Why Is Private Practice On the Road to Obsolesence?

Physicians have always wielded a certain amount of power in hospitals by being able to control admissions of patients to hospitals on which they participate as medical staff members.  

Hospitals compete to have as many physicians on staff who will admit as many patients as possible to highly competitive hospitals. Physicians pay medical staff dues on an annual basis  for admitting privileges (that's the privilege to admit one's patients to a specific hospital) and become medical staff members as independent contractors. They are not employees or salaried.  Generally, physicians seek admitting privileges  to more than one hospital and decide to which hospital to admit patients. The choice is presumably based on which hospital the physician feels will best serve the needs of his patients. But that's not the only criterion.

Because of a corporate practice prohibition in California, hospitals, with some exceptions, for instance state hospitals,  may not employ physicians. The reason is potential conflict of interest, e.g., the worry that some physicians might succumb to pressure from hospitals for rapid patient turn around or to unnecessary admissions to enhance corporate profit for the hospital. The corporate practice prohibition is supposed to make sure that physicians remain responsible to the patient, not to the corporate entity.

That is why corporate entities want to reduce the power of individual physicians to influence the hospital's corporate bottom line and to find an alternative way to admit patients. That problem  has been solved: one way to get around the corporate practice act is to hire a physician to develop a department and to have that physician choose the physicians who'll work at the hospital. In this scenario a chief physician hires other physicians. This scenario doesn't violate the corporate practice prohibition.

Patients can buy insurance policies that tie them to large corporate entities such as foundations,  exchanges, or Accountable Care Organizations (ACOs).  These business entities  may then hire physicians and assign them to groups of patients at designated locations such as clinics or hospitals and get around the corporate practice prohibition. It also takes away the authority of physicians to select their own patients and to admit them to a wide choice of hospitals. This method gives increased power and ultimately increased financial remuneration to the foundations, exchanges, and Accountable Care Organizations (ACOs) and to a lesser extent to each individual hospital since the hospitals will be obliged to affiliate with increasingly larger corporate entities which will compete with each other.

The physician is now an expense to the foundation,  exchange, or ACO. It makes corporate sense for the foundation,  exchange, or ACO  to negotiate the lowest possible remuneration for  physicians who are salaried workers and who will be as obliged as any other worker to negotiate for higher pay, health care insurance, vacation pay, and retirement benefits. Physicians are subject to "economic credentialing," i.e., a corporate record that compares how much each physician spends on diagnostic tests and treatment for each patient. At the end of the year, if Physician A has ordered diagnostic testing and treatment averaging $25,000 per patient  while Physician B has made the hospital or foundation pay $50,000 per patient, the physician who made his plan pay twice as much for patient care is less likely to be offered a renewal contract.

As the provision of healthcare becomes an expense to the business plan, it also becomes an impediment to corporate profit. Physicians, in this scenario, are the gatekeepers to their employers' banks. That is why physicians are quitting private practice -- they can't keep up with advances in healthcare at the same time as they need to compete economically with each other and also with increasingly better oiled business organization.

Health Care Corporation of America is HCA on the New York Stock Exchange (NYSE).  In Northern California, in Santa Clara County, HCA owns Good Samaritan Hospital and Regional Medical Center. UnitedHealth Group is UNH on the NYSE and purchased Monarch Health Group in Southern California while its Optimum business group bought ApplcCare Medical Group and Memorial HealthCare.  Meanwhile, Humana, listed on the NYSE as HUM, took over Metropolitan Health with its network of physicians who render care to Medicare patients and Concentra with 300 clinics in 40 states. Health  Management Associates, listed as HMA on the NYSE, recently featured on CBS' 60 Minutes, is under investigation. In this environment, individual physicians whose primary attention is to comparatively small groups of patients may be sliding into obsolescence.

SB 494 REDUCES PHYSICIANS' ABILITY TO PROVIDE OPTIMAL CARE AND COUNSELING

LEGISLATION ALERT

SB 494 DILUTES ACCESS TO QUALITY  HEALTH CARE

SB 494 was introduced by Senator Monning and enjoys having Senator Ed Hernandez as the principal co-author. Their bill was heard in Sacramento this morning.

SB 494 would increase the number of health plan enrollees or insureds to primary care physicians. The original bill was introduced on 2/21/13 and was amended on 4/03/13 to allow "the assignment of up to 2,000 enrollees or insureds to each full-time equivalent primary care physician and would authorize the assignment of an additional 1,750 enrollees or insureds" to each primary care physician if that physician supervises one or more nonphysician medical practitioners.

The bill threatens that "willful violation ... would be a crime."

