Physicians' Quality Does Impact Cost

December 18, 2014

The most asked question from state legislators: Does physician quality really impact cost?

The American Legislative Exchange Council (ALEC) is a non-profit association of state legislators and private sector representatives very active in developing and promoting model state legislation. It is a conservative group, and it is big, influential, and surprisingly bipartisan.

Two legislative areas come into play here: taxes, which they want to control, and Medicaid, which eats up their state budgets and has superseded education as the largest component in many states. Medicaid is headed for the number one spot in virtually all others.

Why should physicians care? With about two thirds of state governorships and legislatures controlled by conservatives of all political stripes, how they act, and react, in dealing with Medicaid impacts everyone. Especially physicians because something has to be, and will be, done and hospitals have convinced state legislators that they are the central healthcare providers deserving of the bulk of resources.

This is a dangerous state of affairs because the majority of the Medicaid budget goes to hospitals, leaving physicians without the resources to prevent progression of chronic disease in the Medicaid population.

Simply, the money is going to put out fires instead of preventing them and the case is being made very effectively to pour yet more into this failed structure.

This is not hospitals being evil, or states being naïve. It is a fundamental lack of understanding and, frankly, physicians' failure to set the record straight.

This cycle has to be broken the same way that President Bill Clinton, hardly a conservative, worked to break the cycle of welfare dependency in his administration. Focus on the fundamentals, which is a heavy lift because the people in charge don't know what they are.

That became abundantly clear at this fall's ALEC meeting in Washington, D.C., at which I was a speaker.

The most frequently asked question: Does quality affect cost?

My response: Yes, profoundly, and the biggest impact on quality is at the primary-care level for Medicaid as with other payment systems.

Here's why:

1. Underpaying for primary care with fees that represent a small fraction of Medicare not only forces providers to operate at a loss, it strips primary-care providers of the resources needed to manage chronic disease allows these diseases to progress virtually unabated to higher, and much more expensive, levels of acuity.

2. Failing to educate and support patients further contributes to unabated progress to higher and more expensive levels of acuity.

3. Poorly designed, or non-existent, physician incentives complete the triad of institutional failure by stripping any motivation to provide anything but the most basic care, ensuring continued failure.

The concept of paying less for a failed system is no bargain - it is a human and fiscal disaster. So is adding an extra rushed visit or two and calling it "preventative care."

Medicaid primary-care delivery cannot perform without investing in advanced practice techniques, transformation, and analytics.

The least expensive hospitalization, inpatient or outpatient procedure, and diagnostic test is the one that is not necessary because chronic conditions, which are epidemic in Medicaid populations, are only minimally treated instead of properly managed.

Closing gaps in care, providing targeted chronic disease behavioral, nutritional and activity support between physician visits, and using even basic techniques to manage disease at commercial levels is a strong start, and, the best investment of public funds in all of government.

The bipartisan will is there, but proper perspective, advice and guidance is not.

There is no more important civic duty for physicians and administrative professionals than to fill those gaps in knowledge - nor any better business model.