For the past several months I awaken each morning hoping the CMS 2010 Physician Payment Rule issue is merely a nightmare, and I can get up and help the College once again focus on constructive engagement in health care reform. No such luck. It is a nightmare, but one that is part of our reality.

Friday at 4:30 PM -- 30 minutes before the issuance deadline, the CMS (Centers for Medicare and Medicaid Services or See-a-Mess) dropped a bomb.  In a call from Jon Blum, the top political insider in CMS, he said I have “good news and bad news.”

The BAD news: the Rule adopts the AMA-collected practice costs survey data, meaning cardiology gets an average practice cut of 27-40% in private practices. (Note that academic, hospital, and integrated system salaried cardiology is largely insulated from the cuts initially, but the effects could eventually reach everywhere through market forces).

The allegedly GOOD news: CMS will phase in the cuts over four years, meaning they will impose an average of 5-7% cuts in 2010. But, what he told us is not accurate in the language we see that nuclear codes (SPECT) will be cut as much as 36% in 2010. We are working to analyze the language in the final rule, but this isn’t good news, and the Secretary and the White House have signed off on it.

Bottom line: The Four-Year-Phase-In is far better than having the full impact hit in 2010, because it will allow us to survive to get valid data and reverse the cuts completely in 2010 if necessary. BUT WE NEED TO FIGHT THIS DECISION NOW, NOT WAIT UNTIL NEXT YEAR. We need to mount a strategy to prevent even the 5-7% average cut in January and in particular reverse the nuclear/stress cuts.

Next steps
After all the hard work and excellent advocacy we’ve witnessed from all of you these past months, I regret telling you we’re not through. But, please don’t allow discouragement to cause you or others to give up. We’re not done here.

*** Image from morgueFile (jdurham). ***

As expected, CMS released its final 2010 Medicare Physician Fee Schedule at just a little before 5 today. I'll have more later this weekend, but here's the quick and dirty summary for now...

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Final Rule Includes Phased In Cuts for Cardiology

The Centers for Medicare and Medicaid Services (CMS) today released its 2010 Medicare Physician Fee Schedule final rule, which includes policy proposals that will significantly reduce payments for cardiovascular-related services. While CMS has attempted to mitigate the impacts of the cuts by spreading them out over a four-year period, the impact of the cuts is still enormous both for 2010 and beyond. Cuts of this magnitude—whether enacted this year or spread over four—cannot be absorbed and we will continue to fight the implementation of this data until a rigorous review is conducted.

The ACC understands the very real impacts these cuts will have on your practices, your staff and your patients. The College is exploring all options and staff and leaders are working together to help you understand all of your options. Below is a high-level summary of the policy changes finalized in the rule. In addition, we’ve also provided links to the tools and resources available to you now.

More information over the coming weeks will be provided in Cardiology magazine, ACC News and The ACC Advocate. Please also plan to join ACC CEO Jack Lewin and President Alfred Bove, M.D., F.A.C.C., for an all-member call on Nov. 12 from 4:00 to 5:30 p.m. (EST) to discuss the 2010 rule. To RSVP for the call, click here.

RULE HIGHLIGHTS:

Practice Expense: Despite the hundreds of calls and letters from you, members of Congress and patients, CMS has chosen to incorporate the results of the American Medical Association’s Physician Practice Information Survey into its formula for calculating practice expense relative value units (RVUs). In a slight change from the proposed rule, the agency has said the cuts will be phased in over a four-year period versus all at once. With the exception of evaluation and management services, nearly all services that cardiologists perform will see cuts ranging from 10 percent to more than 40 percent for individual services phased in over 4 years. A few key examples for 2010 alone:

• SPECT Myocardial Perfusion Imaging (78452) – 36 percent cut
• Transthoracic echo with spectral and color flow Doppler (93306)--10 percent cut
• Coronary Stent (92980) - 4 percent cut
• EKG (93000 )-- 5 percent cut
• Level 4 established patient office visit (99214) -- 7 percent increase

As mentioned above, the ACC is exploring several options for stopping the implementation of these cuts. CMS’ decision to phase-in the cuts, while not what we would have hoped, is due in large part to your tremendous efforts over the last few months. Your actions clearly had an impact and we strongly encourage you to continue to email your congressional representatives and CMS detailing the ramifications of these cuts as we move into the next phase of challenging these cuts.

