Hospitals expand despite cutbacks

Albany has put hospital closures squarely on the table as part of the statewide effort to cut health care costs. Then why are hospitals throughout New York City spending hundreds of millions of dollars to expand?

The reason, according to the hospitals, is that they need to spend money to make money.

“You have to invest to stay in the game,” says Pete Wolf, acting executive director of city-owned Coney Island Hospital.

But the growth is also pushing up the hospitals’ debt levels–already the highest in the country–and will make it more difficult for the state to trim costs. Even as the governor’s newly formed closure commission tries to cut back, some hospitals are busy expanding.

health-care-ver-2

Approval for projects

Over the past five years, public and private hospitals in the city have won state approval for $3.2 billion in capital projects: modernizations, new buildings and investments in technology.

  • Under a 1960s-era law designed to keep health care expenses down, the state must certify that all hospital expansions that cost more than $3 million are necessary.

Through a separate agency, the Dormitory Authority of the State of New York, the state also helps provide financing for some of the additions.

Of course, not every project gets approved or financed. The intensity of the state’s review process has curtailed some projects. The city’s weakest hospitals have been largely unable to undertake capital projects because of relatively high debt levels.

medical-center-block1

The expansions are driven by two factors: the surge in radiological medicine, which requires expensive technology such as MRIs and CT scanners, and the need to modernize aging facilities. Among other factors should be also put into consideration is the extra expense going with these kinds of machines. For example: regarding the MRIs, the hospital also need to equip power generators, steel frames (for immobilization) and air compressor (read these air compressor reviews first before purchasing) to support the normal operation of MRIs.

Seven hospitals have won the OK for radiological expansions since January. In Brooklyn, Brookdale University Hospital and Medical Center is adding a third CT scanner for $1.2 million, and St. Luke’s-Roosevelt Hospital Center is renovating an interventional radiology suite for $9.5 million.

In some cases, renovations are long overdue. The city’s Health and Hospitals Corp. is spending $1.4 billion on modernization. Officials hope the renovations will help it narrow its four-year-old operating deficit.

  • At Coney Island Hospital, the city spent $91 million on a modernization and construction of a seven-story tower that opened last month. The facility allows the hospital to replace six-bed wards with semiprivate and private rooms. As a result, officials believe, the risk of infection will decline and Coney Island Hospital will be able to attract more patients, increasing occupancy from 74% to more than 85%.

One of the city’s largest private hospitals, Montefiore Medical Center, borrowed $189 million in 2004 to replace more than 300 beds, add five operating rooms, update mechanical systems and add a radiation therapy center.

The additions may help improve the Bronx hospital’s 2% operating margin and accommodate rising admissions, which grew 44% between 1993 and 2005.

medical-center-equipment

Upside, downside

“On the one hand, you can’t not invest in capital needs,” says Joel Perlman, Montefiore’s chief financial officer. “On the other hand, the financial state of New York hospitals is quite fragile.”

It’s likely the expansions will continue at a steady pace.

Many buildings constructed in the 1980s are close to the end of their 25-year life cycles. New York-Presbyterian Hospital, for instance, has been conducting a $1 billion capital campaign with an eye toward a major building program.

And a string of eventual hospital closings may spur expansions by strong hospitals that survive.

New York Hospital Medical Center of Queens, operating at 96% to 97% of capacity, is already planning an expansion because of rapid residential growth.

It may also need to take into account the possible closure of nearby Parkway Hospital, which is in the midst of financial woes. “It is something to be considered,” says a spokesman for New York Hospital Medical Center.

pagosamount / January 19, 2015 / Uncategorized / 0 Comments

Caring for health care

ON THE FIRST weekend of October the Saint Louis University Board of Trustees made an announcement that shook the city from its fall slumber and forced its attention on a growing problem for health care ethics. The decision had been made to sell the University Hospital, a Catholic institution since 1933, to the for-profit Tenet Corporation. Germinated in California in 1969, and named Tenet after a merger with American Medical Holdings in 1995, the corporation embraces 131 hospitals with over 100,000 employees.

The announcement of the sale did not please the Archbishop of Saint Louis, Justin Rigali, who had warned the university’s president, Lawrence Biondi, S.J., “that it would be impossible for you to maintain the Catholic identity of the hospital if you enter a partnership with a for-profit organization.” After the decision was announced, Archbishop Rigali made it clear that it was done without his support or the approval of the Holy See. Judging from letters to the editor in the city’s newspapers and talk around the university, the Archbishop was not alone in his disapproval.

The particulars of the sale–the contractual guarantees of Catholic identity and commitment to the poor, the make-up of the governance boards, the huge gap that separated Tenet’s bid from the “faith-based,” not-for-profit systems–all merit examination. And the startling, urgent concern over the hospital’s commitment to faith and justice, expressed by ordinary folks as well as professional people in Saint Louis, should give pause to anyone who thinks that a Catholic university hospital has only marginal value to a civil community.

But what may well be more important than all the particulars that apply to one hospital in a Midwest city is the growing recognition of the radical changes that are taking place in the health professions.

The for-profit versus not-for-profit distinction, whether in medicine or education, seems not to be a very telling or persuasive one. Both education and medicine (at every level except those that are most counter-cultural-teaching and healing efforts like home-schooling, Catholic Worker and L’Arche communities) are big business, huge business. In a stupendously successful and voracious capitalist society like our own, almost everything is market-driven, from curriculum revision to pre-nuptial agreements. I think it a bit incomplete to speak of “Catholic” or “faith-based” corporate efforts without admitting this fact. Saint Louis University and its hospital have been market-driven for years, and many of the seductions that loom now have loomed before.

It is also a bit presumptuous, perhaps, to think that Catholic or faith-based medical systems are the only ones capable of caring for the poor or defending the sacredness of human life. A for-profit might well embody such values and commitments (although, if it is truly for profit, such value commitments must function only as market decisions).

