The archiving and publishing of the proceedings of the third and fourth plenary sessions of the First National Conference on Primary Health Care Access (April 20 and 21, 1990) is made possible, in part, through the generous support of the San Joaquin General Hospital Department of Family Medicine (Stockton and French Camp, California):
Jerry Rodos, D.O., Chicago College of Osteopathic Medicine (Dr Rodos is a Senior Fellow of the Coastal Research Group): I’m just going to make a few observations on some of the things we have been talking about this evening because it’s getting late. As I listened all day today as you have, You know it’s amazing without really having been terribly directed by the conveners that you have heard a coalescing of ideas about what to do about the problems, and a fair agreement about what the problems are.
We’ve heard some very simple solutions. I don’t mean “simple” solutions. But we heard solutions and we have some sense of what could be done. But the biggest problem always gets to be how do you get it all done. David Schmidt was very optimistic and he mentioned that little list of wonderful things going on that no one would have guessed a year ago would be happening.
But I do want to call your attention to the fact that none those things require the participation of the U.S. Congress. Therefore, they could happen relatively unexpectedly and uncomplicated and unmessed. One of the observations I would like to make about the effect of Medicare and Medicaid which all of us recognize, but it has a significant impact and then I would like to focus just a little bit on graduate medical education funding. I think we would have covered most of the issues that at least I would like to leave with you this evening.
The role of the hospital has changed and many of you who practiced in that period that David Sundwall described before 1965 will remember that the hospital was whether iw as community or teaching, a community institution. It had a social role. It was worthy of support. It treated the uninsured and it provided a lot of services to the community.
Hospitals, believe it or not, fund-raised. Some of you may even be old enough to remember that you worked in an institution that had endowed beds. Probably there aren’t many people here who even know what endowed beds are. (A few smiles!) But, in fact they did exist. We have so changed the role of the hospital that you could not fund-raise for hospitals very readily.
Although there are a few exceptions, the hospital is no longer a community charity for philanthropy. There is a rare teaching hospital that did go out and say to its board, “If you want us to conduct this educational program, we need $1 million a year.” And within two years, the board raised $10 million to fund their graduate medical education program. So that no matter what Medicare does, no matter what happens with funding, this particular childrens hospital has the funding for its program.
But that’s a rarity! How was graduate medical education funded before Medicare? Some of you do remember. The hospitals added small amounts of fees to the daily charges, and they were small amounts – $75 /month, $100/month, $150/month – and even though that was pre-1965, and that sounds like a pittance, it was.
But the hospitals were adding this either as part of their costs or the residencies were funded by the clinical departments out of the doctors’ pockets or partially by the hospitals and partially by the doctors, occasionally by some endowment that was externally funded.
If I had some prepared slides (and I thought about doing that because I do have some) that shows what happens to salaries and numbers of graduate medical education slots through this period until one gets to the last period that David Sundwall was talking about (the mid ’70’s), you see this gigantic rise in numbers and this gigantic rise in specialty, sub-specialty slots and with the increase in salaries that go with it. And now in the mid ’70’s you start to get a retrenchment.
The retrenchment has two effects. I think you’ve heard a little bit about the physician effect. Because we are, in fact, entrepreneurial while we are professionals, as the system responds to whatever it’s doing to try to control the costs of this program, the physicians and the hospitals move into various positions in order to try to make this system work with as much reimbursement as possible. So, in fact, David became a colonoscopist.
Hospitals discovered the role of the family physician even though, as John Arradondo said earlier, they couldn’t spell it because they understand that maybe this means referrals. And if they can control the primary care, they have learned a lesson that is very , very old. If you control the primary care, you’re going to control the tertiary care.
And so you see in various parts of the country, a whole variety of incentives by hospitals to bring primary care people in, in some ways even to reward primary care people for referring. And you see a whole variety of systems – some of them, I think, bordering on unethical.
Graduate medical education is one of the things we are very interested in. If we don’t deal with graduate medical education and prepare for these changes, family medicine and the primary care specialties are going to be significantly effected negatively, especially family medicine. In 1979, the direct medical education costs were a little over $1 billion.
In 1989, the direct medical education costs were $2.15 billion. That sounds like a lot of money! It is a lot of money. But I would ask you to just keep in mind what HUD’s going to cost us this year. What the savings and loan bailout is going to cost us this year! We’re also bailing out major mistakes of the Department of Defense.
So, in fact, we need to set priorities. If, in fact, this is a priority (as it obviously is not in Alabama), then we have to be able to effectively get the message across about how to do these kinds of programs which we already know about. Who has the responsibility? I think we all do.
