Healthy Vision 2020

Eliminate costs and hassles that don’t contribute to or add value to patient care

New compliance requirements are bombarding physician practices seemingly every day. Just in January 2012, a new electronic format for claims and other electronic transactions (called “HIPAA 5010”) added new costs to physician practices. The switch to the International Classification of Diseases and Related Health Problems version 10 (ICD-10), currently set for October 2014, will require the adoption of an entirely new coding system to record all possible diagnoses and inpatient procedures. It will add significant physician and staff training costs.

Medicare’s required new PQRS provides a monetary incentive at first but imposes penalties beginning in 2015. A number of new state and federal privacy laws introduce more administrative burden, and severe new penalties for noncompliance. State and federal governments are using more “fraud” detection, resulting in monumental compliance programs that further increase the cost of running a practice. TMA and dozens of other medical societies have written to CMS “about the imminent storm that is about to occur due to simultaneous implementation of multiple programs that will create extraordinary financial and administrative burden, as well as mass confusion, for physicians.” These changes have limited documented evidence they will lower fraud or improve privacy, but complete assurance they will increase the cost of doing business in medicine.

It’s because of the vast number of complex commercial insurance and federal and state regulations that affect physicians and their patients that TMA developed the Deadlines for Doctors. (www.texmed.org/deadlines)

The cost to operate a physician’s office continues to climb unabated. Unfunded mandates and hidden regulatory burdens like the ongoing hassles of annually renewing state registration to continue to prescribe needed medications for patients threaten the viability of practices and patients’ access to care. The average cost to staff and run a practice now exceeds $500,000 per physician, and that’s before the physician gets paid a dime. These excessive administrative expenses add to the escalating cost of medical care that are borne by patients, employers, and taxpayers.

Excessive regulations also hurt local economies, which receive nearly $1 million in wages and benefits for each physician in practice. Physician offices employ support staff and often work with nonphysician providers, increasing the total number of employees in the industry to well above the count of physicians alone. In 2009, Texas office-based physicians supported 249,010 jobs. On average, each office-based physician supported 5.8 jobs, including his or her own.

Texas should not burden practices with additional regulatory costs that provide no benefit to patients or their health care.

Repeal the Independent Payment Advisory Board

Replacing the Sustainable Growth Rate formula will be meaningless unless Congress also repeals the Independent Payment Advisory Board (IPAB). Leaving both in place would create cruel and unusual double jeopardy for physicians who want to care for senior citizens and military families. The PPACA created a 15-member IPAB to recommend measures to reduce Medicare spending if costs exceed targeted growth rates set by the Centers for Medicare & Medicaid Services (CMS).

The PPACA prohibits the panel from recommending changes to eligibility, coverage, or other factors that drive utilization of health care services. This means the board will have only one option — cut payments. And through 2019, hospitals, Medicare Advantage plans, Medicare prescription drug plans, and health care professionals other than physicians are exempt.This means the board will have only one option — cut Medicare payments to physicians. Cuts the board recommends will automatically take effect, unless Congress acts to suspend them.

As we’ve seen with the SGR, it’s obvious that cuts the IPAB enacts will devastate Medicare beneficiaries’ ability to find physicians to care for them. The issue of Medicare spending for 3.8 million Texans is too important to be left in the hands of an unaccountable board that makes decisions based solely on cost.

Replace harmful restrictions with realistic incentives

TMA believes that the patient-physician relationship must be preserved regardless of patients’ health conditions, ethnicity, economic circumstances, demographics, or treatment compliance patterns. Unfortunately, many pay-for-performance strategies intended to contain health costs could undermine this relationship. These strategies have proliferated in both commercial and government health programs. The PPACA also relies on payment based solely on outcomes and mandates pay adjustments for all physicians, which may selectively penalize physicians who treat disadvantaged patients.

