Download A History of Rationing in Healthcare

A History of Rationing in Healthcare.
Jeff Kaufhold, MD FACP
Summary
Rationing has been a part of healthcare since the beginning of time if you think about it.
At first, there were no doctors, no nurses, no hospitals, no medications or procedures.
In the Middle Ages, Medicine was often WORSE than no treatment; given the only
treatment was Blood Letting, Leaches, and Cupping.
In Colonial times Schools began to be established, which standardized the approach to
ailments and training. Trials of medical treatments started to be undertaken, and
important findings were published in peer reviewed Journals. Access to care still was the
main problem because of difficulty traveling, cost of care, and limited resources.
In the Dayton area, the first Hospital was established in 1890 as the Protestant Deaconess
Society of Dayton. It later became Miami Valley Hospital.
In the 1950’s, economic growth spurred the establishment of Health insurance as a
benefit of employment. Blue cross/Blue Shield was established in the 1950’s and
Lyndon Johnson established Medicare July 30, 1965. These Plans spread the wealth, and
were set up to cover the indigent elderly, and retired workers and their families. The
concept was that 4 working participants paid for 5 people’s care. When Medicare was
established, the average American only lived to the age of 67, so coverage that started at
65 wouldn’t be used very often, and the care available was very basic. The first ICU was
established in the 1960’s, and ICU care was not widely available until the 1970’s.
Doctors and Hospitals provided care to the Indigent and anyone who needed it, free of
charge, until Medicare rules in the 1990’s required Medicare to get the best rate a
Provider offered. That means that providers cannot provide free care to the indigent, as
Medicare will demand the same rate and stop payment. This policy resulted in the upside
down fee structure whereby we must charge the indigent full price, and the wealthy get a
discount!
By the 1970’s Government and Insurance company actuaries noted costs were rising,
seemingly in proportion to the number of doctors, and commissioned a study to find the
right proportion of primary care to specialists. The Graduate Education Medical
Advisory Council also called the GEMENAC study reported to Congress in 1981. This
study group was formed under the assumption that medical specialists were driving up
care by ordering more tests and procedures. As a result, that was the main finding of the
study. The study Group recommended sweeping changes in Medical Schools to
emphasize primary care and limit numbers of students. Ultimately this has created a
shortage of doctors today, as limits to the number of students and residents persist.
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Funding for Medical education, largely provided by Medicare Indirect Medical Expense
(IME) payments to hospitals, has been frozen at 1982 levels. There are recurring
attempts to cut funding for medical education completely out of Medicare funding for
training hospitals.
Specific Examples of the Impact of limited resources:
Hemodialysis is the prototype for Rationing.
The first successful Hemodialysis was in 1943. By 1960, treatment was becoming
available at major centers as the specialty of Nephrology grew. Long-term dialysis
became an option with improvements in dialysis machines and improvements in access to
the circulation. Quinton perfected the dual lumen intravenous catheter, Brescia and
Cimino collaborated on fistula creation, and Scribner developed the Scribner shunt.
Dialysis was expensive: each patient was given a machine, and trained to use it at home.
Since the original expectation was that patients would be rehabilitated and treat
themselves at home, the patient had to be reasonably healthy, trainable, and have a lot of
support at home. Generally, the whole program was too expensive for an individual to
afford, and since it was experimental, insurance would not cover it. Hospitals with an
interest in dialysis had to cover the cost from the operating budget. Even well healed
hospitals could not afford to provide dialysis machines to everyone who needed them.
The nephrologist needed a way to prioritize who should be treated and who would be left
to succumb to their disease. The hospitals established committees to choose among
candidates. These dialysis committees became the forerunners to today’s hospital Ethics
committees. (A trend that really took off after the New Jersey Supreme Court Decision
of March 31, 1976, In the Matter of Karen Quinlan, an alleged incompetent.)
The dialysis committees would meet periodically to decide which patients would be
trained for hemodialysis. The criteria were established by the committee members, and
could vary from hospital to hospital and from one meeting to the next. They would be
presented with a list of potential candidates, and rank them based on prognosis, ability to
be trained, comorbidities, and other factors.
Medicare to the Rescue?
In 1974, Congress responded to pressure from patients, Doctors, Hospitals and insurers
and passed a law providing coverage for dialysis under Medicare. The law was based on
analysis which showed slow, steady growth in the dialysis population. Most patients
remained reasonably healthy and productive members of society. Several patients went
on to become Nephrologists! Of course, this slow growth was the result of the cost of
treatment and the use of gatekeepers in the form of the Dialysis Committees.
Once Medicare covered the cost of dialysis, doctors and hospitals were free to offer it to
anyone who needed it. Patients were unburdened of most of the costs of dialysis. The
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barriers to access to dialysis treatment were gone, and the population blossomed.
