Month: August 2014

Trans-Pacific Partnership: The Corporate Grab

The rent-seeking Trans-Pacific Partnership is the work of big corporations. It would raise the costs of pharmaceuticals (even higher) and lengthen the patents. It extends the range of patents and it turns jurisdiction over to an international tribunal, circumventing national laws. Please read Dr.Flower’s  “Backgrounder on the Trans-Pacific Partnership and health care“.

Primary Care Payment Quick Fix


 Getting a Twofer

There is a quick fix to the inequity of Medicare and Medicaid payments to primary care physicians.  It is hidden in the Conversion Factor. So bear with me.

It is generally conceded that medical care reform in our country depends on redeveloping a strong primary care base.  At the present time payments for primary care physicians services are not competitive with those of specialties that perform procedures. Not only does that reward doing procedures whether they are indicated or not but it overvalues the time spent doing procedures as compared with time spent in personal, comprehensive and coordinated care. Furthermore it has driven downward the interest of medical students to choose the primary care specialties for their careers, a decrease of 50% in the last16 years. The result is the expectation that we are going to have to add 52,000 to the expected number of primary doctors over the next 12 years.

The Affordable Care Act does little to address this problem. Recent rules by the Centers for Medicare and Medicaid Services (CMS) to provide separate payment for transitional care (care from facility back to community) are pitiful and loaded with extra paperwork and bureaucracy. The same is true of the three proposed Complex Chronic Care Management payments to begin in 2015.

Medicare’s formula for calculating the physician payment schedule is complex. It starts with the hundreds of CPT codes which describe all reimbursable doctor patient encounters (office visits, surgeries, etc.) Then each code is given a composite RVU (Relative Value Unit) made up of three basic RVUs, (1) the Physician Work RVU, (2) the Practice Expense RVU, and (3) the Malpractice RVU. Additionally, each of the basic RVU’s is assigned a modifier based on the geographic area (the GPCI) where the service is billed. Each RVU is then multiplied by its GPCI. The three results of these three actions are then added together to produce the composite RVU. This result is then multiplied by a conversion factor (CF) to convert the composite RVU into a dollar amount. This conversion factor is updated annually by a formula prescribed by Congress and it is the key. However, before CMS can use this conversion factor it has to apply a “budget neutrality” to it in order to insure that it does not exceed its annual budget by more than $20 million. Now we come to the Sustainable Growth Rate (SGR). This was enacted by Congress in1997 and is designed to add a final revision of the Conversion Factor for the next year’s payments. Since 2003 Congress has voted annually to postpone the calculated fee cuts.

Much attention is being paid to the whole fee-for-service problem and there are many ideas about what to do. They range everywhere from abandoning fee-for-service to totally revising the codes, definitions, and values in the present system.  Any and all of these could take years to accomplish if Congress could ever agree on what to do. As noted above, the formula for the Conversion Factor is a statutory prescription.

The Fix: Only Congress can change it. It would only take a simple bill to direct CMS to use two different conversion factors, one for primary (Evaluation & Management) codes and one for procedural codes. The RVU calculations could remain the same but at the end the RVU’s could be split into two groups and the Conversion Factor for E&M increased to a level to provide a 25% increase in primary care payments. The Conversion Factor for procedures could be reduced proportionally to maintain budget neutrality. An even better twofer would be to combine this with wording to eliminate the SGR.

Admittedly, this quick fix would not solve the cost and quality problems of our present system but at least it would help put the brakes on the loss of our primary care infrastructure. It would have the secondary benefit of improving accessibility and thereby enjoying the documented decrease in medical spending created by a stronger primary care base.


Primary Care Dissed By A.M.A.

 The Disappearance of Primary Care 

As Uwe Reinhardt, the Princeton University economist writes, “Surely there is something absurd when a nation pays a primary care physician poorly relative to other specialists and then wrings its hands over a shortage of primary care physicians.”(1)  Improving Medicare in preparation for an expanded Medicare-For-All can start here.