WITH the emergence of networking, huge systems and macro-managed care, the very meaning of care is challenged–from the moment a person reports to an emergency room that requests insurance and doctor’s name, through encounters with nurses spread so thin that many are alienated and all are overworked, to the premature expulsion from care and coverage despite protests of physical and occupational therapists. It all pays off–at least for some people. The new gigantism is what accounts for one company to move from a $17,000 profit one year to $17 million the next.

Part of the credit goes to the fact that doctors within such a system may actually lose their own income if they admit patients, call for tests or perform special services. If a doctor is able to shoo the patient away before an expected norm of cost or capitated rate is rung up on the cash register, the doctor can pocket the difference. The best interests of the doctor and the patient are thus at logger-heads. Healing itself becomes a liability to the healer. Trust is a deficit. Personal commitment is a barrier. What must this do to a young physician who became a doctor to serve others or who ascribes to the “Patient-Physician Covenant” that appeared in The Journal of the American Medical Association a couple of years ago: “Physicians, as physicians, are not, and must never be, commercial entrepreneurs, gateclosers, or agents of fiscal policy that runs counter to our trust.” Is there a conflict here?

If there is, it is shared by any hospital and health system, profit or non. But the profit-maximizing of all health care–a profession at its deepest historical roots oriented to service rather than profit–forces new ethical questions forward.

First; since it is terribly difficult to focus any corporate effort on any kind of faith mission in the face of capitalism’s ideological and practical pressures, does not the sale of a Catholic university hospital make such a mission even more elusive, contractual guarantees notwithstanding? How do personal relationships, sustained pastoral care, patient advocacy and holistic healing find a place in a for-profit hospital? Are there not, indeed, a host of spiritual values, basic to Catholic tradition, that make no blip on the radar screen of profit?

In the case of Saint Louis University, it is fondly hoped by those who support the sale of its hospital that the move will guarantee well into the next century the formation of nurses, doctors, practitioners and therapists who are deeply compassionate, faithful and loving in their professional lives of service. But where will such professionals work, if there are no institutions where compassion, fidelity and care figure into a cost-benefit analysis?

I HAD ONCE HOPED that the city of Saint Louis, named after a counter-cultural king, might have been a national flagship for medical care in a Catholic tradition of service to the poor and a radical commitment to the inviolability of human life. This would have demanded intense collaboration and extensive sacrifice on the part of a few corporate “systems.” It would have called upon all friends of Saint Louis University to contribute to and support such a mission. But since this option was not forthcoming, my hopes, like those of many others, will not be realized. One can at least hope, however, that less utopian dreams may come true.

Abstract: 

The sale of the University Hospital of Saint Louis University, a Catholic institution, to the for-profit Tenet Corporation illustrates the divide between faith-based and market-driven health care. The church’s commitment to pastoral care over profit is considered.

pagosamount / January 9, 2015 / Uncategorized / 0 Comments

Beaumont, UM plan hospital expansions

Two Detroit area hospitals on opposite sides of the metropolitan area are preparing to invest a combined $42.1 million in expansions.

Beaumont- UM -plan -hospital- expansions-1

  • William Beaumont Hospital-Troy plans to spend $23.6 million to build an outpatient center on its expansive campus on the Macomb County border, while the University of Michigan Health System has earmarked $18.5 million to renovate and expand the emergency room at the UM Medical Center.
  • Beaumont Troy is responding to burgeoning demand from a growing population in its corner of the county, said Eugene Michalski, senior vice president and hospital director.

Outpatient visits have been growing at a double-digit rate for several years, and the hospital, which has 189 beds, has an inpatient occupancy level approaching 90 percent, Michalski said.

  • Beaumont Troy is the smaller of the two hospitals in the William Beaumont system. The flagship is 929-bed William BeaumontHospital in Royal Oak, which, along with the Troy hospital, is among the nation’s busiest hospitals for its size.
  • UM Medical Center’s plan is to double the size of its emergency room to 24,000 square feet and bring adult, pediatric and psychiatric emergency services into closer proximity while keeping them separate, said Peter Forster, associate hospitaladministrator.

The layout is more efficient and will allow staff to better cover the three areas during periods of peak demand, Forster said.

The medical center gets about 1,000 emergency-room visits a week, he said. The health system plans to spend about $10 million of the $18.5 million for construction, $5 million for equipment and the remainder for various fees, including architectural services, he said.

The emergency room is being designed with an on-site laboratory and two radiology suites, including one with a computerized axial tomography, or CT, scanner to assist with diagnosis, he said.

Beaumont- UM -plan -hospital- expansions-2

The process of diagnosis also is being reshaped.

The emergency department plans to take a page from the medical center’s chest-pain center and develop teams of clinicians to review complicated cases and decide jointly on treatments, Forster said.

The team approach allows the hospital to bring a wide range of expertise into the equation to decide whether to admit patients or release them after emergency-room treatment. Forster said the team concept could be used to assess people who are having fainting spells, asthma attacks or gastrointestinal bleeding, for example.

A team is going to feel more comfortable than an individual physician in releasing a patient and possibly avoiding a costly hospitaladmission, Forster said.

Outpatient business accounted for about 52 percent of the $130.2 million in revenue generated by Beaumont Troy in 1997, Michalski said.

  • The new outpatient center is expected to have three stories and measure 75,000 square feet, he said.
  • The hospital hopes to have it open by December 1999, along with another phase of the hospital’s parking deck to accommodate the additional traffic, he said.

Under the 50-year-old Michalski, Beaumont Troy is looking to open satellite physician clinics in Warren, Sterling Heights and Shelby Township.

Beaumont- UM -plan -hospital- expansions-3

The hospital’s primary service area ranks among the fastest growing in terms of population in the state, with such communities as Rochester, Sterling Heights and Shelby TownShip contributing significantly. CDB

pagosamount / March 30, 2015 / Uncategorized / 0 Comments

Riverview Hospital on life support

St. John Health System is unsure whether it can afford to keep open its St. John Detroit Riverview Hospital on Detroit’s near east side.

An influx of uninsured and Medicaid patients, fueled by last year’s closing of Mercy Hospital in Detroit, caused operating losses at the 230-bed community hospital to widen to $5 million in the 2000 calendar year from $1 million in 1999.

