The archiving and publishing of the proceedings of the introductory remarks and the first two plenary sessions of the First National Conference on Primary Health Care Access (April 20, 1990) was made possible, in part, through the generous support of the Michigan State University/Sparrow Hospital Family Medicine Residency Program, Lansing.
Dr Werdegar: On behalf of our panel I would say that we are open to questions, comments.
Dr Gessert: I would like to ask the panelists for their predictions for reform of the health industry.
Dr Werdegar: I think in some ways overall expenditures for health care will be capped and that will force certain reforms. The best example of that perhaps is the Kaiser system.
The major economic battle is between Kaiser and the community hospital. Sometimes the community hospitals run scared of the public sector system because it takes patients that have reimbursement. But more importantly, they’re running scared of Kaiser as the enrollments of the Kaiser plans keep swelling.
Kaiser keeps opening new hospitals so the practitioners and the community hospitals are wondering where the end is in sight. Kaiser itself isn’t happy about the competition.
But they are eminently successful in most of the group plans because they operate, as you know, out of a capped base, and they are doing a number of things that are right.
They are emphasizing primary care, although not as much as they should. I can think of many ways in which they could improve it, but nevertheless it is a primary care driven system with sparing use of the hospital, only using acute care services when needed.
And they are getting more sophisticated over time about prevention and health promotion programs, surveillance and other things. So that’s what I think is going to force the reform: putting a cap on overall expenditures.
Earlier Sandral Hullett was addressing the benefits package of the Alabama program. Whatever the insurance programs are, they are going to set some limits on the benefits package, and that’s going to force some rearrangement in priorities with emphasis on primary care and prevention. That’s at least my partial answer.
Dr Arradondo: I agree with the portion of Dave Werdegar’s answer dealing with capping. Excessive health care expenditure is a disease. You diagnose a disease and you treat it. One of the ways you treat the disease of spending too much money is to stop making so much money available. So capping, I think, will occur and the more efficient providers will begin to become more valuable.
Unfortunately, the people who are doing the capping, I think, will not recognize the value of the most efficient providers. So they will hurt them in the process and it will have various side effects. There is no doubt in my mind that a rational change that could be put into effect literally tomorrow and be flourishing by mid-decade just within the current system would be to pay family physicians twice the usual and customary charges.
Just do that! And then flip some coins if you want to be rational about the rest and pick the appropriate number of sub-specialties and tertiary are specialties and pay them the appropriate amount less – 80%, 70%, whatever – the usual and customary charges. Now this is clearly a child playground game. But sometimes that’s the level of rationale that the financing system game plays. So I’m using that deliberately. But I think it would have the desired outcome.
Pick literally, randomly if you wish, alphabetically, by income level, by fee size, or by whatever means, the appropriate number of sub-specialties so as not to have the burden borne on just one specialty or two. There are almost a couple dozen more out there. And just shave a bit to balance the change in the primary care reimbursement in the current system. And patient services would change.
I would predict a more rapid decrease in hospital admissions which has already been occurring because of the capping. I would predict a somewhat more rapid decrease in the length of stay and an increase in ambulatory procedures, whether in centers or in offices. I think that kind of reform is less apt to happen, but the business of capping, I think, will occur.
I am optimistic that the Relative Value System at least has been looked at, and although proposed changes have not taken in their entirety, there is some motion being made in that way. I think that the American Academy of Family Physicians is becoming a bit more confident in our medical care system. And I am hopeful that that voice will grow, because more needs to be said.
The RVS debate somewhere along the line is going to lead to public differences among physicians and that’s not something that physicians have traditionally wanted to show. But at some point I think that’s going to occur. And when it occurs, I think some significant differences will be made. In the meantime, the capping phenomenon of governments and cost restraints on health expenditures favored by the large corporations who deal with employee health care benefits, will have a lot to say about it.
Mr Burnett: I think one of the problems that faces us in the 90’s so far and has certainly during the 70’s and 80’s is that with the fragmentation of public policy formulation and development. We now have subcommittees that deal with little pieces of public policy.
One of the outcomes that I would regard as progressive could be the re-emergence of the intellectual ideas of primary care that each of these different diverse deliverers of primary care descent from – to integrate back into the kind of “big picture” thinking and support for public policy formulation that assumes that primary care is something that everybody would be better off with and all the deliverers would be better off with.
With the problems of access, the need is so great that nobody is going to be harmed by the public health departments getting a bigger piece of the action or the practicing family physicians doing more, or for that matter any physicians or nurses or nurse practitioners or community and migrant health centers or whatever, that can be a “point of light” in their community, doing what they need to do to get people’s behavior changed so that their life will be better off and their health status will be better off.