It is generally understood that any solution to the high costs and compromised quality and access to our medical system will depend on developing an adequate primary care base. Over the last 16 years the number of U.S. medical graduates choosing family practice residencies has dropped from over 50% to 8% (1500/year). Among pediatric and internal medicine residents only 2% will go into primary care. The rest are going into subspecialties.  Half of the family practice residencies positions are being filled by graduates of foreign medical schools.(2) 21% of the U.S. populations live in physician shortage areas where primary medical care is badly needed. Now, with the Affordable Care Act, there will be an increasing demand for primary medical care because of increased insurance coverage.  The aging population and aging family doctors will add to this need. It has been estimated that we will need to add an additional 52,000 primary care doctors by the year 2025.

So why do we face the disappearance of primary care physicians?  It starts with money, of course. Costs for medical school leave school loans averaging $140- to $200,000. Then just as the student starts his/her 3 year residency program the loans start accumulating interest. After that the income from family practice is half that of the procedure oriented specialties. As with the rest of our society higher income implies higher status. This concept carries over into most medical schools where the family practice program is treated as an afterthought (although there is more lip service these days). The result is that any initial interest in family practice is soon suppressed.

Please bear with me for a brief history of the physician pay discrepancy.

One of the many ironies in our health care crisis is the role the American Medical  Association has played in killing off primary medicine. This, of course, has been done with the approval of Congress and the Center for Medicare & Medicaid Services (CMS). Since 1991 Medicare fees for physicians have been based on the Resource-Based Relative Value Scale (the RBRVS). This system places high value on procedures and tests and low value on the thoughtful diagnosis, coordination and the caring for patients in their vast variety of medical needs. The values are applied to the items in the Current Procedural Terminology (CPT), a book published by the AMA for which it receives millions in royalties.(3) In1991 the AMA formed the Relative Value Scale Update Committee (RUC) to advise CMS on updating the relative value units. Because the CMS accepts 90% of its recommendations physician pay is essentially determined by this committee. This allegiance by CMS is unbelievable considering that the AMA represents only about 17% of practicing physicians in the U.S.(4)  And the 31 member RUC has only 7 members representing primary care.(5) Until recently the membership on the committee has been undisclosed.  And the minutes and proceedings of the committee were still kept secret. Under pressure the RUC is now releasing minutes but not the voting records of individual members. It should be noted that private insurers use the same relative value system but may pay somewhat more than Medicare by using a different conversion factor (with the same bias toward expensive procedures). Any permanent solution to this problem will require a different payment system for physicians. At the present time there is no unified and effective force that can address and solve this workforce problem.

So we have a non-representative medical organization (guild) designing a national physician payment plan that has effectively put primary medical care out of business. We might ask how they obtained so much power. The answer, one suspects, might revert back to the money. Since 1990 the American Medical Association has spent $30,097,082 on political contributions and $286,377,500 on political lobbying.(6) It would have been nice if this money had been spent on developing a primary care based universal health system for the United States.

It is time to move beyond the incrementalism of SGR and RBRVS debates, the no-value-added administrative costs and insurance company profits and the complexities of a 2900 page lobbyist-written health care law (Obamacare), the restricted access to care and the defects in quality care when compared to other countries. It is time for medical system reform powered by single payer financing. This would be improved Medicare for all. This is urgent. We have already lost almost a whole generation of primary care physicians.


  1. Uwe E. Reinhardt  The Little-Known Decision-Makers for Medicare Physicians Fees. /the-little-known-decision-makers-for-medicare-physicans-fees/
  2. National Resident Matching Program. Results and Data 2013 Main Residency Match.
  3. Why The American Medical Association Had 72 Million Reasons To Help Shrink Doctors Pay.
  4. American Medical Association Membership Woes Continue.
  5. Replace the RUC. Adding Seats: The RUC’s Slight of Hand adding-seats-the-rucs-sleight-of-hand/#more-
  6. The American Medical Association. Heavy Hitter



AMA Killing Primary Care

Katie Jennings in POLITICAL gets after a problem I have been harping on. The AMA and the RUC’s role in killing off primary care for decades. In my blog, “Primary Care Dissed by AMA” ,  I spelled out this issue. This committee has always been super secret. Now, under pressure, they are releasing their numbers but still no meeting notes or conflict of interest. report.  This is a 31 person committee which only recently increased the primary care representation to 7 members. This committee uses their copyrighted procedure manual (CPT) to make pricing “recommendations” to CMS which follow them 90% of the time. We should elaborate that the AMA represents only about 17% of practicing physicians.