Pay-for-performance systems that do not risk-adjust properly for patients’ health status and that rely solely on claims data for evaluation of care will likely hurt the patient-physician relationship. This is particularly true if patient risk factors, chronic conditions, compliance, health disparities, and culturally competent care are not factored into the physician’s performance profile. For example, physicians’ ratings or payments are hurt if they are measured on how many of their patients obtain mammograms at appropriate times and the patient chooses not to follow the doctor’s advice to get the mammogram. Other examples of physicians’ quality rating measurements being directly impacted by patient choice include medication compliance, routine screening exams, weight management, and tobacco counseling.

Make sure enough physicians and other health care professionals are working in all parts of Texas

Imagine life without access to a physician, for yourself, your aging parent, or your child. Without access to a physician, life-enhancing and lifesaving medical care is virtually impossible. Physicians are the nucleus of the formula needed to achieve the vision of the Texas Medical Association: To improve the health of all Texans. Access to health care depends on the availability of physicians with the skills to match the needs of the state’s population.

Texas has a shortage of both primary care physicians and other specialists. Texas ranks behind all the other most-populous states in the number of patient care physicians per capita. To evaluate this shortage across specialties, we have devised a metric that compares the number of Texas physicians per 100,000 population with the U.S. average. We call this the “Texas Specialty Ratio.” The closer this ratio is to 100 percent for a given specialty, the closer Texas is to the national average.

•    Texas has fewer physicians per capita than the national average for 36 out of 40 medical specialty groups.

•    Texas needs both more primary care physicians and other specialists. A number of specialties have acute shortages.

•    Psychiatry and child/adolescent psychiatry are among the specialties with the lowest Texas Specialty Ratio.

We also must look to the Texas of tomorrow to evaluate the kinds of physicians we will need the most. Texas ranks fourth among the six most-populous states in medical students and resident physicians per capita. Texas continues to be overly dependent on other states and countries for supplying new physicians. Last year, nearly 75 percent of newly licensed physicians graduated from medical schools outside of Texas.We are thus subject to the vagaries of external forces that influence the numbers of physicians we can recruit. To meet future physician demands, Texas needs a stable, high-quality medical education system to produce homegrown physicians. Similarly, we must provide a reasonable opportunity for Texas medical school graduates to obtain their residency training in the state without being forced to leave home. Multiple studies confirm that physicians who complete both medical school and residency training in the state are three times more likely to practice here.

Because the human body is complex, the mastery of medical care is correspondingly complex, requiring a lengthy educational and training pipeline. Following college, physicians traditionally complete a four-year medical school education, followed by specialty training in residency programs for three to eight additional years, depending on the specialty.

The United States is in the midst of a medical education building campaign. Texas is among the leaders, with plans to increase enrollments to the nationally recommended 30-percent growth level by 2015. Texas is setting records in the number of medical school graduates, reaching 1,458 in 2011, a net gain of 80 (6 percent) from the preceding year.  The number of graduates is forecasted to peak at more than 1,700 this decade. 

Texas needs continued and stable state support

Invest in obesity control

Overweight and obesity contribute to diabetes, hypertension, heart disease, cancer, and stroke. Texas has an easy-to-see obesity crisis. Some 66 percent of Texas adults are overweight or obese; the United States average is 63 percent. During the past three decades, obesity rates in children have more than tripled in the country. Today, 32 percent of Texas children (ages 10-17) are obese.

The obesity epidemic, and the ever-younger age groups that it strikes, threatens Texas’ physical and fiscal health. Texas’ continually expanding waistline correlates to our health care cost demands. Obesity is responsible for 27 percent of the growth in health care spending. Treating obese patients costs 37 percent more than treating normal-weight patients.

The rise in overweight and obesity is affecting the bottom line of Texas employers. The Texas Comptroller’s Office found that in 2009, obesity cost Texas businesses an estimated $9.5 billion, due to higher employee insurance costs, absenteeism, and other effects. Left unchecked, obesity could cost employers $32.5 billion annually by 2030.

Improved physical health in students has been linked to academic success. Conversely, children with obesity are more prone to absences and lower grades. In the United States, students who are physically active at least 60 minutes on most days, play on at least one sports team, or watch fewer than three hours of television per day consistently have “mostly A’s.”

