The Covert Rationing Blog

Attention Warren Buffet - Health Insurers Capitulate!

May 22nd, 2008 by DrRich

An article in the May 19 issue of American Medical News reports that America’s largest for-profit health plans will continue to rapidly increase their insurance premiums, even though doing so will continue to lose them subscribers.

In a conference call, WellPoint President and CEO Angela Braly told analysts, “We will not sacrifice profitability for membership.” Similarly, UnitedHealth Group CEO Stephen Hemsley said, “We continue to protect our margins. … We are committed to sustaining a quality business without taking shortsighted pricing positions.”

These statements, which are merely the actions of any responsible CEO trying to protect his/her company’s stock price, have garnered the expected expressions of outrage and indignation. After all, as Dr. Poses nicely documents for us, the mission statements of WellPoint and UnitedHealth Group assure us that these companies are both dedicated to making health insurance affordable and accessible. So how can these companies in good conscience abandon the effort to keep their products within a reasonable price range? Their failure to do so (as documented in the AMNews article) is already causing businesses to drop health coverage for employees, and contributing greatly to the rising number of uninsured Americans.

The answer, of course, is the obvious one. These publicly traded companies have a primary responsibility to their shareholders, and failing to take every opportunity to maintain a reasonable profit margin would make them guilty of violating their fiduciary duties. Besides (contrary to what most seem to think), the people who actually are insured with their products are in no way their customers. In fact, the insured (and their accomplices, the doctors) are the source of “medical loss,” and the insurance companies owe it to their shareholders to restrain these parties, by using every means at their disposal. So for insurance companies to take an action that is so manifestly against the interests of their subscribers ought not to surprise anybody.

The truly notable feature of this latest development is that it amounts to a complete and final capitulation, a straightforward admission that these companies have, at last, formally abandoned the purpose for which Congress turned them loose a couple of decades ago. Congress sanctioned for-profit HMOs, and gave them extraordinary protections under the law, for one purpose, and one purpose only - to harness the power of the free markets to control the cost of healthcare. And while it has been obvious for at least a decade now that for-profit insurers actually have no clue as to how to accomplish this feat (despite their numerous draconian efforts at covert rationing), until this moment they have publicly maintained the pretense that, given enough time and latitude, they’d find ways to bring costs down.

But that’s all over now. Ms. Braly and Mr. Hemsley have said it. We, the for-profit HMOs, the entities on which the Gekkonians have been pinning all their hopes for nigh unto 15 years, and the entities on which even today Mr. McCain is basing his entire healthcare reform plan, are completely bereft of cost-containing ideas. We haven’t a prayer of figuring out how to cut healthcare costs, or even how to slow cost inflation enough to prevent truly remarkable increases in our premiums - even though those increases are dropping our subscriber numbers and scaring the hell out of our shareholders and causing our market value to plummet. We, the for-profit HMOs, have officially entered the end-game.

So, Mr. Buffet: Your investment strategy is still on-track. You will soon be able to pick up several hundred thousand more shares of WellPoint and UnitedHealth Group at truly bargain prices, as current shareholders (seeing these companies circling the drain as surely as a subscriber with an expensive-to-treat cancer), scramble to bail out. And seeing a high probability of a Democratic victory in the fall, conventional wisdom will drive the prices even lower. So keep your powder dry.

Thanks to DrRich, only you (and the other people who read this blog, most of whom think DrRich is engaging in irony) know that it’s a Democratic victory, and not a Republican victory, that will send these stock prices soaring once again. What an opportunity!

You’re quite welcome.

Posted in Healthcare economics | No Comments »

How to Invest in the New Medicare Audits

March 11th, 2008 by DrRich

Several bloggers (including DB and Catron) have commented on the recent unleashing of Medicare’s “Recovery Audit Contractors.”

The RACs are a fun tidbit brought to us by the Medicare Prescription Drug Act of 2003. Under the RAC initiative, private contractors will soon be dispatched across the land to perform audits of billing already done by insurers, health plans and physicians. The objective is to find “overbillings,” which the providers will have to repay along with penalties. Further,the act explicitly allows for prosecutions to be brought for “fraud and abuse,” even if the providers have repaid any overbillings.

The purpose of the Recovery Audit Contractors will be, well, recovery. During the 3-year pilot of the RAC initiative, which took place in only 3 states, over $300 million were recovered. This wonderful success is the reason RACs are being turned loose everywhere.

