Healthcare Reform, Physician Shortages and the Struggle to Reduce Cost: Thoughts From Dr. Howard Dean & Ari Fleischer

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At the 19th Annual Ambulatory Surgery Centers Conference in Chicago, Howard Dean, MD, former governor of Vermont and DNC chairman, and Ari Fleischer, former White House press secretary, discussed the most pressing issues in healthcare — the 2012 presidential election and its impact on healthcare reform, the challenge of reducing cost without sacrificing quality, and the issue of recruiting physicians in a debt-dominated world.

The healthcare industry is in a time of transition, Mr. Lauer said. "Healthcare is going through one of the most dynamic times in history, with the passage of the Affordable Care Act," he said. "I've traveled across the country many times and talked to many people, and there is tremendous confusion about the impact of the Affordable Care Act — whether you have an ASC, a hospital, or another healthcare entity."

He said in the midst of this confusion, hospitals and surgery centers are scrambling to make good strategic choices, whether that means partnering with another facility, forming an accountable care organization, or strengthening market share with physician employment.

The future of healthcare reform after the election

Mr. Lauer asked the panelists, "What will happen with the Affordable Care Act if, for instance, Governor Romney becomes the president? What will happen in the future with the Affordable Care Act as a result of the election?"

Dr. Dean said that despite the uproar over the future of healthcare, the result of the election will probably not affect the Affordable Care Act drastically. "It will not be repealed on day one," he said. "These things take time. But I think the passage of this act is a watershed; a decision has been made, whether we like it or not, that healthcare is going to be reformed inside the private sector." No matter who becomes president, he said healthcare is going to change dramatically in the private sector — and that's a good thing.

"Healthcare costs are soaring," he said. He said the answer may lie in accountable care organizations, which are being formed all over the country but have yet to take a standardized form. He said once hospitals are able to build ACOs that can truly take on risk, they will be able to compete with health insurance companies, potentially driving down the cost of care.

"No matter whether Romney or Obama wins, the healthcare system is going to enact these movements towards quality over fee-for-service," he said.

Mr. Fleischer said the problem with healthcare at the moment is the attempt to combine the worst aspects of the public and private sector. "We have a healthcare system that's neither government-run nor private sector," he said. "It's the worst aspects of both, and we keep trying to mesh the two together and wonder why it doesn't work." He said if Gov. Romney wins the election, he will have no choice but to repeal Obamacare: as a conservative businessman rather than an ideological conservative, a failure to repeal the law could cause problems with his right-wing constituency.

How could the Affordable Care Act improve?

"This is the first time I've heard someone in politics who's willing to make a prediction," Mr. Lauer joked about the responses. He asked the panelists about the feasibility of the Affordable Care Act in its current form — "I think a lot of us agree that there are some portions that we all endorse and think are a good thing, and there are other parts which a lot of us are quibbling over." He asked what would have to be changed in the bill to bring the parties together and make the law work.

Dr. Dean responded by saying that the repeal of the Act itself is irrelevant. "Whether it gets repealed, the private sector will take the changes that make sense and run with them." If he were to change the bill, he said he would eliminate the individual mandate, which he never thought was necessary. "We did most of this stuff 20 years ago when I was governor," he said. "All our kids under 18 have insurance, and insurance companies can't charge more than 20 percent difference between the most expensive patient and the cheapest patient." He said the state was able to accomplish these things without an individual mandate.

He said he would also eliminate IPAB, the President-appointed group that sets healthcare pricing. "Price controls don't work," he said. "I'm not opposed to trying to control costs in medicine, but a group in Washington trying to set prices isn't going to work."

Mr. Fleischer said the "biggest plus" of the Affordable Care Act is that it delivers health insurance to approximately 30 million people who previously went without. "[It's] an absolutely worthy goal," he said. "We should care about people who don't have insurance. To be a rich and effective country, it should be bothersome that people can't get healthcare." He said the problem is the path to delivering that insurance — a massive, unfunded subsidy and a bill that will lead to increased spending, as with every entitlement program the government has passed. "We always underestimate how much these programs cost," he said.

He said the fundamental question remains: Do we accomplish our goal of reducing healthcare costs through government control, or is it possible to cut costs through patient-driven methods? He discussed a program pioneered by Gov. Mitch Daniels of Indiana, whereby state employees receive an annual lump sum (in addition to catastrophic coverage) for their routine healthcare. "They're finding that people are making very market-driven, rational decisions, and it's putting pressure on prices to go down," he said.