Too Late, Too Little: Too Much, Too Soon

We Need an Improved Medicare

We should all be looking at ways we can increase the quality of our medical care and decrease the costs at least to equal the accomplishments of the rest of the industrialized world. It makes sense to work on improving Medicare so that when we finally exhaust all of the other alternatives (the American way) and adopt a single payer system, “Improved Medicare for All” we will already have accomplished a lot of the improvement. But Centers for Medicare and Medicaid Services (CMS), while administering Medicare and the Affordable Care Act, seems determined to spend a lot of money on “experiments” that don’t even make sense much less have any evidence to suggest that they are viable.  And they seem to spend no effort on predicting unintentional consequences. The effect of these diversions is going to be a further degradation of the medical care available not only to the Medicare eligible but to the entire population. The latest example is the new twist on Chronic Care Management (CCM) services. This was recently discussed in the New York Times in an article by Robert Pear, published August 16, 2014.  This is a plan to pay doctors a separate fee of $41.92 a month for managing the chronic care of some Medicare patients after January 1, 2015. This is for non face-to-face development and revision of care plans, communication with other care providers, prescription drug management, etc. see ADDENDUM. It will be classified as a G code with the description,” Chronic care management services furnished to patients with multiple (two or more) chronic conditions expected to last at least 12 months, or until the death of the patient, that place the patient at significant risk of death, acute exacerbation/ decompensation, or functional decline; 20 minutes or more; per 30 days.”

There is no question that care coordination is an increasing problem as patient care has transitioned to specialists and hospitals. Medical care of patients with chronic conditions is especially disjointed and plagued with discontinuities. This breakdown in care over the last 20 years has occurred as primary care, basically family practice, has been driven back to an office based medicine with little communication with hospitals, specialists, urgent care centers and other health care providers.

The Problems
The creators of this program have done an excellent job of incorporating many of the concepts that are being developed for complex ambulatory medical care, including the Leap Project.

Unfortunately the Chronic Care Management formula presents a number of consequences (which should be foreseen);The number of patients who will fall within the eligible parameters will probably be less than half of the Medicare population. And, in turn, the Medicare population represents  16.5% of the total population in the United States.

Excel Table3

This creates two major problems: The small, age defined group of beneficiaries will not provide ample sampling size or randomness to derive useful data for improving chronic care over-all. The additional fixed costs to medical providers for participation will be very high considering the small percentage of their practices affected and the reimbursement limited to the Medicare panel.

The matter of cost to the practitioners will limit participation to large groups and corporations. Rural and underserved areas will again be excluded from some of the benefits of Medicare. Keep in mind that as of 2010 almost half of primary care physicians saw their patients in offices of one or two physicians. Since then, of course, many have left practice.

  • Certified Electronic health records are required in this new plan but practice size is a major determinant of physicians’ use of EMRs and HIT capacity, including exchanging patient information electronically and providing electronic access to their patients. Half of physicians in solo practices report using EMRs, compared to 90 percent of those in practices with 20 or more physicians; likewise, there is a 4-fold difference between solo and large practices in achieving multifunctional HIT capacity (11 vs. 45 percent).
  • Participant practices will have to have a supervised staff person on call, after-hours, 24/7,  to address the “urgent chronic care needs” of the patients.
  • Tremendous amounts of paperwork, manpower and teamwork will be required to monitor, coordinate, and document all of the requirements of this plan. For a recent CMS list of these requirements see the ADDENDUM below.
  • Deborah N. Peikes discovered in her analysis of the similar team-based Comprehensive Primary Care Initiative that “At baseline, most CPC initiative practices used traditional staffing models and did not report having dedicated staff who may be integral to new primary care models, such as care coordinators, health educators, behavioral health specialists, and pharmacists. Without such staff and payment for their services, practices are unlikely to deliver comprehensive, coordinated, and accessible care to patients at a sustainable cost.”

