Special Report
Changes in the Delivery of Care under Comprehensive Health Care Reform
N Engl J Med 1993; 329:1672-1676November 25, 1993
- Article
Physicians occupy a pivotal position in the health care system. Economist Victor Fuchs has called them the captain of the ship, responsible for the large majority of decisions that direct the treatment of patients and determine what happens to them1. Physicians also understand the health care system as no one else can. They know when the system works and when it fails.
The critical test of the Health Security Act will lie in the day-to-day practice of medicine. How will it work for patients? How will it work for doctors? Will reform through the Health Security Act foster better access, more continuity, and higher-quality care? Will physicians be able to care for patients in a way that is professionally rewarding? The answers to these questions are key to the success or failure of the reform effort -- and to the quality of care we ultimately deliver to patients.
Structural Changes in the Delivery of Care
Provisions in the Health Security Act that guarantee security and a comprehensive package of benefits will simplify physicians' daily practice and allow them to provide better clinical care. No longer will physicians have to worry about patients' forgoing health care because they are uninsured or underinsured. No longer will doctors have to ferret out details of a patient's insurance policy to see whether a needed service is covered. Preventive services such as mammography, poorly covered under many plans today, will be fully covered. All patients will have coverage for medications, and patients will have coverage for long-term care, provided in the community and in the home, where most patients prefer to stay.
Comprehensive health care reform will also facilitate choice of doctor and continuity of care. Too often patients are forced to switch doctors because the loss of a job or a change in employer means loss of or change in insurance coverage. Under the Health Security Act almost all approved health plans in an area will be available through the health alliance. When patients enter the system they can ascertain which health plans their chosen physician belongs to and choose one of those plans. If a patient subsequently loses a job or changes jobs, or when the patient becomes 65 and is eligible for Medicare, there will be no problem in continuing with the same provider. Security, comprehensive benefits, and continuity of care, fundamental to comprehensive reform of the system, will play out day to day, making it easier for doctors to care for their patients and easier for their patients to obtain the care they need.
Interference with the Delivery of Care
Intrusion into care and the “hassle factor” are major issues of concern to practicing doctors in the present system. Changes in the organization of care have exacerbated these problems. Preadmission certification, concurrent review, and high-cost-case management -- tools originally used by health maintenance organizations (HMOs) -- have been widely adopted by a range of plans that fall under the umbrella description “managed care.” More than 90 percent of privately insured Americans are now enrolled in either a network-based plan or a more conventional indemnity plan that incorporates utilization-review techniques2. Indeed, the 1990s have already become the decade of managed care.
Physicians are concerned that intrusion will increase even further under a reformed system. They fear a loss of autonomy. They worry that they will be prevented from practicing in certain health plans or forced to accept methods of management that will interfere with their efficiency and harm patient care.
Inherent in the Clinton administration's Health Security proposal is the idea that better-organized and more efficient plans will in the long run prosper, leading to greater use of organized networks for care. However, the proposal is also designed to foster the emergence of new community-oriented, professionally centered health plans that will be more responsive to the needs of physicians than existing plans. Networks made up of doctors, hospitals, and other providers will be encouraged to develop health plans in which insurance companies serve as subcontractors and providers bear financial risk. The economic playing field will be leveled to reduce the advantages now held by insurance companies. The current exemption from the antitrust laws enjoyed by health insurers will be repealed; they will no longer be able to determine collectively the rates they charge and other terms of their relations with providers. Physicians will negotiate a fee-for-service schedule with the health alliance. A federal loan program will also be established to assist in the development of community-based plans.
The proposed legislation will also enable providers to negotiate more effectively with traditional insurers and apply other forms of leverage. Under the Health Security Act, physicians' bargaining power should increase relative to that of health insurers. Currently, the majority of employers offer only a single health insurance plan or a choice of two plans (McArdle F, Hewitt Associates: personal communication). When an employer changes insurers, patients are often forced to change doctors. As a consequence, physicians sometimes feel forced to join networks that offer unfavorable terms in order to preserve their patient base.
Under the Health Security Act it will be easy for most patients to choose a plan that includes their doctor, since almost all health plans are likely to be available through the health alliance. When patients change jobs, changing doctors will no longer be necessary. Moreover, if a physician leaves one plan for another, the new one will probably also be available to his or her patients through the alliance. Thus, doctors will be the ones with the greatest control over their patient base. Insurance companies that now increase market share by signing up employers will instead seek to sign up doctors.