The RACs are paid by commission. Essentially they are bounty hunters, and they get to keep 20% of whatever they collect. According to the Associated Press, hospitals and providers are just a tad worried that these contractors, being so generously incented, will prove a little overzealous in their enthusiasm to find fraud. But worried auditees should not look for sympathy from the public. “A little zealotry is what we’re looking for on the part of the taxpayers,” said Leslie Paige, spokeswoman for Citizens Against Government Waste. “We think it’s about time.” Indeed - everybody can get behind fighting fraud, which is what makes the fraud gambit such a powerful tool for covert rationing.

It is good to be an RAC, and, DrRich suggests, it would also be good to own stock in whichever companies are contracted to perform the audits. These outfits are about to harvest the vast bounty of obfuscation that Medicare has been carefully cultivating for 40 years, and has been carefully fashioning as fraud-traps for a somewhat shorter period of time.

DrRich has discussed on this site several of these fraud-traps. Boiling it down, NOBODY can interpret as a coherent document the 110,000 pages of turgid, incomprehensible, self-contradictory language that constitutes the Medicare regulations. And now, “nobody” officially includes Medicare itself.

This becomes apparent from a recent GAO report entitled “Improvements Needed in Provider Communications and Contracting Procedures.” The GAO report notes that the bulletins which Medicare carriers are required to send doctors periodically (to make sure they understand the regulations) are filled with dense, lengthy and poorly organized prose sufficient to make them unreadable. Even if they were readable, the GAO continues, these bulletins would do doctors little good since they routinely announce new regulatory policies well after the implementation date, when doctors will already have been guilty of violating such policies (and thus committing fraud). Finally, the GAO finds that when confused doctors contact the Medicare call centers for clarification on the regulations, they get the correct answer only 15% of the time. (Heck, even the IRS does substantially better than that.) And the Medicare websites, required under the regulations to clarify everything for the providers, universally lack “logical organization and navigational tools,” and as a consequence are nearly unusable.

So even when a doctor prospectively asks for instruction on how to comply with Medicare regulations (so as to avoid committing healthcare fraud and incurring huge fines and jail time) nobody is able to give him/her a straight answer. For, while it’s easy to look at a provider’s actions retrospectively (as the RACs are doing), and find something in the dense regulations that makes those actions imperfect, it’s not so easy to tell providers ahead of time how to navigate those regulations in pristine fashion. As the GAO report reveals, nobody knows how to do that.

This state of affairs is simply part of the covert rationing paradigm, of course. When your goal is to scare doctors into avoiding sticking their necks out for their patients, why would you want to give them a safe harbor for their actions?

So whoever you are, here’s a hot tip. Stop what you’re doing, find out which companies are doing these RAC audits, and buy their stock. These companies have a license to print money.

But DrRich is not here just to tell you what you already know. There’s a twist to this story you ought to take into account as you make your investments. Every time there’s an ostensibly cooperative effort between Gekkonians (in this case, the contractors doing the RAC audits) and Wonkonians (Medicare), there’s a back story that reflects the actual battle to the death in which these groups are engaged.

The RACs see the vast herds of providers (violators one and all) placidly grazing all across the fruited plains, just waiting to be harvested. Indeed, their chief problem will not be finding as much fraud and abuse as they want, but instead will be pacing themselves. If they harvest the herd with the enthusiasm of the Gekkonian buffalo hunters of the 1870s, then like those buffalo hunters, within a few years they’ll be out of business. On the other hand, killing off all the buffalo is just what the Wonkonians want them to do. Like their Wonkonian forebears of the 1870s, their real motive is to place the groups who depend on the buffalo for their survival in a state of penury, to break their independent spirit, to make them entirely dependent on the government, and at last bring them slouching onto the reservation. Once Wonkonians drive enough providers from the field, the beleaguered American patient and their remaining doctors will have no choice but to turn to the government for their healthcare. (A winning strategy here will obviously require the Wonkonians to vanquish all the private insurers before they cause all the doctors to leave medical practice, a strategy not without substantial risk. They will need to find ways of making it “inadvisable” for doctors to leave medical practice altogether; DrRich is confident they’ll be able to manage this aspect of the problem.)

In any case, if you do buy stock in the RAC companies, be sure to sell before the inevitable collapse.

Posted in Wonkonian Rationing, General Rationing Issues | 1 Comment »

Physician Report Cards and the Designated Driver

January 28th, 2008 by DrRich

A new study in the February 2008 issue of the American Heart Journal shows that cardiologists in New York State are less willing to aggressively treat patients with severe heart attacks than cardiologists in other states, and that the mortality of these patients is significantly higher in New York. The authors of the report attribute this reticence to treat to the existence of public report cards in New York, which publish doctors’ names alongside their procedure-related mortality figures.