It is understood that from the perspective of Medicare the high costs of the top 20% of the chronic care patients create the greatest expenditure. But our medical cost and care problems are much bigger than this small corner of the landscape. And all we have to help us is CMS with Medicare, Medicaid, and the Affordable Care Act. Of course if we had everyone in and nobody out we could tackle the bigger problems.

This program is serving as a diversion from solving the problem of adequate compensation for primary care in general. Meanwhile, our family practice workforce continues to decline while Nero fiddles. If as much energy had been put into solving the RVU and physician income disparities we could be on our way to re-establishing a primary care base. Unfortunately the new proposal only aggravates these problems. Two of the major factors that are driving medical students away from primary care is the low future income combined with the high student debt.  The third problem is the large burden of office practice administration. The cost of compliance and documentation with all of the existing programs is already overwhelming . This leaves the primary care profession with no time left over to worry about coordination but with a big desire to abandon this field of medicine. CMS has no solution to this and yet they want to add one more program that requires more continuous documentation, appeals of denial to file, cost of extra personnel, etc. CMS states that as part of the new service, doctors will assess patients’ medical, psychological and social needs; check whether they are taking medications as prescribed; monitor the care provided by other doctors; and make arrangements to ensure a smooth transition when patients move from a hospital to their home or to a nursing home. This workload is multiplied by the fact that the target patients are the sickest and oldest. They have a high mortality rate so the paperwork starts all over for the next replacement on the panel. For $42/month.

The Solution
Who in primary care is left to carry out the program?  Basically, it will be members of large group practices and hospital and other institutional employers in urban centers. The growing supply/demand incongruence of available primary care physicians will make that option even more profitable for the physicians. That leaves out the rest of America. And the uninsured and underinsured will continue to be left out in the cold. We need a broader vision. We need an Improved Medicare for All.

(CMS Statement)

“To assist stakeholders in commenting, we remind you of the elements of the current scope of service for CCM services that are required in order for a practitioner to bill Medicare for CCM services as finalized in the CY 2014 final rule with comment period. We would note that additional explanation of these elements can be found at 78 FR 74414 through 74428. The CCM service includes:

  • Access to care management services 24-hours-a-day, 7-days-a-week, which means providing beneficiaries with a means to make timely contact with health care providers in the practice to address the patient’s urgent chronic care needs regardless of the time of day or day of the week.
  • Continuity of care with a designated practitioner or member of the care team with whom the patient is able to get successive routine appointments.
  • Care management for chronic conditions including systematic assessment of patient’s medical, functional, and psychosocial needs; system-based approaches to ensure timely receipt of all recommended preventive care services; medication reconciliation with review of adherence and potential interactions; and oversight of patient self-management of medications.
  • Creation of a patient-centered care plan document to assure that care is provided in a way that is congruent with patient choices and values. A plan of care is based on a physical, mental, cognitive, psychosocial, functional and environmental (re)assessment and an inventory of resources and supports. It is a comprehensive plan of care for all health issues.
  • Management of care transitions between and among health care providers and settings, including referrals to other clinicians, follow-up after a beneficiary visit to an emergency department, and follow-up after discharges from hospitals, skilled nursing facilities, or other health care facilities.
  • Coordination with home and community based clinical service providers as appropriate to support a beneficiary’s ’s psychosocial needs and functional deficits.
  • Enhanced opportunities for a beneficiary and any relevant caregiver to communicate with the practitioner regarding the beneficiary’s care through, not only telephone access, but also through the use of secure messaging, internet or other asynchronous non face-to-face consultation methods.Similarly, we remind stakeholders that in the CY 2014 final rule, we established particular billing requirements for CCM services that require the practitioner to:
  • Inform the beneficiary about the availability of the CCM services from the practitioner and obtain his or her written agreement to have the services provided, including the beneficiary’s authorization for the electronic communication of the patient’s medical information with other treating providers as part of care coordination.
  • Document in the patient’s medical record that all of the CCM services were explained and offered to the patient, and note the beneficiary’s decision to accept or decline these services.
  • Provide the beneficiary a written or electronic copy of the care plan and document in the electronic medical record that the care plan was provided to the beneficiary.
  • Inform the beneficiary of the right to stop the CCM services at any time (effective at the end of a 30-day period) and the effect of a revocation of the agreement on CCM services.
  • Inform the beneficiary that only one practitioner can furnish and be paid for these services during the 30-day period. With the addition of the electronic health record element that we are proposing, we believe that these elements of the scope of service for CCM services, when combined with other important federal health and safety regulations, provide sufficient assurance that Medicare beneficiaries receiving CCM services will receive appropriate services. However, we remain interested in receiving public feedback regarding any meaningful elements of the CCM service or beneficiary protections that may be missing from these scope of service elements and billing requirements. We encourage commenters, in recommending additional possible elements or safeguards, to provide as much specific detail as possible regarding their recommendations and how they can be applied to the broad complement of practitioners who may furnish CCM services under the PFS.”
    Federal Register Vol 79 No. 133 July 11, 2014

