by Tia Will
With the proposal and subsequent approval of the ACA, concerns have been expressed about the destruction of our free market system of medical care. I would like to address this from the point of view of a front line medical practitioner with 30 years of experience.
What we have had in the United States for as long as I have been in medicine has not been a “free market.” I don’t know if a true free market system would have been better or not. This is a moot point since it simply did not exist. A “free market” did not exist for health care workers, and most importantly, it did not exist for patients.
What I would like to present are what I see as the deviations from a “free market” in the health care delivery in this country prior to the ACA and then what I envision more effective and less costly health care system might look like.
I have worked within the Kaiser system for 27 years and have a view of how pre-paid health care can be achieved in a more efficient and cost effective manner, with better patient outcomes, and without interference from a profit-driven third party – the insurance industry.
First,how did our fee-for-service model of health care delivery differ from a free market?
Let’s start with where the impact matters most on the patient.
For the majority of people, the “free market” started and ended with their employer’s choice of insurance company. Every decision about the individual’s health care from that point on was driven not by a free market, but rather by what the insurance company had decided they would cover. While it is true that doctors could still perform the optimal procedure or prescribe the optimal medicine, they would get no compensation unless the procedure was preapproved. And who actually made the decision? Not a medical care provider and the patient in collaboration, but rather an office worker armed with a company-provided protocol that was determined not on the basis of what was the best for the patient, but rather what was best for the financial well-being of the insurance company.
In this system, the patient was limited in another way. Unlike a free market where you typically know the exact price of an item before making the decision to buy,
this rarely occurs in fee-for-service medicine especially when it comes to hospital care.
In fee-for-service medicine one has to dig very hard to actually get numbers in advance, and even when provided, they are always estimates, not guaranteed final costs.
Now lets suppose the patient has been persistent and finally arrived at an estimate of cost. It’s not like they can walk across the street from Kaiser to Sutter to see if they can get a better deal for their biopsy or ultrasound or MRI. Unless they are independently wealthy, they are stuck with the services and agreed-upon-fees provided by the insurance offered by their employer. The only “freedom” that the patient has in this case is to quit his job and hope that another employer will offer insurance options more favorable to him. However, this option is fraught with risk since the new employer will be free to change their insurance offerings next year. Add to this the “freedom” of the insurance company to refuse to insure on the basis of pre-existing conditions, and the freedom to cancel on the basis of technicalities on an initial application once a high cost diagnosis is made, you certainly have “freedom” for the insurance company, but virtually none for the patient.
Another deviation from the free market for the patient is the inability to know the motivation for a doctor’s recommendation. In the fee-for-service world, health care providers have a financial incentive to advise more procedures. The more procedures performed, the more times they see the patient, the more they can bill within the constraints of what the insurance company will compensate. Unlike a free market as it applies to the purchase of an article of clothing or a dinner out, the patient rarely has the luxury of truly being able to assess objectively what is the best for them based on their budget and individual tastes. They must rely on the doctor to make the best recommendation for them.
Unlike the free market customer seeking a new dress or a night on the town, the patient is frequently in pain, frightened, confused, exhausted, and only wants to feel better. This limits their ability to make the best decision for themselves. While the doctor in fee-for-service medicine may indeed recommend the best course for the patient, they may also have incentives to order additional tests or procedures that are in the doctor’s– but not the patient’s – best interest. These incentives may include fear of lawsuit for a missed diagnosis or just simply what is in their own financial best interest. Often expensive tests or procedures are recommended to the patient “just to be on the safe side,” when the provider knows very well that the findings of the expensive test statistically approach zero benefit for this particular patient.
