Which is the most compelling argument? Do you think that consolitation will save money? Will it improve or inhibit physicain/patient relationships? A lot of people are reading this, and your thoughts and comments are important.
Reform Driving Physicians Out of Private Practice to Reduce Costs
Reform Driving Physicians Out of Private Practice to Reduce Costs
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When Edward Lorenz, a Harvard mathematician and meteorologist, coined the term “The Butterfly Effect” 40 years ago, he used it to simplify his broader “Chaos Theory” by saying that extreme weather in Texas or New York could be caused by a butterfly flapping its wings in Brazil. The Chaos Theory also holds that an outcome in any field of human endeavor is highly sensitive to initial conditions.
When Congress passed the Affordable Care Act (ACA) in an attempt to redirect the unsustainable trajectory of our $2.9 trillion, extraordinarily complex healthcare system, it did so with about 2,600 pages of potential progenitors of the Butterfly Effect.
The casualties of the first flutters wrote large are being seen already. They are doctors being driven out of private practice and into the safe refuge of employment by hospitals, large clinics, and integrated health systems. These consolidated systems, with near monopolies in many geographic regions, will be powerful enough to demand higher rates and new fees from payers. As a countermeasure, government reformers are pushing accountable care organizations, with bundled bills, budgetary caps, and capitated rates, shifting risk to closed systems of physicians and hospitals.
Will big box medicine actually lower costs? There are valid grounds for doubt. If and how long the federal government can afford to keep the new system afloat with cash as it conversely heaps on mountains of new regulations and unfunded mandates lengthens the odds of success considerably.
Exacerbating the entire situation is the present public health concern of physician shortages building to crisis proportions as so starkly outlined by Annie Lowrey and Robert Pear in their July 28, 2012 New York Times article, “Doctor Shortage Likely to Worsen With Health Law.”
Putting physicians who have invested a decade or more in intensive training with six figure school loans out of business and into a big box lab coat is far removed from putting a general store owner out of business and into a big box retail vest. The level of dissatisfaction among physicians is already profound, and worsening. Of greater concern — they have choices other than clinical medicine and resources to pursue them.
So, the question is: Is driving a systemically distressed, contracting, dissatisfied and undercompensated physician sector to be forcibly absorbed by a traditional antagonist, but symbiotic hospital sector on the edge of distress itself and binding them together with miles of red tape and questionably reachable incentives going to reduce costs?
In a July 16, 2012 op-ed in the Boston Globe, Lynn Nicholas makes a compelling case that Massachusetts experience with “Romneycare” proves that reducing payments to hospitals doesn’t reduce healthcare costs; it just shifts them to someone else. The converse being true is equally logical. Shifting risks from one entity to another doesn’t reduce health costs; it just shifts risks – in this case from payers big enough to absorb them to providers, who are not.
One proponent of passing risk and reward to providers is David Lawrence, MD, chairman emeritus of Kaiser Permanente, who reasons that team-based medicine — coordinated care with physicians working in teams — replacing independent, fee-for-service physicians with structured organizations and salaried physicians, will bring order out of chaos with lowered costs1.
On the other hand, Dr. Brenda Zimmerman and her co-authors in their groundbreaking book, “Edgeware: Insights from Complexity Science for Health Care Leaders,” believe that combining workable systems rather than unworkable master schemes and mixing cooperation with competition, rather than emphasizing one or another, is the key to success2.
The smart money, however, is on the “Cyrus Vance 2 1/2 Rule,” which has proven true time and time again: “Always remember that everything takes twice as long, costs twice as much and works half as well as the original projection.”
Vance was Deputy Secretary of Defense back in the 1960s. His was no theory.
Richard Reece, M.D. is the author of "The Health Reform Maze."
Find out more about James Doulgeris and our other Practice Notes bloggers.