The hospital would have closed

Riverview-Hospital -on- life- support-1

Prospects are so precarious that the hospital would have closed had the state followed through earlier this year with a legislative proposal to shift some disproportionate-share funds used to compensate hospitals for extra indigent care from Detroit hospitals to those elsewhere in the state.

The change would have cost Detroit Riverview, one of 10 hospitals in the St. John Health System, about $1.9 million of the $3.7 million it collected in disproportionate-share funds last year, said Elliot Joseph, St. John president and CEO.

That would have sunk us,” said Vernice Davis-Anthony, St. John Health senior vice president, corporate affairs and community health.

St. John Health is determining how it can continue its urban mission without causing unacceptable losses to the company, Joseph said. St. John is the Detroit area’s fourth-largest hospital company, with fiscal 2000 revenue of $1.36 billion.

One of the issues being explored is whether Detroit Riverview can remain open long-term, Joseph said.

``If there are no policy changes, we are faced with the decision to close doors or take mounting losses,’‘ Joseph said.

St. John Health has not set a timetable for a decision on the fate of Detroit Riverview, Joseph said. The hospital employs 1,238.

The hospital, like others in Detroit, has been whipsawed by government reimbursement cuts, medical cost inflation and a growing problem with the uninsured.

Moreover, Detroit Riverview has suffered disproportionately from the closing last year of Mercy Hospital, situated in a poor section of Detroit’s east side.

Patients whose unpaid care caused Mercy Hospital to lose $20 million in 1999 and prompted Novi-based Trinity Health to close thehospital in March 2000 are showing up in the emergency departments of Detroit Riverview, St. John Hospital and St. John Northeast Community Hospital.

Riverview-Hospital -on- life- support-2

The closing has caused emergency visits

Baby deliveries and admissions to spike at those hospitals. The good news is Detroit Riverview is 83 percent full with patients on most days.

The bad news is the government insurance carried by the patients, if they have insurance at all, often is not covering the cost of care. Medicaid admissions last year rose 32 percent, to the point that Detroit Riverview now has a patient base that is 80 percent Medicaid and Medicare.

“We have a saying around here: beds full, pockets empty,” Joseph said.

Davis-Anthony said Detroit Riverview is losing an average of $5,000 on every birth at the hospital. Bad debt rose a total of $21 million last year at St. John Hospital, Detroit Riverview and St. John Northeast.

  • The closing of Mercy Hospital ripped another hole in a health care safety net in Detroit already shredded by the closing of about half of the primary-care physician clinics in the city over the past four years. Poor reimbursement caused physicians and hospitalowners to pull the plug on the clinics, Davis-Anthony said.
  • Another major hospital was taken off line last year when The Detroit Medical Center merged its Sinai Hospital in northwest Detroit into nearby Grace Hospital.
  • Henry Ford Health System, also feeling the effects of the Mercy closing, is worried that the closing of another hospital in Detroit would swamp the remaining players in the city unless there is new government funding.

“This is the equivalent of the California power crisis about to blow,’‘ said Bill Conway, M.D., chief medical officer of Henry FordHospital.

Riverview-Hospital -on- life- support-3

The emergency department at Henry Ford Hospital

Built 12 years ago to accommodate 60,000 patients a year, saw 100,000 patients last year, Conway said. In the first quarter, the hospital experienced a 12 percent to 15 percent increase in the number of seriously ill and injured patients, an increase mostly made up of patients without insurance.

The closing of physician offices in the city in response to inadequate reimbursement or nonpaying patients has meant that hospitalemergency departments often have become the first and most costly health care access point for patients, he said.

“If one more ER closes, we’ll be treating people in the streets,” Conway said.

The state needs to restore about $200 million to Medicaid funding that was taken out when it restructured the program in 1997 by turning over administration of the Medicaid population to private health plans, he said. Only a portion of the 20 percent reduction in funding has been restored by legislative budget increases, Conway said.

  • The problems of Detroit Riverview and other urban hospitals should not be laid at the feet of Medicaid, said James Haveman Jr., director of the Michigan Department of Community Health.
  • Medicaid funds account for about 7 percent of hospital revenue in Michigan, compared with 50 percent or more from Medicare, Haveman said. Hospitals have been far more affected by cutbacks to Medicare in the federal Balanced Budget Amendment of 1997, he said.
  • Legislative increases in fiscal 2001 to the $5.5 billion Medicaid budget added $200 million to the $2.6 billion portion of the budget that directly affects hospitals and physicians, Haveman said.

St. John Health System needs to talk with the department if it is looking for additional relief for Detroit Riverview, he said. The last financial report on Detroit Riverview, for the hospital’s fiscal year that ended last June 30, showed it reporting net income of $2.7 million, he said.

pagosamount / March 30, 2015 / Uncategorized / 0 Comments

The doctor is not in: on the managed failure of managed health care

We are born, we live, and then we die, but these days we do so with less and less help from a medical profession paid to discount our suffering and ignore our pain. Proofs of the bitter joke implicit in the phrase “managed care” show up in every morning’s newspaper, in casual conversations with relatives or friends recently returned from a hospital or from what was once thought of as a doctor’s office instead of an insurance company’s waiting room, and in a country generously supplied with competent and compassionate doctors, 160.3 million of us now find ourselves held captive to corporate health-care systems that earn $952 billion a year but can’t afford the luxury of a conscience or a heart.

Childless women in every city in America dread the simplest fertility workups because they know that the evaluation probably will serve as evidence denying them future payments for diseases of the vagina, uterus, or ovaries; the rest of us have had our co-payments increased, our use of prescription drugs curtailed or replaced by corporate-sanctioned medications, stays in the hospital reduced or eliminated, “pre-authorizations” required for necessary and routine tests. The broad removal of health-care benefits takes place at all points of the country’s medical-industrial complex, and in line with the tone and temper of the times more than 2,300 Massachusetts physicians in December of last year signed a despairing manifesto in the Journal of the American Medical Association:

The time we are allowed to spend with the sick shrinks under the pressure to increase throughput, as though we were dealing with industrial commodities rather than afflicted human beings…. Physicians and nurses are being prodded by threats and bribes to abdicate allegiance to patients, and to shun the sickest, who may be un-profitable. Some of us risk being fired or “delisted” for giving, or even discussing, expensive services, and many are offered bonuses for minimizing care.