Reducing cost without sacrificing quality

As the conversation steered towards controlling healthcare costs, Mr. Lauer asked, "Which will affect the deficit more: the drug prescription program or the Affordable Care Act?"

"The drug prescription program has come in under budget," Mr. Fleischer said. Dr. Dean said he believes drugs actually reduce healthcare costs in the long run, and account for only 10 percent of the total bill of healthcare. He said the central disagreement he has with Mr. Fleischer is the efficacy of health savings accounts. "They're fine for stopping people going to the doctor unnecessary for a $100 office visit, but that's not where the money is," he said. "It's whether you're going to have a $35,000 coronary bypass."

He said when patients have to undergo serious care, they're not likely to "shop around" for a cheaper operation. They may visit a clinic for a check-up because of a cheaper price, but they're less likely to opt for major heart surgery because it costs $2,000 less than another option.

"What consumers can do is shop for health insurance well," he said. "They should make smart decisions about buying health insurance, because they can't make good decisions about which drug to buy based on cost."

Mr. Lauer moved on to the issue of a single-payor healthcare system, asking the panelists if the single-payor model would work on a national level.

"I don't think single payor is necessarily a bad thing," Dr. Dean said. He said because the overhead of Medicare is four percent — compared to 20 percent for private payors — a single-payor system has the potential to reduce cost.

The growing problem of physician shortages

Mr. Lauer asked the panelists whether they would recommend that their children go into medicine, considering the serious physician shortage the United States is facing in the next 10 to 20 years. Dr. Dean responded, "Absolutely yes. I went into medicine because I loved science and I loved people and I wanted to work for myself and not have a boss. If that's the reason you're going into medicine, you should do it."

"My children are six and eight," Mr. Fleischer said. "And I told them they can grow up to be anything they want, except Red Sox fans."

With the country facing a significant shortage of questions, Mr. Lauer wanted to know which areas will be hit the hardest — and what can be done to fix the issue.

Dr. Dean said the biggest problem with physician shortages is student loans. "Eight percent of the total graduating class of medical school graduates in 2010 went into primary care, which is not sufficient," he said. "If you graduate with $200,000 worth of loans, what you make as a primary care physician outside L.A. and New York [isn't feasible]."

Mr. Fleischer said there are a number of programs in the government that do forgive percentages of loans if you will work for a number of years in a rural or struggling community. "There are a number of altruistic young physicians who will move to those areas to take advantage of loans," he said.

Dr. Dean said while loan forgiveness problems are commendable, the real problem lies in how physicians are paid for their work. If physicians were paid on a capitated basis, he said primary care physicians would suddenly become more valuable. "If you are getting a certain amount per patient and you're an ACO, you're going to invest in people who will keep patients out of dialysis and cardiac catheterization," he said. "The best way to do it is to get patients when they're 20 and prevent the problems that will occur when they're 50."

Is information technology as beneficial as providers believe?

Mr. Lauer also expressed concern about the benefits of information technology in healthcare. Large hospital systems are mostly well on their way to implementing electronic medical records, "yet there are not many studies that show it's necessary we have IT," Mr. Lauer said.

Mr. Fleischer responded by saying the key to success with healthcare IT is standardization. If every hospital implements a different EMR that cannot communicate with its competitors, the transfer of information from provider to provider is halted and the technology becomes much less valuable. Dr. Dean added that the cost of implementing IT is prohibitive for a smaller practice — one of the reasons that the era of the entrepreneurial physician may be coming to an end. He said that EMR will likely "pay off someday down the road, but it's a very difficult business."

Consumer education and lifestyle incentives

Mr. Lauer wrapped up the panel with a discussion on consumer education and choice. In the age of the internet, he said, more consumers are making informed decision about where to seek healthcare, rather than simply following the recommendation of a physician. Dr. Dean said the problem is that while consumers are getting better-educated, they're learning more about low-cost, low-impact procedures, rather than serious operations for terminal illnesses such as cancer. He said the place to really make a difference is in incenting people to practice healthy behavior, such as exercising, eating well and visiting a primary care physician on a regular basis.

Mr. Fleischer mentioned end-of-life care, a controversial issue that nevertheless drives healthcare cost significantly. "We need to give patients control over the dying process," Dr. Dean added. "It's the last act of life, and they don't control it anymore."
The panelists concluded by saying that 2013 will be a fascinating time in healthcare, as the country attempts to achieve economic growth without adding to the U.S.'s significant deficit. "I believe all things begin and end with the ability of the economy to grow," Mr. Fleischer said.

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