Happy's Gone Lost His Mind

Our government is awash in fantasy land economics. The Medicare system threatens to destroy our economic stability for decades to come. We cannot continue to globally compete in a world when our financial house of cards is falling apart all around us. The ponzi scheme known as Medicare cannot continue in its current state The future financial pressures will be unbearable. Economically, the Iraq war is a drop in the bucket when compared to the unfunded mandates, over 30 trillion dollars, that are steam rolling their way into our near future.

Attempts to neutralize the health care inflation have certainly failed on all accounts. The RVU/RUC/SGR attempted to create a payment system based on physician work load and practice expenses. The magic formula is discussed here. Unfortunately, it has been hijacked entirely by forces hell bent on protecting their turf at all costs, at all times. Physician work load, in my opinion has been badly under represented for all cognitive Evaluation and Management (E&M) services and overly compensated for procedural interventions (on a relative basis). As well, I believe that practice expense components of the RVU formula have for all intents and purposes, created a very steady gravy train of profiteering for procedural medicine. Because of the budget neutral system of RVU/RUC/SGR, the constant downward pressure on stalled payment rates for all E&M services (since ALL physicians do E&M, it affects all specialties) are the sole cause of volume mill medical offices. Doing more and more in less and less time for less and less money. We get exactly what the system created.

We have a system operating on ever increasing volume that is fully funded by an unending gravy train of money from the Medicare National Bank. The clowns have essentially guaranteed payment for services rendered, no matter what the service is. Do more. Make more. Do less. Make less. And the system is set up so procedures, on a time valued scale, pay more. Much more. Not only on the physician work component of RVU, but also on the gravy train known as practice expense. The system we have in place gives us exactly what it is set up for. Volume. Procedures. Technology. All this at the expense of cognitive financial restraint that E&M can offer.

If anyone in Washington believes PQRI or any other of an assortment of quality systems will put the brakes on health care inflation, they are fools. If you believe they are doing it for quality over money, you are a fool. It's not a quality issue. It's a money issue. And the money train is delivered by volume. We do too much. Way too much. And we do it because we get paid to do it. We do it because we get sued if we don't do it. We do it because the gravy train has a spigot that has no off position. We do it because patients have become doctors. We do it because drug companies have brainwashed the public. We do it because the lobbyists in Washington pay hundreds of millions of dollars in bribe money to keep their piece of the gravy train flowing. I see it every day. I get 10 pieces of junk mail a day telling me what I need to prescribe, what I need to order, what procedures I need to learn.

Does anyone really believe giving an aspirin on discharge to a hospitalized patient (a PQRI indicator) will slow the inflationary pressures of Medicare when the entire system of payment is determined by the do more make more mantra? The quality push assumes that there will not be a need to do more. That the aspirin will somehow prevent do more make more from happening. The current payment system does not allow for simultaneous cognitive restraint and technological exploitation. The current system fully encourages technological exploitation of patients. I have no doubt in my mind. Do more. Make more. It does not pay to think in our current state of affairs. Because E&M (for ALL docs, across all specialties) has failed to get the respect it deserves.

The government, in their ultimate wisdom wishes to put the brakes on health care by creating a facade of value based purchasing or quality based payment systems. They create ever decreasing payment scales which only encourages volume at all costs. In their ultimate wisdom they have created more rules that must be regulated with more bureaucrats. PQRI. More money. More regulation. More expensive medicine.

What do we have. Currently, we have a health care system that costs over 2 trillion dollars a year to operate. It is 15% of our economy. Half of that is government gravy train money. Some would argue, we need expensive health care to keep our economy from collapsing. That 2 trillion dollars funds millions and millions of Americana's retirement, college savings, mortgages, SUVs and t-bone steaks. Removing a significant chunk would collapse the economy. The only problem is, that money is being spent in all the wrong ways. And we are printing money to support a system that is collapsing on its own weight. It might come as a shock to most, but physician payment represents but a very small portion of overall health care expenses, about 22% to be exact. But a small part of the pie. We have hospitals, drug companies, device manufactures, nursing homes, home health care, hospice, durable goods. Everyone wants their piece of the pie. And the gravy train continues to put their money in all the wrong places. I believe it is mostly determined by the vaults of cash resting with the lobby whores.

Nothing will ever work until you take volume out of medicine. As long as do more= make more, we will continue to accelerate our pathway into Chinese financial submission. What we have is a beast that feeds on itself. I offer a suggestion...

I believe local communities can handle the pulse of their citizens far better than a centralized system that tries to treat an entire nation of diverse individuals exactly the same. We have elected to take care of our elderly, defined as 65 years old, for no other reason than the rule of law. There is no justifiable reason why a 65 year old American should get highly subsidized care while a 25 year old is left to the wolves. If we wish to value our citizens, we should value all of our citizens. To exclude government assistance from a 25 year old is akin to saying we will only provide health care benefits to men. Sorry women, you're out of luck. Medicare is a colossal money pit without an end point. We need to establish an end point. What should that end point be? Right now the spigots of Medicare cash flow outward by the billions into corporate behemoths trying to hold onto their share of the pie. The pie must be realigned.