Physicians will also be allowed to join together in groups to establish or negotiate prices for health services if they share risk and have combined market power that does not exceed 20 percent of the market. Larger networks will be given an expedited review by the Justice Department to let them know whether they will be challenged under antitrust provisions. Each alliance will also have an advisory board made up of health providers. Plans will be required to disclose their utilization-review protocols to the alliance. Providers will have an opportunity to review and challenge those that interfere with office practice. Alliances, run by consumers, will probably discourage the use of plans whose utilization-review procedures are disruptive to patient care.
Despite the change in rules and the opportunity it affords, many physicians may still prefer a less active role. This will be possible. There will be a fee-for-service plan available through every alliance, and physicians will be able to join one or more plans as they choose. Individual physicians need not join together in groups that will take on risk or negotiate about the management of care. Nevertheless, the vision embodied in the Health Security Act is of a system in which health providers become more active partners in the organization of medicine. The hoped-for result is community-based care and less interference in day-to-day clinical practice.
Administrative Simplification
Forms, other paperwork, and burdensome administrative requirements are another concern of providers. Statistics on administrative costs support their concern. As much as 25 percent of the hospital bill is spent on administration, depending on the categories included3. Expenditure for administration is far higher in this country than in Canada4. Because of paperwork and related requirements, less than 50 percent of a nurse's time in the hospital actually involves hands-on attention to patients5. Although we lack similar data for physicians, we know that paperwork is cited by physicians as a major concern6.
Administrative simplification is an important goal of health reform. Reducing the number of insurers and standardizing benefits will reduce the burden of paperwork. Multiple claims forms will be replaced by simplified forms that are standard for all payers. Standard coding and content requirements will eliminate the multiple, conflicting requirements health providers now face. Duplicate coverage will be also substantially reduced, eliminating paperwork associated with the coordination of benefits.
The Medicare program will participate in implementing standard forms and streamlining utilization review, as required under health reform. Medicare will simplify its claims process and other procedures to reduce the existing administrative burden. It will, for example, eliminate complexities in the rules for Medicare Part A and Part B claims, limit program changes to once every six months, and repeal legislation requiring precertification by the Medicare Peer Review Organization for certain surgical procedures.
Changes in Quality Management
Quality-assurance programs rely too often on external checks, forms and process manuals, and punishment of providers whose treatment strays from established norms. Insurance carriers, peer-review organizations, and state and federal inspection agencies audit the work of hospitals, doctors' offices, and laboratories and penalize providers if they fail to follow the rules. The Health Security Act will attempt to transform this system into a quality-management system focused on performance measures and continuous improvement.
Currently, both providers and consumers lack information on the performance of providers. The Health Security Act calls for a national program of quality management in which the federal government develops core measures of performance that apply to all health plans, institutions, and practitioners. Annual quality reports will be available to consumers and will include useful information about the performance of alliances and health plans as measured by as many as 50 indicators of access to care, appropriateness of care, outcomes, and consumer satisfaction. The reports will provide information on a smaller number of measures of quality for health care institutions, doctors, and other practitioners when the available data are statistically meaningful.
Providing standard information on the quality of care is not a new idea. New York and Pennsylvania both publish reports on health outcomes after cardiac-bypass surgery. The National Committee for Quality Assurance and a consortium of insurers and employers have developed a battery of measures that assess the performance of health plans. A number of insurers have agreed to publish data on their performance using these measures. United HealthCare Corporation in Minneapolis publishes a performance report on providers for more than 2 million patients in their health care system. Drawing on these efforts, the Health Security Act calls for an unprecedented attempt to provide nationally comparable information on the quality of care.
The provision of standardized information will make it easier for consumers to make choices and press for high-quality care, which will have positive effects on the behavior of providers. As providers take greater responsibility for the management of health plans, standardized information will also allow them to gauge their own performance and stimulate efforts to improve quality within the profession. Regional professional foundations supported by federal funds will provide tools for these efforts by disseminating information about the best clinical practices, innovations in the use of the health care work force, practice guidelines, and successful quality-improvement techniques.
The Health Security Act will also streamline existing quality-assurance programs. The Health Care Financing Administration now conducts three quality-assurance programs -- the Medicare Peer Review Organization program, the Clinical Laboratories Improvement Act program, and the program of licensure and certification standards for institutional providers -- that were designed to provide basic consumer protection. All three have been criticized, however, as placing undue burdens on providers and practitioners.
In line with the new national goals, the peer-review program will continue to move toward analysis and improvement of patterns of health care and outcomes and away from individual case review. Eventually, when the new national program in quality management is implemented, the Medicare Peer Review Organization will be phased out. The regulation of laboratory testing will be refocused to reduce the administrative burden. Laboratories performing only “waived” tests (simple tests such as dipstick urinalysis or testing for fecal occult blood) and microscopy will be exempt from requirements under the Clinical Laboratories Improvement Act, including registration and payment of fees to the Department of Health and Human Services. Proficiency testing will be redirected to serve a primarily educational function. The regulatory burden on laboratories performing moderately complex tests will be eased, and requirements for laboratory personnel in rural and underserved areas will be modified to take into account the effects of personnel shortages.