The study compared the treatments and the outcomes in 220 New York patients with 325 patients from states without public reporting systems, who had shock (severe circulatory instability) caused by myocardial infarctions (heart attacks). They found that patients in New York were significantly less likely to receive either diagnostic cardiac catheterizations or stents. Both groups of patients were equally likely to receive coronary artery bypass surgery, but the surgery was significantly delayed in patients from New York. Among all patients, the risk of death in the hospital was 50% higher in New York than in other states. But among patients who actually received either stents or bypass surgery, there was no significant difference in mortality.

DrRich has pointed out earlier the advantages of physician report cards to a system based on covert rationing. Let us review the many benefits that accrue to the payers:

1) Fewer expensive procedures are being done
2) Fewer emergency procedures are being done (procedures like the ones being avoided in this study are often performed in the middle of the night and on weekends, entailing overtime payments and other excess overhead.)
3) More high-risk patients (destined to be chronically expensive) die expeditiously.
4) The docs who do persist in doing these high-risk procedures stand out even more in the public report cards.
5) Eventually, NOT doing these high risk procedures will become the new de facto standard of care, and outliers then can be dealt with directly (instead of relying on bad report cards to weed them out).
6) All the while, payers can stand upon the altar of altruism, proclaiming transparency and the patient’s right to know.

The inappropriately negative fallout experienced by physicians conducting potentially life-saving procedures on high risk patients, of course, could be easily overcome by appropriate risk-adjustment methodologies (to account, for instance, for the very high mortality predicted for any patient presenting with shock due to myocardial infarction). But doing so would wreck the whole notion of using public report cards to further the cause of covert rationing. (See items 1 - 6, above.)

But, as usual, DrRich has a solution.

It’s called the Designated Driver.

Imagine the distinguished Chief of Cardiology approaching a promising 31-year-old cardiology fellow, who is finally at the end of his long course of training and at last is ready to enter practice, and saying, “Son, you are going to have a brief but spectacular career. You are going to be our Designated Driver.”

For an extraordinary annual salary and immediate vesting in a generous pension plan, this young man is going to have the honor of being the one who gets all the high-risk cases for the group. He will agree to do this as long as it is feasible, that is, as long as he’s not run out of town because his report card is so abysmally bad. Given the inefficiencies of collecting and processing data for report cards (a process controlled by tangled bureaucracies of one flavor or another, and often, by several tangled bureaucracies that have to devise even more tangled processes for some semblance of cooperation), this is likely to take at least 5 years, and in many cases may take 10. With a sufficient number of more “routine” cardiac cases tossed his way by his sympathetic colleagues (to help him buffer his report card statistics), he may be able to survive 12 or even 15 years. But in any case, by the time he is in, say, his late 30s, he’ll be able to retire quite comfortably.

The Designated Driver scheme is a win-win for everybody (almost). Very sick patients can get the procedures they need (i.e., the ethics of medicine can be shored up for a bit). Your typical cardiologist can enjoy his/her long, relatively risk-free career. And your young, aggressive cardiologist will be presented with a glorious challenge not unlike those of the gladiators of antiquity (save that when it’s finally time to face the old “thumbs down,” they will be spirited to a much more agreeable retirement.)

This solution, as brilliant as it is, will attract critics. And those critics will eventually demand (Gekkonians) or pass (Wonkonians) laws, regulations, and guidelines to turn the Designated Driver into merely one more manifestation of the federal crime of healthcare fraud, punishable by the usual massive fines and jail time.

So when that time comes we’ll have to think of something else. But for now, given the alternatives, DrRich recommends the Designated Driver to cardiologists in the great State of New York.

Posted in General Rationing Issues | 8 Comments »

John Edwards and the Distribution of Livers

January 10th, 2008 by DrRich

DrRich has not yet decided who he will support in this year’s presidential election. Whoever he ends up supporting, though, it will not be because he admires their policy on healthcare. No candidate from either party even begins to approach the fundamental problem facing our healthcare system, which is (of course), rationing, and how best to do it. An honest candidate would be saying something like this:

Healthcare rationing, my fellow Americans, is an economic imperative. We can’t avoid it, and indeed we’re not avoiding it. And the manner in which we’re currently not avoiding it - by doing it covertly - is producing most of the disasters we’re seeing today within our healthcare system. So here’s how I propose that we organize that unavoidable rationing in order to make it as equitable, as effective, and as efficient as possible (thus to limit the necessary rationing to the minimum possible amount), and in such a way as to support (rather than undermine) the autonomy of individual Americans.

