Health Affairs

Most experts agree that primary care needs to be re-invented. There are a lot of promising ingredients of practice redesign: better scheduling, electronic medical records with patient portals, redesigned clinician workflow, and work sharing. Linda Green’s intriguing article in the January Health Affairs simulates a strategic combination of these changes and argues if they all happened at once, we would have no primary care physician shortage.

Even if we make much more effective use of clinical time and energy, however, Green’s formula isn’t going to get us far enough fast enough. The baby boom generation of physicians is fast nearing its “sell by” date. In 2010, one quarter of the 242,000 primary care physicians in the US were 56 or older. One in six general internists left their practices in mid-career. Many more hardworking clinicians delayed retirement due to the 2008 financial collapse.

Few manpower specialists have noted the cohort effect likely to manifest itself shortly. A continued economic recovery and, more importantly, a recovery in retirement plan and medical real estate asset values will lead as many as 100,000 physicians of all stripes to leave practice in the next few years. We will be replacing a generation of workaholic, 70-hour-a-week baby boom physicians with Gen Y physicians with a revealed preference for 35-hour work weeks. During this same period, we’ll be adding 3 million new Medicare beneficiaries a year and enfranchising perhaps 25 million newly insured folks through health reform. “Train wreck” is the right descriptor of the emerging primary care supply situation.

For the third year in a row, national health spending in 2011 grew less than 4 percent, according to the CMS Office of the Actuary. However, the report said modest rebounds in pharmaceutical spending and physician visits pointed toward an acceleration of costs in 2012 and beyond. CMS’s analysts make much of the cyclical character of health spending’s relationship to economic growth and also forecast a doubling of cost growth in 2014 to coincide with the implementation of health reform.

This non-economist respectfully disagrees and believes the pause could be more durable, even after 2014. Something deeper and more troublesome than the recession is at work here. As observed last year, the health spending curve actually bent downward a decade ago, four years before the economic crisis. Health cost growth has now spent three years at a pre-Medicare (indeed, a pre-Kennedy Administration) low.

After a summer of disappointing economic news, the recent Census report on the uninsured was a rare bit of sunshine. The number of uninsured Americans declined by about 3 percent, or 1.34 million, to 48.6 million in 2011. This was the largest one-year numerical decline in twelve years. There were “only” about 1.7 million more uninsured in 2011 than there were in 2006, before the devastating recession.

The search for policy fingerprints on these findings points directly to Medicaid. For all the controversy over this program, the safety net did its job. Medicaid enrollment rose another 4.4 percent in 2011, or 2.2 million people, likely masking continued shrinkage in private insurance coverage. If Medicaid rolls had not expanded by 10 million folks from 2006 to 2011, the number of uninsured would have soared due to the recession.

In July, 2012, the US economy produced roughly the same volume of goods and services as it did five years earlier with five million fewer workers.  Yet, during the first four years of the recession (May 2007 to May 2011), the US health system, despite slowing or declining utilization, added 1.149 million workers.  Key sectors,... Read the rest of this entry »

A recent spate of commentaries on the continuing health spending moderation raise an important policy question:  If the cost curve is well and truly bent, why are we investing so much of our policy energy on bending it further, when the more pressing problem is the declining percentage of Americans that can afford our health... Read the rest of this entry »

The Medicare Payment Advisory Commission (MedPAC) is the closest thing Congress has to adult supervision on important health policy questions. The Commission commands bipartisan respect both for its record of sound policy advice and for its leadership. With its October recommendations, MedPac attempted to solve the sustainable growth rate (SGR) physician payment formula budget crisis... Read the rest of this entry »

Other than the egg-laying exercise surrounding the ACO regulations, 2011 was a quiet year among Washington health policy experts until June 6 when McKinsey released the results of a survey of employer plans under the Affordable Care Act. The McKinsey study found that roughly 30 percent of employers were considering dropping their employee insurance coverage... Read the rest of this entry »

