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The Fox Guarding the Medicare Reimbursement Hen House

A recent article in Politico, http://politi.co/1tT0w1c, by Katie Jennings highlighted an issue that I’ve been talking about for years.  It reminded me of a response I got from a Medicare official a number of years ago when I asked a question after he gave a speech to the American Geriatrics Society.  “You doctors control your own reimbursement from Medicare,” he said.  Unfortunately, “we doctors,” were not us geriatricians.  “We doctors,” were the AMA (American Medical Association), and the committee of the AMA that controlled physician reimbursement was called the RUC (Relative Value Scale Update Committee).


The RUC was formed after President George Bush signed the Omnibus Budget Reconciliation Act of 1989.  Since this time the income gap between specialists and primary care physicians (including geriatricians) has grown significantly.  The RUC essentially determines how physicians are paid to care for Medicare beneficiaries.  From the onset, the committee was made up almost exclusively of specialists. In fact, until very recently, there were no regular members of the committee that were geriatricians.  A committee whose purpose was to determine physician reimbursement for the care of Medicare beneficiaries had no members with expertise in geriatric medicine.  This recently changed with the addition of two permanent seats on the RUC for primary care, one of those seats belonging specifically to a geriatrician.  The fact that there is now one member out of twenty nine with expertise in geriatrics is better, but not very encouraging when viewed from a broad perspective.

 

The major problem with the RUC is that it is not representative of the physician population at large.  The average primary care physician, on the front lines caring for their patients, does not make up less than 5 percent of all physicians.  It is absolutely not surprising that over the past twenty years, Medicare reimbursement has increased substantially for those specialities that ultimately constitute the vast majority of RUC members.  The fox has truly been guarding the physician reimbursement hen house.  

 

Another interesting confounding factor is that the government pays the AMA royalties for the privilege of using their coding system. These royalties have been noted to exceed 70 million dollars a year. The AMA also brings in millions of dollars in revenue from publications that relate to the entire coding system.  It is unlikely that most of these revenues are used solely to maintain the coding system, and in fact, it has been recently noted that the RUC process costs about $7 million annually. The AMA also spends a significant amount of money lobbying congress, averaging lobbying expenditures of almost $20 million a year over the past several years.  As Medicare is a federally legislated program, and all changes to the program must be legislated by congress, lobbying has a important place in the process and must be recognized.  The AMA has a clear incentive to maintain the status quo as it relates to reimbursement, and they have the financial resources to back this up with one of the largest lobbying efforts in the country.

 

How can we fix this problem?  I have long advocated dissolving the RUC, but this would leave a vacuum when it comes to determining physician reimbursement.  How would that vacuum be filled?  Will the new approach be better than the old one?  For example, if the RUC were replaced with government bureaucrats, would that improve matters?  Should the process be depoliticized?  How could we achieve this goal?  

 

I have never understood how a committee that determines the reimbursement of health care providers who care for Medicare beneficiaries could be so lacking in geriatric medical expertise.  At the very least, a clear majority of RUC members should have expertise in Geriatric medicine.  Fortunately, there are physicians in the medical and surgical subspecialties who have demonstrated a clear focus in the geriatric aspects of their specialties.  More importantly, primary care must have a proportionally greater impact on the decisions made by the RUC.  This could be done by requiring RUC recommendations to go through a smaller executive committee that was equally represented by primary care physicians and specialists, all with expertise in caring for older adults.

 

What is the likelihood of major changes such as these happening?  Unfortunately, if one does the lobbying dollars math, change will not be readily forthcoming. Maybe this is why I find myself going back to the threat of dismantling the RUC completely.  Is that the only approach that will force the necessary changes in this process?

The Truth about Medicare D

A recent article in the New York Times, http://nyti.ms/1ABmGIg, demonstrated that there has been some apparent benefit from Medicare Part D, which most people know as the Medicare Prescription Drug Benefit.  In fact, it should be known as the Pharmaceutical Industry Windfall Profit Program.  Many of my patients told me at the time that just before the new benefit went into effect, the cost of many of their medications went up 30-40%.  This included generic medications!  While the "benefit" increased the amount of coverage that individual patients had, what it in fact did was subsidize a huge windfall profit for the pharmaceutical industry.  The article does note that the group of people that are still struggling with medication issues are those people on multiple medications.  These are the people that we need to be focusing on the most in the Medicare system, as they are ultimately the ones who utlize the greatest amount of resources.