Such forced denial of care occurs at a time when new medical and surgical technologies allow physicians to treat and often cure any number of conditions that only a few years ago barely could be diagnosed; organs now can be digitally reconstructed in three dimensions to locate previously inoperable tumors; heart attacks can be stopped with injections of a compound known as tPA; blind people may wake up and see with implanted plastic lenses; one-and-a-half-pound premature babies, once given up for lost, routinely are nursed to health; a new generation of medical research brings us genetically engineered tests and one nearly miraculous drug after the next. At the same moment, presumably well insured women diagnosed with disseminated breast cancer must hire lawyers to have their health plans pay for lifesaving bone-marrow transplants and managed-care companies can deny powered wheelchairs to handicapped children who pass a “utilization review” showing them able to stagger twenty-five feet with the help of a walker.

But although a good many of us suspect that somehow we are being swindled, and those of us who have fallen seriously ill know for a fact that the purveyers of managed care often wish we would go away or die–as quietly and quickly as possible–we’re reluctant to draw the commercial moral of the tale. The system wasn’t meant to care for sick people; it was meant to make and manage money.

The theory of “managed care” first attracted attention in the 1940s in the coal regions of Kentucky and West Virginia. Labor unions hired doctors, constructed clinics and hospitals, and supplied prepaid medical services at a fixed monthly rate to their members and their families. The fixed rate per patient was unrelated to the patient’s use of the service. By the 1950s, a few large companies had taken a similarly paternalistic stance and were offering contract health care to their own employees. The arrangement was not designed to profit anyone other than those who received care, which was why it worked.

But in the 1970s, the government and large corporate employers began to seek ways to reduce health-care costs, and the concept of contract medicine was injected with the virus of the profit motive. Cadres of systems managers, some of whom had planned the failed technowar in Vietnam, brought forth new corporate structures meant to introduce market forces into the industry and named by the several acronyms (HMO, PPO, POS, etc.) for preferred or managed medicine.(1) Not only were a lot of people going to get well, but some of them were going to get rich. First promoted by what is known as InterStudy (a health-policy think tank organized in 1972), the proposition relied on the idea that an HMO could make money if it providedmedical care only to people who enjoyed the prior benefits of perfect health and a full-time job. Thus the practice known as “cherry picking,” which virtually removed the burden of insuring people who were seriously ill. You simply cannot be employed full time if you suffer from the effects of a crippling disability or disease.

The full story of how and why, over the short span of twenty years, the concept of the HMO came to dominate nearly every phase of American medicine (directing the distribution of every operation, wheelchair, test, and pill) would embrace all the arts of financial chicanery made popular in the 1980s with appropriate reference to junk-bond financing, the prosperity of the drug companies, the general acceptance of the 401-K plan, the demographics of the baby boom, and probably a list of every fund-raiser attended by Presidents Ronald Reagan and George Bush. Here was but one scheme in an era of schemes, the HMO as a brilliant means of redistributing income from individual physicians to corporate executives and shareholders. The short-term profits were extraordinary: PacifiCare, for example, swelled from a $168,911 enterprise in 1986 to a $10 billion behemoth by 1997.

For corporations and small businesses burdened with rising medical costs, the HMO appeared as a gift from heaven. As recently as 1980 company health plans enrolled only a small percentage of the eligible employees; last year the plans enrolled 85 percent, up from 48 percent in 1993. The percentage of doctors practicing outside the HMOs meanwhile has dwindled to the present 19.9 percent.(2)

But the spectacular success of managed care proved to be the cause of its equally spectacular failures. Cherry picking is another name for a Ponzi scheme, and sooner or later it falls apart. Even a company blessed with tens of thousands of healthy subscribers eventually Ends itself obliged to pay for the occasional premature birth at $1,500 a day, or the occasional employee who develops a brain tumor or whose wife is diagnosed with ovarian cancer. There are car accidents and near drownings. There are the late complications of diabetes, the forty-year-old struck down with a heart attack, the previously undiagnosed melanoma, the complications of hypertension. The odd executive may need a hip replacement because of an old football injury, or a chief financial officer a heart transplant after what should have been a routine viral illness. If the HMO acquires 400,000 or half a million new members (as it must if its stock price is to keep rising), the costs mount at an exponential rate. Now there may be as many as 20,000 claims a month–a metastasis of paperwork, a hemorrhage of cash. The co-payments coming in from new enrollees can no longer keep up with the money going out. New restrictions must be implemented, new administrators hired to guarantee compliance, more controls, more advertisements to attract new members. The whole operation begins to unravel.(3)

When a company finds itself hard-pressed for profit, then behind the closed doors of the executive suite what has been left unsaid becomes the loud and forthright voice of reason: Yes, we are a company that cares about the well-being of the American people, but the free market Is the free market, and so . . . And so, among the middle managers and accountants of the nation’s health plans the talk these days turns to ways of lowering what Wall Street calls an HMO’s “medical-loss ratio”–i.e., that percentage of yearly revenues allotted to patient care. The term, in and of itself, repudiates every principle that undergirds the profession of medicine and flatly contradicts the Hippocratic oath, which pledges a physician’s first responsibility to the care of his or her patient. But banks don’t accept payment in oaths, as was made plain by an analyst from Nutmeg Securities, Ira Zuckerman, who reminded his prospective investors last November that the attractiveness of managed-care companies as investments changes when health plans sign up members who will actually have to see a doctor. The rule of thumb holds that a managed-care business is in trouble if more than 65 percent of its enrollees submit a significant claim in any one-year period. Little wonder then that rehabilitation for stroke victims or occupational therapy for spinal-cord injuries no longer make the list of benefits. Managed-care companies actually seek to hide their competencies; no HMO wishes to advertise its successes with cystic fibrosis or multiple sclerosis, or, say, the skill of its subspecialists who treat AIDS. Were a company to become known for treating complicated or expensive diseases, it would run the real risk of attracting the attention of the very sick. The blurring of priorities becomes embarrassingly obvious in the newspaper ads that promote the virtues of the country’s prepaid health plans. As, for instance, last December in the Minneapolis Star Tribune:

  • We offer an extensive and unique program of reporting quality, accessibility and satisfaction data to consumers at the clinic and physician level–through the internet and other mechanisms.
  • We developed a doctor-led organization, called the Institute for Clinical Systems Integration, that develops nationally recognized medical best practices using the best medical minds in our community.
  • We have received numerous national awards for our community health improvement initiatives.
  • We created the nation’s first comprehensive program to encourage reading and brain stimulation for infants and young children.

