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Health Care Reform: Is it for real this
time around?
Bob Doherty
Senior Vice President, Governmental Affairs and Public Policy
American College of Physicians
Alaska Chapter
June 25 , 2009
Questions
What do the voters want?
Why has Obama made it a priority?
How is health care reform occurring?
What are the key issues for ACP?
Voters express a strong desire for change in our health
care system, with over two-thirds saying we need a
complete overhaul or major reform.
Does our health care system need complete overhaul, major reform, minor reform or no reform at all?
90%
80% 69%
70%
60%
44%
50%
40%
25%
30% 20%
20%
8%
10%
0%
Complete Major Reform Minor Reform No Reform
Overhaul 3
Voters’ greatest dissatisfaction is with the rising cost of
health care and the lack of coverage for everyone. While
they trust their doctors’ training and the quality of care,
over one-third are dissatisfied with prevention of medical
errors.
Now I am going to read you some different aspects of the health care system in the U.S. For each one, tell me how
SATISFIED you are with that aspect of our health care system – VERY satisfied, SOMEWHAT satisfied, SOMEWHAT
unsatisfied, or VERY unsatisfied.
81% 29%
62% 33%
38% 52%
72%
16% 78%
4
Support for reform is strong across all the important
political groups, with the strongest support among
Democrats and Independents, and with over half of
Republican voters on board.
Initial Reform Ballot Republican Support by Gender
90%
70%
90% 54%
49%
50% 44%
38%
80% 30%
13%
70% 67% 10% 2%
59% -10% Republican Women Republican Men
60%
52%
50%
42%
40%
30% 27%
21% Favor Health System
Reforms
20% 15%
12% Oppose Reforms
10% 7%
Both/Neither/Don't
Know/Refused
0%
Democrats Independents Republicans
While opposition messages raise some doubts for voters,
they are much weaker than supporting messages.
Interfering with the doctor is the strongest concept in
opposition messages.
Now I am going to read you a series of statements people have made in opposition to some of these
health system changes. Please tell me whether each raises serious doubts, some doubts, minor doubts,
or no real doubts in your own mind about reforms to the health care system. If you are not sure how you
feel about a particular item, please say so.
In a head-to-head
contest, even after
hearing opposition
arguments, support for
health system reform
remains strong, with a
+29 point margin
favoring reform (56%
support, 27% oppose).
The broad consensus in support of health system reforms
remains robust – even after hearing opposition arguments.
Final Reform Ballot
Health care reform is top Obama priority
“Health care reform cannot
wait, it must not wait, and it
will not wait another year.”
President Obama, WH Summit on Health
Reform, March 5, 2009
Why? Because Obama believes
current system is not sustainable
For individuals and families
For the economy
For the federal budget
Not sustainable for individuals
“Wages earned by American households will become
too small a donkey to carry the load of the family’s
spending on health care.”
• A family who today has a gross wage base of $60,000 might see it grow
by 3 percent per year over the next decade, to $80,600 by 2017
• For the same family, total health spending might grow by 8 percent
per year over the same time frame, to $33,700 by 2017.
• For this worker, 41 percent of the family’s gross wage base would be
taken up by health care alone, before any deductions for taxes or
fringe benefits.
Economist Uwe Reinhardt, accessed November 10 at http://economix.blogs.nytimes.com/2008/11/07/the-
health-care-challenge-sailing-into-a-perfect-storm
Not sustainable for the federal budget
“Slowing the growth rate of health care costs will
prevent disastrous increases in the Federal budget
deficit.”
“Medicare and Medicaid expenditures are projected to
rise from the current 6 percent of GDP to 15 percent in
2040. Only about one-quarter of this rise is due to the
projected demographic shifts in the population …
remaining three-quarters is due to the fact that health
care costs are projected to increase faster than GDP.”
The Economic Case for Health Reform, Council of Economic Advisors, accessed June 2 2009 at
www.whitehouse.gov/assets/documents/CEA_Health_Care_Report.pdf
Not sustainable for government and taxpayers:
Projected Medicare Outlays, 2008-2018
$1,000
Total outlays in billions $887
$814 $850
$800 $729
$681
$636
$567 $568
$486 $514
$600
$454
$400
$200
$0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Share of:
Federal
Budget 16% 16% 16% 17% 17% 18% 18% 19% 20% 20% 20%
Gross
Domestic 3% 3% 3% 3% 3% 3% 4% 4% 4% 4% 4%
Product
NOTE: Numbers have been rounded to nearest whole number.