Dr Sundwall: Let me just follow-up for a second. One in 20 adults in this country [The text of Dr Sundwall’s question is currently unavailable.]
Dr Arradondo: You were going well there until you said “and states.”
Dr Sundwall: [The text of Dr Sundwall’s response is currently unavailable.]
Dr Arradondo: That’s because the states rip off an excessive administrative overhead. They do better than the universities and the research realm. And you know some of those impose 80% to 110% indirect costs. It doesn’t take that much to hand my little piece of the pie. It really doesn’t.
I have been an advocate for sometime, long before I was in public service, that the problems need to be solved as close to where they are as possible. I call that being a good citizen. There are some other words for it, sometimes depending upon whether you do it by yourself or with some other people. For a number of reasons the problems can be most readily recognized.
They are most readily felt at the place where the problems are occurring. I think that the federal government, in some instances when its leadership has so deemed, has done well at helping to equalize things and have everybody on on a similar playing field. That’s one of the unique roles of the federal government outside of defense and some other duties meant to protect the common wealth.
But in terms of managing ongoing programs with the uniqueness of the various regions and the states, the federal government sometimes gets to be like an elephant doing needlepoint. I happen now to be in a state that constitutionally has the authority to divide into five states whenever it wants to.
I always knew Texas was big and I know that they have some big authority to go with it. I have been in some smaller states too where state government has been unreasonably cumbersome, so apparently it’s not just the size of state government, but apparently it’s the processes within state government that can make it cumbersome.
There are a lot of federal dollars that should come directly to the cities which is, in fact, how they come from the cities. I didn’t send my tax to Austin State Finances. I sent it to Austin IRS – directly to the federal government. And I am perfectly happy to get it back that way for all of my epidemics, HIV, STD, TB, infant mortality, air pollution, violence – all the epidemics I have in my town.
I would like to get the federal piece back just the way we sent it because I think that I can manage it more rapidly, at least as efficiently, as my counterpart in Austin. In fact, we have demonstrated that in several areas. I think that philosophically there are a number of programs that need to be reexamined. A number of them are in health, a number of them in human services, as well as some education programs.
When I speak about one of the epidemics – infant mortality – most of the time I talk about education and jobs, because they are the two most important factors in determining infant mortality. (Even on Tuesday, when I have got out the annual Health of Houston report – all the data was there in those two large volumes.)
The most important factors that contribute to infant mortality are the education of the parents and income of the parents. I spend an appropriate amount talking about that third factor, called prenatal care, that we in the medical health field work on. But I certainly spend the most important part of that time talking about the two most important factors.
Dr Werdegar: Well, I think Dave Sundwall’s question was partly rhetorical. I agree with much of what John Arradondo said, at least in this case certainly so far as the city health departments are concerned. And, of course, there are just so many big cities and then you have the rest of the U.S. To be concerned about.
Even in private conversations with Dave Sundwall, I was saying that it was our local planning that enabled us to cope in San Francisco with the HIV epidemic and with some of the other urban health concerns. It was the local planning that was creative, that was responsive to the community. We needed outside dollars and we needed federal dollars.
The AIDS program within his agency, the Health Resources Service Administration (HRSA), would give us a block grant. I feel as keenly as does John about this, that we were well-served by the block grant coming to San Francisco directly and not by way of Sacramento, which to this day doesn’t understand the HIV epidemic fully.
To have the State administer the funds for San Francisco would have just been a disaster. And so having local planning, local initiative, local creativity, using federal dollars that come directly to cities is an effective approach. There are, as I said, only so many big cities like Houston and San Francisco, and the states have their role.
There are large rural areas and smaller cities and the states should be helping them do their creative work. So as for local planning, I would break a strong lance for that. And I think that’s what you were saying – the federal government finding ways of matching or supporting that creative local planning effort.
Dr Werdegar: The most important ingredient in federal dollars is through the Medicare and Medicaid systems and how the Medicaid system is shaped in the state capital. The local communities don’t have very much say in that. You’re ultimately going to have to shape those major insurance schemes.
Nevertheless, as again illustrated by, in my case, the response to the HIV epidemic, local dollars for planning, surveillance, epidemiology, special programs, pulling people together, use of community-based organizations, setting new models is highly creative and needs federal dollars directly. That doesn’t, in a way, preclude a state role. It’s not a dilemma. There is till the overall responsibility of seeing that there is a fair and equitable and universal health insurance problem in which federal dollars are going to play a big role.