DrRich does not expect to live long enough to hear any major politician say anything like this.

By avoiding the rationing question, obviously, each of our presidential candidates (by simple default) continues to endorse covert rationing. Their disagreements on healthcare policy, then, necessarily devolve mainly to arguing about which group of special interests will get to control that covert rationing. The Wonkonians hope to move toward more governmental control, either through ever stricter laws and regulations to force doctors and insurance companies to do their bidding, or by simply taking over the entire healthcare system. The Gekkonians, on the other hand, wish to rely on “market forces” (such as the gentle ministrations of truly avaricious, cold-hearted insurance executives) to manage the covert rationing. Either way, the rationing (being covert) will be conducted not according to what is most fair, effective and efficient, but rather, according to what they (the Wonkonians and Gekkonians) can most easily get away with.

And as readers of this blog will understand, DrRich does not have a clear preference as to which of these two species of covert rationing will finally be used to dispatch him and his loved ones and friends. We’ll all end up just as dead, either way. Fire and ice, as the poet says.

So, given this synthesis of the issue, it may be a bit unfair of DrRich to single out any single presidential candidate for criticism on an issue related to healthcare in general, or rationing in particular. But in Mr. Edwards’ case, DrRich cannot refrain.

It was John Edwards’ quasi-victory speech after the New Hampshire primary this week that finally did it. Finally, DrRich has had quite enough of hearing Mr. Edwards suggest he is the one who knows best how to distribute livers.

The now infamous case of Nataline Sarkisyan, the 17-year-old girl who died a few hours after her health insurer finally approved her for liver transplantation, has become the rallying flag for the Edwards healthcare platform. If not for the corporate greed of the CIGNA company, Edwards suggests, this wonderful young person would still be alive. It is completely obvious that she ought to have received a liver, and the fact that she did not is a signal travesty, a clear marker for everything that is wrong with our healthcare system today. CIGNA wanted to save some money; a young person is dead. A compassionate Edwards healthcare system (fully 100% Wonkonian) would have prevented this tragedy.

DrRich does not pretend to know whether Ms. Sarkisyan should have received a liver transplant. Her youth and her fighting spirit mitigated for it. Her odds of survival after a liver transplant (being a patient with leukemia who, according to CNN, had been in a vegetative state for weeks prior to her death) may have mitigated against it. DrRich cannot adjudicate this question.

What DrRich does know is this. Livers, as well as all other transplanted organs, are truly and openly rationed. Demand far outstrips supply; there simply aren’t enough donor livers to go around. So most people who need liver transplants in order to survive will die without ever receiving one. As of this morning (according to the Organ Procurement and Transplantation Network) there are 17,143 Americans officially on the waiting list for livers. In the year 2007, only 5398 patients from this list received liver transplants, while 9286 were “removed” from the transplant list without being transplanted.

So each time a person from the transplant list is selected to receive a liver, there’s necessarily another person on that same list who will, as a result, not get a liver and will die. This means that we should be pretty careful about distributing donor livers. They ought to go to patients who have at least a reasonable chance of surviving after they’re transplanted, so that in making the selection we have a fighting chance of dooming only one person, and not two. It seems clear that such decisions should be made, to the fullest extent possible, based on objective medical criteria, and not subjective political criteria.

Edwards asserts that CIGNA executives were acting solely out of corporate greed (i.e., were behaving like Gekkonians) when they initially denied Ms. Sarkisyan a transplant. CIGNA (all evidence to the contrary aside, they being an insurance company) denies it, and claims they were using objective medical criteria to make their decision. (While lying comes as easily to insurance executives as swatting mosquitoes does to sharecroppers, in this case there’s at least some evidence to suggest they have a point.)

Edwards also declares that under his healthcare system, in which the Gekkonian insurance companies would either cease to exist or would behave according to the humanitarian rules of the Wonkonians, Ms. Sarkisyan would certainly have gotten her liver. However, since no matter how you cut it livers need to be rationed - some patients will get them, some will not - then the blithe willingness of a politician to declare from a remote distance, for his own political gain, that this or that particular person is deserving of a liver fully reveals the conceit of the Wonkonians. Wonkonian rationing only seems more humanitarian; in truth, it’s not. (Edwards, of course, has no words of comfort for the unnamed individual, one of the 17,143 now on the waiting list, who would have died as a result of his awarding a liver to this particular patient.)