In the ten months since the passage of health reform, health care managers, particularly those in hospitals and health systems, have struggled to make sense of an onslaught of change in Medicare policy.  The response has been depressing:  an accelerating wave of merger and acquisition activity, both horizontal hospital mergers and an accelerating concentration of... Read the rest of this entry »

Of all the ghosts that haunt the Medicare program, none has been noisier, scarier or rattled more chains than the Medicare Sustainable Growth Rate (SGR) problem.   SGR has required Congress to reset physician payment policy almost every year for the last decade to avoid gutting Medicare physician compensation, a recurring reminder of how difficult Medicare... Read the rest of this entry »

Last fall, David Blumenthal and James Morone published a timely history of the presidential handling of health reform from Franklin Roosevelt onward, called The Heart of Power (see my review in Health Affairs). At the end of the book, they offered eight rules for presidential management of health reform distilled from the experience of the past... Read the rest of this entry »

Tim Jost’s thoughtful analysis of the state of health reform concluded that the only practical means of accomplishing health reform is to find a short parliamentary path to some melded version of the two bills that passed the respective Houses. In a comment in response to Jost’s Post, I argued that even if the bills were... Read the rest of this entry »

No single government report more reliably generates editorials on the nation’s healthcare “crisis” than the annual CMS actuary’s report on US health spending. I’ve long suspected that a lot of these editorials, like obituaries, are written in advance, so that the editorialist can simply fill in the new numbers.  A two-decade long accumulation of these editorials... Read the rest of this entry »

Last week, the Congressional Budget Office weighed in on the biggest economic imponderable in the health care debate:  how private health insurance premiums will behave under health reform. Building on its December 2008 CBO health insurance market analysis,  CBO forecast largely benign effects from health reform’s private market reforms and subsidies on the vast majority... Read the rest of this entry »

As Senate and House Committee versions of health reform move toward unified legislation and floor votes, the most complex political challenge is how to resolve the “public option” controversy.  While one would have thought weightier issues such as the shape of Medicare reform, the taxation required to support coverage subsidies, or the presence or absence... Read the rest of this entry »

Editor’s Note: In the post below, Jeff Goldsmith argues that the concept of accountable care organizations (ACOs) is “not ready for prime time.” In a response, Aaron McKethan, Mark McClellan, Elliott Fisher, and Jonathan Skinner state that ACOs represent a critical step away from volume-based health care payment and toward better health and better care at lower cost.... Read the rest of this entry »

One of the most controversial parts of the Obama health reform campaign platform was its pledge to create a new Medicare-like public health insurance offering that would “compete” with existing private insurance plans, and put pressure on them and on providers to hold down costs. It would do this mainly by using Medicare-like pricing leverage... Read the rest of this entry »

Since the release of the president’s budget in February, the national health reform policy process has entered its “underground” phase. While we wait for details to emerge from secret meetings on Capitol Hill, the president’s financing plan for health reform is in increasing difficulty. We should take President Obama at his word that he is... Read the rest of this entry »

When President Obama announced Peter Orszag as his choice for director of the Office of Management and Budget, many in the health care community ran for Google. Orszag, an intense and studious 40-year-old economist, who headed the Congressional Budget Office during 2007 and 2008, has emerged as a forceful advocate of controlling entitlement spending and... Read the rest of this entry »

When Tom Daschle, President-elect Barack Obama’s designate for Secretary of Health and Human Services, published a book earlier this year titled Critical: What We Can Do about the Healthcare Crisis, I saw the favorable reviews and made a mental note to buy and read it. After Obama’s announced choice of Daschle for HHS secretary, this... Read the rest of this entry »

Barack Obama won the presidency campaigning on a promise substantially to expand health coverage. His ability to achieve this promise rested on the capacity to raise and spend about $1.6 trillion over ten years to subsidize private coverage for individuals and small businesses that could not otherwise afford to buy it themselves, as well as... Read the rest of this entry »