Bundled codes for myocardial perfusion/SPECT imaging
CMS’s continued pressure to bundled together imaging services reported with multiple codes has now hit myocardial perfusion imaging. In 2010 myocardial perfusion imaging/SPECT studies including wall motion and ejection fraction will now be reported with a single code. CMS decided to substantially reduce the payment for myocardial perfusion imaging as part of this rule by reducing both the physician work value and the practice expense value. To make matters worse, because there is a new code for the service, CMS apparently is not applying the four-year transition of the practice expense cuts and instead is using the fully implemented value. The result is a 36% cut in payment for 2010. This change alone accounts for more than one-third of the projected payment cut to cardiology. ACC will begin immediately to pursue strategies to mitigate this cut. Specifics on the new codes and tips on how to work with health plans to transition to the new codes will be emailed to you next week and also included in the November issue of Cardiology magazine.

Consultations: Payments for consultations provided in office and hospital settings are eliminated under the final rule. The RVUs assigned to these codes will be redistributed to office and hospital visits and services now billed as consultations will be billed as hospital or office visits. This will reduce payments to varying degrees for consultation services.

Malpractice: CMS has chosen to update the malpractice RVUs with data from a new survey of specialty-level malpractice premiums. In addition, CMS has proposed a new method for determining malpractice RVUs for technical component services. The proposed new malpractice RVUs would reduce cardiology payments by 1 percent. However, the impact will vary depending on the mix of services provided.

Equipment utilization: CMS has finalized its proposal to change the agency’s formula for calculating the per-procedure cost of diagnostic medical equipment worth more than $1 million. The proposal would assume that all diagnostic equipment with an acquisition cost greater than $1 million is used 90 percent of the time an office is open, thus driving down the practice expense RVUs for services using that equipment. Within cardiology, cardiac MR and cardiac CT services will be subject to payments set based on this utilization assumption. CMS did agree not to apply this cut to equipment for non-hospital cardiac catheterization services.

SGR: As required by current law, the final rule includes a 21.5 percent reduction in Medicare Physician Payment as of Jan. 1, 2010. This cut is in addition to the payment reductions that result from the proposed policy changes described above. In short, there could be as high as a 30 percent cut in Medicare payments for cardiology. However, as in previous years, Congress is expected to pass a one to two year fix this fall. CMS did finalize its proposal to remove physician-administered drugs from the accumulated SGR debt, which makes a fix to SGR less expensive.

WHAT’S NEXT
Taken together with the payment cuts cardiology has already experienced, CMS’ final rule represents a grave threat to cardiology practices and to patient access. The consequences, whether intentional or not, are already being felt. The ACC and its partners in the cardiology community are prepared to help you and your practice navigate these challenging times, while also pulling out all the stops to stop the practice expense cuts and find real solutions to payment. The following resources are available to you now. Your feedback on the tools and resources you’d like to see in the coming months is also appreciated. Please email advocate@acc.org with your thoughts.

• Practice Management Toolkit: This newly updated site contains information designed to help you best manage your practice. While continually being updated, you’ll find information on practice solutions, health IT, coding and billing, working with health plans, quality and educational tools, and more.
  
  
• Medicare Provider Enrollment Website: This CMS site provides you information about Medicare enrollment. The ACC will provide information to members on options in future communications.
  
  
• ACC CardioAdvocacy Network / ACC Political Action Committee: The ACC’s CardioAdvocacy Network (CAN) keeps you up to date on ACC’s grassroots efforts and ways you can get involved. Currently the site contains links to a sample congressional letter regarding the final rule. The ACC Political Action Committee (PAC) is another way to ensure the cardiovascular voice is heard on Capitol Hill. There’s no better time to get involved with either or both of these key advocacy programs.

The ACC recently came out with this great CVN video highlighting our recent Legislative Conference. In the video, I point out that the proposed cuts, the final version of which are soon to be announced, are distracting us from pursuing other noble health care reforms, such as promoting quality, reforming malpractice laws and increasing access. I've listed a couple of possible options for what else we COULD be focusing on right now if it wasn't for the Rule, but add your own suggestions in the comments section below.

 

Senator Debbie Stabenow (D-Mich.) produced what could turn into a major miracle in Congress this week with the introduction of S. 1776. The bill would eliminate the (un)Sustainable Growth Rate (SGRrrr*) formula for the next 10 years, without creating the budgetary impact of $245 billion of accumulated debt associated with the formula that the Congressional Budget Office (CBO) requires to ‘pay for it.’ In essence, Stabenow would consider paying off the SGRrrr debt by making it a contribution to the multi-trillion national debt, not a 2010-2020 budget cost. The bill thus would eliminate the Pay-Go rule. Although Congress has taken similar actions for the Stimulus and to pay off part of the Alternative Minimum Tax hit, recognize that this is done VERY rarely.