Rationing healthcare is bad. It means that at least occasionally, at least some healthcare will be withheld from at least some patients who need it. We should not leave such rationing decisions to the Gekkonians, who will always be inclined to make those decisions arbitrarily, from the position of corporate greed. We also should not leave those rationing decisions to the Wonkonians, who will be inclined to make them arbitrarily, from the position of political greed. Rationing healthcare equitably is too important to leave to either variety of greed.

Thanks to Mr. Edwards for reminding us of the second, less-talked-about variety.

Posted in General Rationing Issues | 4 Comments »

Wonkonians Send Gekkonians a Message

October 12th, 2007 by DrRich

Joseph Paduda of Managed Care Matters comments (here) on the recent New York Times report (here) that private health insurers are, to be technical, screwing thousands of Medicare patients. According to federal auditors, the insurers accomplish this crime by employing devious sales tactics, misrepresenting their products, improperly terminating coverage for people with expensive diseases, and creating enervating inconveniences designed to discourage consumption of healthcare services.

The bottom line of this unsavory episode is nicely summarized by Mr. Paduda:

If you’re a single payer advocate, you get to sit back and watch the private sector prove your case.

DrRich agrees with this assessment, but when examined more closely there’s more to this story than first meets the eye.

One aspect that comes out in the New York Times article, for instance, is that the health plans may feel they are being treated unfairly here. As absurd as this proposition might seem, let’s play with it for a moment.

All the abuses duly tabulated by the federal auditors, of course, amount to standard operating procedure for Gekkonian health plans. It’s their business model. Covertly rationing healthcare is not easy - indeed, it’s a thankless job. But somebody’s got to do it. And we, through our elected representatives, have deputized the health plans to do it for us. If we’re going to send the for-profits off to accomplish the covert rationing for us, then we’ve got to give them the means to make a profit doing it, don’t we? After all, it’s only fair.

The unfairness of criticizing the health plans for doing what we asked them to do is reflected in the plaintive words of John H. Wells, compliance officer at Bravo Health, who said (as quoted by the New York Times),

“The appeals and grievance process is very complex. It is very difficult for any plan to be fully compliant. In many cases, the government’s guidance is unclear, so it’s impossible for a business to know what to do.”

Now, DrRich will not sympathize with the Gekkoninan health plans. They show no mercy or empathy for the sick people in their charge who are harmed by their unfair policies and Byzantine procedures. Why should they expect any quarter when they themselves are skewered by similar policies and procedures promulgated by the feds?

But nonetheless, Mr. Wells has a point. Even if the health plans wanted to be good citizens, and wanted to be fully compliant with each of the laws, rules, regulations, and guidelines spewed forth with great regularity by myriads of federal agencies, they couldn’t. The health plans are inherently caught up in the great Regulatory Speed Trap. If you’re working in the healthcare arena today, then each and every day, no matter how careful and meticulous you may be, as you navigate the monstrous and seething regulatory tangle in one way or another you’re committing healthcare fraud.

The great Wonkonian regulatory hammer can be brought down any time the feds want, on anybody they want. Indeed, on closer examination it becomes immediately apparent that the Wonkonians aren’t even all that serious about it this time. Consider: Given the list of abuses reported by the federal auditors, heads could have rolled, executives imprisoned, companies shut down. After all, real people were done real harm here; some might have died. Instead, the feds merely fined 11 companies a total of $770,000 - a pittance, a trifle, not even a substantial part of the profits they’ve made by doing these evil things, an amount they can make up by foregoing one or two TV ads (aimed at convincing us of how caring they are).

But the Wonkonians aren’t yet ready to deliver the fatal blow. The people aren’t quite ready for what that would mean. (It would mean what Mr. Paduda says it would mean.) This time the Wonkonians are simply sending the Gekkonians a message, and they’re doing it publicly enough to render the people (i.e., us) just a bit more resigned to their inevitable endgame.

Mr. Wells has heard the message. “We’ve got you where we want you, Gekkonians. Behave yourselves and we’ll let you play a little longer. But don’t kid yourselves. When the time is right, it’s all over for you.” Wise Gekkonians will be carefully packing their Golden Parachutes.

Posted in Gekkonian Rationing, Wonkonian Rationing | No Comments »

More Praise for Fixing American Healthcare

September 27th, 2007 by DrRich

David E. Williams has posted a new review of DrRich’s book, Fixing American Healthcare - Wonkonians, Gekkonians, and the Grand Unification Theory of Healthcare, both at the Health Business Blog and at the World Congress Blog. Mr. Williams seems to like the book a lot (despite the title, which has drawn groans from others). He hopes you will read it.

