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Ann Thorac Surg 1999;67:301-304
© 1999 The Society of Thoracic Surgeons
a Division of Cardiothoracic Surgery, Department of Surgery, Washington University School of Medicine, St. Louis, Missouri, USA
Address reprint requests to Dr Barner, Division of Cardiothoracic Surgery, Washington University School of Medicine, Suite 3108 Queeny Tower, St. Louis, MO 63110
e-mail: barnerh{at}msnotes.wustl.edu
Presented at the Forty-fifth Annual Meeting of the Southern Thoracic Surgical Association, Orlando, FL, Nov 12–14 1998.
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I was fortunate to have a father who practiced medicine in a blue collar community of ten thousand people, that was built around a United States naval ship yard. I was well aware of my father’s profession from an early age but did not participate in it as some sons might. I was occasionally exposed to the "evils of socialized medicine" through conversations between my father and other physicians. I also learned that the American Medical Association was solidly against this form of medical practice, which I did not fully comprehend. At that time it seemed a far off possibility and not particularly threatening even as I considered pursuing medicine as a career.
It was during college that I decided that medicine would be a good career, for several reasons. I had a personal health problem that I wanted to research and correct for myself and others. There seemed to be a good market for physicians. Providing care was satisfying to one’s own mind and was associated with respect from the community. And if one were diligent and even modestly successful one would not starve.
Medical school taught me enough to engender a new respect for my dad, who delivered babies, set fractures in his office, and then developed the x-rays of the same between pediatric patient visits, performed major abdominal or gynecologic operations in the morning before heading to the office, managed to make house calls at mundane as well as odd hours, and speak with patients on the phone in midst of family dinners (the phone was in its place beside the kitchen table where we ate). At that time I could recall Sunday drives in the country when father would point out a farmhouse where he had delivered a baby, where he had treated a patient with heart failure, or relate that he had to back his model-T Ford up the hill to another house as low gear did not provide enough power to make the grade. Mother told me how wonderful it was when the bridge was built across Port Washington Narrows in 1932 so that instead of a 10-minute ferry ride it was a short drive across the bridge to make a house call and it saved a 1-hour drive home when dad missed the last ferry in the evening. These vignettes from the practice of a solo practitioner engaged in the great American fee-for-service tradition that existed from the founding of our country until recently are uncommon today except in very rural or remote areas.
Occasionally my dad would mention that some patients had no money or not enough to pay for services, which never seemed to be a problem for him. The only vexation that I perceived was on occasion when such a patient would become unusually demanding of his time, such as a lengthy phone call while we were eating. Some less-well-off patients, but also those who did pay, were grateful in other ways by bringing something from the garden, the beach, the water, or something crafted by hand and dropped off at the office or our home.
In my clinical years at the University of Washington School of Medicine I learned of a new form of medical practice called "group health," which was a practice where doctors and patients belonged to what could be described as a cooperative and both parties were enjoined to relate in a mutually beneficial setting. In brief conversations with other students, residents, and attending physicians about this experimental practice, it was intimated that the participating physicians were in some way different from usual practitioners. However, I was also advised that some respected graduates of the University of Washington joined group health, with the implication that this new concept must have some merit.
As my medical knowledge and experience expanded during internship and residency at the University of Rochester, I continued to reflect on my father’s ability, or perhaps courage, to practice such a broad field of medicine. I marveled even more that he performed general, gynecologic, and orthopedic surgery with only 2 years of training at the Mayo Clinic, whereas I struggled to master just one of these disciplines. It was in Rochester, New York that I became aware of the "blues" (Blue Cross and Blue Shield) and learned that more than 80 percent of the community was covered by this form of medical insurance thanks to the economic success of employers like Eastman Kodak, Xerox Corporation, Bausch & Lomb, and Ritter-Pfaudler.
