Day: January 1, 2010

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December 30, 2009, 7:00AM

By PETER MAHR

As a family physician I must write to convey my frustration and indignation with the Senate health care bill.

 It is an immense bill offering minor advances in the access to health care for Americans via private insurance, the expansion of Medicaid and the increase in money for community clinics. But in cementing the role of private insurance as the vehicle for Americans to access necessary health services, the bill wastes billions of dollars a year due to the inefficiency and profit motive inherent in this system.

 Furthermore, the bill will still leave millions without any insurance and even more people underinsured. Those who have insurance with affordable premiums will find the cost-sharing (deductibles, co-pays and out-of-pocket expenses) onerous. Those with insurance offering adequate access to health services will pay premiums that are unaffordable.

 Finally, by taxing Americans four years in advance of the initiation of subsidies for the purchase of insurance, this bill underestimates the true cost to our country. In the end the bill will mandate that all of us buy into and subsidize the inefficient and expensive private health insurance financing system we have today.

My frustration doubles when I realize that there is a viable, efficient and affordable alternative to health care financing that could be enacted tomorrow. With a system of national health insurance, we could cover 100 percent of Americans at a dramatically reduced cost for families, businesses and our country. Under a national health insurance plan everyone pays into the insurance pool via progressive income or payroll taxes.

Let’s call this our premiums. Then, when we are sick and go to the doctor or have a surgery, the doctor or hospital gets paid from the money in the pool. It is not socialized medicine: Doctors and hospitals continue treating patients as before. They remain private and autonomous.

Since a national health insurance system eliminates the profit motive, as well as the advertising and executive pay associated with private insurance and slashes burdensome and expensive administration on the doctor and hospital level, it would finance access to health care for all while reducing costs dramatically.

Finally, my frustration will pale in comparison to the American people’s anger when they find out what the Senate bill means for them. In the Senate bill, the Congressional Budget Office estimates that a family of four with a household income of $54,000 would be expected to pay 17 percent of their income, or $9,000, on health care costs. On the other hand, a family of four making the median income of $56,000 would pay just $2,900 under a national health insurance plan.

If the American people knew that we could organize our health care financing in an efficient, fair and affordable manner, and reduce their family’s health care costs by a third, they would jump at the chance. If they find out after the fact, when they are paying taxes to subsidize a private insurance system that does not meet their health care needs and puts their personal finances at risk, they will surely be looking for someone to blame.

 Are you paying attention, senators?

Peter Mahr of Southeast Portland is a family physician with Physicians for a National Health Program.

Dec. 31 (Bloomberg) — The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little.

More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.

Obama in June cited the nonprofit Rochester, Minnesota-based Mayo Clinic and the Cleveland Clinic in Ohio for offering “the highest quality care at costs well below the national norm.” Mayo’s move to drop Medicare patients may be copied by family doctors, some of whom have stopped accepting new patients from the program, said Lori Heim, president of the American Academy of Family Physicians, in a telephone interview yesterday.

“Many physicians have said, ‘I simply cannot afford to keep taking care of Medicare patients,’” said Heim, a family doctor who practices in Laurinburg, North Carolina. “If you truly know your business costs and you are losing money, it doesn’t make sense to do more of it.”

Medicare Loss

The Mayo organization had 3,700 staff physicians and scientists and treated 526,000 patients in 2008. It lost $840 million last year on Medicare, the government’s health program for the disabled and those 65 and older, Mayo spokeswoman Lynn Closway said.

Mayo’s hospital and four clinics in Arizona, including the Glendale facility, lost $120 million on Medicare patients last year, Yardley said. The program’s payments cover about 50 percent of the cost of treating elderly primary-care patients at the Glendale clinic, he said.

“We firmly believe that Medicare needs to be reformed,” Yardley said in a Dec. 23 e-mail. “It has been true for many years that Medicare payments no longer reflect the increasing cost of providing services for patients.”

Mayo will assess the financial effect of the decision in Glendale to drop Medicare patients “to see if it could have implications beyond Arizona,” he said.

Nationwide, doctors made about 20 percent less for treating Medicare patients than they did caring for privately insured patients in 2007, a payment gap that has remained stable during the last decade, according to a March report by the Medicare Payment Advisory Commission, a panel that advises Congress on Medicare issues. Congress last week postponed for two months a 21.5 percent cut in Medicare reimbursements for doctors.

National Participation

Medicare covered an estimated 45 million Americans at the end of 2008, according to the Centers for Medicare & Medicaid Services, the agency in charge of the programs. While 92 percent of U.S. family doctors participate in Medicare, only 73 percent of those are accepting new patients under the program, said Heim of the national physicians’ group, citing surveys by the Leawood, Kansas-based organization.

Greater access to primary care is a goal of the broad overhaul supported by Obama that would provide health insurance to about 31 million more Americans. More family doctors are needed to help reduce medical costs by encouraging prevention and early treatment, Obama said in a June 15 speech to the American Medical Association meeting in Chicago.