The House attempted to do something similar to get rid of the SGRrrr in HR 3200, which prompted the AMA and American Academy of Family Physicians to support the entire bill; but including the SGR elimination as part of health care reform causes the CBO to chalk up the debt cost as part of the cost of reform. S. 1776 is a better and parallel approach.

ACC was called by Sens. Reid and Baucus this week and asked to support this radical move, which Mr. Reid (D-NV.), Mr. Dodd (D-CT.) and Mr. Baucus (D-MT) also believe is necessary. No problem getting our support -- we’ve been trying to get rid of this nightmare for 10 years. Action on S. 1776 will of necessity have to move with lightening speed. It will move fast, or die fast. Getting this albatross off our necks would be a major plus for all of medicine.

If S. 1776 doesn’t pass, Congress will definitely kick the SGRrrr can down the road and propose another one-year band aid patch on it as they do every year.

Again, the AMA deserves great credit for delivering on this SGRrrr issue if it happens. To underscore how much momentum is behind it, AARP is teaming up with AMA to get S. 1776 enacted and is contributing 50 percent of the advertising cost to a major multi-million national TV campaign. We need our constituency to call your Senate office and ask them to vote YES on S. 1776 this coming week to promote security and stability in seniors’ access to Medicare physician services.

(* note  --“SGRrrr,” for those of you new to the Blog, just adds a ‘growl’ to SGR)

*** Image from Flickr (YardSale). ***

The Senate Finance Committee voted earlier today 14-9 to approve the America's Healthy Future Act. All the Dems voted for it, and Sen. Snowe was the only Republican who voted for it. The committee's approval allows the process to proceed to merger with the Senate HELP bill and then to the floor. The Congressional Budget Office (CBO) has estimated that the bill would cost $829 billion over the next decade and reduce the deficit by more than $80 billion. One reason it's less costly than the House bill is that it doesn’t fix the SGRrrr.

The CBO has slowed activity in the House as they analyze costs and debate whether the House SGR fix must be added to the cost of HR 3200. So, floor action there is unlikely in the next two to three weeks; and the Senate will take some time to sort through their issues as well as they try to merge the Finance and the HELP Committees bills. In terms of more details about the activities on the bills:

First, on the House side:

• The caucus considered several options for reducing the gross cost of their bill to $900 billion, none of which had great appeal to House members.  But that does seem to be an agreed-upon goal. And CBO is watching.
  
  
• The conversation regarding the public option revolved around a version that would use Medicare +5% rates, negotiated rates, or “some combination thereof.”  The last reference appears to suggest a trigger-like mechanism for starting with negotiated rates but moving to Medicare-like rates if savings targets are not achieved – an idea discussed in some of this morning’s press reports.  In sum, a “robust” public option appears likely in the House.  Leadership’s strategy is that is the best means of producing the left-most version in conference, although with the Senate heading for 60 or 61 votes at most, how far that issue can shift in conference is dubious at best.
  
  
• One means of lowering the cost of the bill that’s being considered in the House is to raise the Medicaid eligibility threshold from 133% of poverty to 150%, with the federal government absorbing most, if not all, of those incremental costs.
  
  
• The high-end insurance plan tax is unlikely to be included in the first House-passed bill, although many caucus members acknowledged some version of it is likely to come out of conference with the Senate.

Then, on the Senate side:

• “Rule 28”, which prohibits extraneous provisions from being included in House-Senate conference negotiations, will apply to the HELP-Finance merger process.  Staff for both committees have been adamant that provisions not included in either the final HELP or Senate bills will not be considered at this stage.  We predict that “rule” (more of a “guideline,” as Dr. Peter Venkman would say) will get broken at least once, but it is an added barrier to new issues being introduced to the process in the near term.  The “Manager’s Amendment” laid down once the Senate has moved to the reform bill could include new provisions, and there will likely be extensive consideration of amendments on the floor.
  
  
• Due to the fact that the $81B “surplus” in the Finance bill is “off budget” – because it is derived from new payroll/Social Security tax revenues – we think it is unlikely that the provider “fees” and other offsets and revenue raisers in the bill will change meaningfully during the merger process with HELP.
  
  
• Many Senate Democrats do not consider this the final word on, or even as necessarily relevant to, the public plan debate in that chamber.  Sens. Carper and Snowe continue to push their approaches to a fallback public plan, with the key distinction being Carper’s is almost exclusively state-managed, while Snowe’s would entail a single, federally-chartered corporation that would administer the state-based plans where the trigger has been pulled.  Neither appears to have made significant concessions to the other at this point, but inclusion of some compromise version looks probable via an amendment on the Senate floor.