Compulsory military service interrupted my residency and gave me the opportunity to serve as the medical officer aboard the USS Macon (Georgia), a heavy cruiser. After a NATO exercise in the North Atlantic Ocean we visited Kiel, Germany, and I met a young woman who is here today. This tour was followed by a year at the United States Naval Hospital, Chelsea (Boston), where the Leahy Clinic sponsored a small research laboratory. This position gave me my first opportunity to do animal research, and, although not the National Institutes of Health, it was a worthwhile experience and one which I would expand upon. Military medicine was a respite from a surgical residency, as active duty personnel tended to be younger and healthy, although retirees presented the usual array of illnesses. After returning to Rochester I completed general surgery training and spent another year as a United States Public Health Service postdoctoral research fellow. During that year I performed experimental studies on autologous and allogenic vascular grafts, splenic freezing and transplantation, and the microcirculation of the frozen-stored-reimplanted omentum. Then I went on to a 1-year cardiac surgery fellowship at St. Louis University before joining the faculty there in 1966. This was the year that Medicare and Medicaid began. After 25 years in St. Louis I relocated to Long Island Jewish Medical Center (affiliated with Albert Einstein College of Medicine) and 2 years later joined Washington University.
During my training years I would imagine practicing with my father. His office was on the second floor of an older but attractive building on main street in town. There was a large waiting room and a cubicle at one end for Lucille, the nurse-receptionist-bookkeeper. Dad’s office was good sized, with a large desk and an oak swivel chair. The treatment room had an adjustable table, a glass cabinet for instruments, and a small sterilizer. Down the hall was an examining room and adjacent to it the x-ray room and table.
I chose an academic pathway because I perceived that I might be able to contribute to the evolution of surgery and the training of young surgeons. I also reasoned that progeny should try to do better by building on what their parents had accomplished. What is better is always debatable and frequently so only in the eyes of the beholder. There was also some anxiety on my part about entering the surgical community, and the nurturing environment of a faculty position was reassuring. The idea of a salary was also appealing because I did not want remuneration to confound treatment, and I did not want to be accused of entering medicine to seek riches. Although the salary was small initially and grew slowly, it increased during the eighties before stabilizing, and has declined somewhat in the late nineties. My remuneration has always been based on academic rank and achievement and was never adjusted by my practice revenue.
Fee-for-service solo practice was the standard of practice throughout the United States until the 1990s when enrollment in Health Maintenance Organizations (HMOs) and preferred provider organizations (PPOs) escalated to 100 million by 1996. This was industry’s response to the runaway increases in health care premiums of 16.7% to 18.6% per year from 1988 through 1990.
The first managed care organizations arose in the 1940s in southern California (Kaiser-Permanente), in the pacific northwest (Group Health Cooperative of Puget Sound), and in New York (Health Insurance Plan of Greater New York) and have been joined by a few other smaller plans. These original nonprofit plans salaried their physicians without tying compensation to the financial bottom line. In 1996 about 2% of physicians’ salary at Group Health Cooperative of Puget Sound was dependent on financial success of the plan. As much as 10 to 15 percent of physicians’ income is at risk for similar but newer plans, such as Harvard Pilgrim Health Care and Tufts Associated Health Plan.
In contrast are the for-profit Health Maintenance Organizations (HMOs), which were named by President Nixon in 1973. In these, physician compensation is commonly based on incentives and bonuses that are dependent on meeting financial goals in the physicians’ practice as well as on the overall success of the plan. Even more attractive to HMOs is having the physician assume greater risk through capitation, a concept whereby a physician or a group receives a fixed amount of money to care for each patient. If there is only one physician and a small number of patients (fewer than 250) there is the potential for serious financial loss for the physician if even a few patients become seriously ill. The risk of losing money can be controlled by stop-loss insurance. However, individual physicians most often have not obtained this type of coverage, and certainly their employing HMOs have not supplied it. Most capitation agreements involve primary care physicians and the services they provide. Surgical specialists might be involved in capitated contracts as part of a large multispecialty group or in an integrated hospital-physician organization, where the organization collectively is at risk with regard to performance against a global budget. The optimum structure for capitation contracts remains to be defined, but having more than 20 percent of income at risk has been cited as unacceptable and physicians should not be at risk of losing more money than is being withheld [1]. In other words, in some capitated contracts that are over budget the physician might not receive any at-risk income and if this does not balance the budget the physician could be liable for the loss.