Reid Cherlin, a White House spokesman for health care, declined comment on Mayo’s decision to drop Medicare primary care patients at its Glendale clinic.

Medicare Costs

Mayo’s Medicare losses in Arizona may be worse than typical for doctors across the U.S., Heim said. Physician costs vary depending on business expenses such as office rent and payroll. “It is very common that we hear that Medicare is below costs or barely covering costs,” Heim said.

Mayo will continue to accept Medicare as payment for laboratory services and specialist care such as cardiology and neurology, Yardley said.

Robert Berenson, a fellow at the Urban Institute’s Health Policy Center in Washington, D.C., said physicians’ claims of inadequate reimbursement are overstated. Rather, the program faces a lack of medical providers because not enough new doctors are becoming family doctors, internists and pediatricians who oversee patients’ primary care.

“Some primary care doctors don’t have to see Medicare patients because there is an unlimited demand for their services,” Berenson said. When patients with private insurance can be treated at 50 percent to 100 percent higher fees, “then Medicare does indeed look like a poor payer,” he said.

Annual Costs

A Medicare patient who chooses to stay at Mayo’s Glendale clinic will pay about $1,500 a year for an annual physical and three other doctor visits, according to an October letter from the facility. Each patient also will be assessed a $250 annual administrative fee, according to the letter. Medicare patients at the Glendale clinic won’t be allowed to switch to a primary care doctor at another Mayo facility.

A few hundred of the clinic’s Medicare patients have decided to pay cash to continue seeing their primary care doctors, Yardley said. Mayo is helping other patients find new physicians who will accept Medicare.

“We’ve had many patients call us and express their unhappiness,” he said. “It’s not been a pleasant experience.”

Mayo’s decision may herald similar moves by other Phoenix- area doctors who cite inadequate Medicare fees as a reason to curtail treatment of the elderly, said John Rivers, chief executive of the Phoenix-based Arizona Hospital and Healthcare Association.

“We’ve got doctors who are saying we are not going to deal with Medicare patients in the hospital” because they consider the fees too low, Rivers said. “Or they are saying we are not going to take new ones in our practice.”

To contact the reporter on this story: David Olmos in San Francisco at dolmos@bloomberg.net

Baptist St. Anthony’s Health System was selected Tuesday to be the exclusive provider of hospital services to Amarillo municipal employees, a right held for more than two decades by the system’s chief competitor.

 The Amarillo City Commission unanimously voted to approve an acute care hospital services agreement with BSA, which narrowly bested Northwest Texas Healthcare System in competitive bidding for the work.

The city of Amarillo spent about $4.5 million last year on acute inpatient and outpatient hospital care for the estimated 4,300 employees, retirees and dependents enrolled in its self-insured medical plan, consultant Neal Welch said.

The proposal BSA tendered for an exclusive contract could result in a savings of $400,000 to $500,000 a year, said Welch, who spent the past two months assisting city administrators in evaluating the two hospitals’ offers.

The contract with BSA will take effect Friday and last one year, with the possibility of four subsequent one-year extensions.

Only 4.3 points separated the two hospitals’ proposals in scoring used by Welch and city staff to compare the proposals. The scoring method took into account such things as the prices the hospitals offered for types of services and the range of services to be included in the proposals, Welch said.

Northwest didn’t ask for exclusivity in its offer, Northwest representative Melanie Dennis said, in questioning the scoring method used to make the decision.

Rather, Northwest proposed that the city use both facilities and allow its medical coverage plan participants to choose which hospital they would use at the beginning of the health plan year.

“For a four-point value difference, you’ve chosen one hospital,” Dennis said.

“Also we’re looking at the savings too,” Commissioner Madison Scott replied.

BSA tendered both a nonexclusive offer and an exclusive offer, with the potential of exclusivity resulting in better proposed prices, said Welch said.

“We do not demand exclusivity in any way,” BSA Director of Managed Care Collin Hays told commissioners. “We had a nonexclusive proposal (submitted to the city), but it wouldn’t provide the savings.”

The nonexclusive contract offer from BSA still scored higher than the Northwest proposal in the evaluation.

Trauma services that Northwest provides that aren’t offered by BSA were accounted for in the scoring method, Assistant City Manager Dean Frigo said.

Northwest will continue to provide trauma services, but city health plan participants will be transferred to BSA if they are hospitalized or scheduled for outpatient services, Welch said.

“This has been a good process that we’ve gone through, with the two hospitals playing by the same rules, competing for the city’s business,” Commissioner Jim Simms said. “We appreciate greatly what the hospitals have done and the numbers that they put forward.”

Editor’s Note: The City of Amarillo is well known in the insurance industry as a trailblazer in stablizing their group medical costs. Jim Parrish, Dean Frigo, John Ward are three individuals who could teach the big insurance consulting firms a thing or two.  If those three ever decide to open up an insurance consulting firm, they would no doubt help other Texas political subdivisions millions of dollars.