Road To Hellth

Jun
29

Fake Patient Program Put on “Indefinite Hold”

Yesterday we posted a description and analysis of the Obama Administration’s program to have contractors posing as patients call medical offices in order to determine whether doctors were discriminating against the poor and elderly in their scheduling practices. Well today the New York Times is reporting that the initiative has been placed in “indefinite hold”. This means that HHS will not say whether or when they really will carry out the program. After all, if they meant that the program was actually cancelled, they would have said “cancelled” . Instead the HHS spokesman merely said “We have determined that now is not the time to move forward with this research project.”

Well why not? If it was a good idea yesterday, why isn’t it a good idea today? Was the original announcement just a trial balloon to see whether or not anyone would complain about the sneaky and invasive nature of the inquiry? The only reason given in the article was a non-reason:

“Plans for the federal survey were devised by the office of the assistant health secretary for planning and evaluation, Sherry A. Glied, and the government retained a big survey research company to help conduct it. Ms. Glied declined Tuesday to respond to questions about cancellation of the survey…

Administration officials evidently concluded that the survey could be a political liability. But Christian J. Stenrud, a Health and Human Services spokesman, said, ‘Politics did not play a role in the decision’ Tuesday.”

The basic goal of the program – to acquire a virtual club that would be used to cudgel your doctor for behaving rationally – hasn’t gone anywhere. The speech that we described in our last post in which physicians are vilified for discriminating against the poor and elderly is still ready to go. It’s just waiting in the wings for a suitable triggering event.

The trusty reporters from the New York Times and the Wall Street Journal could prove it if they wanted by asking one simple question:

“Mr. President/HHS representative, do you believe that doctors are discriminating against the poor and elderly in their scheduling practices?”

To which the reply would be made:

“We simply don’t have the data to know whether this is the case. We certainly hope not. Since you’re brought it up, it’s something we should investigate.”

And the next thing you know, the secret caller program will be back in the saddle.

Categories : Abuse of Power, Clinical Care, Healthcare Policy, Political Hellth, Politics, The Practice of Medicine

Jun
28

Of Spies and Stratagems*

by Dr. Doug Perednia

Okay, pop quiz! It’s a multiple choice question.

“When I see or call my doctor, I want him/her to be:”

Suspicious
Distracted about money issues
Resentful and angry at the world
Thinking about retiring or changing careers
All of the above
None of the above

If you answered A through E, you probably work for the Obama administration or the Department of Health and Human Services. If you answered F, then congratulations! You have a modicum of common sense.

This quiz is a logical one given news that the Obama Administration is launching a “secret survey” program designed to uncover the truth about whether and how America’s primary care doctors and clinics are, (*insert blood-curdling scream here*), rationing their office visits. We’ll let the New York Times pick up the story:

“The administration says the survey will address a “critical public policy problem”: the increasing shortage of primary care doctors, including specialists in internal medicine and family practice. It will also try to discover whether doctors are accepting patients with private insurance while turning away those in government health programs that pay lower reimbursement rates.”

Right then and there we have a logical disconnect. A survey is a survey, and healthcare providers are healthcare providers. Even the best survey in the world is not going to create a single healthcare provider or provide a substitute for his/her services. Therefore it is inaccurate to say that the survey will “address” the critical public policy problem of a shortage of healthcare providers. The best the survey could possibly do is document the problem. This may seem like a nit-picky point, but really it’s not. Politicians and their bureaucratic functionaries have a nasty habit of thinking that they can solve problems simply by defining them, applying a partial or inappropriate solution, and declaring victory. Think “Mission Accomplished”, or “We have to pass this bill so you can find out what’s in it.” So the survey isn’t the solution. What is?

“Christian J. Stenrud, a Health and Human Services spokesman, said: ‘Access to primary care is a priority for the administration. This study is an effort to better understand the problem and make sure we are doing everything we can to support primary care physicians, especially in communities where the need is greatest.’

The new health care law includes several provisions intended to increase the supply of primary care doctors, and officials want to be able to evaluate the effectiveness of those policies.”

That is wonderful news. So this whole thing has been created because the administration loves and values your primary care doctor, and wants to help and support him/her in any way possible. Well let’s hear more about this helpful survey, then and think about exactly how it’s likely to help your doctor feel safer, more secure and inclined to want to spend a few more years taking care of patients instead of looking at early retirement. But first, let’s think about the sort of information that would be helpful as a yardstick. According to Mr. Stenrud from HHS, we want to be able to measure whether ObamaCare is having a beneficial impact on the supply of primary care physician services. What sort of data might one normally use to determine this? First, there’s the number of primary care providers. Second, there is the number of hours that these providers are actually working in a patient care capacity. Third, there is the percentage of primary care providers who are taking new patients. Fourth, there is the length of time that the average patient has to wait to be seen. So the administration’s focus will be on: (1) measuring each of these elements; (2) understanding why each of them is at the current level and increasing or decreasing; and (3) undertaking policies and programs that will make people want to become primary care doctors and maximize the amount of time they spend with patients.

Check, check and check. Now here’s the NYT description of the actual survey:

“In the mystery shopper survey, administration officials said, a federal contractor will call the offices of 4,185 doctors — 465 in each of nine states: Florida, Hawaii, Massachusetts, Minnesota, New Mexico, North Carolina, Tennessee, Texas and West Virginia. The doctors will include pediatricians and obstetrician-gynecologists.