Senator Hernandez has also proposed enlarging the scope of practice for nurses, optometrists, and pharmacists (SBs 491, 492, 493). Diluting the quality of health care, Hernandez evidently feels, will improve access to health care generally. SB 494 is a companion bill that will make it impossible to do anything else but reduce the quality of physician-time spent with patients. Physicians will be penalized for having assistants by having their workloads increased. That maneuver by itself will chop down the amount of time physicians can spend counseling patients. If this bill is signed into law, patients will yearn for the day then they were allowed a whole ten or fifteen minutes with their doctors.

SB 494 is intended to bully physicians because it makes willful violation a crime. Physicians may not be in charge of whether or not they have assistants since assistants may be hired by HMOs, Accountable Care organizations, Foundations, hospitals, and managed care plans generally. This proposed legislation damages physicians' chances to provide optimal diagnostic and counseling efforts. 

At the hearing today, no testimony was offered by physicians' organizations.  

The Affordable Care Act (Obamacare) with emphasis on the Independent Payment Advisory Board (IPAB):  Memo to Subscribers & Followers of www.politicsofhealthcare.com   The hot-button issue in healthcare this week is the Affordable Care Act (ACA), known as Obamacare to some.  Within the text of the ACA is an item known as the Independent Payment Advisory Board (IPAB). The IPAB is the section of the law that will allow unelected appointees to overrule treatment decisions made by our personal physicians. The IPAB is empowered by Sections 3403 and 10320 of the ACA. This writer has found large enough fault with the IPAB to have called for its repeal regardless of whatever fate befalls the rest of the ACA. The fate of the ACA is likely to be decided on November 6th -- President Obama wants to keep the ACA as is, Governor Romney wants to repeal the whole thing. Check out our posts on this topic, e.g., January 18, 2011; June 29, 2012; October 4, 2012; and October 20, 2012 (this last one updated on October 29, 2012). When you check out the posts of 1/18/11, 6/29/12, and 10/20/12 you'll see reprints of my comments in POLITICO. Click on the box to enlarge the print to read the comments. Let me know what you think by commenting directly on-line at www.politicsofhealthcare.com (we do not sell, rent, or share your e-mail addresses with others.  Your comment will be considered for publication unless you ask us not to publish). -- RLW, Ed.

OBAMACARE: "DOCTORS ET CETERA" IN THE ACA AND IPAB

DO IT OUR WAY OR DIE

October 29th Update to Politico comment of October 22nd. The above comment is in reference to "Presidential debate: 5 things to watch Monday" by MAGGIE HABERMAN and GLENN THRUSH | 10/22/12 4:23 AM EDT.
Read more: http://www.politico.com/news/stories/1012/82696.html#ixzz2AhZSGXJx

The highwater mark of Obamacare is carried in the bowels of the Independent Payment Advisory Board (IPAB), a level that hasn't yet been reached because the Affordable Care Act (ACA) is still in its infancy. It is the IPAB that will have the authority to declare entire diagnostic and treatment protocols too extravagant not only for Medicare but also for the general public and therefore not covered or payable by the ACA -- that's when Obamacare will become known for its bite.

But that bite won't chomp on President Obama or Congress because both of them are exempt from the ACA. Did you know that? Congress has its own health care plan. The Congressional plan does not include an IPAB to water  down care by restricting access to diagnostic testing and treatment. The current ACA does just that. The IPAB portion of the ACA should be repealed even if we continue to debate the rest of it.

Keep in mind that Congress keeps special healthcare benefits handy for itself including access to treatment at military hospitals.

In the autumn of 2009 President Obama stated "I will ensure that no government bureaucrat gets between you and the care you need." It's probably safe to say he wasn't thinking of the IPAB at the time. President Obama has now promised a minimum of 15 brand new bureaucrats.

In the first debate, President Obama said the IPAB would consist of "doctors et cetera." The fact is that there'll be plenty of "et cetera" but there's no obligation under the ACA that any of the 15 appointees to the IPAB must be a physician.

Governor Romney did no better than the president because he didn't seem to realize that President Obama was winging it when he said "doctors et cetera." What else does Governor Romney not know about the ACA except that he prefers his pals in the insurance industry, the blokes who rescind health care contracts once the subscriber has the temerity to get sick?

For a guy known for his financial expertise, we're surprised that the Governor failed to mention that each one of the 15 appointees to the IPAB will be paid $165,000 annually for a total annual budget of $2,475,000 just for the 15 appointees -- staff and resource time will get counted later, right?

The IPAB can be repealed without repealing the entire bill. The mechanism would be to rescind Sections 3403 and 10320. The current stand-off means that one side won't improve what's wrong with the ACA and the other side would repeal all of it to bring back the greed-soaked insurance companies.

See also our October 4th blog; use the glossary to find more articles about the IPAB, the ACA, and related topics.

First Step: Repeal Section 10320 of the Affordable Care Act

In response to Politico writer Jennifer Haberkorn's article, "Tom Daschle, Bill Frist join forces on health care reform," here is my comment as to why Section 10320 of the ACA should be repealed.