In addition to controlling costs by reducing physician payments, HMOs have saved money by restricting patient services. This method has included HMO review of all hospitalizations, allowing specialist referrals only by a gate-keeping physician and denial of expensive or unproved therapies. Patients may be forced to travel inordinate distances to obtain specialist consultation because the HMO does not have a specialist in the plan at the site of initial contact with the generalist, although appropriate nonplan specialists are available at the site. Some plans mandate prior approval for all emergency room visits despite approval of the prudent lay person standard by President Clinton’s Consumer Bill of Rights and legislative law by many states, which declare that the judgement of a prudent lay person is an appropriate and justifiable indication for emergency care. Many HMOs have failed to make it clear to the patient at the outset that certain services are not covered by the plan. Additionally, HMOs may restrict (gag clause) the physician from fully disclosing to the patient that some services are not covered by the plan or that there may be good diagnostic or treatment options for a specific problem that the plan will not cover. Finally, most HMOs do not have internal or external mechanisms for the patient to seek damages for denied or unsatisfactory care and federal law, the Employee Retirement Income Security Act (ERISA) of 1974, prevents patients from suing managed care organizations. During 1998 both parties and both the House and the Senate have proposed bills considering patient rights vis-à-vis managed care, but bipartisan disagreement led to failure to achieve compromise legislation before congress adjourned. Heavy lobbying against passage of such legislation by the Health Benefits Coalition, comprised of HMOs, insurance companies, and employers, and the Business Roundtable, which represents 200 large businesses, clearly influenced the demise of this legislation. Undoubtedly these issues will return in 1999, but will meaningful legislation result or will we continue with a relative hodge-podge of individual state controls?
This control of medical practice by HMOs compromises the ethical basis of the doctor-patient relationship and undermines the trust inherent in this relationship, which has been a foundation of the medical ethic since the time of Hippocrates, 400 years BC. It is apparent that capitation poses an even greater potential threat to this ethic by creating conflicts of interest for physicians that can undermine patients’ trust. All compensation systems have the potential for conflicts of interest [2], which must be countered by the physician’s integrity.
Last year marked 150 years since the writing of the American Medical Association’s Code of Ethics [3]. It has often been revised but has never been more meaningful than in this time of moral crisis created by the for-profit HMOs. The market, the corporate board room, and the stockholder meeting have little interest in preserving the doctor-patient relationship. When the terms of the clinical encounter are dictated by the HMO and its managers, and the physicians income is tied to clinical decisions, only great moral strength will achieve the goal of placing the patient first. On the positive side, capitation, if wisely used, can motivate physicians to improve approaches to the prevention of illness, enhance quality of care, and create more efficient systems of health care delivery. Clearly, the for-profit HMOs were instrumental in reducing the yearly double digit increases in health care expenditures to single digit increases during the 1990s, but 8% to 10% increases in health care premiums are likely in 1999. Proponents for HMOs argue that fiscal success was easy, as excess was simply squeezed from a bloated and wasteful health care system. Consumers and physicians argue that savings were achieved by such measures as denying patients hospitalization, restricting length of stay, preventing specialist referrals, and not allowing certain costly diagnostic and therapeutic modalities. The truth lies somewhere between these two extremes. It is clear that the health care system has become more efficient, but reduced payments have had a dominant effect on the bottom line of health providers.