Dr Arradondo: It was something Dave was saying. In terms of reform, I have to go back to what I said earlier to Charles Gessert on capping and putting on economic pressure and then more efficient units being the result. The ones that aren’t damaged by all of the interplay going on with cost containment efforts might be able to rise to the fore and be recognized and show how some new mechanisms would be more effective and perhaps more efficient. That’s my prediction.
So what I am about to say now is more or less what could happen and, therefore, would be more my hope. And there’s a difference. I usually don’t bet my lunch on hope. I’ll bet my lunch on my prediction. What could be done – I advocate regularly that the federal government should pay for health promotion and disease prevention services for everybody up to age 25.
That takes care of all the kids. Really I say from minus one to plus 25 for a good reason, because we know the condition of the mother before conception affects the child. And we know all about prenatal care, and that the condition of the mother during pregnancy affects the child.
The upper limit of priority attention should be age 25 for a lot of reasons. There are things that fall through the cracks all the way along the line – at school entry, during school, entry into college entry on the job. That might be a better use of all the Medicaid dollars that the feds spend than the current use. And I’m not knocking the poor. I could comment further on that.
Or, of the five Medicare programs, say other than the program for 65 year olds, we could take a couple of those. Once I am thinking about at the moment spends about $3 billion or $4 billion a year. That would go a long way toward taking care of every person up to age 25 in preventive health services. And that’s a lot of services.
Those are very clear possibilities where we have a lot of experience already. It’s within the realm of the current medical care system, at least within the realm of things that primary care providers are trained to do. It doesn’t require a lot of new training, but a little bit of attitude shift. And certainly it can be done with the appropriate financial incentives.
That’s the kind of thing that I have been advocating on a regular basis. If we’re talking about keeping what we have and adding, the thing I would add is care up to gave 25 because caring for the kids to the first six or eight years is very important, certainly during that minus one year.
And I’m talking about simple things like food, shelter, education, Head Start, HIPPY (Home Instruction Program for Pre-school Youth) where you get the mother to teach the kid and all of a sudden the mamma’s learning and your job wasn’t to teach the mom, it was to teach the kid.
And the mamma is teaching the kid, and learning how to teach the kid, and steadily teaching the kid, and before long the mo wants to go back to school and get a GED, wants to go back to school and face detractors and get a regular diploma and go on and get a job. And I guess Bill Clinton, the Governor of Arkansas, is the best proponent of that.
There are a number of programs that have implications for health. Health essentially is the final common denominator of all the social forces. We are battling upstream when we try to take just the health matters which aren’t health at all but are a disease for the most part, needing treatment for the most part, and trying to change the end result of the social forces. So I feel on safe ground when I just advocate spending a little to address the social forces.
I’m not going into building homes or anything like that, just a good tent and some reading and writing and a little arithmetic and some food. And then all these good shots that we give and all the well baby care is within the realm of our existing entitlement programs. Medicare will increase in the next ten years by the amount that I would ask for today if what I have just said were O.K.’d tomorrow.
Just the increasein Medicare, having nothing to do with the containment programs – if that were shifted to a prospective approach to kids up to a certain age and for that matter to their maims as long as they have a kid up to that age, we could make a quantum leap in the health status of our people.
Dr Werdegar: I know that question that you asked is going to be returned to – Dave Schmidt touched on it this morning. It’s going to be the issue of fee-for-service care and the modeling of systems, how much there should remain fee-for-service. So I know the topic will return.
Dr Lawrence: I would like to re-ask what I thought I heard Charles as earlier about reform of the health care system
Dr Werdegar: Well, I probably should be blamed for introducing the notion of the cap. What I meant was actually a sort of system cap – where you say you have so many dollars and then you have to use them most efficiently. And that, for all its faults, is what the Kaiser system tries to do.
The first thing they accomplished is to try and make as sparing use of the acute care hospital as they could. So they have driven their care way from The acute hospital setting into the ambulatory setting. By degrees they’re learning more about how to give care in the ambulatory setting, because it used to be multi-specialty clinic in format with patients going to too many specialty clinics.
They are learning increasingly how to center it in a primary care base and offer prevention services. In some of the Kaiser hospitals – they differ, they’re not all uniformly the same – the care is truly family oriented and increasingly they are introducing health education in other models.