Every day these and other issues are being debated and debated. We’re in there, pushing for the SGR fix, tort reform, and protection of the physician right of ownership, among other issues. And, we’re always reminding everyone about the 2010 Payment Rule debacle -- and asking they do something about so we can turn our attention to reform.

Last week and this week in Washington have been even crazier than any before in the health care reform soap opera of 2009. I recently heard a modern philosopher opine (can't remember his name) that "life is a first-class opera played by a tenth tier cast." If you tuned in to C-Span this week to observe the Senate Finance hearings, you’d understand.

Actually, this health reform debate is more a soap opera, at least as Mr. Baucus' long awaited bill was received. Baucus likes the bill very much. I’m not sure anyone else in his Chamber does. Nonetheless, I predict it will be the platform for the final bill for two reasons: first, the CBO marks up the costs over ten years at less than $900 billion ($856 B), AND they say it will actually save money over time. The other two major bills cannot claim this distinction.

Second, at least one Republican might vote for it (Snowe—R-Maine). But most of what the bill contained when Baucus put it out will likely be amended away. It’s becoming a platform, not a plan. Democratic colleagues Rockefeller and Wyden have been the most critical of Baucus, particularly in requiring coverage with insufficient subsidies for lower income families.

Tri-Com Bill
Meanwhile, House leaders still think their Tri-Com bill (HR 3200) will be the real platform, with Ms. Pelosi and others clarifying that the 'public option' (not included in Mr. Baucus' bill) must be in the final legislation. But their proposal is more expensive -- even though they ‘fix’ the SGR. They don’t finance the SGRrrr fix though -- they just sort of write it off as part of the debt, not part of the next budget.

The Senate doesn’t buy that approach. They say it has to be paid for (adding $245 billion to the House bill cost if so) -- hence the Senate chose to band aid patch it for one year only to prevent the 21 percent cut in physician reimbursement from kicking in this January, even though it kicks in the following January. (They don’t yet seem too concerned about the 27 percent cut to cardiology practices looming in 2010 relating to the Medicare Payment Rule, however. The Rule has nothing to do with health system reform and these bills -- it’s just an ugly manifestation of the present mess -- but it’s a worse predicament).

It is clear that neither Democrats or Republicans on the committee are completely satisfied with the final product and those not included in the “Group of Six” negotiations over the past weeks want to have their voices heard. 

Hearing
After opening statements by members, the markup started with a tense tone as Chairman Baucus, committee members, and CBO Director Doug Elmendorf held a contentious discussion over the “safe speed” of CBO’s work to produce budget scores on the proposal and amendments. Republicans have called for “transparency,” with several hours of debate on an amendment by Sen. Bunning requiring final legislative language and CBO budget scores 72 hours prior to the committee’s final vote (the amendment failed).

The markup is slow going, with hundreds of amendments lined up dealing with coverage, delivery system, and financing and debate over many amendments lasting hours and at times becoming heated. Several attempts to strengthen the bill’s provision on medical liability have failed so far, as did an attempt by Sen. Cornyn (R-TX) to address the SGR fix. Sen. Cornyn also offered an amendment to strike the controversial Independent Medicare Commission from the proposal, but it failed. Later, an amendment by Sen. Rockefeller to modify the Commission, which is based on a bill of his, passed. So far the MedPAC on steroids piece is alive in there. The “public option” is not. 

One very controversial aspect is the creation of a new system of modifiers to payment based on quality of care in relation to resources spent. This provision would thus penalize higher spending regions with lower payment. It’s true that variation in spending is very uneven. The Dartmouth Atlas folks (Wennberg and Fisher) deserve credit for publishing that variation based on Medicare spending per capita, but it’s based entirely on claims data. And, it doesn’t include socioeconomic and credible risk adjustment data, and that must be included before variation can be fairly linked to payment or to fair comparisons of geographies. ACC has proposed using clinical data (NCDR) to help look more carefully into this variation. 

The markup continues next week.  All eyes continue to be on Sen. Snowe, who may be the lone committee Republican to vote with Democrats for passage of the bill.

Despite the controversies, and after all the amendment hubbub, the Dems should still have the votes to get a bill out in both Houses in my view. In the Senate, after Massachusetts Governor Deval Patrick on Thursday appointed Paul G. Kirk Jr., a former aide and longtime confidant of the late Sen. Edward M. Kennedy, as an interim senator, that 60^th vote should be there soon. We’ll see. 