… Each office will be called at least twice — by a person who supposedly has private insurance and by someone who supposedly has public insurance.

Federal officials provided this example of a script for a caller in a managed care plan known as a preferred provider organization, or P.P.O.:

Mystery shopper: ‘Hi, my name is Alexis Jackson, and I’m calling to schedule the next available appointment with Dr. Michael Krane. I am a new patient with a P.P.O. from Aetna. I just moved to the area and don’t yet have a primary doctor, but I need to be seen as soon as possible.’

Doctor’s office: ‘What type of problem are you experiencing?’

Mystery shopper: ‘I’ve had a cough for the last two weeks, and now I’m running a fever. I’ve been coughing up thick greenish mucus that has some blood in it, and I’m a little short of breath.’

In separate interviews, several doctors said that patients with those symptoms should immediately see a doctor because the symptoms could indicate pneumonia, lung cancer or a blood clot in the lungs.

Other mystery shoppers will try to schedule appointments for routine care, like an annual checkup for an adult or a sports physical for a high school athlete.

To make sure they are not detected, secret shoppers will hide their telephone numbers by blocking caller ID information.

Eleven percent of the doctors will be called a third time. The callers will identify themselves as calling ‘on behalf of the U.S. Department of Health and Human Services.’ They will ask whether the doctors accept private insurance, Medicaid or Medicare, and whether they take ‘self-pay patients.’ The study will note any discrepancies between those answers and the ones given to mystery shoppers.”

Now we ask you, exactly what is this $347,370 survey to be conducted by the President’s own University of Chicago designed to measure?

Does it measure whether a practice is closed to new patients? Yes.

Does it measure waiting times? Yes.

But it doesn’t stop there. It clearly has a third measurement agenda: do physician offices try to see patients whose insurance pays more in preference to those whose insurance pays less? Still worse, are they being deceitful and lying about it so that they don’t look bad in the eyes of the media and the public?

It’s an axiom of good medical practice that you should never order a test unless you know what you are going to do with the result. So let’s look at the possible outcomes of this study and analyze how the administration might handle them. We’ll dispense with possible outcome number one right away: that the study finds no shortage of clinicians, no waiting list to be seen and all patients are given appointments within the same period of time. There are plenty of data showing that there simply aren’t enough primary care docs, that waiting times are long (especially in Massachusetts), and that large numbers of doctors have closed their practices to Medicaid (and increasingly Medicare) patients because payments are so low and administrative burdens are so high that they’d go broke if they took them. So let’s take a look at the likely outcome: that there’s a shortage of primary care docs, many of their practices are closed to patients with government insurance, and those who do take Medicare and Medicaid patients try to schedule those with higher-paying private plans first. Do their office schedulers lie about it? Maybe they do, maybe they don’t. In any case, how would a rational planner react? And how will the Obama administration react in comparison?

A rational person’s first reaction should be a complete lack of surprise. Doctors and clinics are businesses, and they will remain solvent only if they make money. It’s an axiom of economics that any business is willing to supply more services when offered a higher price for its goods and services than when it’s offered a lower price. (That’s why the supply curve slopes upward.) This is exactly what happens in every other business and industry. Airlines fill as many seats as possible with passengers paying full-fare, and only later reduce fares as needed to fill the plane. Stores hold sales when there aren’t enough full-price customers for goods they have in stock. Why would anyone expect physician practices to be any different?

A rational person’s response to this situation would be to raise the prices that Medicare and Medicaid pay for healthcare to market rates, reduce the administrative overhead burden associated with seeing Medicare and Medicaid patients, allow clinical pay scales to vary in response to market demand and minimize the cost and hassle associated with the training and deployment of primary care providers. Doing so would increase the supply of primary care services and the willingness of young doctors to enter primary care. As we’ve said before on these pages and in an entire book, it’s possible to do all of these things and actually save money in the long run. But we’ll bet you a pony that this is not what the administration will choose to do. We predict that within 120 days of the survey’s results being released, the President (or one of his functionaries) will make the following speech:

“My fellow Americans, the secret caller studies ordered by this administration have now shown a consistent and disturbing pattern in the way America’s physicians discriminate against the poor, the elderly and the most vulnerable in our society. We have found that two patients with the same symptoms; one poor or elderly and one rich and well insured, receive wildly different responses when calling a typical doctor’s office for an appointment. If you’re rich and well insured, you’ll be seen promptly. If you’re poor or elderly, you often be asked wait weeks before being seen. In a number of cases we’ve found that medical offices blatantly lie when they’re asked whether they discriminate against the poor and elderly in this way. This is not the America we know, nor is it an America that any of us wants. A two-tiered healthcare is inherently unequal, and should be illegal. As a result, this administration has decided to take the following action effective immediately.

First, American taxpayers have a right to expect that healthcare programs funded by their tax dollars aren’t second class citizens in the eyes of greedy and duplicitous doctors. When we contract with doctors to see Medicaid and Medicare patients, we expect them to be treated in exactly the same way as any other patient. Henceforth, we consider it a form of fraud for doctors to discriminate against Medicare and Medicaid patients based on scheduling. Such discrimination will be punishable by fines, a prison sentence, or both. To find and eliminate this fraud wherever it may be, we are expanding the secret caller program to include all medical offices and clinics, and making it permanent. If you are a doctor who cares more about money than about the patients seeking your care, rest assured that we will find and punish you accordingly. Second, we intend to ask Congress to pass legislation that will require all healthcare providers to accept Medicare and Medicaid patients into their clinical practice, and accept Medicare and Medicaid reimbursement as payment in full. Anything less is unfair to our elderly and our poor. We know that you will stand with us in correcting these gross injustices. Thank you.”