Despite the apparent success of the market-driven HMOs it disturbs me greatly that 20% of the consumer dollar goes to the stockholders and to senior executives. This is in addition to overhead costs that further reduce the medical loss ratio (the percentage of premium income spent on patient care), which is well above the 90% range for the nonprofit HMOs. Unfortunately the nonprofit managed care organizations have been eclipsed by the for-profits. Kaiser-Permanente has expanded into the midwest and northeast, but not without growing pains. From the very nature of the two groups it should not be surprising that the entrepreneurial one has become dominant, and from the financial market it has readily raised capital for expansion. Lamenting this fact will not alter what has occurred and it is not likely that the nonprofit plans will dominate, but they can certainly contribute as they have and carve out larger market shares as their virtues are appreciated. After all, there has been no public outcry or legislative reining in of the nonprofits after 50 years of existence, whereas it has taken less than five years for the profit-driven plans to elicit such a response. Is there not a message here? Will disillusionment continue if they do not respond to the clamor and legislative directive? Will return to double digit increases in health care costs bring reassessment of their apparent success? Will other forms of managed care become competitive? Provider Service Organizations have joined Preferred Provider Organizations as competitors for patient care contracts, The former have included physicians, or hospitals and physicians, who unite as care systems to provide integrated care through direct contracting with industry. Innovative liaisons such as these probably have a better chance of competing with money-hungry HMOs, which may not be greatly altered by proposed legislative reforms. In fact, it is likely that we are in the midst of an evolution in health care delivery that is unlikely to end with the HMO and perhaps move far beyond it.
And Medicare, what of its future? Medicare has grown since 1966 to cover 40 million people primarily as a result of an increasing and aging population but also because of moderate expansion of its programs. Historically, physician reimbursement for services was low compared with fee-for-service plans, and some physicians would not accept Medicare patients for this reason. Medicare payments for surgical services have declined sharply in the past 5 years and are currently at a level 15% to 20% lower than HMO reimbursement for coronary artery grafting. Medicare reimbursement to nonsurgeons has increased somewhat, but has declined for most nonsurgical specialists.
As a result of reduced reimbursements many specialists, including thoracic surgeons, have experienced income declines, whereas other have worked harder to maintain income. Increasing economic and professional competition and channeling of patients into health care systems has made solo practice almost a thing of the past, and small group practices have been forced to coalesce into larger groups. Some physicians have become hospital employees. In other instances, physician groups have entered directly into economic and geographic arrangements with hospitals. Hospitals have merged or joined into groups, some so large that they themselves have become managed care plans.
We will be forced to continue to pursue economic tightening through vertical and horizontal integration of care to obtain the best possible outcomes consistent with current fiscal restraints.
Another large issue being dealt with poorly or not at all by the present systems is the increasing number of uninsured people in our country, which is currently about 43.4 million (16.1% of the population). During my years of practice I have been fortunate enough to be able to admit any patient who I thought would benefit from my services without any form of institutional approval—until the late 1980s. Then for a time at three institutions it was necessary to seek in-house approval for patients with reduced or absent resources, but approval was always forthcoming because of institutional largesse so that I, like my dad, could render appropriate care to those requiring it without consideration of the ability to pay. In the future, however, as institutional reimbursement continues to decline and cost shifting, which was feasible in former years, becomes nonexistent, there will, indeed, be no safe haven for the medically indigent, either in the form of health insurance or charity care.
Those of us who have enjoyed the economic good times and are now faced with decreasing health care dollars, which may approach a level comparable to that of our neighbors to the north and our counterparts in Europe, must not forget why we entered the profession. We must either live with these changes or abandon our calling, as sadly some have done.
But how does the next generation of physicians view our current circumstance? Medicine has never looked more attractive! Medical school applicants are at record numbers and the best and brightest are applying. Speaking with students and residents reveals that they are just as enthusiastic, idealistic, and motivated as we were, if not more so. They will face infinitely greater competition for training, positions, and employment, and will receive less remuneration. This does not deter them. Nor does the fact that solo fee-for-service practice will be a memory, not for them, but for us. They will be salaried and will provide care in a managed health care system that is yet to be fully defined. But medicine is and will continue to be a great profession. The one-on-one doctor-patient encounter is one of the most gratifying relationships in the world, despite all the efforts to compromise it. Despite HMO restrictions on the practice of medicine, the words of Hippocrates and the American Medical Association’s Code of Ethics will survive. The next generation of physicians will live with managed care, serve the citizens with distinction, and find their own self-fulfillment in the practice of medicine. Doing the right thing for the patient will continue to define the integrity of the physician and surgeon of the future.
References
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