*** Image from Flickr (Brent and MariLynn).***

On Friday I spoke with MedPage Today about the Senate Finance Bill, potential tort reform and the revisions necessary to the SGRrrr. The final video is below.

Last week I spoke with Anne Underwood of the New York Times for a Prescriptions Blog entry she was writing about physician payment based on quality. In the interview, I discuss with her the inherent problems of the fee-for-service system and how virtual quality networks could change the way we practice medicine. I encourage you to check it out. However, you need to know that a lot of what I said was not included -- that many smaller and non-integrated practices produce very high quality; and that some integrated systems do not.

A lot of folks thought this showed ACC leadership in leading the quality and payment reform debate, but some did not (and I can see why, given what was edited out). One ACC member, David Perloff, M.D., F.A.C.C., thoughtfully objected to the comment: “Doctors get rewarded for more tests, more volume, more hospital admissions, more visits in the current system.” Dr. Perloff believes comments like these “make cardiologists out to be money-motivated opportunists who simply over-order tests to make more money!” He believes that instead we should “counter these accusations by insisting that, in general, our test ordering is based on either appropriate guidelines or because we are forced to over-order tests to protect us from a broken liability system.” Too bad he wasn’t able to hear my entire interview.

I am in complete agreement with Dr Perloff. Most cardiologists -- indeed most physicians -- are motivated by their patients’ needs. But, our payment system and our physician liability system are fundamentally flawed. And, frankly, everybody is not as conscientious as he and the ACC are about this. But, the Congress, along with many supportive consumer, union, and employer groups, are pushing to eliminate or greatly reduce fee for service and replace it with the Harvard Business School longstanding proposal for reward better outcomes, evidence based care, and efficiency. We better make sure such future systems are designed by physicians and organizations like the ACC -- and not those who are only ‘playing doctor’ in the policy agenda.

If you've read the interview, I'd like to hear your thoughts. Leave a comment below.

As I'm sure you know, the Senate Finance Committee on Tuesday began a markup of its health care reform legislation ("America's Healthy Future Act of 2009"). The ACC likes some pieces of the bill (like its attempts to expand coverage to every American and strengthen Medicare) but isn't so fond of other provisions (including its one-year fix to the SGRrrr rather than a permanent fix, as included in the House bill) -- see ACC's full comments on the proposal for more.

But now I turn to my readers: What do you think of the bill? Do you think it should pass as is? Undergo major revisions? Die? As always, leave your full comments in the comment section below.

I spoke with the New York Times "Prescriptions" blog contributor Anne Underwood this week about physician payment reform. Here's an excerpt, but visit the NYT's blog for the full interview:

Q. What’s wrong with the way physicians’ pay is structured now?
A. We have built our system on a payment model that rewards volume. Doctors get rewarded for more tests, more volume, more hospital admissions, more visits. There are no incentives for quality of care or administrative efficiency. That’s part of why our system is more expensive than other nations.

The good news — and the reason why I’m excited about health care reform — is that the best health care in this country often tends to be very affordable. The whole discussion about bending the cost curve can be resolved by setting new incentives in payment that reward better outcomes with evidence-based medicine.

Q. The Cleveland Clinic and Mayo Clinic pay doctors a salary rather than fee-for-service. Is that what you mean?

A. At the Mayo Clinic, Cleveland Clinic, Kaiser Permanente and other integrated systems, doctors are salaried to improve quality. They’re unfettered from having to deal with the dizzyingly complicated current payment systems. And they can do it precisely because they have an integrated system.

But about 85 percent of the U.S. health care system is not integrated. Instead, it’s divided between small practices and community hospitals that aren’t linked together with incentives to coordinate care. In the hand-offs that occur between hospital care and outpatient treatment, patients sort of get lost in the shuffle. That’s one reason why 27 percent of patients with heart failure are back in the hospital one month later. They often don’t have the medications right or in hand, or they don’t understand what they need to do to help take care of themselves.

Even between the internist or family physician who generally manages a heart patient and the cardiologist who occasionally consults on the patient, you don’t have the coordination that should occur — unless you’re in one of those integrated systems, with electronic health records and incentives for coordination and quality.

The ACC earlier this morning issued the following statement on Baucus' health reform proposal. I'll have more on this in coming days (I'm about to get on a plane for the annual meeting of the Japanese College of Cardiology), but here's our first take on the proposal.

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ACC CEO Dr. Jack Lewin’s Statement on the Baucus Draft

 WASHINGTON, D.C. - Dr. Jack Lewin, CEO of the American College of Cardiology, made the following statement Wednesday regarding the Baucus draft:

"We appreciate Chairman Baucus's hard work on this very important piece of legislation.