Of course the defect in this logic is that no one is discriminating against the poor or the elderly, they’re discriminating against a fiscally irresponsible and unsustainable pair of insurance. Any poor person or any elderly person who has an insurance plan that pays market rates will be seen quickly, just like anyone else.

One has to wonder if this is any different from the way people are granted audiences with the President. Do poor and elderly individuals have the same access as wealthy and influential lobbyists? If so, we’d like to sign up to talk with him next Friday.

Thanks goodness this is all being done in an effort to do “everything we can to support primary care physicians”. Sheesh. With friends like these, who needs enemas?

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*This post shares its name with an excellent book by Stanley P Lovell. It describes the origins and World War II history of the Office of Strategic Services – the forerunner of the Central Intelligence Agency. (Julia Childs, “The French Chef” was an OSS agent.)

Categories : Abuse of Power, Healthcare Policy, Political Hellth, Politics, The Practice of Medicine

Jun
23

EMR Vendors: The New Drug Companies

by Dr. Doug Perednia

One good way to tell which vendors are swimming in profits and political influence is by watching who’s sponsoring medical education conferences. In the old days (nearly ten years ago) these would have been the “Big Pharma” drug companies. Flush with cash from newly developed brand-name drugs that lowered cholesterol, treated diabetes, suppressed the immune system, grew hair and corrected erectile dysfunction, major manufacturers like Lilly, Merck, Abbott, GlaxoSmithKline and Genentech were the primary sponsors of most medical education conferences directed toward physicians. Not only were medical conferences good public relations (“Mega Pharmaceuticals: Giving back through medical education!”), but it was good marketing as well. Heck, otherwise why would they do it? These conferences gave clinicians the opportunity to hear about the great results that newer medications produced – results that, in many cases, gave them an alternative in cases unresponsive to older generic drugs – and talk with drug reps who could tell them about formulations, packaging and cost. Was that information biased? Some of it was, of course. When one is talking with a drug rep, common sense dictates that the information be taken with a certain amount of salt. As Ronald Reagan was fond of saying in reference to the Soviet Union, “Trust, but verify.”

According to the Congressional Budget Office, drug companies spent about $3.4 billion to sponsor professional meetings and events in 2008, and another $400 million on promotional advertising in medical journals. This is for an industry whose domestic sales in that year were $189 billion. At the same time, direct-to-consumer marketing activities on behalf of prescription were ramping up dramatically, from little or nothing in the late 1990s to $4.7 billion in 2008.

In the never-ending arms race over who should have the right to tell your doctor what to think and do next, all of this spending was cause for concern. For many years, drug company support of “educational” spending had been the subject of considerable hand-wringing by those who worry that doctors are being unduly influenced when deciding what to prescribe to patients. As the Washington Post reported in 2007:

“Drug companies have become the biggest sponsors of continuing medical education courses in recent years, even at the nation’s top medical schools, a development that critics say raises health-care costs, skews doctors’ treatment decisions and allows the industry to skirt laws against advertising “off-label” uses for its products…

Now, nearly two-thirds of the cost of continuing education courses sponsored by medical schools, popular for their prestige, are paid for by drug and medical device companies and other commercial interests, figures show. Overall, commercial sponsors pick up about half of the $2.25 billion annual cost of the courses doctors must attend to keep their licenses.

‘Most of what doctors know about drugs comes from the industry, and that’s not healthy,’ said Jerry Avorn, a Harvard Medical School professor and critic of the sponsorships. ‘Academic organizations lend their names to courses that are nothing more than infomercials…’

…The hearing marks the second time this year that the Senate has examined the independence of industry-sponsored continuing education. In April, a Senate Finance Committee study found that the Accreditation Council for Continuing Medical Education, the main accrediting body for education providers, does not scrutinize course materials for accuracy or evidence of bias toward sponsors’ products. At times, sponsors have been able to select topics, and presenters have discussed off-label uses for drugs, the report found.

‘There has to be a bright line between drug company spending on medical education and spending on marketing,’ Sen. Max Baucus (D-Mont.), the committee’s chairman, said in remarks echoed by Charles E. Grassley of Iowa, the panel’s top Republican.”

As this quote points out, an interesting aspect of this controversy is that states require physicians to receive continuing medical education (CME) as a condition of maintaining their ability to practice medicine. Somebody has to fund that activity. Physicians might be expected to pay for much of it, and they do when they attend various academy and society meetings. But their real income and ability to pay has been declining for the past 15 years. Thus, the real question is what sort of state-mandated ~~propaganda~~, er, information, physicians should be receiving from those who are willing to pay for it. The problem is that all information is potentially biased; the nature of the bias simply depends upon who’s footing the bill. For example, if private insurance companies (or the federal government, which is the largest insurer in the country as a result of Medicare and Medicaid) were to sponsor medical education, one might well be concerned that they would be biasing clinicians toward cheaper, less effective treatments and drugs. But we digress.