SOURCE: Kaiser Family Foundation, based on Congressional Budget Office, The Budget and Economic Outlook: An Update,
January 2008.
Medicare Beneficiaries and The Number of
Workers Per Beneficiary
Millions of beneficiaries Number of workers per
79
beneficiary
62 4.0
3.7
47
2.9
40
2.4
34
19 20
1966 1970 1990 2000 2010 2020 2030 2000 2010 2020 2030
SOURCE: Kaiser Family Foundation, based on 2001 and 2008 Annual Reports of the Boards of Trustees of the Federal
Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
How will health care reform occur?
First stages:
• Re-authorization of SCHIP
• Stimulus legislation (“down payment” on
health reform)
• Budget
Now:
• Comprehensive health care reform legislation
in both chambers before August recess
ACP priorities for health reform
Affordable coverage for all
Reverse shortage of primary
care physicians
• Medical education and financing
• Payment reform
ALT AR U M IN ST I TU TE P R ES E NT A TI O N 2 0 0
9
Reason for Concern: USMD PC Preferences and Practice
Our analysis shows that declining interest in primary care is leading to a decline
in supply
Practice following
preferences
Preferences
equal to the
all-time low
Sources: AAMC Graduation Questionnaire (preferences), AMA Masterfile (practice), Altarum analysis (forecast)
16
Why does it matter?
Demand for primary care is
increasing
Primary care is associated
with better outcomes and
lower costs
ACP review of impact of primary care
on outcomes and costs
States with higher ratios of primary care
physicians to population have better health
outcomes, including mortality from cancer,
heart disease or stroke
An increase of just one primary care physician
is associated with 1.44 fewer deaths per 10,000
persons
How is a Shortage of Primary Care Physicians Affecting the Cost and Quality of
Medical Care: A Comprehensive Literature Review, ACP, 2008
ACP review of impact of primary care
on outcomes and costs
During the year 2000, an estimated 5 million
admissions to U.S. hospitals may have been
preventable with high quality primary and
preventive care treatment; the resulting cost was
more than $26.5 billion.
A 5 percent decrease in the rate of potentially
avoidable hospitalizations alone could reduce
inpatient costs by more than $1.3 billion
How is a Shortage of Primary Care Physicians Affecting the Cost and Quality of MedicalCare: A
Comprehensive Literature Review, ACP, 2008
Solving the problem requires a multi-faceted
approach
How influential were the following factors in determining
your specialty choice?
*2008 AAMC Graduation Questionnaire
100
90
80 Moderate Influence
Percent of Students
70 Strong Influence
60
50
40
30
20
10
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Create a national workforce policy
Problem:
• Workforce based on institutional needs, not
national priorities
Solution:
• Commission to establish goals including
primary care physicians, policies to achieve
them, and benchmarks for success
Improve primary care training
Problem:
• Students and residents not exposed to well-functioning
primary care practices
Solution:
• Eliminate barriers to training in ambulatory settings
• Increase funding for primary care training programs
• Grants for primary care mentorship programs and faculty
and curricula development
Eliminate student debt
Problem:
• Average debt burden of public school graduates was over
$145,000
• High debt = less likely to choose primary care
Solution:
• Scholarship and loan repayment awards
• Allow deferment of educational loans
Increase Primary Care GME Capacity
Problem:
• GME slots are capped so that we cannot produce
enough primary care physicians to meet demand
Solution:
• Lift GME caps but require residency programs to
give priority to general IM, family medicine, and
pediatrics
Reduce administrative costs
Problem:
• Primary care physicians spend more time (3.5 hours weekly) than other
medical specialists (2.6 hours) or surgical specialists (2.1 hours) on
interactions with health plans
• $64,859 annually per primary care physician - "nearly one-third of the income
plus benefits of the average primary care physician.“
Solution:
• Reduce hassles associated with formularies
• Uniform billing, credentialing, and eligibility
Casalino, et al, What Does it Cost Physician to Interact with Health Plans, Health Affairs, May 14, 2009
http://www.healthaffairs.org/press/mayjun0903.htm
Reform a dysfunctional payment system
Problem:
• Current system rewards volume not quality or value
• No incentive to collaborate across settings
• Primary care not competitive with other fields
Solution:
• New payment models to align incentives with patient-
centered primary care
• Increase FFS to make primary care ompetitive
New payment models are needed!