At the time that Medicare Part D came into being, I posed the following question, "shouldn't we be more concerned about why so many seniors are on so many medications?"  Instead, we just focused on helping seniors pay for medications, many of which they did not need.  I have written many articles about how many health care providers are not adequately trained in the field of geriatrics.  This leads to the prescribing of many unnecessary and often harmful medications.  During my thirty year career as a geriatrician, I have stopped more medications than I have started.  The most egregious case was one of an older woman who came into my office, in a wheelchair, on 50 medications! Over the course of one month, we reduced the number of her medications down to three and she felt much better, and could walk on her own.

Why are Medicare beneficiaries on so many medications?  There are a lot of reasons, none of which include any significant evidence for many of the medications that physician prescribe.  Physicians who care for Medicare beneficiaries are incentivized to spend as little time as necessary with a patient.  Writing a prescription takes much less time than explaining why they don't need one.  The marketing of medications rarely acknowledges that the medication has not been adequately studied in older people, much less than in older people with any degree of frailty.  The addition of a Prescription Drug Benefit has only served to make the prescribing of medications to Medicare beneficiaries more palatable for seniors.  It is an ironic twist that medication non-compliance due to lack of ability to pay for a medication may actually help some people who are needlessly on too many medications!

What do we do to improve this situation?  The Medicare D program has created an entire new health care industry, which basically adds an additional silo of care to an already overburdened system.  I will endeavor to come up with two types of solutions, one for those who believe in government run health care and one for those who don't.  Take your pick, I believe that both are actually feasible!

Since the government is paying for people's medications, one could argue that they should singularly control that process.  While I am not generally a fan of more government, in this case I believe that it's the devil you know that wins out.  The government should be responsible for the Medicare Part D program and should have the ability to negotiate with the pharmaceutical industry on pricing.  Why should the government as a payor be forced to accept whatever the industry charges for medications?  Where are the free market principles in that?  

There is another interesting approach that could be taken that would take the government out of the picture.  Give every Medicare beneficiary a voucher payable to their Medicare D provider.  All medications that they ever need would be covered by this voucher.   The amount of the voucher would be the average amount presently spent on medications by a Medicare beneficiary, minus 5-10%, as we need to be lowering these costs.  This would put the pressure on the Medicare D providers to negotiate for better pricing, as well as to develop more effective guidelines for the prescribing of medications.  And, it would occur in the free market.

We all intuitively know that older people are given too many medications.  Let's stop supporting this and work towards changing the system and improving the health of older adults!

 

Medicare's $8 Billion-a-Year Secret

If Bill Gates was given the opportunity to subsidize the training of every computer programmer in the country, do you think that he would train them all on Macintoshes? Of course not, yet that is what the federal government does with our healthcare workforce. Every year the Medicare Trust Fund spends close to $8 billion dollars to subsidize the training of young physicians. How much of that money is used to train physicians in the art and science of caring for Medicare beneficiaries? The answer is very little. It gets worse. Many of those same doctors whose training was subsidized by Medicare either limit their practices to Medicare, or refuse to accept Medicare patients altogether! But it gets even worse. Conservative projections suggest that we could use 15-20,000 Geriatricians now, and upwards of 30-40,000 in the coming years. Today we have fewer than 7,000, and the number is going down every year!

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A World Without Death Panels

During the development of the Patient Protection and Affordable Care Act (ACA), there was a proposal to pay doctors to discuss end-of-life issues with their patients. Some compared this to having “death panels,” although the proposal never went beyond a discussion between a doctor and their patient. I thought that it would be useful to look at this issue from the perspective of the type of patient that I have dedicated my life to serving.bigstock-Healthcare--Pulse-444340

Daisy Smith was born in Oklahoma City during the 1918 influenza epidemic. She survived the Dust Bowl and the Great Depression. During World War II, she worked in a local factory funded by the U.S. Defense Department. She married a returning Veteran, and they had five children. Those five children would produce 15 grandchildren, 30 great-grandchildren, and most recently two great-great-grandchildren. Daisy was the matriarch of the family. She would always dress impeccably and was active in her local church. Daisy was widowed in 2000, and the family began noticing that her memory was declining. Today she lives in a nursing home, paid for by Medicaid, and does not recognize any of her family members.

Daisy’s health care needs are paid for by Medicare and Medicaid. A doctor or nurse practitioner sees her at least once a month. In order for them to bill Medicare, the visit must be “medically necessary”; but this is not an issue, as Daisy suffers from severe Alzheimer’s disease, diabetes mellitus, congestive heart failure, chronic renal insufficiency, and a host of other medical conditions. As there are “performance” incentives now built into the Medicare program, Daisy’s physician gets bonus payments if he makes sure that she is being treated for some of these conditions. Between Medicare Part D and Medicaid, her medications are all paid for.