As a result of ethical concerns and government pressure to just shut the heck up about their expensive products, drug makers have responded by pulling in their promotional horns. In 2008, pharmaceutical giant Pfizer announced that it was going to stop issuing grants to companies who make their living by providing government-mandated CME training. In June 2010, the New York Times reported that, although commercial support for CME had declined under continuing pressure from government and industry critics, the battle was still raging:

“The accrediting body for postgraduate medical education, for example, recently said it would no longer grant credit to doctors for attending medical meetings that feature industry employees presenting product research.

The decision was met with howls of dissent this month from some doctors, including the director of the National Institutes of Health and the president of the American Heart Association, who said it would unfairly cut physicians off from scientific knowledge.

On the other side of the argument, a leading medical ethicist asserted that the prohibition did not go far enough. Dr. Bernard Lo, lead author of a 2008 Institute of Medicine report on conflicts of interest, said private doctors and academic physicians who are paid to speak for drug companies should be barred from presenting educational material at accredited conferences. ‘Mouthpieces for their products,’ he called them.

Private medical education companies, which receive money from drug makers to produce such courses, and some doctors who lead the courses, disagree that industry financing or speakers lead to bias. They say that company-financed programs provide a vital service, keeping doctors up to date on the latest and most effective treatments.

‘We present what we think is the state-of-the-art of the management of the disease,’ said Dr. Rafael Fonseca, deputy director of the Mayo Clinic Cancer Center in Scottsdale, Ariz., who gives 20 to 30 such courses a year, about half for universities and half for commercial medical-education companies. ‘The accusation that there is bias is not substantiated.’”

All of which naturally leads us to the rise of the intensely commercial (and distinctly for-profit), healthcare information technology (HIT) industry.

With the possible exception of the space and defense industries, no industry in America has gotten a bigger pork-flavored boost from the federal government than the vendors who make electronic medical record systems (EMRs). As a direct result of federal mandates and approximately $20 billion in subsidies written into the American Recovery and Reinvestment Act of 2009, the EMR business is booming. Federal government efforts to punish doctors and hospitals to fail to buy this industry’s products in a timely fashion are now projected to double healthcare spending for HIT – “from $1.9 billion in 2009 to $3.8 billion by 2015, …about twice the growth rate analysts are seeing over the health information technology market and the general IT market.” One direct result of this growth is that the HIT industry’s Chicago-based trade organization, the Healthcare Information and Management Systems Society is apparently flush with cash. So much so that they’ve apparently made the decision to venture out into medical education, just like the big pharmaceutical companies.

This came to our attention when we received an invitation to attend a “collaborativeCARE” conference that claims to fill the “urgent need for medical education that is not only unbiased, evidence based and expertly informed but also fosters coordinated care and, ultimately, better outcomes for your patients.” Who could not want that? Once such conference is taking place in Long Beach, California in November 2011, and is being put on by a company called Lighthouse Learning, LLC. This commercial firm says that produces “conflict-free curricula, created by leading national experts, uniquely address the needs of primary care and specialist physicians, as well as patients and their families.”

“The pharmaceutical and medical device industries have funded innumerable high quality continuing medical education (CME) activities – and strict guidelines govern commercial support of CME. Unfortunately, instances of commercial influence on educational content persist – and can impact a physician’s judgment in the delivery of care.

Lighthouse Learning provides a conflict-free approach to physician education, with no funding or support from industry. With the support of a distinguished national advisory board, we have instituted a series of checks and balances to ensure that Lighthouse Learning – and its curricula – remains conflict-free.”

Hmmm. Really? It made us wonder how they do that. What truly immaculate source supplies their money? Are they a branch of some church?

There is no question that Lighthouse Learning is a for-profit company. One look at resume of its CEO confirms that he’s a serial entrepreneur who has done lots of business-to-business education-oriented startups before. So how does Lighthouse maintain its squeaky clean image? By passing the money from conference exhibitors through someone else before booking it as income! This is from a company press release:

“The C3 CME program is supported through an independent block grant from Medical Exchange. Medical Exchange is a for-profit company that obtains funding through exhibitor-related fees. There is absolutely no influence by industry on the Lighthouse Learning education at C3.”

Perhaps not, but don’t we always seem to be talking about shades of gray rather than black-and-white? It’s hard to imagine that a company panned by one of Lighthouse’s presentations would be eager to sign up with Medical Exchange for a second round of financing. Enough criticism of enough vendors, and it’s a sure thing that the Lighthouse Learning program developers would be buffing up their resumes just before the first mass layoff.

And lo, in the midst of all this “influence free” atmosphere, HIMSS somehow landed itself a half-day of CME offerings on two separate days of the conference to talk about the unbiased benefits of its vendor’s technologies:

“As a practitioner, you are focused on delivering unsurpassed patient care. And today’s advanced health care information technology is highly complex but also enabling. HIMSS recognizes that you need insight into the many health IT-focused issues of today and their impact on how you deliver care and administer your practice. To help you understand and navigate this period of dynamic change with the various Federal programs dedicated to health IT like the American Recovery and Reinvestment Act of 2009 and the Patient Protection and Accountable Care Act of 2010, as well as technology in general, HIMSS has created educational offerings that give you the tools you need today while looking to the future of care delivery. After attending the HIMSS Health IT Educational Track, you will be able to:

-        Demonstrate the knowledge and ability to implement health care IT and management systems through improved workflow and process improvement methodology.