As, humbly, does DrRich.

The book is available today from the publisher’s website (free shipping, signed by the author), and should be available next week from Amazon.com and Barnes&Noble.com.

DrRich, by the way, did consider other titles, but he rejected them as seeming too bombastic. DrRich does not wish to seem bombastic.

Posted in Fixing American Healthcare | No Comments »

Weep Not for UnitedHealth Group

September 6th, 2007 by DrRich

Vanessa Furhmans of the Wall Street Journal Health Blog reports that a group of state insurance commissioners “plan to announce a multi-state settlement with [UnitedHealth Group] concerning some of its claims-paying systems.” It appears that regulators from four states have been negotiating a settlement with the health insurance giant for years. According to Furhmans, “the settlement aims to improve the accuracy and timeliness [emphasis DrRich’s] of the company’s payment to health-care providers and consumers. The agreement is expected to include a set of performance benchmarks the insurer has agreed to meet.”

But how can this be? DrRich just recently described how the systematic inefficiencies that health insurers have built into their claims processing - the “Chutes and Ladders” paradigm - is a chief component of their business model. Does the pending settlement not strike at the very heart of profitability for UnitedHealth Group and its peers?

The Wonkonians certainly hope so. For, in the grand scheme of things, this new development is just the latest battle in the ongoing struggle between Wonkonians and Gekkonians. Here, the Wonkonian regulators are attempting to take a giant step toward their ultimate goal of pushing the Gekkonian insurance companies into fiscal oblivion.

But it’s way too early to give up on the insurance companies, which have flourished in the face of bigger challenges than this one. In this case several things can mitigate the damage.

First, the insurance companies themselves are the only entities that fully understand their labyrinthine reimbursement schemes; they control the process. In this light it is telling that UnitedHealth Group and the regulators have been “negotiating” the “improved” reimbursement procedures for at least a couple of years. In a culture swimming in seamless electronic processing systems, the puzzle of simplifying claims processing should have been solvable in a couple of weeks.

Second, remember that the Wonkonians themselves, in the guise of Medicare and Medicaid, are also deeply engaged in purposefully mysterious reimbursement schemes. One suspects that there’s a limit to how far they’ll push the insurers toward transparency and simplicity, lest the expectation for similar processes is turned back on them.

Third, when was the last time any regulators have ever been able to simplify anything?

So whatever “improvements” come out of this settlement, it is unlikely to yield a straightforward claims processing system. It would not be a big surprise for claims processing to end up even be more complex than before, what with the regulatory benchmarks that will doubtless be glommed on to the whole mess.

Furthermore, the insurance industry - given that it has been “in negotiation” with regulators for years over their “Chutes and Ladders” reimbursement schemes - has had plenty of time to see the writing on the wall, and to devise new business models to take up the slack. Pay for Performance is one. UnitedHealth Group’s foray into the Medical Home is another. And recently, as pointed out by Dr RW and Retired Doc, the Wonkonians have demonstrated to the insurers yet another method to avoid paying for medical care, namely, Non-Pay for Non-Performance (NP4NP).

The ultimate demise of the big health insurers is by no means imminent. Weep not for UnitedHealth Group.

Posted in Gekkonian Rationing, Wonkonian Rationing | 1 Comment »

Why the Doctor-Patient Relationship Has To Go

July 30th, 2007 by DrRich

Consider the problem faced by the CEO of an HMO, or a Medicare administrator, or any one of the other individuals we have deputized to reduce our healthcare costs.

When such an individual looks out over the landscape of medicine as it is traditionally practiced, he beholds a frightening sight: over two million times each day, individual physicians and individual patients - just the two of them, alone in a room - make millions of individual decisions about which healthcare resources should be called upon for the sake of that individual patient at that particular time. And when each of these decisions is finally reached, and the doctor places pen to paper and signs her name, the entire medical-industrial complex immediately bends to her will.

Our CEO, witnessing all this in a cold sweat, is thinking, “They’re spending my money.”

Actually, they’re spending society’s money. But whoever has dibs on the money, the fact remains that we can no longer allow such spending decisions to be made in a vacuum, as if the cumulative effect of those decisions on society are irrelevant. Since we cannot affect those individual spending decisions through an open system of rules - since that would be admitting that we are rationing - we must affect them in some other way.

To both the HMO executive and the governmental regulator, the answer is quite simple. Coercive pressure must be applied at the focal point of all healthcare spending - the physician-patient encounter - to force spending decisions to be made on the basis of something other than what is best for the patient.