Medicare has been reeling from the cost of this decision ever since. By 1978 Medicare
funded a study to see if patients were being dialyzed too much. As a result of the
increasing percentage of Medicare funds going to End Stage Renal Disease care,
Medicare funding for dialysis treatment has fallen (in real dollars) ever since.
Initially, reduction in reimbursement for dialysis drove measures to improve efficiency,
which resulted in the closing of most home dialysis programs and consolidation of
patients into dialysis centers. Recently the reductions have begun to impact access again,
as patients share of the cost has risen. Furthermore, because physician pay for dialysis
care has been stagnant or reduced over the last 10 years, Nephrology training programs
have had trouble finding applicants, and practices have trouble recruiting. It is estimated
that the field of Nephrology requires at least 400 new Trainees per year to cover the
expanding population of ESRD patients and the loss of practicing Nephrologists to
retirement. However only 200 graduates are produced each year. This forebodes a grave
shortage of qualified physicians in coming years.
Pay for Performance (P4P) initiatives are the latest effort by Medicare and other insurers
to “improve care”, which means “reduce expenditures”. Although no study has shown
that P4P measures will improve care or reduce costs, they are already in place to take
effect by 2010. Measures which raise concern about negative impacts on access include:
a. “Budget neutral” nature of the initiatives – many providers pay will be cut, so
a few that meet the arbitrary criteria can have a raise in reimbursement.
b. Quality benchmarks in P4P that cannot realistically be achieved in the most
rapidly growing segment of ESRD patients: the elderly cardio renal patient.
This segment has nearly a 50 % six month mortality, and poor vasculature for
fistula creation. The nephrologist may have to choose between denying
access to these patients and shouldering the tremendous cost of their care.
Rationing by Any other Name…
Rationing by Inconvenience is the method used by Insurers, including Medicare, to
reduce cost. If an insurer can get even 1 % of patients and providers to say “forget it, this
is such a hassle I’ll just pay for it myself”, the insurers save over a Billion dollars a year!
Methods of Rationing by Inconvenience include the classic case of an insurance company
offering healthcare with NO EXCLUSION FOR REEXISTING CONDITIONS. Signups
were limited to one day with little notice, and the office was on the third floor – of a
building with no elevator! More insidious are the cases which are denied because the
form isn’t completed properly, or in a timely fashion, or the “paperwork fell behind the
file cabinet”. Doctors who are paid by the Insurer to act as reviewers receive a
percentage of the profits based on their ability to deny cases. Pre-certification is another
example of rationing. The phone numbers are always busy. Your call is important to us
and will be answered in the order received….. with wait times of 20 to 40 minutes
average. Once the doctors office gets precertified, there is still no guarantee of approval.
It is amazing how often an insurance company representative can be “no longer with us”
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when the insurer decides to retrospectively deny a procedure or treatment AFTER the
doctor’s office staff has specific information on the approval process.
The other trend which lead to the inordinate power of the insurance company in medical
decision making occurred in the 1980’s. It was at this time that insurers started using the
terminology of “Provider”. Insidious at first then more brazenly, “Physician” and
“Doctor” were replaced by PCP (primary care provider) and provider or other
terminology. Once the captain of the ship was renamed, every aspect of care had a
provider, in effect leveling the power of physician, pharmacist, nurse, insurance
company, etc. This linguistic change has had a very powerful effect on reducing the
public’s perception of the place of the physician. It confuses the concept of WHO
SHOULD BE IN CHARGE of healthcare decisions. Is it the Doctor and Patient? Or is it
the Healthcare Team?
TO further confuse this central concept, insurers made another linguistic change also in
the 1980’s. At the same time as “The Doctor” became just another “Provider”, insurers
started using the language of “approvals”. I remember the first time I had to talk to an
insurance company representative in 1986. I had admitted a patient to the ICU for
evaluation of chest pain. The patient ruled out for MI and a stress test was planned. The
insurer needed more information and I was given a number to call. After waiting on
hold, I provided the synopsis of the case. At that point, the representative (they became a
“reviewer” in another linguistic coup) said “well I guess I can approve the admission”. I
asked if the rep was a physician, then reminded them that they couldn’t approve ANY
medical decision I made, they could only agree to PAY or not.
As a direct result of this linguistic charade, the insurance company has inserted itself at
the same level as the physician and patient, and given itself the authority to approve or
deny any treatment, at any time, even retrospectively, at the insurer’s whim. If a patient
becomes ill with an expensive disease, the insurer will go back years to find a symptom
such as fatigue or a cough, to imply that the disease pre-existed before the patient signed
up for that company’s insurance policy. Then drop the patient even if they are in the
midst of life saving treatment such as chemotherapy for cancer, or hemodialysis for renal
failure.
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