Doctors Groups Fail Because They Don't Understand Risk

The October 7, 2010 New England Journal of Medicine has two interesting articles, one by Harold S. Luft, Ph.D.  titled "Becoming Accountable - Opportunities and Obstacles for ACOs" and the other "The Effects of the Affordable Care Act on Workers' Heath Insurance Coverage" by Christine Eibner, Ph.D. and others. Like the Affordable Care Act, neither of the articles discusses an issue which my experience tells me has played a major role in the failure of a number of physicians' practices to survive managed care and other forms of contracted health care relationships.

Insurance companies understand risk: they hire skilled actuaries to analyze underwriting risk and to tell them about it and how to shuffle it off to others.  The Federal Government understands risk, and as one plows through the 900+ pages of the Affordable Care Act, there are many references to the requirement that highly sophisticated actuarial studies be done to guide future policies and actions  But individual doctors don't have the financial means to hire actuaries (or attorneys)  to tell them about the risks that they blithely assume, and even if they did, their fracturing into relatively small business entities makes the per-doctor cost of securing actuarial advice prohibitive.  And then there are antitrust issues when groups of physicians combine resources to strengthen their ability to negotiate with employers, government and insurers.  So insurers, government and business shift risk to physicians who bite off more than they can chew - and choke.

The current proposals for health reform is not going to solve that problem. As physicians learn that the emphasis on "efficiency" and driving down the cost of services leaves their bank accounts empty, I expect them to resort to their experience-tested means of generating income: see more patients, do more procedures, order more tests and ramp up the billing. In this era of "evidence-based care," ironically it is the physicians who lack evidence about the business risks they are asked to undertake by insurers, government and businesses.

Acountable care organizations will not survive in that environment.

Gee, The NY Times Finally Noticed: The Fox Is Guarding the Hen House

Our U.S.government is not expert in the "insurance risk" business, but health insurers and HMOs, which may not have corporate competence in health care but do understand their respective financial bottom lines, understand the concept of risk very well. And corporate health insurers and HMOs lobby for laws which explicitly limit their risk or allow them to limit their risk by defining that risk away and influencing their friends at the states' level to help them.

As Reed Abelson of the Times describes in his 7/24/10  "For Insurers Fight Is Now Over Details" article, insurers are trying to define away their risk under the health reform provision which requires that 80 cents of each premium dollar be spent on the welfare of patients. Instead of the 80 cents purchasing actual health goods and services, the health care industry is attempting is use that 80 cents to pay for the paperwork and clerical functions involved in credentialing doctors in its networks, for commissions to those who sell insurance, for taxes on investment income and other items which will improve its bottom line (such as policing health care billing fraud), but not the health care bottom line of those insured under the health reform package.

Insurers are already showing their willingness to dump sick kids who are under individual (not group) health insurance policies as they manipulate their exposures to risk. Our health care premiums will buy less health care, more bureaucratic services, and we will not have the true reform promised by the Obama administration.  The health insurance and HMO industry, guarding the hen house like foxes, will take care of their needs first and provide only left-overs for Americans who will dig deep into their pockets for health insurane coverage.

Evidence Is Only A Part of Evidence Based Medicine

EBM is the integration of clinical expertise, patient values, and the best evidence into the decision making process for patient care. Clinical expertise refers to the clinician's cumulated experience, education and clinical skills. The patient brings to the encounter his or her own personal and unique concerns, expectations, and values. The best evidence is usually found in clinically relevant research that has been conducted using sound methodology. 

There are serious subtleties in Sackett's straightforward statement. Has the physician, addressing your problem, necessary cumulative experience? How is relevant cumulative experience defined? How do patients judge a physician's total  education? How does a patient assess a physician's clinical skills?

What are some of the other important issues? Does the physician have a stable personal life? Is he or she in financial difficulty?  Did he or she have a knock-down drag-out fight with his or her spouse or children the night before he or she is scheduled to perform a technically difficult procedure, requiring a sharply focused mind,  for you?  Does the physician use too much alcohol or is he or she a drug-user?  Does he or she have a health problem which affects medical practice and judgment?  Is he or she a personal risk-taker and is that a personality characteristic you consider useful in your care?

Is the physician intellectually aggressive and knowledgable? Is the physician energetic or lazy?  Is the physician inappropriately fearful or self-defensive?  Does he or she seek-out and value the opinions of other physicians in the same specialty or does he or she dismiss those opinions which are inconsistent with his or her views. Does he or she know what evidence is important in your case, obtain that evidence and then carefully review it, integrating it with the available history, physical findings and other medical data about you? Does your physician seek consultation or make referrals or does he or she believe that he or she can "handle it all" even though his or her experience may be very limited?