Covert rationing requires that decisions made at the bedside be made with society’s priorities in mind, and not the patient’s. Indeed, covert rationing demands that the doctor forgo his primary duty to his patient, in favor of “the greater good.” The demand is non-negotiable. If doctors are reluctant to give up their traditional role as their patients’ advocates, they must be coerced into doing so, and the ones who still refuse need to be weeded out. Thus, an essential truth is revealed. The engine that drives covert rationing must be - can only be - disruption of the doctor-patient relationship. So the traditional doctor-patient relationship has been specifically targeted for destruction by both the Gekkonians and the Wonkonians.

There is no denying that the needs of society are important. In fact, if the proportion of the gross national product we spend on healthcare is not soon limited, we will find our society becoming dangerously unstable. But by choosing to limit our health care spending surreptitiously, by rationing at the bedside, by making our physicians the agents of rationing instead of the agents of their patients, we choose a particularly deadly approach to this problem.

Doctors, as imperfect as they are, are the only thing standing between patients and the growing lust for cost-cutting displayed by HMOs, insurers, hospitals, the government, and the majority of citizens who are not seriously ill at any given time. When we permit the destruction of the traditional doctor-patient relationship, not only do we abandon patients to their own devices in this hostile environment, we do so in their very hour of need, and at the very time they are least capable of fending for themselves. The doctors, too, are grievously wounded by the loss of this relationship. For when doctors turn away from their obligations to their patients, even if only because they are coerced, they betray the first principle of medical practice and devalue their profession to the point of worthlessness.

But when compared to the need to keep the rationing covert, both the right of the sick patient to an advocate and the integrity of the medical profession have been reduced to “nice to haves.” Worse, they have been reduced to “must goes.”

Posted in General Rationing Issues | 4 Comments »

Former CMS Official “Admits” to Covert Rationing

July 16th, 2007 by DrRich

In his forthcoming book, Fixing American Healthcare - Wonkonians, Gekkonians and the Grand Unification Theory of Healthcare, DrRich demonstrates how the imperative to covertly ration healthcare causes payers to bastardize evidence-based medicine. In a recent interview in Health Affairs, Sean Tunis MD, formerly Medical Director for the Centers for Medicare & Medicaid Services (CMS), goes a long way toward admitting this to be the case.

The case in point was a CMS coverage decision that was made in 2003 regarding the expanded usage of the implantable cardioverter defibrillator (ICD). The need for a coverage decision arose because a major randomized clinical trial (MADIT II) had been published demonstrating beyond reasonable doubt that patients with prior heart attacks and compromised cardiac function had significantly better survival if they received ICDs.

To make a long story short, despite incontrovertible scientific evidence that these patients would benefit from ICDs, despite the endorsement of the MADIT II results by professional organizations, despite the fact that most private insurers in the US had already expanded coverage to this new patient group, and despite the fact that CMS’ own advisory panel (hand picked by CMS) voted 7 -0 to expand coverage, CMS declined to do so. (Actually, they expanded coverage to some extent, but not to the extent supported by the evidence.) In making their non-coverage decision, CMS resorted to a particularly “interesting” form of statistical analysis that more objective observers recognized right away as statistical legerdemain.

In the recent Health Affairs interview, Dr. Tunis at last sheds some light into this decision. Cost, and not just scientific evidence, must be taken into account. He says,

“It was well understood by me and others at CMS that ICDs were expensive and that there were a lot of additional people who might be eligible for an ICD, and that added up to a large amount of money. So what does that cause us to do differently than for decisions with less potential financial impact? It causes us to look extremely carefully at data on safety and effectiveness. You might think of this as an upside-down or inside-out variation of a cost-effectiveness analysis in which the evidence threshold for coverage is implicitly adjusted based on a qualitative judgment about the economic impact of the decision.”

“In fact, explicit statements have been repeatedly made by Medicare that cost is not factor in coverage decision making. But my guess is that for anyone who works for a large payer in a policy environment that is increasingly panicked about the cost of health care, it’s easy to imagine how economic impacts could still have subtle and perhaps even unconscious effects on some of the scientific and value judgments that we have been talking about, whether or not these folks are told to ignore costs.”

Allow DrRich to interpret: Because CMS had to take cost into consideration, but at the same time because it is the explicit policy of CMS not to take cost into consideration, their only choice was to twist the science in such a way as to make the coverage decision they had to make because of cost considerations, while “blaming” the decision on the science.