So that’s what I had meant by the cap that says they’re offering insurance at such and such a rate with a certain variety of benefits and they accomplish it by achieving economies. They were forced to achieve them, and they did this in a successful way, and people re-enroll. I’m not saying that that’s a total answer, but I was pointing to it as one of the ways you can bring about some changes in a competitive market place. We all know that they have other advantages.
Their selection base is more favorable than would be in John’s and my public health care systems in terms of health and socio-economic status. Nonetheless, I don’t want to wind up here being a Kaiser spokesperson.
In San Francisco they take care of a disproportionate share of HIV patients. But in San Francisco they had the adverse selection of many with HIV. They had a broad enough base that they could accept HIV patients into their insurance system and then be appropriately responsive in the services they gave, which is largely the full spectrum of care.
Dr Arradondo: I probably didn’t communicate well if I left you with the notion that a cap would be the cure. I literally was answering as straightforward as I could Charles’ question, “What is the prediction for reform?” And, of course, I said very little except that what reform is apt to occur, likely will occur as a result of cost containment. You know when the going gets touch, the tough get going. And there are some efficient providers here who have the right idea.
I think that some positive changes may occur as the cost containment measures become more stringent. Now hospitals that never knew how to spell family practice have discovered family physicians. They get their emergency room personnel to be friendly to them. For the family docs who don’t like to go to the emergency room, they take care of their patients, they smile, and they get their patients back to them. For the ones who don’t like to admit patients to the hospital, they’ll assign somebody to that patient in the hospital. They’ll make all matter of money off the patient while the patient is in the hospital, get them out and do very well.
All of that is because the hospitals have been constrained. So they have discovered family physicians. Many of the large community hospitals have eaten the lunch of the teaching hospitals because the teaching hospitals hadn’t figured it out, particularly the university teaching hospitals. Many of them still haven’t figured it out.
And the large community-based hospitals that have become secondary in some areas, tertiary care hospitals, have just figured it all out and they ave gone out and they happen to know all the family docs. Cost containment did that to them.. They couldn’t’ spell family practice prior to the cos containment efforts. So I think that what reform will occur will occur as a result of that, Now I would rather it occur some other way.
My advice to the person who was dealing with 115 unionized Ford workers in 1979 spending $3,000 a head minimum on them, was to adopt a prospective approach to providing services to those workers rather than what they were doing at the time, which was a fee-for-service. I outlined the whole mechanism for them.
Interestingly, over the last 10 to 12 years, they have moved a little bit closer to that because of negotiating pressures. They could have gotten more service for themselves, saved money for the system, and however that accrues to the stockholders and to them, benefited by moving to that kind of system 10 years ago.
Large employers will probably make some difficult and unpopular decisions, and move the system a little bit closer to what, say, Kaiser is now doing. A lot of others could make such decisions like that. But some governments around the world have made pretty clear decisions along that line. And when you start spending $30 or $40 billion or something like that, you’re entitled to sit back and stop and maybe make a clear decision every once in a while. And a decision to put the dollars in a manner that have been demonstrated to be more efficient, while you provide the same services, if not more, is a decision that’s over due.
I agree with you that the hospitals and some of the other institutions have eaten up the pie. I have a fairy tale I could tell along that line and one that actually was true at midnight. But I won’t do that today. It has to deal with time.
Dr Hullett: One of the issues is the concern of reform …. [Dr Hullett’s remarks are presently unavailable.]
Dr Midtling: With that I think we should break. As a moderator, thought, I have the last word. I would say that five years ago, three years ago, maybe even two years ago, if we asked anybody in this room about the changes that are occurring now in Easter Europe, we would all have said “Impossible, it would never happen.”
And I think that only through great crises can there be change. I think the change that is occurring in Eastern Europe is because the system is in crisis. Oil prices went down. The Soviet Union can no longer support the satellite system and that whole system began to crumble. And I think our health care delivery system is on the verge of that.
I believe how much change we get will depend upon how much crisis occurs. But I think it’s going to take a major crisis to get tremendous change in the system and we may be headed for that. I liken it to the movie, “The Right Stuff.” Remember, as the guy kept approaching the sound barrier, they wondered what will happen when he exceeds the sound barrier. Will the plane explode or will it be smooth on the other side? I think we are approaching the sound barrier. I really do. I think the system is definitely in crisis.
The Second Plenary Panel Question and Answer Session was preceded by: First National Conference on Primary Health Care Access (2nd Plenary Panel, Part 3, Arradondo)
The Second Plenary Panel Question and Answer Session was followed by: First National Conference on Primary Health Care Access (3rd Plenary Panel, Part 1, Sundwall)