In less than five years, managed care has managed to eliminate from the public-policy debate any and all words that describe suffering and disease, and together with the good news about “reporting quality,” and “satisfaction data,” the industry defends itself against past, present, and future criticism by explaining the symptoms that afflict the country’s health-care system with at least five warm and welcome fairy tales that the public apparently still chooses to believe:

ALL DOCTORS ARE RICH AND OMNIPOTENT.

The stereotyped image of the aloof and wealthy physician driving a Mercedes or wandering over a golf course allows the proponents of managed care to imply, usually with a good deal of success, that any doctor who speaks ill of corporatized medicine is, by definition, a greedy and callous fellow who thinks only about his fees.

As a percentage of all medical costs, the money allotted to physicians’ services has remained constant over the last thirty years. Between 1993 and 1995, what the American Medical Association calls “median physician net income (after expenses, before taxes)” declined, in real terms, by 1.4 percent. Surgeons and radiologists, among them the most highly paid practitioners in any of the medical professions, earned, on average in 1995, roughly $250,000. The sums dwindle into pittances when compared with the earnings of the executives of publicly traded managed-care companies, which, on average in 1996, approached the handsome sum of $10 million. What inflates the price of medicine in the United States is the cost of corporate vice presidents, not the cost of doctors.

Which possibly explains why the number of practicing physicians in the United States has increased by no more than 20 percent in the last six years, while since 1983 the number of health-care managers has increased by 683 percent. The comparative percentages speak to the loss of authority on the part of doctors who no longer have much to say about the schedules they keep, the fees they charge, the treatments and protocols they prescribe. As often as not, they possess as little power of decision as the custodians of a hospital’s linen supply.

THE OPERATION IS UNNECESSARY:

The rich doctor requires the unnecessary operation (as well as the superfluous test, the costly prescription, the frivolous C-section or coronary bypass) not for any sound medical reason but in order to become even more rich. Thus the nation’s hospitals and operating rooms supposedly overflow with patients who have no cause for serious complaint, healthy, happy people, who, were it not for the avarice of their physicians, would be baking pies or running relay races.

Once again, actual practice contradicts the heartwarming cant. The numbers of C-sections performed in the country have more to do with the availability of fetal-monitoring equipment and the fear of malpractice suits than with the will to profit on the part of the attending obstetrician. Recent reviews of coronary-bypass operations have shown that the number of inappropriate procedures varies from 0 percent to 2.4 percent, while the number deemed “equivocal” never has exceeded 7percent. The number of inappropriate coronary angiographies in a 1994 study conducted in New York State was 5 percent. In 1992, a Medicare pre-authorization program was discontinued when, following a review of Medicare requests for coronary-bypass procedures in the state of Texas, a negligible number were found to be inappropriate.

Health-care executives like to say that doctors get away with performing needless operations because their monopoly of the standard surgical repertoire excuses them from having to explain or justify their actions. The canard ignores the fierce but societally beneficial struggle between different medical specialties, a struggle that constantly forces the argument about what is necessary and what is not. Internists develop drugs to reduce the need for the cardiovascular surgeons’ bypass procedure; neonatalists use chemicals to get premature infants off respirators quicker and keep them out of the hands of pulmonologists; infectious-disease specialists develop oral regimens and home antibiotic therapies as alternatives to orthopedic surgery or in-hospital IV medications.

THE DOCTOR IS A MECHANICAL DEVICE: The systems planners at the Pentagon construed the Vietnam War as a manufacturing problem–victory a product, death a means of production, soldiers listed in the inventories like truck tires or boxes of ammunition. A similar habit of mind inclines our health-care managers to classify doctors as interchangeable pieces of hospital equipment. As with light bulbs and bottles of saline solution, so also with heart specialists and neurosurgeons. Every doctor serves as well as every other doctor. The proposition is patently false, but it allows the HMOs to limit their patients’ choice of physician. Like nineteenth-century coal miners obliged to buy their necessities from a company store, subscribers to late-twentieth-century health plans must go to the doctors named on a company list. A number of HMOs improve the policy with a further refinement of cost-saving simplification. Not content with the assignment of absolute equality to doctors in all degrees of specialty, they suggest that the only physician whom any patient ever needs to see is the primary-care physician–i.e., the doctor who knows a little of this and a little of that, who is so well rounded that he points in no direction at all, a compliant soul content to follow a memo or a guideline because he isn’t sure when an MRI is really appropriate or whether, in the attempt to rule out Lyme disease, it is best to do the expensive Western Blot test or the cheaper ELISA essay.

THE PATIENT LOVES GOING TO THE HOSPITAL: As corollary to the story of the rich doctor, the health-care companies tell the story of the patient as spendthrift fool, who, if left to his or her own devices, will bankrupt the country with an “infinite demand” for heart transplants, kidney dialysis, and liposuction. But as with the health-care industry’s other probings of imaginary symptoms, the diagnosis has been proven false. Most people check into hospitals only when they have no choice in the matter, and the nonexistent phenomenon of infinite demand doesn’t lead to the unproven result of infinite cost. New medical treatments and surgical procedures, no matter how expensive when first introduced, retain their original costly forms for astonishingly short periods. Less expensive and less complicated therapies invariably replace the early experiments.