-        Identify issues that impact patient safety and security in the health care enterprise and ambulatory practice

-        Discuss issues that impact the future of health care information management such as: improvement of patient safety, implementation of electronic record keeping, and health care legislation and regulation.”

What follows this mixture of flattery and ( by alluding to federal IT mandates) veiled threats is a list of IT-oriented physicians and HIMSS-fellow CME instructors, the likes of which, in earlier days, might have made a sponsoring drug company proud.

This is not to say that those individuals are in any way corrupt, intellectually dishonest or non-credible. But there is absolutely no reason to believe that this “new breed” of healthcare conference and CME is any less biased, or more ethical, than the pharma-sponsored meetings it is meant to replace. The only real difference is that the government, insurers and academia happen to have a pro-HIT industry bias so that no one’s complaining. It’s okay to stuff the coffers of private industry by influencing physician judgment as long as those economic and clinical decisions agree with the interests of Medicare, Medicaid, Blue Cross and the academic institutions turning out “IT leaders”.

Until, of course, there’s a change of political administrations, government accountants report that all of this expensive IT is actually costing us an arm and a leg, and someone, somewhere begins to take it seriously. At that point ethicists (what would we ever do without them!) will once again cry foul, and Congressional hearings on the funding of CME will begin anew.

But until then, move over Big Pharma. The Silicon Boys are here.

Categories : Clinical Care, Clinical Information Technology, Electronic Medical Records, Ethics, Healthcare Policy, Politics

Jun
16

How Can We Apply “Primum Non Nocere” to Government? – Part II

by Dr. Doug Perednia

In our last post we examined the myriad of potential hazards created by government influence, and/or control over, the world of healthcare. It’s clear that ill-considered laws and regulations can and do waste many billions of dollars and dramatically reduce the cost-effectiveness and efficiency of the healthcare system. The risk is magnified considerably under a government run single-payer system, where the government becomes the de facto “Decider” with respect to everything medical. Sole payers can dictate who will receive what treatments and under what circumstances, what healthcare information technologies will be used, and what sort of clinicians will be allowed to provide care. Monopsonies are can be just as harmful and inefficient as monopolies, both socially and economically. So the real question is, given the potential hazards of a single-payer system and the proven inability of government to keep itself from meddling in healthcare, how can the government be discouraged from doing harm to patients, providers and taxpayers?

Wow. This is quite a challenge. When is the last time you remember stat and federal governments being reined in, as opposed to being given yet more power over healthcare and the economy?

As we consider this challenge there are two powerful entities to be considered. The first and most obvious is Congress itself. Congress is, of course, free to pass any law it likes regardless of how ill-considered it might be. The ACA (aka, “ObamaCare”, or “ObamneyCare” as it has recently been dubbed) is only the most recent example. The second is what Heritage Foundation Senior Fellow Bob Moffit has characterized as a fourth branch of government: the “administrative state”. In his recent discussion paper, Mr. Moffit makes a convincing case that the administrative state is not only a distinct feature of American government, but one that is growing rapidly in both size and importance.

What is the administrative state, and how does it differ from the traditional role of Executive Branch? Well, back in the good old days Congress passed laws and apparently expected there to be some accountability with respect to how those laws were implemented through rules and regulations. In fact, in 1946 Congress passed the Administrative Procedures Act (APA) in an attempt to ensure regularity and transparency in the way federal laws were administered by bureaucrats who largely resided in the Executive Branch. This act divided rules into two groups: “formal” rules (which affect to relatively important things that affect large numbers of people and/or amounts of money), and “informal” rules. Bob Moffit does a great job of explaining this:

“In formal rulemaking, when Sections 556 and 557 of the APA apply, the act provides for a process that requires the gathering and orderly presentation of evidence, an oral hearing presided over by an administrative law judge with some measure of independence from the rulemaking agency, prohibition of ex parte communications with the presiding official, the right of contending parties to present opposing cases, a presumptive right of cross examination of the witnesses in the proceedings, and a requirement that the public record of the proceedings be the exclusive basis for the regulatory decision. Formal rulemaking, then, is conducted very much as the civil procedures of a courtroom are conducted. Not only would the administrative law judge be empowered to issue subpoenas, but counsel or representatives for parties on either side of a regulatory issue would be able to make the case in this open hearing to secure, in the language of the statute, “a full and true disclosure of the facts.”

This formal style of rulemaking has fallen into disuse, though it was quite commonplace until the early 1970s.”

The decline in formal rulemaking can be attributed to a 1973 Supreme Court ruling that required Congress to include specific language into laws if they wanted the resulting rules regulations to be treated as “formal”. Congress rarely does this:

“…Almost all rulemaking today uses informal procedures, which simply require the agency to give notice of its intention to propose a rule, receive comments in writing from interested parties, and issue a statement of the rule’s basis and purpose if one is issued. There is no requirement of oral proceedings or cross-examination of witnesses, no formal presentation of evidence, no impartial administrative law judge overseeing the proceedings, and no requirement that the agency rule be based exclusively on publicly vetted and adversarially tested evidence. This informal process of mere “notice and comment” is a recipe for backroom deals and special-interest lobbying.”