Healthcare as a Right?

Darn it. Let’s get this right. Health Care for All is not just a need that we all have (like I need to go to the bathroom).  Health Care is not just a right that we can march in the street for and demand because it’s implied in our Declaration of Independence and Constitution. It’s not something that just the neglected should fight for (as their right). It’s a moral mandate that covers all of us and should be embraced by all of us.

The New Disease That is Killing Us, Zykadiacertinibxalcoricrizotinibsovaldisofosbuvir

Peter Bach has stirred the pot with his recent article, “Cancer: Unpronounceable Drugs, Incomprehensible Prices”. Apologists for the drug industry like to argue that new anti-cancer drug, Zykadia (generic=ceritinib) is far superior to the current $11,000/month drug, Xalcori (crizotinib) and is therefore worth $13,000/month. At present the main argument for this superiority refers back to The New England Journal of Medicine article whose lead author has been an advisor and consultant to the company that makes the drug. If further evidence verifies the superiority it doesn’t argue that our medical system can afford the ever-growing list of multi-thousand dollar drugs. See the Hepatitis C treatment, Sovaldi, at $30,000/month for a total of $84,000 a treatment.

Bach rightly concludes that, “Regardless of the estimate, the pricing of new drugs for cancer and now other common diseases has come unglued from the rationale the industry has long espoused.  Instead, pricing is explained by a phenomenon of increasing boldness by the industry against a backdrop of regulators and insurers who have no legal authority to dictate or even propose alternative pricing models.”.  At present the model is that the companies charge what they do “because they can”. That won’t work. This free market cliché is unsustainable. The best (?only) solution lies in a medical payment system that gives universal coverage and the power of negotiated pricing with the drug companies. At another time we’ll discuss the lack of transparency of that industry when discussing the true cost of new drug research.

This last January two cancer specialists published an article explaining “Why Oncologists Should Support Single-Payer National Health Insurance”. In his Huffington Post Blog, Dr. John Geyman discusses this problem and points out that not only is the ACA is powerless to control drug prices but it is also unable to control the cost-shifting that is exposing all of us to unsupportable medical costs. Every person concerned with the future of health care and the economy in the United States should read these critiques. The future is now.

The Triple Goal

The single payer movement in the U.S. is built around the concept of an “improved Medicare for all”. The “improved” part of that message recognizes that our present Medicare system needs some revisions to make it a valid vehicle to provide universal health care. Some of the major areas of concern are the control over fraud and abuse, the contrary incentives of the fee for service system, the disappearance of the primary care workforce, and the uncontrolled costs of prescription medications and durable goods. Solution to many other aberrations in our delivery of health care will have to wait for single payer.

Tackling some of these problems now can help ready us for producing a winner out of the starting gate. This includes working to improve quality of medical care. But trying to move forward illuminates the same problem that prevented the Affordable Care Act from achieving quality and cost-saving while providing comprehensive insurance coverage, viz., the political power of the various stakeholders and lack of any immunity from micromanagement by congress and the administration.