I envision an age based determination of expected medical expenditure . If you are a 35 year old man, your actuarial average yearly health care expenditure is $1,000 a year. If you are a 75 year old female, your actuarial average yearly health care expenditure is $15,000 a year. These are just examples and do not represent real numbers. I believe the federal government should establish age based expected health care expenditures from the most economically efficient regions of our country, and add a healthy percentage "bonus" to encourage regional cost efficient care. If Minnesota is the best in the country at $1,000 a year for 35 year old men, then Minnesota should get $1,100 a year to care for him. If Minnesota can provide care cheaper than New York, then New York needs to change. There is no excuse for paying for more expensive care. If the Minnesota can do it cheaper, they should be the national basis for federal financial medical assistance. And they should reap the benefit of bonus money in their cost efficient model of care.

I believe Medicare should be disbanded in favor of age based subsidies for our entire population. And it should be capitated. That's right. Capitated. We need to establish regional health districts that receive these federal funds and are disbursed by locally elected health board officials. Local (city) or regional (counties) districts should be established. And these elected health boards should have full authority for the release of all funds to all entities within their health board district.

I envision an additional subsidy of local business tax or community tax (the equivalent of company health insurance) to be fully determined by the local community based on their needs and wants. The values of the community will determine how much or how little additional assistance is necessary, as determined by the will of the people. These dollars in conjuction with Federal funds would provide a basis for aligning all the forces of health care on a community wide basis.

Why do I believe this is necessary? All forces are aligned in a capitated system. There is one pot of money that must be dispersed. A pot determined by efficient national best practices. It forces all players to become lean business machines. Establishing nationwide best practices, with an additional bonus fund would highly encourage cost effective care from all players in a regional health district. All forces are aligned. From hospitals, to doctors, to pharmacies, to physical therapists to durable goods. Hospitals want to keep patients healthy. Doctors, patients, pharmacies all use the cheapest effective therapies. When you are not getting paid for volume, volume has a way of disappearing.

Communities have every incentive in the world to establish highly effective, free community services to improve the health of their citizens. From free smoking cessation classes to free nutrition classes to free exercise classes. The community can determine how best to improve the health of their community with the federal funds. To keep their citizens out of hospitals, off of drugs and physically and functionally active. These are community decisions free from federal government over site and mandates. The forces are aligned.

You can get more primary care docs in a community providing cost effective care, when these doctors are monetarily valued in a local community. You get more doctors going to rural areas with promises of financially rewarding compensation practices. You get the right number of doctors with the right number of specialists that a community can support. You get hospitals within districts that stop competing with each other and start cooperating. When all health care expenses decline, everyone wins in a capitated system.

I envision the distribution of federal funds to all players being determined by local cooperative agreements. I imagine, for example, a town of 100K citizens obtaining an average age adjusted federal subsidy of $3,000 per person, or $300 million dollars. The city can use it however it likes. At the will of the community. They can attach additional tax financing on business or sales tax or income tax. Or none at all. If you have an older community, that $300 million may become $500 million dollars. Throw in a business "tax", the equivalent of employer health insurance coverage and that $500 million dollars may turn into $1 billion dollars for a local health care district.

I envision health care districts providing fully funded (100%) care to those citizens without additional resources. From clinics, medications, laboratories, durable goods, physician services. The Medicaid of life. I envision local districts establishing their own guidelines for their public assistance programs, free of federal mandates. I envision these health care districts giving lucrative incentives for providers of these services to become employees of the health district. Much like the federally funded assistance clinics of today.

I envision for other providers, a hybrid of federally funded capitation dollars, self pay and private insurance that allow providers of health care goods and services to charge a market based price agreed upon by patient and providers alike. To provide additional service at an additional price. The market and the patient meeting on equal terms.

For example I envision a choice of granny going to the fully funded district clinic with no copay. With this option, some service will be sacrificed for access. She also has the option of going to clinics that carry market determined co pays. She also has the option of purchasing private insurance as well.

I envision capitated hospital payments as well. There is no reason to have 5 hospitals in a region that only supports three. More beds means more beds to fill, means more expensive care. There is no reason for twelve CT scanners in a city that only supports six. There is no reason to have two hospitals competing for identical services that only support one hospital. More expensive care. With regional health districts providing capitated funds, the competition between cooperating entities becomes coordinated.

The community sets the standard and pays for what it values. And gets the care it wants at the price it wants.

This is just one idea for aligning the forces on a community level.