Federal government should fund pilot tests of
new models to align incentives with value
Then expand successful ones nationwide into
Medicare and other public programs
Criteria should be used to evaluate and
prioritize selection of new models
Traditional FFS
Medical Care: Version 1965
Based on the way that care was provided forty
years ago—not the way it is delivered today
• patients treated only when sick (acute condition)
• little or no emphasis on prevention and coordination
• care based on doctor’s best judgment as informed by
CME and journals but not on evidence-based
guidelines
• specific visit or procedure code
• individuals not teams
• “usual, customary, reasonable” (UCR)
Wanted! New pay models for
Medical Care: Version 2009
Medical care today:
• prevention/management of illness rather than just
treating disease
• care rendered by coordinated teams of health
professionals
• clinical judgment informed by evidence-based
clinical decision support
• results matter (not just service rendered)
• systems and processes of care to support better
outcomes
New payment models should:
Support patient-centered primary care
Create incentives to work across settings
Consider challenges faced by smaller practices
Be administrative feasible—practice level and
administration by government
New payment models should:
Support chronic disease prevention and
management
Recognize quality and efficiency and reward
appropriate stewardship of resources while
promoting and maintaining high quality
Transition to a unit of payment that diminishes
the incentive to increase volume, ensures
appropriateness, and promotes greater
accountability
Improve FFS
Average primary care income is 55% of the average of
the medians all non-primary care specialties
AAFP Graham Center determined that the average
non-primary care physician earns $3.5 million more
over a 35-40 years
Specialty preferences among USMGs is correlated
with PCP income as percentage of specialty income
Robert Graham Center. Specialty and Geographic Distribution of the Physician Workforce: What Influences
Medical Student & Resident Choices? March 2009.
Ebell MH. Future salary and US residency fill rate revisited. JAMA. 2008;300(10):1131-1132
Primary Care Income Less Than Most Other Specialties
Median Salary by Specialty in thousands of dollars, 2006
Cardiology-Invasive
Diagnostic Radiology
Orthopedic Surgery
Gastroenterology
Anesthesiology
Hem atology/Oncology
Urology
Derm atology
Otorhinolaryngology
General Surgery
Opthalm ology
OB/GYN
Em ergency Medicine
Psychiatry
General Internal Medicine
General Pediatrics
Fam ily Medicine/General Practice
$50 $150 $250 $350 $450
Source: MGMA Physician Compensation and Production Survey, 2007; slide from AAMC Physician
Workforce Research Conference, IM Subspecialty Meeting, April 29, 2009
Source: MGMA Physician Compensation and Production Survey, 2007
ALT AR U M IN ST I TU TE P R ES E NT A TI O N 2 0 0
9
Relationship Between Income and Preferences
USMD preferences move with relative incomes but relationship varies
90%
80%
PC Income as Percent of NPC Income
70%
60%
50%
PC incomes as a % of
NPC income
40%
30%
%graduates interested
in primary care
20%
10%
0%
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
Year of Graduation from US Medical School
Sources: AAMC Graduation Questionnaire for preferences, MGMA data on incomes
34
Improve FFS
Medicare and other payers should increase primary care
compensation to be competitive with other specialties
Replace the Sustainable Growth Rate (SGR) and cycle of
ongoing Medicare cuts
Establish a mechanism to assess impact of primary care on
other aspects of the Medicare program, e.g. Part A, and
apply such anticipated savings to increase payments to
primary care
Improve accuracy of relative values
Growing Support for Primary Care
We're not producing enough
primary care physicians.”
President Obama, White House
Summit on Health Reform, March 5,
2009
Growing Support for Primary Care
“Primary care is the keystone of a high-
performing health care system. Increasing
the supply and availability of primary care
practitioners by improving the value
placed on their work is a necessary step
toward meaningful reform.”