Does your physician work in isolation? Does he or she test his or her ideas in study groups, professional lectures or other activities? Does he or she read leading medical journals or rely on pharmaceutical company sponsored education programs for updates? Are your physician's extra-curricular activities primarily medical-political, or is he or she focused on activities benefitting the comunity?

Does your physician work in a medical group run or owned by lay people? Are the physicians in the group setting its course or are they only paid employees for whom working conditions, patient volume, practice philosophy, professional standards,  office facilities, and financial production numbers are dictated by others?   Do the physicians in the group carefully observe each other so that substandard care is addressed and high quality care is rewarded? Is referral outside the group discouraged? What are the ethical standards and practices of the group? What is its mission?

"Evidence" is a single factor in a many-faceted  physician-patient relationship.  While the preparation, interpretation and value of medical evidence changes rapidly, the physician's wisdom, personal and professional judgment, compassion and competence in addressing life's issues tend to be stable. Don't get hung-up on evidence. Look for the subtleties.

Genetics, Population-Based Risk Studies & Public Access

Years ago, while performing 5-minute employment-related physical exams for a nursing home's employees, I violated the guidelines published in an insurance company's sponsored meta-analysis of the value of various physical examination steps. My mistake in examining the 35 mostly female workers was that I actually performed brief physical exams which uncovered a thyroid cancer in a 16 year-old (subsequently cured by surgery), an abdominal mass in a 16 year (a large teratoma subsequently successfully removed) and a cancerous breast lump in a 40-ish administrator.

According to the meta-analysis, I wasted my time checking the thyroid, abdomen, breast and other organs in these apparently healthy, uncomplaining, low-risk women.

Population based risk studies cannot predict the particular person who will have a thyroid cancer, teratoma or breast cancer. They predict that a certain percentage of the population will or will not get sick, not the names of those individuals. Risk-analysis studies should never be relied upon by a payer, physician or other provider as conclusively determining what needs to be done for each patient.

The 5 minutes I spent for each of the women described above yielded cures of serious diseases and saved the nursing home and its health insurers significant sums as patients were cured in an asymptomatic early stage of their diseases.

For the last 3 days, at my own expense, I have been in Houston, attending a genetic genealogy symposium held by Family Tree DNA (I have no financial interest in Family Tree DNA). Among the technical subjects, there was significant discussion of steps taken by various state governments, under the urging of "doyens of proper practice", against 2 companies which market "Direct to Consumer" genetic testing and provide information about population-based risks. Some of the experts have even leveled their artillery at genetic genealogy (which in my case, has restored a broken link to a family I would never have otherwise found).

Genetic genealogy is no threat to consumers. Participation is voluntary. If one does submit a specimen for analysis and is disappointed with the results (i.e., finding out that he is not related to Gates or Buffett, but might have several horse thieves in her family), it's not likely that the person will be at significant physical, mental or financial risk. Genetic genealogy links traditional genealogy research techniques to inferences about ancestral genetics. An enormous anthropological study, using similar techniques, is sponsored by The National Geographic Society and has been well supported by the American public. Rather than throw-up roadblocks to progress, government should provide standards which each laboratory performing genetic tests should meet and supervision by qualified inspectors to be certain that standards are met.

At the meeting, I heard reports of criticism of companies performing "screening" genetic tests to assess population-based risk of disease. Several of these companies employ genetic counselors (disclaimer: a member of my family works for one of the companies, but has not had any input into this blog) to provide sophisticated information to their clients. And at least one provides training for physicians interested in this area so they can develop expertise and provide medical advice and care to their patients.

The opposition to allowing individuals to spend their money to learn about population-based risk is puzzling. Dismissive statements such as "instead of spending money on genetic tests, they should stop smoking, reduce their alcohol intake, exercise and eat more vegetables" reflect arrogance. Political involvement in this issue may be more focused on raising political contributions, than in contributing to the knowledge, health and life enjoyment of Americans. Americans should have an unfettered right to purchase information and knowledge which may stimulate them to make changes in their lives affecting their health. And they should have the right to take their information to the physician of their choice to seek consultation and advice.