 "I am excited to see the CMS innovation center idea that will focus on better payment and outcomes in this draft. We are also happy to see a mention of tort reform which is a step in the right direction, and we hope to see tort reform in the final package.

"While we appreciate the effort to stop the 22 percent cut to physician reimbursements under Medicare scheduled to take place next year, we believe you can't have complete health reform until you permanently eliminate the flawed Sustainable Growth Rate (SGR) payment formula.  I shudder to think of how that 1-year band-aid will lead us to spend the next year trying to fix that formula to prevent a payment disaster instead of working on the quality projects patients deserve.  Failure to permanently eliminate the SGR means patient access is threatened while Congress plays chicken with Medicare benefits year after year.

"Ironically, the highest quality care in this country is not the most expensive care.  The most effective way to bend the cost curve is to put the incentives on the table for doctors and hospitals to improve quality and care systematically by using evidence-based tools. 

"The American College of Cardiology is well positioned to lead this effort.  With over 43 percent of all Medicare dollars spent fighting heart disease, the ACC has tools in place to eliminate waste, fraud and abuse out of the system.

ACC President Bove and ACC leadership have asked staff to get in the weeds a little bit more around some of the controversies swirling around health care reform, such as the public option, the "MedPAC on steroids notion," what the minimum benefits should be, how quality will be incentivized, and so on. We have very little time to get such ideas agreed upon and on the table, but we are committed to doing so. A few of the ideas that we believe ought to be incorporated could include:

• Payment and delivery system reform. While this critical need is a minefield of extraordinary complexity, we believe at least one new provision must be added that would create significant resources to fund pilot projects and experimental demonstrations around payment reform, bundled payments, accountable care organization concepts, the patient-centered medical home and other such ideas that will never come to fruition without significant funding and experimentation. We believe that new funding approximating 1.5 to 2 percent of Medicare spending for hospital, physician and other provider reimbursement should be made available to the secretary of HHS for such payment reform experimentation -- and with new dollars. That would provide about $4 billion out of a $450 Medicare billion overall program -- not even 1 percent of total spending. That money could not only fund a broad array of pilots that could extend to smaller practices and hospitals, but it would allow the CMS (Centers for Medicare and Medicaid Services) to expeditiously hire the kind of expertise and capacity-building resources it will need to help the nation make these transitions gracefully and effectively, and to work with the profession to make it happen sensibly.
  
  
• The SGRrrr needs to be obliterated. HR 3200 wipes it out for 10 years, but not completely. I think Mr. Baucus will just fund a one year fix -- that’s unacceptable. Let’s move on.
  
  
• Tort reform has to be included. The cost of defensive medicine is widely argued. HHS estimates it at $126 billion per year including almost $60 billion in Medicare and Medicaid, but Pricewaterhouse Coopers estimates it at $210 billion (I trust them more than HHS), and others claim it may even be higher. So, what’s to argue? It’s a lot of wasted money, not to mention the legal costs and hassles! What if we cut the defensive medicine estimates by 75% to, say, an estimate of $50 billion a year? Saving $50 billion annually would result in a $500 billion savings over the 10-year budget period for which expanded access to care is estimated to cost $1 trillion -- the cosmically sized number Congress has not yet decided how to pay for. Dang! Why not fund half the cost of reform by reducing the hemorrhaging of health care dollars into the legal system? While we know the U.S. Senate won’t vote for the most comprehensive reforms we would like to see, we believe the current pressure for bipartisan action could open the door for significant tort reform progress that would save that $50 billion of defensive medicine target I referred to. ACC is working on convening specialties, states, consumer groups and others to get this issue back on the table!
  
  
• Primary care: Nobody would disagree that primary care is more devastated than the rest of medicine, even though workforce shortages in cardiology, CT surgery and other specialties will also impair the system in the future in significant ways. But primary care really is a disaster in terms of supply. So, why not fund a renaissance of primary care as part of the $1 trillion investment, rather than the “robbing Peter to pay Paul,” nickel-and-dime approach currently before us? These approaches won’t work in terms of saving primary care; they divide the House of Medicine, and they will further impair access to specialty care. HR 3200 puts some new funding in for primary care, but it will be insufficient to even persuade one medical student to move in that direction.
  
  
• Benefits: If the cost of universal access exceeds what Congress is willing to spend, why not consider having the minimum benefits consist of USPHS-approved prevention services and high deductible coverage (perhaps over $2000) at minimum? People would still have to pay for some outpatient care, but nobody would be bankrupted by health care anymore, and any serious condition would be covered. This isn’t perfect, but it is so much better than we have now.