“Okay,” you might say, “but a little casual rule-making hardly constitutes a ‘fourth branch of government’ or a constitutional crisis.” That would be true except for two factors. The first is that Congress has become increasingly sloppy about writing laws. Over the past two decades it has taken to passing legislation that gives government bureaucrats and regulators broad power over larger and larger portions of the U.S. economy: Homeland security. Housing. Banking and finance. And most recently (but not least), healthcare. The ACA legislation itself is a prime example. Here Moffit quotes the New York Times:

“Congress provided a road map for measures aimed broadly at getting more Americans covered by health insurance and providing more federal safeguards against risky financial practices. But the laws were so broad and complex that executive-branch regulators have wide leeway in determining what the rules should say and how they should be carried out. In all, the bills call for drafting more than 300 separate rules on a rolling schedule by about 2014, plus dozens of other studies and periodic reports. That may be only the beginning. A recent report from the Congressional Research Service said the publication of rules under the health care law could stretch for decades to come.”

The second problem is that regulatory agencies are increasingly independent of both Congressional and judicial authority. They not only have the ability to make the rules, but serve as judge, jury and executioner with respect to their enforcement. Moffit quotes Gary Lawson, a professor of law at Boston University on this point:

“Many administrative agencies have authority over matters that are far removed from any of the enumerations of the Constitution…. Many of these agencies—the so-called independent agencies—are statutorily insulated from presidential control. And to cap things off, the agencies perform all of the functions of government at the same time: They promulgate rules, enforce the rules, and adjudicate their own enforcement actions.”

For those affected by them administrative rulings have the force of law, yet there is often no appeal except to the same individuals who are making and enforcing them.

Obviously all of this greatly complicates the problem of protecting patients and providers from potential harm if the government is in charge of a single-payer system. So what is to be done?

With respect to the administrative state Moffit has six eminently reasonable suggestions:

Stop expanding it by crafting specific, clear and concise laws that spell out exactly what is to be done and how. One reason that Congress is enamored with passing vague legislation is that it allows members to duck responsibility for their consequences. Obviously this defeats the purpose of accountable and representative government. Unless and until voters require their elected Leaders to “grow a pair” and own up to their responsibilities, the administrative state will continue to thrive.
Restore formal and transparent rulemaking as the norm. “Congress should require the restoration of formal rulemaking as the norm. This could be done either as an omnibus measure, applying the requirement to all federal departments or agencies, or as an amendment to any bill governing the activities of any agency that has federal regulatory authority.”
Reinforce Congressional control of regulation. In 1996 Congress passed the Congressional Review Act. (CRA) This requires regulators to send proposed “major” rules having an annual economic effect of $100 million or more to Congress for consideration. Congress then has the option of enacting a joint resolution disapproving the rule and rendering it. Given the divisions in Congress and the desire of its members to avoid accountability, this option has rarely been exercised. The problem could be corrected by requiring Congress to actively affirm major regulations before they go into effect.
Strengthen Congressional oversight of rulemaking. All “major” and important “minor” rules and regulations should be subjected to Congressional hearings and investigation simply as a matter of shedding light on their risks and benefits.
Establish an internal mechanism for regulatory review. Here he suggests creating a Congressional Office of Regulatory Review (CORR) that would independently score rules and regulations for their cost and socio-economic impact. This would be done in a manner similar to that by which the Congressional Budget Office currently scores proposed legislation.
Provide citizens with a right to legal self-defense and recovery for regulatory damages. One of the most serious problems with the current system is that it’s so easy and painless (at least for them) for regulators to impose burdens on others. Their unelected positions are not at stake, the agency is often immune from legal recourse and in some cases they are even immune from Executive Branch oversight. To address this, two measures have been proposed by Judge James L. Buckley:

“First, any accused citizen should be presumed innocent until proven guilty before the imposition of administrative fines or penalties, and, if successful, the citizen should also be able to recover costs of presenting his case in an administrative or civil hearing.

Second, Congress should waive sovereign immunity for federal agencies in certain circumscribed areas of regulatory enforcement. This means that a business owner, for example, would be able to recover damages from abusive or incompetent agency actions.”

Although hardly risk-free, there is no question that these measures would make a American single-payer system far safer and less subject to abuse from the “administrative state” than the existing situation. In fact, there should be no consideration of a single-payer system in the U.S. without safeguards of this type. The stakes are simply too high.

However despite Dr. Moffit’s excellent work, we are still left with a sizable elephant (or donkey as the case may be), left in the room. What is one to do about a Congress who will pass legislation as fiscally and medically irresponsible as the ACA? That will be the topic of our third and final installment on minimizing the government harm in healthcare.

Categories : Bureaucracy Run Amok, Economics, Ethics, Healthcare Policy, Overhauling Healthcare, Politics, Solving Problems

Jun
5

How Can We Apply “First Do No Harm” to Government? – Part I

by Dr. Doug Perednia

Excess administrative overhead expense is the single largest source of source of savings currently available to the U.S. healthcare system. As documented in Overhauling America’s Healthcare Machine, the sheer magnitude of administrative waste and inefficiency is staggering. We’re talking hundreds of billions of dollars each year. A substantial portion of this overhead can be attributed to the way in which private insurance companies are permitted to operate. Accountable to no one but themselves, the amount of foolish and unnecessary work they create for patients and providers is legendary. None of the forms are the same. None of the policies are the same. Everything requires pre-authorization. If you want to pre-authorize something, all of the records have to be submitted. Generally speaking, it’s impossible to find a person in authority that you can speak to on the phone. Records and requests are repeatedly “lost”. Policies and formularies are continually changing. Heck, most insurance card don’t even have information about deductibles and co-pays printed on them anymore; clinic staff are now supposed to take the time to call the insurer or log on to their website to figure it out. And don’t even get us started on “denial management”.