To his credit, in the Health Affairs article Dr. Tunis explicitly decries this sort of covert healthcare rationing as obviously damaging and inefficient, and goes on to endorse a public discussion of rationing, with the aim of making it explicit and therefore less destructive. One suspects, on reading his comments, that a reason Dr. Tunis is no longer with CMS may be to avoid being repeatedly placed in the position of being an agent of covert rationing.

In any case, we see again in the ICD example an instance of the Fourth Corollary of the Grand Unification Theory of Healthcare: Covert rationing corrupts everything it touches. In this case, it corrupts the interpretation of medical science, and renders evidence-based medicine illigitimate. It is very difficult to trust evidence-based policy decisions when the “evidence” is being arbitrated by the payers - those who society has deputized to covertly ration our healthcare.

Posted in Wonkonian Rationing | 2 Comments »

Why Gag Clauses are Obsolete

June 20th, 2007 by DrRich

After the collapse of the Clintons‘ plan to federalize healthcare in 1994, the Gekkonian HMOs experienced explosive growth. For the remainder of the 1990s, American doctors had little choice, if they hoped to retain access to American patients, but to sign contracts with one or more of these HMOs. The large majority of these contracts contained clauses that subsequently came to be called “Gag Clauses.” Here is a typical Gag Clause:

“The physician agrees not to take any action or make any communication with patients or patients’ families, potential patients or potential patients’ families, employers, unions, the media or the public that would tend to undermine, disparage, or otherwise criticize (this HMO) or (this HMO’s) health care coverage. The physician further agrees to keep all proprietary information such as payment rates, reimbursement procedures, utilization-review procedures, etc., strictly confidential.”

In plain and straightforward language, a Gag Clause prohibits the doctor from disclosing certain types of information to his or her patients. The forbidden information is likely to be material to the patient’s ability to accurately assess the doctor’s medical advice, and therefore the lack of that information may impact on the patient’s health. A Gag Clause renders it a violation for a physician to tell his patient anything that might cast the HMO in a negative light, such as “This HMO, unlike the health plan up the street, won’t cover a certain treatment that might benefit you.” Or, “You really ought to have a CT scan, but the HMO pays me more if I don’t offer it to you.”

A Gag Clause clearly and egregiously negates the historically sacred physician-patient compact. Yet, physicians, completely without choice, signed the new contracts by the tens of thousands with nary a peep of complaint. The Gekkonians made a brazen assertion to doctors. They said, “You answer to me, and me alone. You’re all mine.” Doctors, by their legally-affixed signatures, acknowledged that assertion.

From a purely practical standpoint, Gag Clauses are a threat to patients.

But from a more philosophical standpoint, what the Gag Clause represents – by the fact that HMOs used them with impunity and physicians signed them with little more than a whimper – is a formal death certificate for the physician-patient relationship. It officially and legally certifies that the doctor’s first loyalty is to the integrity and reputation of the HMO, which supersedes any loyalty or duty that might exist toward the patient.

Gag Clauses attracted a fair amount of criticism in the late 1990s, but essentially only from the standpoint of it’s not being nice to “gag” physicians from telling their patients what they need to know. Little has been said about the implications of HMOs having had the audacity to include Gag Clauses in physician contracts in the first place, or of physicians quietly and timidly signing them by the tens of thousands.

In response to the voiced concerns over Gag Clauses, the General Accounting Office more recently conducted a study to assess their continued prevalence in HMO contracts. The report concluded that Gag Clauses are no longer a problem, and for the most part they don’t even exist any more.

The reason they don’t exist anymore is that the HMOs, feeling the heat, have converted them to “business clauses.” Generically, business clauses require the signer (usually an employee) to agree not to disparage the business, not to encourage clients to use some other business instead, and not to break confidentiality with the business. In other words, business clauses are merely gag clauses somewhat reworded, and then relabeled.

In this manner HMOs have asserted that, since they are a business, they have a right to the same protections as any other business. And if assertion of those business rights require the business’ contractors (i.e., doctors) to forego previous arrangements and understandings (i.e., the doctor-patient relationship), well, that’s business. The GAO, apparently, was swayed by this argument.

Various proposed Patients Bills of Rights require striking Gag Clauses from HMO-physician contracts. Presumably (now that they are just business clauses), that has already been accomplished. But even if all such clauses – whatever they are called – are struck from every contract this very day, the damage has been done.

For, when HMOs asked physicians for a declaration of loyalty that superseded all other loyalties, physicians gave it. Removing Gag Clauses from contracts at this point doesn’t change the fact that, when asked, physicians signed.

Once a dog learns to heel, you can get rid of the leash – the dog still heels just fine. The HMOs have more than made their point.

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