American “free market” medicine has also imposed artificial constraints on other parts of health care delivery. The “market” for doctors and to a lesser degree other health care professionals has been artificially manipulated for as long as I have been in medicine. The number of training slots in both medical school and residency programs has been held down to maintain a high level of compensation. The rationale provided has been that this is necessary to maintain the high quality of skills and knowledge needed by physicians. My opinion is that this is neither the primary cause nor the outcome. At the time I was in training, a typical workweek was frequently 90+ hours at less than minimum wage. Although this has been adjusted to less than 80 hours weekly, at slightly higher compensation, it engenders a mindset focused on paying back student loans and achieving the lifestyle to which some feel entitled, given the amount of time, effort and money they have invested in their career. Ultimately, it is the patient that pays for this antiquated and not “market driven” system without realizing that they are subsidizing a profession that is being manipulated for profit.
Obamacare is only a small step in the right direction, I believe the most cost-effective and equitable system would be single party payer administered through a Kaiser-like model of care delivery.
Based on my experience, here are some real-world examples of how a pre-paid system actually works more efficiently.
1. Elimination of fee-for-service provides the following benefits:
No incentive to order more or more expensive tests or procedures.
- Income provided on the basis of salary for all workers, including doctors, eliminates the temptation of a “more is better mind set.” Financial incentives are based on providing more efficient and better patient care.
- Overall cost savings. Prepaid preventive care lowers cost by preventing high cost illnesses from occurring and allowing for less expensive early interventions.
A common example from my practice: Obese women have an increased risk of developing precancerous conditions of the uterus which present as heavy bleeding. The best and most cost-effective practice would be to encourage and ensure that women with obesity have access to programs effective to help with weight reduction. Within Kaiser and other integrated systems of care like Group Health Cooperative in Seattle,this can be done through appointments, classes, with telephone or on line consultations, most of which are fully covered. Next best practice if she has progressed from increased risk to actual symptoms of abnormal bleeding would include a same day office biopsy. Once cancer is excluded, the next best practice would be either an oral hormonal agent or even better, the Mirena IUD which can be placed at the same appointment. Only if ineffective would one go on to surgical management up to and including the most expensive option, a hysterectomy, which includes the most risk of expensive and dangerous complications as well as the highest cost.
How does this same scenario play out in the fee-for-service, “free market” model?
The recommendation for weight reduction may be made, however weight reduction services are rarely available without additional cost. A visit to a nutritionist, or exercise physiologist or other support critical to success in this very difficult area will involve referrals for which the patient will often have to pay out of pocket. She may not be able to do this, or may not be able to take time off work to go to appointments even if covered.
In the fee-for-service world, she will often have hysterectomy recommended as the first option, not because other less costly options are not available, but because that is the most highly compensated procedure for the doctor. But first, the insurance company, not the doctor, is going to decide that they will approve the hysterectomy only after the doctor has done an endometrial biopsy which should have been done at the first appointment. So now the patient must come back for that procedure as a separate appointment thus costing more. Next will be an ultrasound to determine the size of the uterus and to exclude the possibility of fibroids, both determinations which can often be made on the initial office exam without the need for ultrasound. This test will be ordered on yet another visit dictated by the insurance company with additional time and monetary cost. The patient will likely now proceed to hysterectomy without benefit of having tried any safer, less expensive options first.
2. What are the advantages of a collaborative, integrated model of care for the individual patient ?
Within the Kaiser model, I enjoy access to real time consultation with a specialist in virtually every medical specialty. My patients have access to specialty care limited only by the time needed to process and convey test results to me. This is a two way street. A specialist who identifies the need for routine care such as a clinical breast exam can refer the patient for a same day appointment with me.
For instance, a patient presents with no menstrual periods although they had previously been regular.Part of the evaluation is a blood test that can suggest the presence of a benign brain tumor usually medically managed. The patient had her blood test drawn in our on-site lab immediately after our appointment. The results were available within 24 hours and indicated the need for an MRI, which is completed within two days. I call the results to an endocrinologist who sees and treats her the next day.