Weighing in on Other Controversies
We probably do need to help Congress find its way to work around the public option dilemma, the MedPAC on steroids idea, and other divisive issues. But if we were to succeed in getting the previously mentioned objectives moving, these controversial provisions might iron themselves out on their own, given the lack of consensus about them in the Congress. In other words, we might do better to be emphatic and clear about what we want to happen than to spend all of our energy on what we don’t want.

Regarding an empowered MedPAC, Sen. Rockefeller (D-W.V.) has introduced a separate bill on this topic. We will need to think about what we agree with. His bill would:

• Reform MedPAC as Executive Agency Modeled After the Federal Reserve Board
  
  
• Elevate MedPAC to be an independent, executive branch entity, like the Federal Reserve, with the power to implement recommendations that are more insulated from special interests, and more accountable to the American people
  
  
• Inform new research in health services to adequately address deficiencies in the evidence
  
  
• Test new and innovative payment models for provider reimbursement, and
  
  
• Expand the capacity to evaluate basic and health services research for reimbursement. 

President Obama tonight will address Congress on health care reform "in understandable, clear terms [with] what our administration wants to happen with regard to health care, and what we are going to push for specifically," according to Vice President Biden. Let's see if he addresses any of the items I've outlined here.

*** Image from Flickr (WilWheaton). ***

The Mayo Clinic under the leadership of CEO Dennis Cortese, M.D., has released a payment reform proposal to Congress based on value-based indexing, meaning payment would be based much less on volume of services, and much more on quality and efficiency (Q/C = value).

It’s an interesting payment reform concept (strongly supported by Harvard Business School and various physician-friendly economists) that would require the creation of a value index within the formula used to determine Medicare physician fees.

(For those interested in the related specific policy details, their proposal eliminates the current geographic indexing of the physician work component of the fee schedule, and applies instead a value index to the work component.  It does not change the indexing of practice expense or malpractice expense. While the current fee schedule formula applies the geographic index to 25% of the work component, and there is currently a temporary floor at 1.0, the Mayo proposal applies the value index to the entire work component and there is no floor or ceiling).

While not everybody will like (much less fully understand) this, it could possibly be a way out of the mess we’re in. Of course the devil’s in the details, but in looking through the Mayo proposal, many of the methods proposed involve (real or virtual) integrated systems. The College is exploring “virtual integration” concepts that we would suggest to CMS as “pilots in payment reform.”

But, there is also a “patriotic cause” here in promoting "value" as a pathway to reduce the risk of a bankrupted or much diminished system of rationing in the near future. In addition, I suggest we also consider a potential patient and physician opportunity here, were we able to design and recommend a 'value' approach that both allows a systematic means of improving quality, and also providing a real upside for physician practices.

Present, Past and Future
It ain't easy, but that's because we have for decades been immersed in a frustrating, dizzyingly complicated, and volume-based reimbursement concept that we seem to be clinging to, hoping that we can tweak it to viability. I don’t believe we can. The current payment model needs to be replaced in carefully planned phases. I predict that in the future cardiologists and most physicians will compete on and be paid by market-based salaries (with quality and patient satisfaction incentives). Practice organizations will administratively interact with the payment formulas and models of tomorrow, which will also be freeing doctors to spend more time with their patients, while reducing administration costs enormously. However, administrative “liberation” should not mean that physicians should ignore the responsibility for leadership of their practices in the future. Quite the contrary -- if we had not in the past abrogated such leadership, we wouldn’t be saddled with the dysfunctionality of the current payment system!

I applaud Mayo for suggesting a potential pathway to a better future for doctors, patients, and society. But most of medicine is hardly positioned to participate as easily as Mayo and other integrated systems might. We need to work with ‘non-integrated’ practices to get them ready for the coming changes, not just to survive, but rather to thrive. Nothing is more important for us in my opinion. I think we’re up to the challenge; but we’ll need to work together to educate, experiment, and make such a transition possible for most members.

*** Image from Flickr (alasam) *** 

The two economist titans, Uwe Reinhardt and Paul Ginsberg had an interesting point-and-counterpoint on payment reform last month that was published on the Health Affairs blog.  Reinhardt suggests shifting away from the present, price-discriminatory system of semi-arbitrary private sector pricing toward an all-payer system. He sees this as a transition to a future system based on bundled payments per episode of illness for acute care, and a new and better version of capitation for chronic care and prevention.