A great proportion of obese adults were overweight or obese as children. This serious risk factor is found in Texas, where more than 30 percent of children in grades 4 through 11 are overweight or obese. A child who is overweight at age 12 has a 75-percent chance of being overweight as an adult.

There is no single solution to preventing or addressing obesity. Multiple evidence-based approaches must be pursued for physicians, communities, schools, and workplaces, and each must identify potential barriers to implementing local programs.

Stop the Medicare Meltdown — repeal the SGR

Since the turn of the century, nothing has so regularly and completely vexed and frustrated physicians more than our annual game of chicken with Congress over Medicare payments.

Medicare patients and military families are never out of danger. Year after year, the specter of congressional action or lack of action threatens to jeopardize health care for Medicare patients. And, because TRICARE rates for military families are based on Medicare, they’re in danger, too.

This is because federal law requires Medicare payments to physicians to be modified annually using the Sustainable Growth Rate (SGR) formula. Because of flaws in how it was designed, the formula has mandated physician fee cuts every year for the past decade. Only short-term congressional fixes have stopped the cuts. In 2010 alone, Congress had to intervene five times to stop a 25-percent cut. It took emergency action in December 2011 and again in February 2012 to stop a 27.4-percent cut. That would have meant an annual loss of $1.71 billion to physicians for the care of elderly patients and Texans with disabilities.

Most commercial insurers pay physicians based on a percentage of the Medicare rate, which has changed little over the past decade. This double hit has meant a flat-lining of physician payment rates that threatens the viability of many physician practices and makes investment in new clinical equipment and health information technology increasingly more difficult and challenging.

Because Congress once again failed to repeal the SGR, the Congressional Budget Office projects that the next cut, scheduled for Jan. 1, 2013, will be approximately 30 percent. Without a permanent solution, the size of the cuts continues to grow.

Instead of fixing the flawed formula, Congress freezes the cut each year. In essence, Congress has put the SGR debt on our credit card. The 10-year cost of fixing the problem is now well over $300 billion.

Considering that Medicare currently pays, on average, at least 20 percent less than a physician’s cost to provide care, this decade-long and continued uncertainty is forcing some physicians to make the difficult decision to either opt out of Medicare, limit the number of patients they treat, or retire early. A recent TMA survey indicates that 50 percent of Texas physicians are considering opting out of the Medicare program altogether.

Medicare patients often can’t get in to see their physicians as quickly as needed. This forces Medicare patients to put off care until they are so sick they need to use a hospital’s ED, which is more expensive. Sending a Medicare patient to the ED is counterproductive to the goal set by Congress and the White House to keep health care costs down by encouraging all Americans to have a “medical home.”

We all recognize the value that hospitals, nursing homes, home health services, durable medical equipment, and other health care providers give to Medicare patients. Over the past decade, they have received annual payment increases, while physicians have not.

Medicare patients should feel anything but secure about the future of their health care. Physicians are the foundation of the Medicare program. Without a robust network of physicians to care for the millions of patients dependent on Medicare, the program will not work.

Invest in obesity control

Overweight and obesity contribute to diabetes, hypertension, heart disease, cancer, and stroke. Texas has an easy-to-see obesity crisis. Some 66 percent of Texas adults are overweight or obese; the United States average is 63 percent. During the past three decades, obesity rates in children have more than tripled in the country. Today, 32 percent of Texas children (ages 10-17) are obese.

The obesity epidemic, and the ever-younger age groups that it strikes, threatens Texas’ physical and fiscal health. Texas’ continually expanding waistline correlates to our health care cost demands. Obesity is responsible for 27 percent of the growth in health care spending. Treating obese patients costs 37 percent more than treating normal-weight patients.

The rise in overweight and obesity is affecting the bottom line of Texas employers. The Texas Comptroller’s Office found that in 2009, obesity cost Texas businesses an estimated $9.5 billion, due to higher employee insurance costs, absenteeism, and other effects. Left unchecked, obesity could cost employers $32.5 billion annually by 2030.