I think that Dr Sandral Hullett talked about our individual potentials to do that. I talked about it earlier. We talked about community programs. And I have to come back to the academic medical center because though I do believe very firmly that academic health centers have a social contract and a social responsibility and that’s been stated by lots of folks.
I don’t believe that the contract is the same for all academic health centers. I think it’s a mistake to commit all academic health centers to the primary care mission because there are too many other institutions in our country who have that mission, have that commitment, have the faculty in place, and a nurturing environment.
So the feds have reached the point now at which they can say, “Fine! We tried to encourage people to do this. Now those who have a significant program, those that have done these things will be supported.” I believe there is a very definite need for more than one kind of institutional mission among our academic health centers.
So with those kinds of major comments, I think I’m going to allow for any discussion because it is way past longer than anyone should sit after the good meal we had. Thank you.
John E. Midtling, MD, MS, Chair, Department of Family Medicine, Medical College of Wisconsin (moderator) [Dr Midtling is a Senior Fellow of the Coastal Research Group]: We may have time for a few questions.
Charles Gessert, MD, Vice Chair, Department of Family Medicine, Medical College of Wisconsin: When you made the list, David (Sundwall), of the four things that the Commission was looking at, one of the things that you mentioned was effectiveness. There weren’t very many discussions of effectiveness that transcend technical effectiveness, such as effectiveness interventions which also include quality of life or cost considerations.
David N. Sundwall, MD, MPH, American Health Care Systems, Inc. [Dr Sundwall is a Senior Fellow of the Coastal Research Group]: No. In his overview, effectiveness was a subset of what he entitled “efficiency.” The impression of the Social Security Commission members is that there is a great deal of waste and duplication and inefficiency in the hospital system. They want to become more efficient and that’s what I suggested that part of their efforts to get that would be – medical effectiveness was part of that.
One of my current jobs is to represent AMHS in a task force that’s run by the health education and resource trust of AHA called the Quality Measurement and Management Project. Hospitals around the country are trying slowly, but some quite successfully, to implement what they call total quality improvement based on the Japanese model of quality, which was actually invented by some Americans.
Anyway, this has become fashionable in the hospital world. But where it has taken hold, they’re achieving 20%-30% more efficiency, in other words less costs based on doing things right the first time and parting with this notion that there is an acceptable mortality rate for a certain procedure. There is no such thing. Perfection is the goal.
They’re looking at efficiency and economies to be achieved from that. Part of that is the effectiveness research.
Dr Gessert: The basis of my question was really rather the concern that I have with the old National Center for Health Services Research activities in medical health care technology assessment areas. They, for instance, recently were reviewing liver transplants in an advisory capacity to HFCA.
Their assessment was just as you described, totally an assessment concerning the technical efficacy of the procedure. To me, the cost and the quality of life considerations were 98% of the issue and I think to many audiences would be 98% of the issue rather than the 2% that they were charged to examine. My question is very much relevant to the overall reimbursement question, in that if effectiveness is to have any role in eventual reimbursement decisions, that effectiveness has to be defined more broadly.
Dr Sundwall: Well, there was an interesting amendment to the law. I understand that in the statute creating the new agency for Health Care, Research and Policy, it is the charge of that agency to do effectiveness research or to do these practice guidelines, and it ties in cost effectiveness. So their recommendations henceforth have to include cost issues, not just whether it works or not.
Because clearly if things theoretically work, we’ll spend ourselves blind continuing to pay for those unless we factor in the cost effectiveness. We’ll see how courageous they are. They don’t like, at the federal level, to make those hard decisions.
Dr Rodos: I think that’s what the Oregon approach, for hose of you who are following it, is an effort to look at priority setting with Medicaid funding. The state has said, “Wait a minute! We have just so many Medicaid dollars. Should we be doing liver transplants? Forget effectiveness.” Shouldn’t the higher priority be prenatal care, perinatal care, immunizations, or whatever?
The Oregon law sets out to set those criteria and to set those priorities. Those of you who have not been watching it, I suggest that you do, because it will be very interesting just to see how it evolves and what they choose to do, when do you stop doing it, and whether they stop doing, say, renal dialysis when the federal program is not going to cover it. A very interesting program!
David Kindig MD, Ph.D., University of Wisconsin-Madison School of Medicine: I hear David Sundwall and John Midtling disagreeing about what the impact of RBRVS will be on primary care.