The evolving art of kidney dialysis offers the textbook case in point. Long before the advent of managed care, kidney specialists looking for an alternative to hemodialysis–with its inconvenience, risks of infection, clotting, and blood loss, as well as its complicated machinery–pursued the development of the less demanding peritoneal dialysis. So also with balloon angioplasty, which today has become the preferred alternative to the expensive coronary bypass. So also with every other specialty that anybody but an insurance agent cares to name.

An axiom of economics holds that nothing can be rationed that is itself not scarce, and, absent evidence of infinite demand and infinite cost, you can’t ration health care when there are more than enough doctors, hospitals, and high-tech equipment distributed through the country to do everything and anything that needs to be done. American health care is an unsaturated demand market, and in such markets “rationing” is simply a code word for not spending the money to take care of the poor, the uninsured, the underinsured, and the high-risk patient.

SICKNESS IS THE PATIENT’S FAULT, AND DEATH IS A PREVENTABLE DISEASE: Because we live in a society that equates youth and wellness with intelligence and superior moral character, the health-care industry can pretend that it really isn’t supposed to do anything at all. If the patient hadn’t been so careless–if he or she had given up smoking and drinking, read the complete works of Andrew Weil, cut down on the day’s fat intake, checked the blood pressure, ridden the stationary bicycle, ingested the correct amounts of garlic and zinc, gotten in touch with the inner child–then the patient wouldn’t be making so many awful noises, wouldn’t be conspiring to harm the “medical-loss ratio,” wouldn’t be bothering doctors (busy and important people, albeit overpaid) with the miserable proofs of their weakness and stupidity.

No health plan advertises the fact that a good many patients admitted to the hospital with a diagnosis of a myocardial infarct have few or none of the so-called risk factors for a heart attack: they are not smokers; they are not overweight; they are not hypertensive; they exercised; they have normal cholesterol. No plan sends out notices or memos that one in twenty-five births will have a congenital defect, or that a third of patients with diabetes run the risk of going blind.

In truth, it is a dangerous world out there. Slip through the ice, get hit on the freeway, wake up with blood in your urine, have trouble breathing, stumble about after a splitting headache, lose the ability to feel, have trouble remembering things, experience ringing in your ears, find mucus in your stools, start gasping at night, and garlic pills will be of little help. But wellness is the panacea of the 1990s, and the health plans promote the wonders of aerobic exercise and fat-free diets in order to obscure the real purpose of medicine, which is the treatment of illness and the relief of suffering. To the extent that the plans can shift the burden of health care to the private sectors of personal hygiene and morality, they excuse themselves from the tedious and increasingly expensive chores of providing a public service or addressing the common good.

For the last twenty years the theory and practice of managed care has enjoyed the protection of the political and financial interests–insurance companies, the pharmaceutical industry, large business corporations, suppliers of hospital equipment, members of Congress–eager to keep the Ponzi scheme profitably in place. Assured of the approval of the best people that money can buy, the HMOs have gone calmly about the business of eliminating one treatment after another and adding one doctor after the next to their rosters. For the time being they probably can count on their formularies of false diagnosis to preserve the illusions of compassion and competence. But every month another 315,000 Americans reach the age of fifty, a figure that will rise over the next fifteen years. Of the money spent on medical care during the course of an average American’s lifetime, the bulk of it is spent during the last two or three years of that life, and by the year 2010, people over the age of sixty-five will constitute the most rapidly multiplying sector of the population. They will want, expect, and need medical care, but who will pay the bill? The government has been steadily depleting the funds intended to meet the future costs of Social Security and Medicare, and the working children of what promises to be the most long-lived generation in the country’s history can’t be counted on to come up with either the money or the will to support a pyramid scheme.

Because Americans as they grow older tend to become more political, the demographics also imply the likelihood of active protests on the part of large numbers of people (surprisingly vigorous, remarkably well informed) bent on redressing what they will come to perceive, not without reason, as a balance of wrongs. The reaction already has begun. A few months ago the Massachusetts physicians published their manifesto, and the American College of Rheumatology recently recommended that chronic arthritis patients should be seen at least once by a rheumatologist both for confirmation of the diagnosis and the development of an adequate treatment plan. The American College of Cardiology has compiled its own guidelines for heart disease and posted them on the Internet in the hope that Americans might learn from a computer what they never will learn from a doctor sworn to silence by an HMO.

All the symptoms of protest confirm the same diagnosis–a health-care industry sickened with the virus of “medical-loss ratio” and unlikely to recover until cured of its addiction to the profit motive. A physician is not by nature a commodities broker, a clinic is not a meat-packing plant, and unless the health-care industry quits caring for money instead of people, its chronic pathology almost certainly will be referred to the consulting rooms of government. Not that the politicians will want to take the case, but let enough people make strong enough complaint, and the therapeutics committees in the country’s legislatures might be forced to write a new and not so mean-spirited set of guidelines.

(1) Alain Enthoven, who served as a systems analyst under Defense Secretary Robert McNamara during the Vietnam War, devised the theory of managed competition and sail serves as its principal apologist, both in his capacity as chairman of California’s Managed Health Care Improvement Task Force and as a professor of health-care economics at Stanford University.

(2) The wealthier American zip codes continue to support a troupe of expensive physicians whose skills (at unclogging beefeater hearts or smoothing the wrinkles in a woman’s neck) are so renowned, or whose clients are so prosperous, that they do not accept any form of insurance. Such practices are, in effect, boutiques, and the practitioner is able to lavish time and attention on his patients, who may in turn congratulate themselves on the quality of the care they have received.

(3) Last fall, Oxford Health Plans, Inc., a “model” HMO that aggressively marketed its friend liness toward consumers, reported losses of $125 million, citing higher medical costs than expected. Not surprisingly, the stock price of Oxford lost 80 percent of its value over the span of four months. Shortly thereafter, investors accused Oxford executives of withholding information about the company’s balance sheet while they sold large blocks of shares. The Securities and Exchange Commission and the New York Attorney General’s Office are investigating the complaint.

Ronald J. Glasser, M.D., is a Minneapolis pediatrician and the author of several books, among them 365 Days and Ward 402 and, most recently, The Light in the Skull.