One recent morning, Daisy woke up with a slight cough and fever. The nurse immediately called her doctor, who ordered a chest x-ray. A few hours later, it was determined that Daisy had pneumonia. She was given an oral antibiotic, but her condition worsened throughout the day. She began wheezing and her oxygen saturation levels started to decline.

In 2009, during the development of the ACA, some charged that Section 1233 of HR 3200 would create “death panels” when in fact it would just allow for reimbursement to physicians for providing counseling to patients with regard to end-of-life issues. This bill was never enacted, nothing similar ended up in the ACA, and her health care providers now have no financial incentive to discuss her end-of-life wishes with her. On the other hand, they have plenty of incentive to aggressively treat her medical conditions.

When Daisy’s physician received a call that evening about her condition, he asked about her resuscitation status and was told that she was a “full CPR” (do everything possible to keep her alive, including CPR). He felt that he had no choice but to send her to the emergency room via 911. Once Daisy arrived at the emergency room, she was in extreme distress and placed on a ventilator. Daisy spent a week in the intensive care unit, where she was agitated and had no understanding of what was being done to her. She did improve and ultimately returned to her nursing facility, where, at an additional cost to Medicare, she received skilled nursing care for the next several weeks.

One day, a young geriatrician was covering for Daisy’s doctor and reviewed Daisy’s medical record. As he read through the chart, he became more and more unnerved by what he was reading. He picked up the phone and called Daisy’s oldest daughter, who had durable power of attorney for Daisy’s health care. After introducing himself, he asked one question: “What would Daisy say if she knew her present condition?”

The daughter’s answer was immediate: “She would tell us to shoot her.” Upon further discussion, it became clear that Daisy had long ago told her family that she did not want to be a burden to them or to society. She had seen friends end up in nursing homes and did not want to end up that way, especially if she could no longer recognize her friends and family. Yet no one had ever asked Daisy’s daughter this simple question. Every time that Daisy was sick, the family just went along with what the doctors wanted to do, because they figured that Daisy was getting the best care that money could buy.

Today, billions of dollars are spent annually on people just like Daisy, providing expensive health care, much of it actually unproven, just because it is covered by Medicare. Furthermore, Medicaid provides the majority of funding for people like Daisy who are living in nursing homes, having spent down their assets. Not only should there be nothing wrong with a physician inquiring about a patient’s wishes, but it should be part of a comprehensive approach to caring for the whole person. Reimbursing a physician for their time spent in having these discussions is not an incentive for a “death panel” decision; it would be compensating them for doing their job. If all we do is compensate physicians for treating people aggressively regardless of the circumstances, we will get what we pay for: an expensive health care system run amok.

GME: We're Getting What We Pay For

Graduate Medical Education: We’re Getting What We Pay For

Prior to 1965 when physicians graduated from medical school and proceeded on to an internship or residency program, they were fortunate to get room and board. It was a struggle, but a necessary one. Many physicians went into what was then considered “General Practice” in order to save enough money to obtain further training in a specialty of interest.

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Treating the Frail Elderly: At the Crossroads Between Progress and Stagnation

I just testified at a public FDA hearing on a new drug for hyponatremia (low sodium)--a simultaneously fascinating and frustrating experience.bigstock-Pills-2280306

When one of the FDA's Advisory Committee members commented that "we shouldn't be just treating a number, we need to know that we're treating the problem," I realized that I was in a bizarre time warp. As a geriatrician, I've wanted to hear doctors say this for my entire career. Today, however, this meant that I might be denied a tool to treat a problem for which I essentially have no tools. As a clinician who deals with a very complex frail population of patients, I want some options from which to make clinical decisions.

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GME, Reimbursement, and the High Cost of Medicare

In 2010, over $9 billion was spent on Graduate Medical Education by the Medicare Trust Fund. Despite this taxpayer subsidy, very little is spent on geriatric medical training.1 One can argue that using Medicare tax dollars to subsidize the training of physicians, while not training them in the nuances of caring for the elderly, has only served to support an expensive, unproven, high cost approach to medical care in the Medicare population. Below are several examples of the known differences in treating the elderly versus a younger population.

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Voices of Health Care Reform: Geriatrics

Voices of Health Care Reform: Geriatrics

Recorded in 2009, this slide show, an interview with Senior Care's Michael Wasserman, MD, appears on the PBS News Hour website series, "Voices of Health Care Reform: Geriatrics."

Watch and listen as Dr. Wasserman talks about geriatric medicine, working within the Medicare system, and how physicians talking to patients could lower the cost of healthcare in the United States.

 

Click Here to Listen

WassermanPBS

"As Medicare goes, so goes heathcare in this entire country."

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