Sundwall: I just think that there’s an awful lot of hope being placed in this new payment reform that I am skeptical is going to translate into changes that are desired. I would welcome students choosing family medicine because they see a reassessment or maybe more economic benefits.
But when I look at those bar graphs that were put up on the specialty services, the specialists will come down a bit and the family docs will go up a bit, but they’re hardly going ot meet unless there is a lot more refinement and changes in the law. There’s still going to be a a real economic advantage to being a sub-specialist.
Dr Rodos: I think there’s going to be an unfortunate disadvantage! If you do the mathematics, an 18% reduction in surgeon’s fee and 27# increase, 22% increase, 8%, whatever number you like, of a family doctors fee, is not a wash. This is budget neutral because you’re watching what I think is one of the best shell games that you will see.
The dollars that are going to be taken off the specialists side I do not believe are going to appear on the primary care side. While primary care physicians, family physicians, are all enthused about this as if they won a victory, I think when the dust gets settled we’re going to see that they didn’t get very much out of this at all.
Dr Midtling: I think my comment relating to the RBRVS benefit spoke to the potential benefit to funding the graduate medical education programs. IF we could increase our practice plan earnings and increase those earnings above one-third of program costs, this will relieve at least some of the financial pressure on the programs. But I am very leery.
We’re already seeing the administration saying that they want to implement the savings early, so as to use it to offset the deficit. Now that they have this spigot, will it be cranked down? Will RBVRS ever be implemented? Will it be enough? It’s really hard to say.
Dr Sundwall: I left a slide home that I wish I had brought because it showed the history of payment to hospitals since prospective payment was enacted in 1984. The upper line of this graph showed what should be reimbursed according to the pro-payment assessment commission.
They really tried to be thoughtful and considerate of the market basket index and all the things that go into the cost of doing business. And then underneath the line, the slide shows what, in fact, has been awarded to hospitals each budget year. There’s a growing gap. As soon as you have a target that you can shoot for, Congress is going to underpay that by a certain arbitrary amount every year because of the budget deficit.
When we once have this upper line defined with the volume performance standards, I can guarantee you that Congress will allocate less than that in an attempt to get some savings. I think we would be remiss in this session devoted to physician reimbursement if we weren’t perfectly honest witho ourselves about the political realities in Washington. Can you imagine finding a congressman or a senator who’s willing to put in a bill or go down to the floor and fight for more money for doctors?
If you think for a minute that people in the halls of Congress spend a lot of time differentiating between primary care and referral specialists, you’re wrong. Doctors are doctors! We are overpaid professionals who are privileged having a heavily subsidized education and our stock is not high. I don’t care if one is compassionately serving in an underserved clinic.
If one is a medical doctor, one is not considered suffering, I can guarantee you. I think that the “oughts” and “shoulds” that you ticked off sound great. I think it’s going to be awfully hard to get Congress to focus on physician incomes or redistribution beyond what this new change in payment reform has enacted, because we’re all perceived as pretty well off and just fighting among ourselves for a bigger piece of an already very big pie.
Dr Schmidt: I think that no ther country in the world, no other period of history have physicians place in society and compensation ever been as high.
Dr Arradondo: I guess I spoke softly earlier today, but since I’ve written on some of these matters, I suppose I shouldn’t speak so softly. There are doctors and then there are doctors. Family medicine has shown that it can stand on its own. It’s the largest body of physicians in the world outside of the AMA – it is organized, and it is better organized today than it was in 1980 or 1970 or 1960.
In the ’60’s and ’70’s family physicians were mainly fighting for presence, name, and funding. Family medicine should be controlling Medical care in this country to the extent that physicians can control it. Other large institutions are doing much more than controlling of health care delivery than physicians are getting credit for controlling.
But in reality family practice could exert as much, if not more, control over the medical care than is currently being exerted for all physicians. IF family medicine can do that, why should family medicine take the flack that all the physicians are heaping up on all physicians in this whole endeavor? Maybe even salvage a part of medical care, especially if it expands into health care because all of these things are going on.
One of the hospitals’ favorite endeavors in the last decade, particularly 1975 through 1985, was on bonding and medical care. That little act in and of itself sustained all the hospital based people as well as many of those who were in and out of the hospital, procedural based people. And that was just a notion that hospitals pushed and many physicians bought and it became quite fashionable.
Many physicians are doing what family physicians can do as well with probably fewer complications to patients. We could go on with this. A slight disagreement that I would make with you Dave Sundwall. I share his pessimism that this RBRVS isn’t’ going to go that far – except that if you look at it in the long run, a smaller percentage of a much larger amount might be bigger than a large percentage of a much smaller amount.