1 David Lawrence, “From Chaos to Care: The Promise of Team-Based Medicine,” Perseus Press, 2002
2 Brenda Zimmerman, Curt Lindberg, and Paul Plsek, “Edgeware: Insights from Complexity Science for Health Care Leaders,” VHA Inc, Irving Texas, 1998
I just got the following note from Howard Moskowitz, Ph.D., the noted Harvard psychophysicist and thought that it was worth sharing - JD:
The law of unintended consequences always seems to rear its less than welcome head when we attempt to do good things for good people. Or, in other words 'no good deed goes unpunished.' We see that with healthcare reform. By legislating for the common good, we in essence create a planned economy, one limited to health, but a planned economy nonetheless. Planned economies don't work over the long haul. Rather than letting Adam Smith's 'invisible hand' regulating the health care system, with slight fixes along the way, the health care reform is trying to take control of a massive economy, not knowing how the pieces of the economy interact, how one factor 'drives another.' The end game - the system will break down, as the individual players, the physicians, simply find that they cannot really do 'doctoring' in an economy that's set up to do reporting and oversight. In the world of administration versus talent, talent inevitably loses, takes its marbles, and walks away
The law of unintended consequences always seems to rear its less than welcome head when we attempt to do good things for good people. Or, in other words 'no good deed goes unpunished.' We see that with healthcare reform. By legislating for the common good, we in essence create a planned economy, one limited to health, but a planned economy nonetheless. Planned economies don't work over the long haul. Rather than letting Adam Smith's 'invisible hand' regulating the health care system, with slight fixes along the way, the health care reform is trying to take control of a massive economy, not knowing how the pieces of the economy interact, how one factor 'drives another.' The end game - the system will break down, as the individual players, the physicians, simply find that they cannot really do 'doctoring' in an economy that's set up to do reporting and oversight. In the world of administration versus talent, talent inevitably loses, takes its marbles, and walks away
Obamacare, once passed, never answered the most fundamental question of all; Exactly what incentive will doctors have to remain in their roll as doctors? As the ripple effects of this disastrous Bill are becoming revealed, it becomes clear that it is an unworkable master scheme. This article articulates the unworkable underpinning of the program and explains the chilling effect it will have on the medical profession. Cudo's to Mr. Doulgeris and Mr. Reece for providing a clear overview as to how this Bill will interact by the time Obamacare becomes fully implemented. The medical monopoly that will ensue and the constraints that doctors will face should be of the highest concern to all Americans.
EVERYTHING that the 'progressives' do to 'reduce costs' and 'improve access' and 'improve quality' does exactly the OPPOSITE.
Thousands of years of history and experience in many nations and cultures has repeatedly proven that a REAL Free Market-Capitalist (not 'Crony-Capitalist) system provides the best quality goods and services to the most members of society in the most efficient manner possible, at the lowest possible costs.
Every time the government gets involved, allegedly to 'tame the excesses' of the free market, the electorate rewards the 'pick-the-winner' public policies with lobbying dollars, campaign contributions, and re-election, so the spiral towards a government-run, socialist economy proceeds irreversably.
Yet we have naive college-kids and wealthy-elite who are desparate to maintain their power and influence, and just leeches on welfare, all gathering together for 'hope and change'. Unfortunately, like most political rhetoric, the reality differs - the 'progressives' version of 'change' is to increase the same old collectivist policies the big-government republicans have pursued in order to reward their big-corporate contributors. Of course when it is the democrats doing it, the news media spews the "saving the working man" story, and those who have no clue wind up falling for it. Both parties are whores for the wealthy and big corporate interests, and we're so distracted by their fighting among each other, we fail to notice that every incremental 'regulation' and 'reform' just makes things worse.
Thousands of years of history and experience in many nations and cultures has repeatedly proven that a REAL Free Market-Capitalist (not 'Crony-Capitalist) system provides the best quality goods and services to the most members of society in the most efficient manner possible, at the lowest possible costs.
Every time the government gets involved, allegedly to 'tame the excesses' of the free market, the electorate rewards the 'pick-the-winner' public policies with lobbying dollars, campaign contributions, and re-election, so the spiral towards a government-run, socialist economy proceeds irreversably.
Yet we have naive college-kids and wealthy-elite who are desparate to maintain their power and influence, and just leeches on welfare, all gathering together for 'hope and change'. Unfortunately, like most political rhetoric, the reality differs - the 'progressives' version of 'change' is to increase the same old collectivist policies the big-government republicans have pursued in order to reward their big-corporate contributors. Of course when it is the democrats doing it, the news media spews the "saving the working man" story, and those who have no clue wind up falling for it. Both parties are whores for the wealthy and big corporate interests, and we're so distracted by their fighting among each other, we fail to notice that every incremental 'regulation' and 'reform' just makes things worse.
Great article, Jim...
I applaud your efforts to engage, educate and empower both health care consumers and providers. Knowledge can be very powerful especially when applied by a group of individuals determined to enhance the quality of health care despite "The Butterfly Effect" of health care reform.
Thanks for lighting the way!
Gary Gardner
Best of Health Tampa Bay
I applaud your efforts to engage, educate and empower both health care consumers and providers. Knowledge can be very powerful especially when applied by a group of individuals determined to enhance the quality of health care despite "The Butterfly Effect" of health care reform.
Thanks for lighting the way!
Gary Gardner
Best of Health Tampa Bay
Excellent post to stimulate much thought and discussion. As the co-author of www.thenewhealthage.com, I certainly concur that integrated delivery models are the future of health care. That said, in order for "into the safe refuge of employment by hospitals, large clinics, and integrated health systems"to work, the integrated network has to engage physicians into becoming active participants in the medical practice model of the future versus simply delivering them a pay check (though the rewards system will be critical). How will this occur? It starts with developing a health care system culture around aligning interests towards prevention, wellness, and proactive care to improve outcomes and reduce costs. Hospitals must realize in The New Health Age, that inpatient stays and admissions are not the long-term answer to strong income statements any longer. Disease management, treating and preventing chronic disease, reducing hospital stays, wellness, community health, and other new flows that we write about in our book are. If all the players share this vision, then the economic upside and "safe refuge" is possible.