Abstract:

Managed health care is a for-profit industry in which insurance companies attempt to limit treatment. This system is corrupt, giving physicians an incentive to allow the seriously ill to die instead of providing them with costly treatment.

pagosamount / January 17, 2015 / Uncategorized / 0 Comments

The lady is for turning: health-service reforms

Virginia Bottomley has a great opportunity to transform the national health service. She is fluffing it

IMAGINE that John Major, his soap box forgotten, had lost the last election. On entering Downing Street, Neil Kinnock would no doubt have made a rousing speech about the national health service (NHS), boasting that he was taking it out of the hands of the accountants and giving it back to the people. The health portfolio would have gone to someone who looked cuddly and sounded caring. The Department of Health would have spent its time churning out policies on sexual health and drawing up targets for employing women.

Mr Kinnock and his colleagues would have stopped short of killing the internal market: the purchaser-provider split has proved too useful to health planners, and fundholding too popular with doctors. Instead, they would have hedged it with regulations. Health authorities would have supervised every transaction. The ministry would have ensured that glamorous hospitals stayed open and well-connected bureaucrats kept their jobs. In other words, a Labour health secretary would have behaved exactly as the Tory one, Virginia Bottomley, has done since the election.

The past ten months should have seen substantial progress with the internal market. The NHS reforms were delayed and diluted in the prolonged run-up to the general election. The government allowed institutional changes to go ahead–hospitals became self-governing and general practitioners gained their own budgets–yet made sure that the market lacked a dynamo. The health authorities were discouraged from shopping around for the best deals. The inner-London hospitals were shored up with enormous subsidies. The health department even had a name for this politically expedient inertia: “the steady state”.

The unexpected victory on April 9th provided the Conservatives with an opportunity to entrench the market. Labour’s health spokesman, David Blunkett, reversed his party’s pledge to dismantle the reforms. The Tomlinson report, which called for a rationalisation of London’s hospitals, provoked powerful support as well as predictable opposition.

So far Mrs Bottomley has squandered her chance. Health managers complain that the “steady state” is getting ever steadier, that the market is little more than a fiction, that millions of pounds are being wasted on bureaucracy. “Mrs Bottomley had a choice between creating a centrally planned health service with a few market incentives”, says one well-placed observer, “or a market-driven health service with a bit of central planning. Unfortunately, she chose the former.”

The first charge against her is that she has dithered over London’s hospitals. No health minister has ever been in such a good position to tackle the over-supply of expensive and specialised hospitals in the capital. The Tomlinson report has provided a blueprint for slimming and merging hospitals. So far Mrs Bottomley has failed to take a firm decision, and a raft of newspaper rumours suggest that St Bartholomew’s, one of the surplus hospitals, will be kept open.

The second charge is that she has dithered over regional health authorities. Increasingly, the 14 authorities are bureaucracies in search of a function. They can cost over Pounds10m ($14m) a year to run, employ hundreds of bureaucrats and are headed by Tory worthies and local businessmen. William Waldegrave, Mrs Bottomley’s predecessor, planned their demise, setting up six high-powered organisations, each employing about ten people, to take over their functions. He hoped that this would be the start of an anti-bureaucratic revolution. Now Mrs Bottomley is protecting the regional authorities, and shows few signs of remodelling the rest of the NHS bureaucracy.

The third charge is that Mrs Bottomley has done too little to turn the 170 or so district health authorities into purchasers. The newly created purchasers should have been the most dynamic element in the NHS, analysing the health needs of their populations, shifting their resources from over-funded hospitals to primary and geriatric care, and shopping around for the best combination of cost and quality. So far their performance has been faltering. They have done nowhere near as well as the hospitals in adapting to their new roles and recruiting new staff. Far from helping them, the health department, terrified that inner-city hospitals will go to the wall, has plagued them with regulations.

There is still a chance that Mrs Bottomley will win her spurs. She emphasises the importance of purchasers, makes aggressive noises about London hospitals, and admits that the regional health authorities need to be remodelled. So far, though, it is just talk.

pagosamount / January 14, 2015 / Uncategorized / 0 Comments

The price of a child’s health

At age 10, Greg Tredo loved to play capture the flag during gym at Pine Trail Elementary School in Ormnond Beach, FL. But when it came time to run, the other children laughed at him because he tired so quickly. He’d try to rest, but the coach insisted that he continue playing, unless he brought a note from home. So three times a week, Greg handed over a note from his mother. Then, as his schoolmates played, he sat on the sidelines and watched, flushed with embarrassment.

Greg suffer from asthma. His disease could have been treated with regular doctor’s visits and medication, but for the hardworking Tredos — Greg’s mother, Jill cleans doctors’ offices and his father, Rodney, comanages a car dealership – health insurance has always been out of reach. To purchase it would have cost $300 a month, which was impossible on their combined income of 26,000 a year. To pay for private pediatric visits and preventive medication would have cost even more, as much as 4,000 each year.

Instead, Greg received episodic care for his chronic asthma, lurching from one health crisis to the next. For annual checkups, Jill took him to a free walk-in clinic, where he was seen by a different doctor each time. About once a week, he’d have an asthma attack; when the attack seemed serious the family would dash to the hospital emergency room, usually putting the 75-plus fee on a credit md. Meanwhile, his parents limited Greg’s physical activity and hoped for the best.

THERE ARE MANY GREGS IN THIS COUNTRY

Ten million children who don’t have health insurance. That’s one child in every seven, and the number is growing by nearly a million a year, according to national surveys. To the surprise of many, the majority are the children of working parents — our friends, our. neighbors, maybe even our own children. Nine out of ten uninsured children have parents who work. Almost eight out of ten are white. Six out of ten live in two-parent families. Two thirds live in families with incomes above the poverty level — to well-off to be insured by the government, but not well-off enough to buy their own insurance.

In Washington, DC, the crisis has finally captured the attention of legislators from both parties. Before Congress recessed for the summer, it approved $24 billion for children’s health care. Up to five million children could be insured through this financing, which would allow states to use federal money to buy private health insurance for children or cover additional children under Medicaid.