Senator Max Baucus, D-MT, Chair, Senate Finance Committee, White
Paper on Health Reform
Growing Support for Primary Care
"We've upset the whole practice of
medicine to such a point that we don't
have many primary care givers. That has
driven up the cost of medicine itself with
emphasis on specialists, and it has
reduced the quality of delivery,
particularly in rural areas."
Senator Charles Grassley, R-IO, March 19, 2009
Kaiser Family Foundation, Health Reform Newsmaker Series, Senator
Grassley’s full remarks are available at:
http://www.kaisernetwork.org/health_cast/player_kff.cfm?id=60#clip_1
Figure 7. Promoting the growth of integrated delivery systems
and increasing supply of PCPs though payment reform seen as
most effective in reducing growth of health care costs.
“How effective do you think each of these proposals for structural change
in health services markets would be in reducing the growth of health care costs?”
NET
Promote the growth of integrated delivery systems 25% 37% 62%
Increase the supply of primary care providers by raising payments for
primary care services, providing additional payments for providers who
serve as a patient-centered medical home accountable for quality and 29% 61%
32%
efficiency, rewarding providers for high-quality and coordinated care,
and offer incentives that encourage patients to enroll in medical homes
Establish a public/private center for comparative effectiveness
to produce and disseminate information on effectiveness, 22% 32% 54%
guide clinical practice, and inform benefit design
Provide funding to accelerate the adoption of health information
technology, promote uniform standards for interoperability, 19% 31% 50%
and establish health information exchange networks
Increase the supply of primary care providers and
public health practitioners through loan repayment programs, 23% 27% 49%
training grants, and infrastructure support
Reform the malpractice liability system 12% 19% 31%
THE
COMMONWEALTH
Extremely effective Very effective
FUND
Source: Commonwealth Fund Health Care Opinion Leaders Survey, April 2009.
Preserving Patient Access to Primary
Care Act of 2009, H.R. 2350/S. 1174
Introduced by Representative Allyson
Schwartz on May 12, 2009 and on June 3
by Sen. Maria Cantwell (D-WA), Sheldon
Whitehouse (D-RI), and Susan Collins
(R-ME)
Comprehensive approach to primary care
workforce crisis
Preserving Patient Access to Primary
Care Act of 2009
• Primary care mentorship and curricula development
• Scholarships and loan forgiveness, expanded GME
and more ambulatory training
• Increase Medicare FFS payments, apply savings in
Part A to primary care, and pay for care coordination
• Patient-Centered Medical Homes
• Reduce hassles of Part D formularies and test “real
time” claims adjudication
What about tort reform?
ACP believes that medical liability reform is
essential
But caps on non-economic damages will not
pass a Democratic Congress or be signed into
law by Obama
Obama told AMA he was open to other ideas:
health courts? Alternative dispute resolution?
Safe harbors if following guidelines?
House draft health reform bill
Coverage Consistent with ACP?
Medicaid expanded to Yes
cover the poor (133% of
FPL)
Sliding scale tax credits for Yes
people above poverty
level, up to 400% of FPL
People can keep own
insurance or buy coverage Yes
through an exchange
House draft reform proposal
Coverage Consistent with ACP?
Health plans must cover Yes
people with pre-existing
conditions, guarantee
renewability, not vary
premiums except for age,
gender and location
House draft reform proposal
Coverage Consistent with ACP?
Commission to Yes
recommend covered
benefits
Plans must provide Yes
essential benefits,
including preventive
services; no cost-sharing
for preventive services
House draft reform proposal
Workforce Consistent with ACP?
Advisory council to Yes
recommend workforce
goals
Increased funding for Yes
NHSC and Title VII
primary care programs
New scholarships/loan
repayment for primary care Yes
physicians in areas of need
House draft reform proposal
Payment reform Consistent with ACP?
Eliminates current SGR Yes
formula and accumulated
cost
Yes, but does not complete
Higher updates for eliminate GDP. Provides
primary care (separate and GDP plus two for primary
higher spending target for care, GDP plus one for
primary care) other services.
Medicaid pay for primary Yes
care increased to Medicare
House draft reform proposal
Payment reform Consistent with ACP?
Bonus payments for Yes, but ACP is pushing
primary care: 5% for for a higher bonus
designated services by
primary care physicians,
increased to 10% in health
professional shortage areas
Yes, provides over $1
Patient-centered medical billion to fund pilot to pay
home to be tested on a qualified practices for care
national scale coordination
House draft reform proposal
Administrative simplification Consistent with ACP?