In fee-for-service medicine the patient would have an initial appointment with a co-pay. The labs would be ordered and the patient would have to have a separate appointment with additional co-pay for the lab draw. The labs would be drawn and the results conveyed to the doctor. There was commonly a lag time associated if the doctor was not using an integrated electronic medical record, which posts results as they are completed. The doctor would then request an MRI using a contracted radiology service, with further delay and possibly more cost depending on the insurance plan selected by her employer. The results of the MRI would be conveyed to the doctor with more time passed. The doctor would then decide on an endocrinologist and would place a consult that would be triaged by the consultant’s office. Additional time wasted and money spent for no improvement in care is the cost of competitive fee-for-service medicine. These are amongst the savings offered by a collaborative, integrated, preventive model of health care delivery.
3. Some have suggested that a preventive, collaborative, integrated model of health care delivery would prevent innovation in health care.
My experience suggests this is not the case. Here are two examples.
Kaiser physicians have been leaders in innovation in the practice of medicine. One example locally is a specialist in gynecological oncology. This specialist is a world renowned researcher instrumental in rewriting the nationally and internationally approved recommendations which have allowed cervical cancer screening to be performed every three years rather than annually. This change has decreased cost both to the patient and to the health care system while improving early diagnosis and treatment of precancerous conditions of the cervix. He did not do this for financial gain. He receives the exact same compensation from Kaiser (and with no outside financial compensation) for every hour he works whether he is seeing patients in the office, taking care of them by phone or online, operating, doing research, or teaching. What is his motivation for innovation in this setting ?
His motivation is the improvement of health care for women.
What about innovation in the provision of health care services? I believe Kaiser has also been a major leader and innovator. This is largely achieved through the efforts of administrators and directors at all levels in the Kaiser system all of whom are also front line providers working with the front line doctors not directly involved in management. Our departments are responsible for constant innovation to improve services. The highly efficient consultation system I described above has only been in place for three years and is under constant revision to fine tune it.
Recently, forecasters underestimated the number of new patients that would sign up for services through Covered California, the state’s new health care exchange. This resulted in a deficit of appointments. In fee-for-service medicine this would have resulted in longer and longer delays for those initial appointments. This has occurred to a lesser degree in our system as department managers were given the directive, but also the freedom to seek and promote efficiencies within our departments to maintain patient access. Our salaries are not dependent upon this. We will get the same compensation whether we are working on this during normal working hours, or whether we are performing any other function of our job including surgery. Kaiser physicians frequently work after hours without compensation to plan and implement these initiatives.
So why do we do this knowing that we will not be getting paid overtime? For most of us, it is because we are committed to the improvement of patient care. While I am aware that this also occurs in private companies, we have the advantage of economies of scale and collaboration rather than competition as our model. If one region or office develops a better model, we do not hide it for competitive advantage, we share it so that all of our patients benefit from the change. Kaiser and other integrated health care systems do this to improve patient care and, admittedly, to prove the superiority of our model of care. Innovation can and does occur without additional economic incentive.
I can imagine a future health care system in which no doctor in the country (not just in Kaiser) works alone in competition with others but rather works collaboratively with all doctors to provide the best possible care for every patient. I can imagine patients benefiting from the best evidence-driven care possible regardless of physician, lab, hospital or pharmaceutical compensation, but only dependent upon what best meets their individual need. I can imagine a system in which research about any aspect of medicine is freely shared to promote further innovation and best practices, not kept as “trade secrets” for individual profit.
I can imagine such a system. I know it can be done because it exists in the microcosm that is Kaiser and similar systems, which while not perfect, are leaders in moving toward this model of care. It has not yet been adopted on a broader scale largely because patients outside of the system and the public in general do not know it is possible. It has also not been adopted because of the fears of the stakeholders in the current system that their incomes, maintained through artificially imposed constraints, not the “free market”, will be threatened.
As just one individual, one doctor who could have earned much more money in private practice especially in the early days of my career when obstetrics/gynecology was still a male dominated specialty, I did not and would not have chosen to have my practice outside of Kaiser. Private wealth is far from the only reason that people go into medicine. Many of my colleagues and I have established and maintained our careers within Kaiser because we believe that this is the best model of care for patients, and the best model of care for our country.
I would love to see a system like this established within my lifetime. I do not believe it will be, but I know that it will not if someone does not envision and act on what they know can be achieved.