic people is controversial, to say the least, and there are huge conflicts of interest in the people and organizations who write the guidelines for such treatments. In any event, there is only so much time, and doing all of these preventive activities would almost totally consume the time of our current primary care physicians.

Most outcomes are not under the doctor’s control, so paying for outcome leads to gaming the system and managing the case mix. Reducing payment for activity means less activity, less patient care.

The immediate effects of “healthcare reform” are:

  1. A great increase in compliance costs, driving independent physicians out of business—actually one of Donald Berwick’s explicit objectives. He blames independent physicians for the cost spiral in his book New Rules.
  2. Shifting effort and resources from caring for the sick into “population health” by ACOs, as explained above.
  3. Physician shortages due to increased demand for services by newly insured patients and health plan requirements, plus early retirements.

The average age of practicing physicians in many areas is >55. Many are likely to retire early rather than make huge investments in infrastructure, or change their mode of practice. Already an estimated 39% to 40% of American physicians are experiencing burnout (JAMA 5/18/11). Before ACA passed, in 2003, the majority of physicians surveyed by AAPS (62%) said that they plan to retire from active patient care at a younger age than expected five years ago. The leading cause was “increased government interference in medicine,” followed by “increased regulatory burden” (54%), “decreased control over factors affected medicine” (49%), “increased fear of litigation/prosecution” (48%), “increased hassles with Medicare” (47%), “HIPAA compliance, including electronic claims filing” (40%). Finances ranked number six, at 39%, followed by increased work load (37%). About 65% said that if they were starting their practice today, they would not take part in Medicare (J Am Phys Surg, winter 2003, available at www.jpands.org).

In September 2010, an Investor’s Business Daily poll showed that 45% of physicians would consider retiring if ACA passed.

Private Medicine Is the Answer

I will continue to practice private medicine as long as I am able and permitted to do so. This means only two people in the room: my patient (and possibly a family member or friend) and I. No government auditor or insurance bureaucrat.

Private medicine, without the third-party overhead, is efficient, patient-friendly, affordable, ethical, and sustainable. That is not the definition of a dinosaur.

Like “managed care” before them, ACOs are big, clumsy, costly, and voracious. The third party system is the real dinosaur; it is not sustainable, and we must keep it from devouring and trampling the private physicians. The third-party Titanic (Medicare, Medicaid, and managed health plans) created by government policy has hit the iceberg of insolvency. Private medicine offers the lifeboats.

Physicians cannot practice medicine as docs in a Skinner box. Running bureaucratic mazes and pushing coding levers to collect meager “reimbursements” only detracts from the practice of medicine.

Physicians, in the words of Hippocrates, practice medicine for love—love of the art, and love of humanity. If the art is replaced by the quality metric, and the individual human patient with a name and a face by a warm body on an assembly line, the outcome is the death of medicine.

What is called “heathcare reform” is really a revolution bent on replacing personalized medicine with a heartless, calculating, collectivized, depersonalized, monstrous, uniform health care delivery system. There will be people in white coats working or pretending to, but your doctor will not be in.

What do private physicians want from you? We are not here to request subsidies or favors. We just want you to leave us alone and allow us to work for our patients. The reform billed moved us in the opposite direction—toward total dominance by the third-party payment system that caused the problem.

Real reform means getting the government and other third parties out of medicine.

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