I recently visited my cardiologist. It was a routine follow up after a heart attack a year ago. I enjoy our relationship. As a token of my regard, I came bearing a gift. It was a copy of my book Obama, Doctors, and Health Reform.
I knew he had qualms about Obamacare. He expressed doubts about the health reform bill’s merits. The bill will roll out over the next ten years. The big budget items covering the uninsured will start in 2014.
He did not think Obama is close enough to the doctor-patient relationship to grasp the bill’s implications. He feels the bill tampers with that relationship. It raises costs of care while discouraging bright young Americans from becoming doctors. One target of the bill, in his view, are specialists like himself. They care for sick Medicare recipients.
These patients account for a high proportion of Medicare’s costs. Some 5% of patients with chronic diseases — diabetes, heart disease, mood disorders, asthma, and hypertension- consume 50% of health spending.
In the end, to rein in costs, Congress has four basic options: ration care, slash physicians’ incomes, delay age of entry into Medicare, or means test Medicare. For political reasons, Congress is unlikely to overtly ration or to change Medicare entry or to ask those with higher incomes to pay more. That leaves the easy option — paying doctors less.
Even before Obamacare, he noted Medicare recently cut fees for heart procedures by 40%. He expected more cuts under reform. Congress uses its Medicare powers as a blunt instrument to lower physician incomes, often arbitrarily, capriciously, and unilaterally. There is nothing rational about it. Ominously, the reform bill proposes to gut $565 billion from Medicare over the next ten years.
The political jabber is that these cost cuts will come from reducing fraud and abuse, ending waste based on regional variation, and standardizing care under comparative effectiveness research, More likely, says the cardiologists, most cuts will take a bite out of doctor pay for high tech procedures, such as placing stents in heart arteries or inserting pacemakers. He says cardiologists feel this downward reimbursement trend is inevitable. Anticipating this trend may be why the number of new American-trained candidates for cardiology fellowships are in short supply, and dropping rapidly.
Other trends are going unnoticed, he observed. These include hospitals buying out cardiology groups in unprecedented numbers. Cardiologists are seeking economic security and the capital necessary to recruit new cardiologists. finance information infrastructures, and compensate for rising business expenses. Their fears and needs make them ripe for hospital plucking.
On their part, hospitals, fearful that health reform will negatively impact them, are purchasing cardiology and orthopedic practices. These practices contribute as much as 80% of hospital bottom lines. There is a drive to consolidate hospitals and specialty practices under one organizational roof. This will raise costs. Inpatient procedures tend to cost twice as much as those performed outside.
With that, I bid him farewell until next time.
Richard Reece is the author of Obama, Doctors, and Health Reform and blogs at medinnovationblog.
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