We need to get our voices heard as we work on the triple goals to:

  1. Improve Medicare
  2. Improve the quality of medical care
  3. Create Single Payer Medicine

These goals provide a set of action points for realizing the “Triple Aim” of improving the individual experience of care; improving the health of populations; and reducing the per capita costs of care for populations. (

Also read….

Questor Behavior Begs for Controls

Charles Ornstein’s article in Upshot discusses one more example of the unethical dealings of the pharmaceutical industry.   An old drug (ACTH) with a newer brand name (Acthar)  is reaping profits with no evidence that it gives any better results than inexpensive cortisone-type pills and injections.

When I started medical practice in 1964 a common treatment for arthritis and other inflammatory conditions was the ACTH shot. ACTH is adrenocorticotropic hormone, a hormone which we all have in our bodies. It is made by our pituitary gland and is responsible for the feedback mechanism that regulates the cortisone output by our own adrenal glands. ACTH causes us to increase our own output of cortisone. That reduces swelling and makes inflamed tissue feel better. In 1964 that was the rationale for using it.  But then came along the oral cortisone preparations such as prednisone (which costs about 1 cent a pill to make) and ACTH was no longer used (I think it used to cost about $5.00 for a shot that worked for 1-2 weeks).

But Questor came along in 2001 and bought the drug and began marketing it without any proof of benefit or effectiveness over prednisone. They have now worked the price up to $32,000 for a 5 dose vial. This story is just an example of  a pharmaceutical world of lying, greed, cheating, fraud, graft, bribery, and corruption.* These are not things that can be controlled by the “free market”. Like it or not; this industry has to be put under strong government control. We need not be hood-winked by the old clichés about stifling research and innovation. Very little of that goes on in the pharmaceutical industry which spends 19 times as much on promotion as they do on research. And a lot of basic research is paid for by the NIH. The high costs of drugs in general could be reined in by restructuring and empowering the Federal Drug Administration and allowing Medicare and health exchange plans to negotiate drug prices. These could be two more steps in creating an improved Medicare for all.

The drug companies have a license to steal…and they use it.

*For additional information on the corruption involved read Andrew Pollack’s article:

The Pot…….The Kettle

Karen Ignagni, the President/CEO of AHIP in discussing the astronomic price of Gilead’s HepC drug, Sovaldi ($84,000 for a 12 week course at $1,000 a pill):

 “The reality is that the company in this case is asking for a blank check, and we can’t give anyone anymore a blank check in the health care system – whether it’s a pharmaceutical company, a hospital, a device manufacturer […] because it will blow up family budgets; it will blow up state Medicaid budgets; it will blow up employer benefit costs; and it will wreak havoc on the federal debt. So we now have to step back and say, is the hallmark of innovation higher pricing” (1)

Irony of Ironies.  Karen Ignani slapping down the Pharmaceutical Industry. The CEO of the medical insurance cartel with its $102.4 million spent on lobbying during the health care reform debate(2) is calling out the drug companies because they will “blow up family budgets”.  Forget the fact that the other industrialized nations provide full drug coverage in their universal health care systems. Forget the fact that the number of under-insured people with their new high deductible, narrow network policies can’t afford to get their medical needs cared for even though they are paying monthly premiums to the insurance companies(3).  Forget that the insurance companies siphon off 20-25% of the premium dollar for “overhead” which includes outlandish payouts to their CEO’s. Aetna’s CEO received $30.7 million in 2013 and the CEO’s of the top 11 non-profit insurance companies took home $125 million.(4) Forget that it is the insurance companies who deny care prescribed by their customers’ doctors.  Both of these rapacious, rent-seeking industries (insurance and pharmaceuticals) need to be reeled in because they are already wreaking havoc on the economy. Just another problem that could be solved by Medicare for All.

(1) The Atlantic Forum on the Future of Medicine

(2) Exclusive: AHIP Gave More Than $100 Million to Chamber’s Efforts to Derail Health Care Reform


(4) Payouts for Insurer CEOs Keep Growing