Improved physical health in students has been linked to academic success. Conversely, children with obesity are more prone to absences and lower grades. In the United States, students who are physically active at least 60 minutes on most days, play on at least one sports team, or watch fewer than three hours of television per day consistently have “mostly A’s.”

A great proportion of obese adults were overweight or obese as children. This serious risk factor is found in Texas, where more than 30 percent of children in grades 4 through 11 are overweight or obese. A child who is overweight at age 12 has a 75-percent chance of being overweight as an adult.

There is no single solution to preventing or addressing obesity. Multiple evidence-based approaches must be pursued for physicians, communities, schools, and workplaces, and each must identify potential barriers to implementing local programs.

Improve rural access to care

Physician shortages constitute a special problem in rural areas of the state. The continued urbanization of Texas exacerbates this longstanding problem. Approximately 12 percent of Texans live in rural counties, yet only 10 percent of primary care physicians practice there. In 2011, Texas had 52 primary care physicians per 100,000 population in rural areas versus 72 per 100,000 in urban areas. Physician shortages in rural areas not only hinder access to primary and other specialty care but also lead to potential losses in the local economy, difficulties attracting new businesses, and diminished quality of life for residents. A number of factors hurt physicians’ ability to open and sustain rural practices, including heavy concentration of Medicare, Medicaid, and uninsured patients; professional isolation; and high debt after medical school.

Physician practices in rural Texas contribute to the local economy in three critical ways.

•    They employ administrative and clinical staff to help care for patients. On average, a solo primary care physician in a rural area will employ three staff: a registered nurse, a medical technician or licensed vocational nurse, and a receptionist/billing clerk.

•    They contribute revenue to and generate additional employment at local hospitals through inpatient admissions and outpatient services.

•    They generate essential tax revenues for their communities.

If rural physician practices and rural economies are to thrive, physicians need incentives to practice in those areas. Medical school programs with rural-focused curricula increase the supply of primary care doctors in underserved areas as do loan forgiveness programs like the National Health Service Corps and the State Physician Education Loan Repayment Program (SPELRP).

TMA Recommendations on Health Care Workforce:

•    Preserve and protect state support for undergraduate medical education and the cultivation of the future generation of Texas physicians, thus ensuring stable access to health care for all Texans.

•    Support and develop new graduate medical education programs in the specialties that best reflect the state’s health care needs. Support incentives for hospitals and other community-based agencies to develop residency programs in the specialties most needed.

•    Direct the Texas Higher Education Coordinating Board to coordinate the availability of graduate medical education training positions so that Texas can retain our graduates for residency training.

•    Sponsor research to identify and promote innovations in training primary care residents for practice in Texas, and to address the factors that influence why few U.S. medical school graduates select this training.

•    Adjust the payment system for health care services to make primary care an attractive career option for those considering a rural practice.

•    Reinstate the State Physician Education Loan Repayment Program funds that were slashed during the 2011 legislative session to encourage physicians to practice in rural and medically underserved communities.

•    Strongly oppose any efforts to expand scope of practice beyond that safely permitted by nonphysician practitioners’ education, training, and skills.

•    Support expansions of scope of practice laws that protect patient safety, are consistent with team care, are based on objective educational standards, and improve patient care services.

Support responsible ownership of hospitals

Texas’ health care delivery system has changed dramatically over the past decades. Life-saving technologies and treatments, and the types of settings in which patients receive services have proliferated. Physicians, hospitals, and others have invested extensively in these technologies and settings. While physician investment in the health care system is not new, there have been considerable changes in health care coverage, financing, licensing, and regulatory environment over the past decade. These changes drive the debate over who should invest in facilities. Texas is also the uninsured capital of America, which creates competition for a dwindling supply of paying patients.