Since the Middle Ages, science and truth and knowledge dissemination have driven societal development and progress. When government prohibits access to information and advances in information technology, it is doing the nation no service. Let's stop the paternalistic nonsense of "our government will tell you what's good for you and what you need to know." If individuals want access to genetic risk-based information, they should be able to have it.

In these days of evidence-based medicine, rather than accept the criticism of the doyens, a study should determine whether the availability and understanding of genetic information about population risks changes people's behavior, reduces their risks and reduces the nation's cost of health care. Based on my participation as a fellow of the Health Research Council of the City of New York in the early 1960s (which is when dietary saturated fat intake dropped dramatically for the first time), I predict it will.

Will Anyone Pay For Your Care?

Last week, a drug company bought lunch for me and a group of physicians. There was no sales pitch nor a discussion of any drug. The drug company representative sat and listened as physicians discussed their increasing difficulties practicing medicine.

One of the doctors told his consultant that he was going to stop sending him patients because consultations were being scheduled two to three months after the patient called. The consultant, in turn, complained that he was experiencing a practice-crippling "no show" rate of fifteen percent, notwithstanding confirming calls the day before appointments. He and other physicians described increasing difficulty in collecting accounts receivable in a timely manner from payers. They complained that their staffs' energy, and their own practice time, was being wasted by insurers who refused or delayed authorizing medicines for individuals with serious medical problems. They observed that loss of employment means that one day a person has health insurance and the next day she doesn't, and won't show up for a needed medical appointment.

I asked whether any of these physicians had ever asked to see the financial statements of the HMOs, PPOs and indemnity insurers with which they do business and have burgeoning accounts receivable? Had they ever considered that they were at risk of non-payment because the companies might be under financial pressure, like other financial institutionsin our depressed economy? Had they thought about the possibility that payers were not approving medications because they were having cash flow problems?

Not one physician had considered doing what small businesses know: beware of financial weakness in businesses that owe you money. Although one physician group in the area in which these physicians practice had declared bankruptcy several years ago, leaving some of these doctors with substantial losses on accounts receivable, not one physician had factored the concept of business risk into his or her financial plan or willingness to contract with, or render services to, patients of HMOs, PPOs and indemnity insurers. Many of these physicians were driving down their own income by doing business with companies which paid substantially less than the rate paid by their average payers which in some cases, was less than the physician's cost of providing services (allowing these companies to grow by undercutting the rates charged to employers by better paying payers).

Under these circumstances, would anyone actually expect physicians to oppose a single payer system? Not likely!

Cost Shifting: From Airlines to Health Care

The concept of cost-shifting is easy to understand: once upon a time, when you flew from New York to San Francisco, your fare included an edible meal. Then the fare went up. That was not cost-shifting. But when the airline took away the meal and made you buy it yourself or go hungry, the airline cost-shifted dollars you paid for your meal to its bottom line.

In health care, it's a bit more difficult to understand. If you incur a hospital bill and your payer has to pay more for the same services than another payer, part of the costs of hospitalization have been shifted to your insurer (and probably to you if you have a copayment requirement). If the government doesn't pay the full beneficiary bill, based on fancy higher-mathematical calculations (read - "guesses") to justify paying a lower amount, the government has shifted costs to your insurer and to you. If your HMO says that you have to leave the hospital on the second day after hospitalization, when you still are pretty sick and can't take care of yourself, and your family has to stay home from work to take care of you, the HMO has shifted costs from itself to you and your family and perhaps your employers. And if the uninsured in the emergency room can't pay their bills, you and your insurer and the government will have to subsidize their care. Neat, huh?

Now, let's take it a step further. If you work for a small employer and have several co-workers who have incurred high health care costs, the premium for health insurance at renewal time may go up disproportionately, making your employer look somewhere else for coverage. Not only has the initial insurer rid itself of what it considers an adverse actuarial risk, but if another insurer takes on your company, the first insurer may have moved an adverse risk to a competitor. A number of years ago, when an aggressive national HMO took on bartenders (and, if my memory is correct, grave-diggers) in one city, its competitors were joyful: they knew their insurance experience with those occupational groups was awful and were glad to get rid of them to the new competitor in town. Incidentally, the HMO eventually went into bankruptcy. Apply the same way of thinking to the decisions of hospitals to move from high-cost low-reimbursement areas (center city) to low-cost higher reimbursement areas.

So, in health care, cost shifting is a way to increase profits, move costs to someone else's pocket, disadvantage your competitor and game the system. Cost-shifting is a monetary concept, not a quality-related one.