One way of reducing these costs is by adopting a “single-payer” system. (Typically this “single payer” is the government, but it doesn’t necessarily have to be. One could, for example, give a single private insurance company a monopoly on selling health insurance nationwide.) Enlisting a single payer can eliminate all sorts of administrative expenses: reducing the number and types of forms required, providing a uniform policy with respect to referrals, pre-authorizations, formularies and coverage, streamlining billing, and obviating the need for advertising. Indeed, the case for a single payer seems so compelling that single-issue organization have been created on its behalf. Some of these include Healthcare-NOW!, the 18,000 member-Physicians for a National Health Program, the 581 labor unions represented by Unions for Single Payer Health Care, and dozens of others. The state of Vermont has just passed legislation mandating the creation of a single-payer system of healthcare within that state, sadly without having a plan in place to finance it. It calls for all healthcare in the state to be “managed by a five-member board, [that] will set reimbursement rates for health care providers and streamline administration into a single, unified system.”

So many of the prospects for single-payer healthcare are so useful and charming, that at first blush it’s hard to see why anyone wouldn’t be in favor of it. But just as there’s no rose without a thorn, turning the healthcare system over to any single payer does have one terrible flaw: if there is only one all-powerful organization in charge, what happens to all of us patients and healthcare providers if, or perhaps when, the people running it decide to screw things up? This is of particular concern if the single payer happens to be the government. Because of its control over the law, regulations, taxes and the armies of people who enforce all of them, not only can the government make things go badly, it can make them go very badly, and with little recourse on the part of those most adversely affected.

One never hears single-payer advocates discuss this problem. This seems odd because, as an advocate, you would presumably wish to anticipate and address any potential objections to the policy that you would like others to embrace.

And it’s not as if the prospect of gross administrative incompetence is novel or difficult to imagine. There are plenty of examples of government mismanagement anywhere one might care to look, from the federal government’s role in creating the recent housing bubble to the management of defense procurement. Moreover, none of this absurd and fiscally irresponsible behavior is new, or should be unexpected. Nearly a hundred years ago during the first World War, the U.S. government decided to enter assist the shipbuilding industry by creating the Emergency Fleet Corporation (EFC). The result was a classic bureaucratic mess in which ships that would have cost $75 per ton to build in the United Kingdom cost the U.S government $145 per ton. President Wilson’s own Treasury Secretary reported that:

“Appalling prices were paid for everything that had to do with a ship. Engines and other equipment were purchased at such as staggering cost that I fancied more than once that the machinery we were buying must be made of silver instead of iron and steel.”

By the end of the program the EFC had received 2,311 ships, nearly a quarter of them made of wood and already obsolete.*

But even the Federal Emergency Management Agency’s performance during Hurricane Katrina can’t hold a candle to the poor planning, mismanagement and counterproductive behavior that we’ve already seen in state and federally-managed healthcare programs, both in the U.S. . Consider just a few of the following examples:

- Wildly inaccurate financial projections. From the very beginning of the Medicare program, federal legislators and administrators have shown a complete inability to accurately estimate the program’s true costs and control their urges to provide more benefits than can be realistically financed. Hayward and Peterson’s now-historical 1993 article, “The Medicare Monster” :

“At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee estimated that Medicare would cost only about $ 12 billion by 1990 (a figure that included an allowance for inflation). This was a supposedly “conservative” estimate. But in 1990 Medicare actually cost $107 billion.

This is a mere bagatelle compared with “conservative” projections for the next generation. The Congressional Budget Office estimates that Medicare will cost $223 billion by 1997. Constance Homer, deputy secretary of Health and Human Services, warns that “by the year 2003, at the current rates, we will be spending more on Medicare than we do on Social Security.”

In fact, Medicare spending in 1997 was just $215 billion, and Social Security spending (at) was still higher that Medicare spending (at $483 billion vs. $275 billion) in 2003, but that’s small consolation given the fact that both funds are now operating at a deficit. Another chronic problem that governments seem to have with healthcare is honesty – especially with respect to accounting. Medicare actuaries have been objecting to the annual financial projections of the nation’s Medicare Trustees for decades, and even generations. Take a look at this passage from Hayward and Peterson:

“But even the supposedly pessimistic assumptions behind these projections aren’t realistic, and herein lies another small drama. Roland King, the chief actuary of the Health Care Financing Administration (HCFA), has been blowing big holes in the projections. King has to sign off on the “actuarial soundness” of the projections in the annual report each year. Acknowledging the “garbage-in, garbage-out” quality of the projections, King has noted in his statement that the projections assume unprecedented growth in average wages over the next generation.

The projections assume real income growth (pay increases adjusted for inflation) substantially above the trend line of the last 25 years. Calling this “unjustified optimism,” King notes that even the “pessimistic” projection assumes that real income will grow at an annual rate that is faster than the cumulative rate for the last 25 years.

King concludes in a memorandum he circulates with copies of the Medicare annual report: “Indeed, the assumptions are so optimistic that even the pessimistic assumptions project real earnings increases during the next quarter century, and each quarter century thereafter, will be many times the increases of the last quarter century….The Trustees’ assumption that real earnings growth rates will suddenly accelerate to levels that substantially exceed the real earnings growth rates of the last quarter century must be viewed as unreasonable.” King believes that the actual actuarial deficit will be 60-percent higher than even the pessimistic forecast.