Standardize language and forms Yes
Establish operating rules and Yes
companion guides for using and
processing health care
transactions
Increase consistency of claims Yes
edits and code corrections
Increase electronic exchange of
administrative and clinical data Yes
House draft reform proposal
Administrative simplification Consistent with ACP?
Standardize quality Yes
reporting requirements
Development of “smart
card” technology Yes
Plans must spend at least
85% of premiums on Yes
patient care instead of
administration
House draft reform proposal
Public plan Consistent with ACP?
Offers a public plan to Yes and no—only some of
compete with private ACP’s criteria for support
insurers were met:
Physician participation Yes
voluntary--not mandated if
you also accept Medicare
House draft reform proposal
Public plan Consistent with ACP?
Medicare rates (plus 5% No, ACP believes that
for physicians who Medicare rates are not
participate in both adequate; safeguards need
Medicare and public plan) to be in place including
used for first 3 years, then independent assessment of
plan would create own plan’s payments compared
rates to private sector and
ensuring sufficient
participation by physician
specialty and locale
House draft reform proposal
Public plan Consistent with ACP?
Must offer essential Yes
benefits including
prevention
Administered by separate Yes
entity than the federal
agencies running the
exchange
Financed by premiums not Yes
federal treasury
What is missing from the House plan?
How much will it cost?
Who will pay?
What about the Senate?
HELP committee is working on legislation that
includes many of the primary care workforce
and coverage proposals supported by ACP,
similar to House bill
But SFC is working on a “scaled back” bill to
cut the total cost; co-op idea being considered
instead of a public plan
Next few weeks will tell us . . .
If there is a governing consensus in
Congress (disagreements among the
Democrats and the House and Senate are
the biggest challenge)
Whether the public will continue to
support it
New NY Times Poll
72% support a public plan option, including
overwhelming majority of Democrats and
Independents and majority of Republicans
85% believe that health care must be completely
rebuilt or fundamentally changed, but 77% are
“somewhat” satisfied with own care
Majority would pay higher taxes and most have
more confidence in government to control costs
NY Times, June 22, 2009
“Stars are aligned” (Obama) but now
comes the hard part
1. Mandates on employers, individuals
• Pay or play
• Minimum benefit packages/ERISA exemption
• Penalties on individuals for non-compliance
2. “Rationing” and “taking decisions from your doctor”
• This argument raises biggest doubts
• Physicians will be key in how the public responds
“Stars are aligned” but now comes the hard
part
3. “Public plan” option (both sides suggest that it could
lead to a “single payer” plan)
− But what do they mean by a public plan?
− Current dysfunctional Medicare rates? Or
improved payments?
− “Playing field” with other health plans?
4. Where does the money come from? Taxes on wealthy,
taxes on health premiums?
5. The budget deficit
Conclusion
“The stars are aligned” for comprehensive
health care reform
• Public wants it
• Popular president had made it his top priority
• Democrats have the votes—if they stay together
• Current system is not sustainable
Obama will need to overcome deep divisions on
public plan option, mandates, and taxes
Conclusion
Policies on primary care must reflect
urgency, be multi-faceted, and
implemented concurrently
Payment reform to support patient-
centered primary care is essential
Conclusion
ACP priorities on workforce, primary care,
coverage and payment reform are being
addressed, but “you can’t always get what you
want” *
There will be pain with the gain
But the alternative is a health care system that
will collapse under the weight of rising costs
*Source: Mick Jagger, Rolling Stones
What can you do?
Politics is not a spectator support:
• Physicians have more influence over the outcome than anyone
else
• Why? Because the public trusts physicians!
• Requires that each of you participate in the political process—
starting with joining and supporting your physician advocacy
organizations
• Internists: sign up to become involved in ACP advocacy!
• But don’t wait—next 8 weeks may define health care for
generations
A Marxist definition of politics
“Politics is the art of looking for trouble, finding
it everywhere, diagnosing it incorrectly, and
applying the wrong remedies”
Groucho (not Karl)
Our task: help find the real problems, diagnose
them correctly, and get Congress to apply the
right remedies