But if you begin to take in the volume that the procedural people are pushing vigorously now, I think that if the number of family physicians grows as a result of this apparent benefit from business that some of the high income people have, might decrease and if then we add to that the percentage reduction, those lines might come much closer than they would in the short run.
I agree that the way the thing is set up, I wouldn’t’ put a lot of money on the lines coming closer together in the short run. I think the implementation of it should have been about 150% minimum of what the RBRVS recommended.
Dr Schmidt: The indebtedness of the medical student is a factor.
Dr Rodos: I have to go back to the fact that the junior and senior years are important. Let me point out to you that the admissions process is also very important. Faculties don’t like to hear this, but they don’t change the student. That’s why the admissions committee is so very important as to be the kind of student you take and what you do in the first two years.
By the time you worry about the third and forth years, folks, it’s too late. If you get negative role models in the first two years, it will offset everything you’re going to do in the third year.
Dr Sundwall: I’m going to take the lead speakers prerogative and suggest we have comments from Bill Burnett and then Charles Gessert and then retire or whatever you want to do this evening in Sheboygan or Kohler, Wisconsin. Is Sheboygan a hot place?
William Burnett, California Office of Statewide Health Planning and Development (Mr Burnett is a Senior Fellow of the Coastal Research Group): This follows John’s point. I believe that there are numerous concerns facing what I referred to in my remarks as the providers of “normative primary care” – the physicians who are intended to do particular things.
Even so, in the two decades since society invented the new kind of family physician (and I believe society rather than government or the professional societies should be credited with the invention of the family practice society) in the interim family physicians have become the largest group of physicians, unless you categorize all of the sub-specialties of internal medicine as the single entity of internists.
Were family medicine to begin again as its leaders did in the ’60’s to effectively present the agenda of meeting societal goals, they can help society solve some of its problems.
They’re doing this working with Bruce Behringer and his community and migrant health service; and with John Arradondo and Dave Werdegar in their public health departments. The post-1960s graduates are in rural areas; they’re in East LA; they’re even doing a lot of important things that they weren’t expected to do.
What they haven’t done collectively is begin to assert their presence in the numbers in a coordinated way. They may never do it. But then as John said earlier, we weren’t expecting Eastern Europe to turn into a bastion of transitional market economies that we’re seeing right now. That is one of the things we need to consider.
Dr Sundwall: We’re all talking here as though family physicians are saints who are going to save our system. Lord knows I’m an advocate of all the things we have been talking about. But I think we have to recognize that family physicians behave an awful lot like other fee-for-service doctors.
In fact, I’ve never forgotten that when I went to Los Angeles to speak to the National Medical Association [NME], I was amazed that NMA’s agenda, primarily was how to maximize fee-for-service, and how to maintain their incomes. NMA’s agenda was so parallel to the AMA’s primarily because they were practicing physicians and that’s what their primary interest was as an organization.
They had a subset of folks who were very concerned with the social responsibility. I think whatever group of physicians there are, they respond to the financial incentives which have been great in our society to-date but it can’t go on. It’s going to change.
Dr Gessert: I had the privilege of opening our discussions this morning with some thoughts. I think I can close it. I looked up a couple definitions. One definition is that someone tried to define promiscuity – it’s people who are having more sex than you are. To draw on our discussion, a definition of obscene income is a person who makes more money than you do. They make more than 10% of what you do. The reason I bring that into my closing remark is that a lot of our recent discussion has an intellectual air to it; it has a very emotional air to it as well.
I think the emotional aspect of it is that we are privileged in our American society to gross $80,000, $100,000, $120,000 or $500,000. But that privilege carries with it a great moral responsibility. The thing that makes us so irate about our industry and our colleagues is that so many accept the physicians high renumeration but ignore the physicians moral responsibilities to our society.
There is a language that tobacco executives use to justify their positions. I would like you to check out a couple of their phrases because they’re equally applicable to some of my medical colleagues, maybe even myself. “I didn’t make the rules.” “I do my job well within a larger system that I didn’t create and can’t change.” “What are we going to do with the people who demand ….” People have a language that they use when they are accepting a large reward from society and want to separate themselves from moral obligations.
Many physicians are as guilty of that mentality as the most cynical tobacco executive. So, with that stimulating thought, we can close this evenings session.
This presentation was preceded by: First National Conference on Primary Health Care Access (3rd Plenary Panel, Part 3, Nycz)
This presentation was followed by: First National Conference on Primary Health Care Access (4th Plenary Panel, Part 1, Arradondo)