The Hospital Insurance Fund trustees have had a prickly reaction to King’s observations. In last year’s annual report, the trustees offered this grumpy dismissal: “We believe that the comments on real-wage gains by the HCFA Chief Actuary also represent an expression of a preference outside the bounds of the legally required actuarial opinion.” In an appendix of the latest annual report, the trustees take aim at King again, but without offering any substantive refutation of his arguments: “It is perplexing and disconcerting that an actuarial opinion with unjustifiable qualifications has been allowed to be repeated for several years in the HI reports.” In other words, shut up.”

If this sounds hauntingly familiar, one need look no further than this recent Road to Hellth post describing the second year in a row in which Medicare’s own actuaries have filed a report that politely characterizes the numbers in the Trustee’s report as pure fantasy. It is no exaggeration to say that the consistent inability of government to either predict, or stay within, its governmental healthcare budget is a major contributor to America’s current multi-trillion dollar deficits.

- Inept procurement and use of healthcare information technologies. The federal government has spent billions on defective, hard-to-use and non-communicating electronic medical record systems (EMRs) for the military that have been, or soon will be, scrapped. The DoD’s current AHLTA system has charitably been described as “a debacle.” And soon President Obama will be tossing billions more good dollars after bad to fix or replace them. This system is just the latest in a line of defective EMR deployments stretching back decades to the military’s CHCS I and CHCS II programs. Even worse for the private healthcare sector, the government’s obsession with deploying fancy, expensive and hard-to-use EMRs is now being forced on them as a result of the American Recovery and Reinvestment Act of 2009. In all fairness, the U.S. government is far from alone in its wasting tax dollars on defective EMRs. “Across the pond” in the United Kingdom, the National Health Service has wasted many billions more (currently over 11 billion pounds and counting!), and still doesn’t have any idea when it will have a workable system.

- Expensive and disruptive incentive programs that produce little or no clinical benefit. As we’ve seen previously, both the NHS and Medicare have launched pay-for-performance (P4P) programs that reward and/or punish clinicians for engaging in specific rote behaviors. By 2015, all Medicare clinicians will be forced to report quality metrics to the government or face penalties. Although these programs clearly frustrate clinicians, add to administrative overhead and increase the complexity of the healthcare system, a number of studies have now found that P4P does not appear to improve care. Yet the programs continue.

- Payment systems – mandated by law – that dramatically increase administrative overhead. Regular readers will know that we’re referring to Medicare’s one-of-a-kind Resource-Based Relative Value Scale, or RBRVS. Surely one of the most complex, special interest-manipulated and administratively expensive medical payment schemes ever conceived, the RBRVS spawned the Relative Value Scale Update Committee, or RUC. This system has pitted specialty physicians against primary care doctors (which, coincidentally, may have been one of the ideas in the first place), directly reduced the number of primary care physicians available, spawned an expensive and sophisticated medical billing industry in which “code manipulation” is the order of the day, and has provided hundreds of millions of dollars (if not billions) in indirect subsidies to The American Medical Association. No other country in the world has seen fit to adopt a similar system. The RBRVS system has now been in place for over 20 years – more than enough time to appreciate its defects and replace it with something far simpler and less expensive, yet it remains the law of the land.

- Payment policies that routinely pay for less than the cost of the goods and services consumed. This has been a universal problem for government-run healthcare systems around the world. As T.R. Reid documented in his book The Healing of America, inappropriate payment practices have led to doctor strikes n Germany, shabby and rundown healthcare facilities in Japan, and long waits for care in Canada. In the U.S. state and federal underpayment policies have resulted in a wide variety of ill effects. These include forcing physicians out of Medicaid (and, in the near future, Medicare), increasing the cost of care to private individuals and businesses as they subsidize government healthcare programs through cost shifting, reducing the real income of clinicians and increasing the number of providers opting for early retirement.

If we’re really and truly objective about it, it’s hard to come up with any reason to think that a government-operated single-payer healthcare system is going to be efficient, cost effective or even fair. Our experience – and the experience of many other countries – has been exactly the opposite. This is not to say that simply turning the American healthcare system over to private insurers is necessarily going yield any better results. If anything we should be ashamed of the rapacious and inefficient behavior that our society (and its state and federal governments) have been willing to tolerate in the private health insurance market. Anyone with any doubts in this regard need merely pick up a copy of Wendell Potter’s book, Deadly Spin.

So here’s the real question. Whether or not we enlist a single-payer system, what measures can we take to save government from itself with respect to healthcare? This will be the topic of our next post. In the meanwhile, we welcome your comments and ideas.

*Cruikshank JL, Schultz AW. The Man Who Sold America. Harvard Business Review Press, 2010.

Credit for the image goes to The Smallest Minority website.

Categories : Abuse of Power, Bureaucracy Run Amok, Clinical Information Technology, Economics, Electronic Medical Records, Healthcare Policy, Hellth Across The Pond, Overhauling Healthcare, Politics, Solving Problems, Uncategorized

Archive for June 2011

Fake Patient Program Put on “Indefinite Hold”

Of Spies and Stratagems*

EMR Vendors: The New Drug Companies

How Can We Apply “Primum Non Nocere” to Government? – Part II

How Can We Apply “First Do No Harm” to Government? – Part I

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