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Hospitalists, Healthcare Reform, and the Presidential Election


Even though the 2008 elections seem very far away, the presidential nomination process is in full swing. Obviously, the No. 1 issue for most Americans is the war in Iraq. But, interestingly, the No. 2 item on many peoples’ list is healthcare reform. This is of particular interest to hospitalists because they are not only young and early in their careers, but clearly at the center of acute healthcare.

There are opportunities to reshape the financing and delivery of healthcare in a way that will be better for our patients and for hospitalists for many years to come. This will require us to be lucky, which I define as being prepared when opportunities present themselves and being ready to step up and change even when the future is not clearly defined.

The driving forces are several, not the least of which is the fact that in the richest country on Earth almost 50 million Americans still have no health coverage. We know these people eventually find their way to emergency rooms and are admitted to hospitals, but studies show the uninsured are sicker and die more quickly than the insured population. The uninsured are not the unemployed or the illegal aliens, but generally those with full-time jobs, our neighbors, our friends, and often our children of working age.

Because of a failure to adopt a national policy, several states have decided to move forward with their own attempts to insure all their citizens. Massachusetts enacted its landmark plan in 2006. (See The Hospitalist, May 2007, p. 1.) California Gov. Arnold Schwarzenegger has proposed a broad plan to insure the 6 million Californians without coverage. Schwarzenegger’s plan would require sacrifice by all constituencies and would be financed in part by taxing 3%-4% of each physician’s gross collections and an equal percentage on the revenue of hospitals. As you might imagine, this has led to the usual squawking from physician and hospital organizations. He has also called on contributions from the state’s general fund and support from the federal government.

Hospital medicine can no longer wait to see what will happen. SHM, along with other national partners in hospital medicine, must start developing the hospital medicine strategy and be active in reform.

At a national level, the American College of Physicians has developed its Patient Centered Medical Home proposal and has drawn support from the American Academy of Pediatrics, the American Academy of Family Physicians, and others. Basically, this plan calls for changes in the payment structure to recognize the coordination of care in managing chronic illness and taking care of the patient over time. This is a marked departure from our current system, which pays by the episode of care—the visit or the procedure. In many ways this approach harkens back to the best of managed care without being dragged down by managed care’s image of rationing care and limiting resources.

There are increasing calls to develop a single-payer plan to squeeze out the funds now “wasted” on the insurance industry and unnecessary administrative cost. In a perfect world this would allow for >90% of the healthcare dollar to go for patient-care services at a time where some insurance companies retain as much of 30% of every health dollar for profit and administration.

Some say we have elements of this process in place in covering seniors and the disabled with Medicare, in covering the very poor with Medicaid, and in covering children with S-CHIP (State Children’s Health Insurance Program). Much of this discussion overlooks the fact that in order to support Medicare, Medicaid, and S-CHIP, there needs to be cost-shifting to the tune of >125% that now comes out of private insurance payments. This also needs to be thought of in context of a population that craves choice and freedom in their healthcare and are very suspicious of enlarging government programs.

Some are calling for DRGs (diagnosis related groups) for hospital care for the physician component, much as exist for the hospital facility charge. This case-based approach may work well for the hospitalist model, where efficiencies could result and rewards can be tied to performance. More modeling and projections need to be done before this can be a viable option.

This leads to thoughts of how much pay for performance (P4P) will be a part of any healthcare reform. Some see this as the panacea. Others see P4P as motivating systems or institutions, but doing little to change individual physician behaviors. Some feel performance standards need to be part of the equation because institutions need to provide a transparent accountability of just how good a job they are doing. Hospitalists are in a position to provide leadership and direction as quality and documentation of performance become valued.

All this is woven through a political process that is media- and sound-bite driven.

While Hillary Clinton probably has more insider knowledge of healthcare reform concepts, she is so associated with the failed Clinton plans of the early 1990s that she may be reluctant to make healthcare her main policy direction.

John Edwards and Barack Obama, who want to speak for the “other America,” seem positioned to take on healthcare reform as a way to level the playing field and bring the 50 million uninsured at least up to some sort of healthcare access parity with the rest of Americans. Any proposal that tries to include another 50 million people will by necessity cause a revolution in the current system with marked, probably seismic, shifts in payment and delivery of care.

As the Republican candidates get sorted out, expect healthcare reform as a popular issue that isn’t a war issue to take a higher priority, much the way Al Gore and George Bush were touting their own approaches to a pharmacy benefit for seniors in 2000.

Hospital medicine at age 10 can no longer sit on the sidelines and wait to see what will happen. SHM, along with other national partners in hospital medicine, must start developing the hospital medicine strategy so we can be active participants in the reform discussions. The current system of reimbursement at the level of the visit or the procedure does not recognize the full value hospitalists can bring in improving quality, reducing resource use, increasing throughput and efficiency, etc. In addition, being on the front lines, catching everyone who is acutely ill and needs hospitalization regardless of ability to pay, puts us squarely in the middle of dealing with those Americans who lack insurance.

The good news is that hospitalists present many fewer barriers than other physician groups. We know we will be measured and that we need to prove our performance. We know we will treat the uninsured. There is no escape. We know many of us will still practice in 2025 and 2030, and we need to fix the system now because we will live in this space for many years to come.

Reforming healthcare—an industry that accounts for $2 trillion and 16% of the GDP—is staggering, but signs appear to indicate change is coming. SHM and hospitalists everywhere are ready to be part of the solution. TH

Dr. Wellikson has been CEO of SHM since 2000.

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