Presented at AAPS Briefing
Cannon House Office Building Rm 340
May 26, 2011
CLICK HERE TO WATCH VIDEO OF STATEMENT
After graduating medical school, young doctors must complete several years of residency training in a hospital. This is where they learn to function as a physician. Though hours and work conditions have improved over the years, it remains a challenging apprenticeship, with long hours, sleepless nights, and new levels of stress that accompany assuming responsibility for patients’ lives. Traditionally, most residents were eager to finish their training and enter private practice, either alone or with an established group. Over the past 10 years or so, this has changed. Resident physicians increasingly look to take jobs that keep them within a hospital or clinic system. And more recently, we are witnessing a mass migration of physicians in private practice moving back within the hospital walls. According to Dr. Scott Gottlieb, in 2005, doctors owned more than two thirds of medical practices. By next year over 60% of doctors will be salaried employees, and a third of these will be working for hospitals. Nearly 50% of jobs listed by MD recruiting firms are for hospital jobs, up from about 25% five years ago. A report in Renal Business Today quotes a Medical Group Management Association survey of 58,000 physicians found that 55% of practices were hospital owned in 2009, up from 30% five years earlier.
What is behind this trend, and, more importantly, what are the implications for patient care?
Clearly the largest driver of this mass migration is money. Practice expenses are rising along with or faster than the general inflation rate, and reimbursement rates have not kept pace. Another MGMA survey from 2007 found that overhead costs exceeded 60% of practice revenue on average. Medical malpractice premiums in some specialties have gone up 10-20% annually. Third party payments have either been cut, or have not kept up with inflation. Thus, financial pressures imposed by the third party system are literally forcing doctors to give up their independent practices and move into the hospital setting.
Passage of PPACA has certainly accelerated this trend. Doctors can see increasing regulation, reporting requirements, mandatory e-prescribing, mandatory electronic health records, all coming at them. Many are making a rational decision to pass these expenses to a larger organization, i.e. a hospital or clinic.
What are the downsides? Dr. Orient has discussed several. I will focus on the loss of the fee-for-service payment model, loss of autonomy, inefficiency, and practice by guidelines.
Medical and surgical residents are paid a modest salary during their training years; most of this money comes from Medicare. They receive the same meager salary whatever they do. Every additional minute of work done erodes their hourly wage. I have observed a nearly universal attitude among residents to avoid extra work (not including moonlighting, which they eagerly sign up for). The most obvious manifestation of this is the “turf,” where residents attempt to have a new admission or a difficult patient directed to someone else’s service. There’s no question doctors will revert to “turfing” if they become salaried hospital employees.
The only cure for this behavior is a fee-for-service model. FFS has been wrongly blamed for runaway health spending, when the real culprit is the third party system, unrestrained by meaningful co-pays or deductibles. FFS aligns the payment with actually working on behalf of a patient, and is what insures patients are treated promptly. For many years at my hospital radiologists were salaried and had no incentive plan. It was a constant struggle getting invasive studies and reports were sluggish to arrive. A few years ago, a new department chief instituted a FFS plan for the physicians. The change was remarkable. The waiting list shrunk, and reports were faxed or emailed within a few hours of the study. And I’m sure I noticed a friendlier reception when I would go down to review a film!
FFS rewards physicians for doing what is a difficult job. Medicine is hard work. Many simply do not appreciate how hard it really is. Paying physicians a fixed salary results in work avoidance and will have a devastating effect on access to care. The endgame here is the unionization of doctors. I fully expect hospital-based physicians to come under the heavy hand of the SEIU within the next few years.
Hospitals are notoriously inefficient. The administrative sector seems to grow, and of course this absorbs a lot of money. Very few administrators create value. The productive sector of the hospital, i.e. doctors, nurses, technicians, and maintenance, is squeezed. Each year I notice more and more people standing around the nursing station, either doing nothing or reviewing charts (making them unavailable for those who need to document actual care). It’s beginning to resemble the TSA. Certainly things could be more streamlined, but the union makes it nearly impossible to cut positions.
In order to stay in business, hospitals need to impose rigid rules and limit providers’ choices. They are paid a lump sum per admission based on diagnosis. Drugs are limited by a formulary, largely based on cost considerations. The use of certain expensive drugs is restricted. There is pressure to discharge patients as soon as possible to maximize revenue. Physician employees will feel this pressure, which may conflict with their obligation to the patient. Ironically, PPACA will penalize hospitals for frequent readmissions.
Hospital docs are required to serve on committees. Often these have names like “Quality Assessment,” or “Quality Initiative.” Rarely do these committees discuss meaningful issues. More often, by removing physicians and others from direct patient care, they impair quality. Quality in medicine is not about achieving numerical benchmarks; it’s about enhancing the doctor-patient interaction.
This brings me to practice guidelines. They sound innocuous, but are quite nefarious. They are produced to “guide” but end up being used to control practice and to limit payment. They form the basis of “payment for performance” plans, and “quality performance measures.” Guidelines are typically produced under the auspices of a medical specialty society, or by governmental agencies such as the National Heart Lung and Blood Institute. More often than not, they are partially industry funded, and industry clearly has a role in deciding who participates in “expert” panels. Panelists almost invariably have extensive financial ties to industry. It should not come as a surprise that guidelines frequently recommend intensive treatment to achieve various therapeutic “targets.”
Guidelines purport to be evidence-based, but the evidence is often incomplete, poor quality, or completely lacking. Great harm can be done to many when a guideline “gets it wrong.” In 2006, guidelines for treatment of anemia in patients with chronic kidney disease were published by the National Kidney Foundation. Based solely on observational data they recommended target hemoglobin of 11-13 grams/dl. Later that year, two prospective studies were published showing either no benefit, increased side effects, and excess mortality when higher hemoglobin targets were used to guide therapy. In the subsequent brouhaha it was revealed that the NKF receives substantial funding from the maker of the drug used to treat anemia. This incident led to a major change in the way government pays for dialysis services. It is certain that many patients were harmed.
Treatment guidelines for hypertension, diabetes, high cholesterol, low bone density, and other conditions are flawed and biased towards greater levels of treatment that are inappropriate in many. Applying treatment guidelines indiscriminately, which is what may happen if medicine becomes regimented through hospitals and accountable care organizations will cause great harm.
If current trends continue, private medical practice will be reduced to those in direct pay and concierge practices. The good news is that these models are increasing, and if left unfettered, will provide excellent, reasonably priced and timely care to millions of Americans. However, it is unlikely these practitioners will be able to handle the load. Many millions will be seen in hospital clinics, in ACOs, or in emergency rooms, and will not receive excellent care.
Richard Amerling, MD is a nephrologist practicing in New York City. He is an Associate Professor of clinical medicine at Albert Einstein College of Medicine in New York, and the Director of Outpatient Dialysis at the Beth Israel Medical Center. Dr. Amerling studied medicine at the Catholic University of Louvain in Belgium, graduating cum laude in 1981. He completed a medical residency at the New York Hospital Queens and a nephrology fellowship at the Hospital of the University of Pennsylvania. He has written and lectured extensively on health care issues and is a Director of the Association of American Physicians and Surgeons. Dr. Amerling is the author of the Physicians’ Declaration of Independence
(http://www.aapsonline.org/medicare/doi.htm).