Ginsburg suggests that an all payer system might put pressure on doctors to contain costs in a "far less radical" manner than the public option proposed by many advocates of health reform. Ginsgurg praises the "success" of Maryland’s all-payer system. (Health Affairs will cover Maryland’s in detail in their Sept. 9 issue).

I am fond of both of these exceedingly thoughtful and smart gentlemen. But, I think both suggested methods could be scary for doctors and patients without a phase in or glidepath from where we are to any new model. As they sparred in a friendly fashion, I was reminded metaphorically of the old Godzilla and Mothra movies, where the altercations resulted in no damage to the fighters, but instead destruction of the infrastructure all around (and I supposed we would be the people running down the street screaming).

Uwe's proposal would be far simpler than competition around the present 20,000 or so itemized charges or list prices each hospital uses, or the more than 9000 list prices for doctors in the physician fee schedule. He also suggest associations (like ACC) might negotiate with insurers in a region (a state?) as is done in Germany, and make the results binding for both doctors and insurers. Doctors would then charge all insurers or patients the same price for identical procedures.  Medicare and Medicaid could be part of the arrangement he thinks. Pretty radical. Some major anti-trust relief would be needed, and there are clearly risks associated. But, hmmmm.

We’ve been hitting the media particularly hard with our messages about both reform and the outrageous proposed payment cuts in the parallel 2010 CMS-issued proposed Medicare Physician Payment Rule, noting our membership’s focus on reform has been completely diverted to trying to undo the impending payment rule. People need to be clear that “health reform” and the “Medicare Rule” are 2 different and almost unrelated topics. The Rule is just the annual CMS announcement about changes in payment they will institute (supposedly based on sound data and methodology -- NOT!).

On the rule: All the CV societies and the Cardiology Advocacy Alliance are working together with us (as is Oncology) on getting the word out about how unfair the proposed Rule would be if implemented. At this point, we have about 12 House members ready to sign on to the Gonzales-Roger letter to the Secretary, asking that the CV aspects of the Rule not be implemented. We think there are more willing to sign, but with them out on recess it’s hard to know yet. On the Senate side, Senator Lincoln sent a letter for American Society for Therapeutic Radiology and Oncology addressing the cuts in the Rule, and we have other letters pending. Our Board of Governers and Chapters have been cranking out the letters and visits to members in the Districts. This is great advocacy, and we are all soooo grateful here to those who are working so hard.

On reform: the ACC conducted a satellite media tour on the topic from the National Press Club, reaching 15 stations across the country. An ACC op-ed appeared in Roll Call online, making our point that “basing health care reforms on quality and driving down costs will allow us to provide more coverage and make available more resources for education, the environment and other critical societal needs.” On some of these stories we were able to get the flawed Medicare Rule in there also, as something that exemplifies what a mess the current CMS payment structure is, and how this issue is stealing the energy for reform as we fight to get the Rule reversed before it is issued.

Also on reform: With little notice (somebody important probably cancelled out), I was asked to depart early from the NY CEO meeting to rush over to FoxNews.com Live with Alan Colmes on a panel to discuss the push for health care reform. We debated tort reform (me positive), the single payer option (me skeptical), and the need for payment reform (me positive) in what was a very stimulating conversation — so stimulating in fact that my fellow hospital administrator panelist (CEO of Universal Hospitals) was so frustrated apparently about hospital cuts and ‘public options’ questions that he walked off the set. I wasn’t able to get the Rule issue raised in my few minutes there though, but asked Colmes if we could have another chance to get our leaders on to talk about it.

Other societies have been busy beating the health care reform drum, too. Our own J. James “Jim” Rohack, M.D., F.A.C.C., President of the American Medical Association, appeared on “Larry King Live” to discuss health care reform and give us some background on why the AMA endorsed HR 3200. Dr. Rohack carefully avoided throwing his full support behind the details of the bill, saying the AMA endorsed it “to move the process forward” in order to increase access. Former Sen. Bill Frist, another panelist on the show, strongly rebutted the AMA position, saying we need to “stay at the drawing board” and listen to senators who are working toward bipartisan legislation that will “bend the cost curve.” The AMA is getting beaten up based on a lot of misinformation, and I told Dr. Rohack we'd send around a letter he’s writing to get straight the facts about AMA’s positions on the controversial issues.

Dr. Rohack did make an important note that “the reason HR 3200 is very important is there is a fatally flawed formula (SGRrrr) … that will affect seniors’ access to Medicare.” He continues that “at least … the House bill … fixes this fatally flawed formula once and for all.” 

*** Image from Flickr (maliciousmonkey). ***