TMA strongly supports responsible physician investment in technology, facilities, services, or equipment. Physicians invest in facilities to improve the effectiveness, efficiency, timeliness, and quality of the care they provide to their patients. The focus should be not on who owns the medical facility — a physician, a nonprofit entity, or a for-profit company — but on the quality of the facility and appropriateness of patient care. Referrals to a physician-owned entity or an entity in which the physician has a financial relationship must be based on the patient’s medical needs, and full disclosure of financial relationships to patients is appropriate. If overutilization or deviations from quality care are the issues, legislators should address those problems regardless of ownership, rather than limiting patient choice and innovation in the marketplace.

One of the more egregious sections of the Patient Protection and Accountable Care Act significantly inhibits physicians’ legal right to own or invest in hospitals and other facilities that provide high-quality care to their patients. Section 6001 prohibits new doctor investment in hospitals that take Medicare patients; no physician-owned hospitals may start nor may current ones expand.

Federal law should not interfere with physician ownership of hospitals. Studies show physician hospitals have better health care outcomes, shorter hospital stays, and much higher patient satisfaction ratings than nonphysician-owned hospitals. In Texas, physician-owned hospitals employed 22,226 people and paid $1.2 billion in salaries in 2009.Nationally, physician-owned hospitals provide, on average, approximately 6.2-percent charity care. These hospitals pay billions in salaries, hundreds of millions in taxes, provide charity care, and deliver services in underserved or abandoned areas. TMA has filed several legal briefs that support a lawsuit seeking to overturn Section 6001 of the PPACA.

Promote the patient-centered medical home for every Texan

Consider that the costliest 1 percent of patients in the United States account for more than 20 percent of what the nation spends on health care. They are older patients with cancer, diabetes, heart disease, and other serious chronic conditions. Many have multiple health problems, and their relatives might not be helping with their care. Most have private insurance and are white and female.

As public and private payers look for ways to lower costs, improve patient outcomes, and ease burdens to access, they are turning to models of care that both increase economic efficiencies and enhance patient care. One of these is the patient-centered medical home (PCMH) model. A PCMH is a primary care physician or physician-led team who ensures that patient care is accessible, coordinated, comprehensive, patient-centered, and culturally relevant. The physician or team directly provide, coordinate, or arrange health care or social support services as indicated by the patient’s individual medical needs and the best available medical evidence. The model uses a team-based approach with the patient’s primary care physician leading the overall coordination of care. Trained teams and well-constructed electronic health records (EHRs) are key to a successful PCMH.

TMA supports the use of the PCMH model in Medicare, Texas Medicaid, and commercial insurance plans. Public and private payers have, increasingly, been looking to this model as a way to reduce fragmented care, lower costs, avoid repetitive and costly procedures, and improve patient outcomes. Given the budget constraints that Texas faces and a growing population with unique health care needs, the PCMH offers the potential for Medicaid cost savings as well as improved patient outcomes and physician and provider satisfaction.

In recent years, numerous states have implemented PCMH initiatives that engage both private and public payers. While each program design was unique and each measured success differently, these initiatives showed improved outcomes and reduced costs. Below are just a few examples of PCMH successes.

•    In a recent Blue Cross and Blue Shield pilot in Colorado, New Hampshire, and New York, the program showed an 18-percent decrease in acute inpatient admission rates compared with an 18-percent increase in the non-medical home group. Additionally, there was a 15-percent decrease in the rate of emergency department visits, compared with a 4-percent increase in the non-PCMH group.

•    Oklahoma saw complaints about access to same-day or next-day care decrease from 1,670 in 2007 (the year before PCMH implementation) to 13 in 2009 (the year after implementation). Oklahoma saw a decline in expenses of $29 per patient per year from 2008 to 2010.

•    Inpatient hospital admissions for aged, blind, and disabled Medicaid beneficiaries participating in Community Care of North Carolina decreased 2 percent between 2007 and the middle of fiscal year 2010. Inpatient hospital admissions for the unenrolled beneficiaries increased 31 percent over the same time period. Overall, Community Care of North Carolina saved nearly $1.5 billion in costs between 2007 and 2009.