However, because states that receive the funding will be required to put up their own money as well, there is concern among children’s health advocates that some might be less committed to insuring care than others. “This is a significant investment in children’s health care,” says Robert Hannemann, M.D., president of the American Academy of Pediatrics (AAP). “The challenge now lies with governors and state legislatures who will each need to decide what health benefits they are going to offer.”

The AAP has joined forces with more than 40 national organizations, including the U.S. Catholic Conference and the Children’s Defense Fund (CDF), to form a group called the Children’s Health Group. It intends to continue to lobby Congress this fall for a solution that will cover all uninsured children.

“If the funding provided for in this bill is not enough to reach the ten million kids without insurance, Senator [Orrin] Hatch and I will offer further legislation to increase funding,” says Senator Edward M. Kennedy (D-MA), who with Hatch (R-UT) cosponsored the original legislation.

The crisis in are for children has been more than a decade in the making. The cost to employers for offering health-care coverage to a worker and his or her family has shot up from an average of $48 a month in 1988 to more than $600 a month today. At those prices, some small businesses have been forced to forego supplying health insurance altogether. Even major employers are reducing health coverage for workers’ families, in many cases by cutting the number of jobs that include insurance benefits. The number of fulltime positions in Fortune 1,000 companies has dropped by nearly four million jobs over a 13-year period. In addition, the percentage of people covered by employment-based health insurance has gone down by about 10 percent since 1988.

It shouldn’t be this way. “Children are a special case,” says Bruce Davies, a pediatrician who sees many uninsured children in his practice at an outpatient clinic in Tacoma. “Caring for them is one of the basic responsibilities of a society.”

Each year, according to data on uninsured children compiled by Kennedy’s office, untreated asthma in 600,000 of those children results in missed school days and preventable hospitalizations and deaths. Each month, one million children suffer from infections that can lead to kidney and heart diseases and rheumatic fever if left untreated. One million children a year get recurrent ear infections that may result in permanent hearing loss if not monitored by a doctor. And 300,000 children go without needed prescriptions each year,

Years ago, hospitals provided free care to uninsured children and covered this cost with the money left over from treating insured patients. But with hospitals now receiving lower reimbursements from HMOs, they increasingly cannot afford to shelter the medically home6%” who are sometimes referred to free clinics unless the problem is life-threatening,

Many parents with uninsured children must rely heavily on school-based services. But the quality of such care, often poorly funded, an vary widely. In 1991, in Fort Myers, FL, Nadine Crews received a letter from the Tice Elementary School stating that her 10-year-old son, Aaron, had a vision problem Though Aaron’s eyesight had been declining gradually, the school nurse had not been able to identify the problem in previous years when it was legs serious. “Probably dining Aaron’s whole elementary career, he didn’t have a professional eye exam. We always relied on the school” Nadine explains.

Nadine was working full-time as a bookkeeping clerk. The job provided her with free health benefits, but adding the rest of the family to the plan was too expensive. Her husband, Andrew, was a land surveyor who wa.9 forced to quit his job after he concern diabetes because of medication restrictions and complications stemming from his disease, he was no longer able to be out in the sun). They brought their two children for checkups at free clinics, but Aaron, a shy and diligent student, had never mentioned his eyes.

After receiving the school’s letter, Nadine made an appointment with a local optometrist. When Aaron tried to read the chart, “it broke my heart,” she recalls. He was acutely nearsighted. He had managed to do well in class by listening to the teacher and taking notes. But he was hardly ever able to see a thing on the board

“I was very young,” says Aaron, now 16. “I thought that’s what the board was supposed to look like.” Over the next six years, Nadine charged Aaron’s eyeglasses on her credit card. But his vision began to deteriorate rapidly, and every eight months, he would need a new exam and prescription, which together cost $400. Between medical bills for her son and husband, Nadine has accumulated more than $6,000 in medical debt. “People who’ve been insured their whole lives,” she says, “don’t realize how quickly you can get into trouble.”

SIXTEEN STATES HAVE STEPPED IN TO help people like the Crews family, developing programs that offer low-cut health insurance for children and charging families an affordable monthly premium subsidized by state and federal grants.

Last year, New York State’s Child Health Plus Program covered 115,000 children, approximately one fifth of the state’s uninsured kids. The cost of the program, $109 million a year, is relatively inexpensive considering what it covers: extensive outpatient care, including well-child checkups, emergency care, and prescription drugs, as well as more specialized treatments like chemotherapy and dialysis. Inpatient surgery and hospital stays are also covered. The children of families with incomes of up to $29,592 for a family of three are eligible. Monthly premiums are based on family income and range from no charge to $13 per child, and $2 for each doctor’s visit.

The Tredo family was finally able to buy insurance for Greg four years ago through a similarly innovative Florida program called Healthy Kids. They pay $25 a month, and a $3 copayment for each prescription. The insurance has allowed Greg to see the same doctor on a regular basis — and the results have been miraculous, says Jill. He now rides his bike and plays tennis. He has made friends. And he’s getting A’s in school. Nadine Crews enrolled Aaron in the same program, and he has just gotten contact lenses. He is finally able to see girls, his mother joke,,,, and he wants to look his best.

Hard number also indicate success: Emergency-room use, as a regular source of care, has dropped from 11 percent to 1 percent among Healthy Kids enrollees, while school performance has risen.

Advocates hope that the new federal funding will allow states to develop and expand similar programs but as the task of putting the federal dollars to work begins, questions remain as to whether all states will commit themselves to providing comprehensive health care for all uninsured children. We must remind the administration and Congress that the job is not done,” says the AAP’s Hannemann. “Even if we are able to help five million children, another five million will still lack health insurance. We have to continue our efforts until each and every one of them has the health care they deserve.”

Abstract: 

There are 10 million children in the US who do not have health insurance. Congress has approved $24 billion for children’s health care and some states have developed low-cost health insurance programs, but more needs to be done to give all children the health care they deserve.

pagosamount / January 11, 2015 / Uncategorized / 0 Comments