Over time, uniform standards that focus on performance will replace the detailed structural and procedural standards that are now part of the licensure of health care institutions. In nursing homes, for example, this shift might mean focusing on rates of decubitus ulcers rather than ensuring that kitchen shelving is a certain distance from the floor. Government inspections will also be coordinated and their number reduced.
Medical Malpractice
We know that the existing malpractice system serves neither physicians nor patients well. Many patients who are injured through negligence fail to bring suit,7 and many claims that do reach the courts are frivolous, resulting in needless expenditure and distraction for physicians. The defensive medicine that physicians practice as a consequence not only produces unnecessary expenditures but in some instances also causes patients harm.
In the Health Security Act, reform of the malpractice system encompasses both changes in tort law and the development of alternative approaches to resolving patients' claims against providers. The reforms will first change the requirements for injured patients who wish to go to court. Under the Health Security Act, anyone claiming a malpractice-related injury will first need to submit the claim to an out-of-court panel that will use mediation or a related technique to resolve the complaint (alternative dispute resolution). If the patient remains dissatisfied, he or she may pursue the case in court but must first obtain a certificate of merit -- an affidavit from a doctor stating that the care the patient received was not up to par. The act will also limit attorneys' fees to one third of an award, allow damages to be paid over a period of time rather than in a lump sum, and prevent patients from being paid twice for the same injury -- both by the doctor and by their own health or disability insurance. Finally, the act will promote experiments with progressive ideas such as freeing doctors from malpractice liability if they can show that they followed prescribed guidelines for clinical practice.
Each of these proposals has been tried in some states, and most have been endorsed by the physician community. However, no state has adopted all of them. The Health Security Act represents the first national attempt to address malpractice reform, and it does so from several angles.
Cost Containment and Physicians' Incomes
Historically, physicians have been well paid. American doctors earn nearly five times what other workers earn8. In recent years that disparity has increased. Between 1982 and 1989 physicians' real incomes went up by 24 percent,9 whereas the incomes of others went up by only 9 percent10.
These global data on physicians' incomes hide tremendous disparities within the profession. Primary care physicians are much less well paid than certain specialists. For example, in 1991 the mean income for family doctors was $111,500, whereas radiologists earned $229,800 and surgeons $223,80011.
Adoption by the Health Care Financing Administration of the resource-based relative-value scale for Medicare beneficiaries set off a series of changes that will reduce the disparity in income between doctors who provide primary care and specialists. Under health reform, many fee-for-service plans will probably use a variant of the scale to set fees. Thus, the Health Security Act will accelerate trends toward equity within the profession. Indeed, the Health Security Act calls for the Health Care Financing Administration to modify the current resource-based relative-value scale and future expenditure targets to pay more for primary care and to encourage more young physicians to enter primary care practice. There will also be a national program of forgiving medical students' loans to encourage practice in primary care.
The Health Security Act will also reduce disparities in payment among different patient groups. Full payment will now be provided for the care of patients who qualify for Medicaid or who would otherwise have been uninsured, thereby reducing the amount of uncompensated care that physicians provide.
The overall effect of health care reform on physicians' incomes remains to be seen. The provision of universal coverage is likely to increase the overall demand for physicians' services. The Health Security Act takes strong action to slow the overall rate of growth of health care expenditures in the United States. But it relies first on the power of competition to accomplish that goal. Doctors and other health care providers who practice in health plans and networks that provide high-quality care while controlling costs may see little change in their incomes.
The magnitude of any change is also uncertain because it will be determined largely through private-sector negotiations between physicians and health plans. Health plans will surely favor a lower rate of increase in doctors' fees, just as they do now. But payments to doctors account for only 20 percent of the total health care bill12. Cost containment will succeed only by engaging doctors in cooperative efforts to control the provision of inappropriate and ineffective services.
Academic Health Centers
There has been substantial concern that academic health centers will be unable to compete in a revitalized market because of their higher costs, putting in jeopardy the valuable services they provide in research, training, and the provision of front-line and highly specialized care. The Health Security Act will protect academic health centers while challenging them to refocus their mission to be consistent with dramatic changes in the medical landscape.
Historically, academic health centers have had autonomy in determining the number and mix of their medical trainees. The Health Care Financing Administration has covered a share of the direct costs of medical education (for example, residents' salaries) based on patient volume ($1.6 billion in 1992) and the indirect costs caused by the need for highly specialized services, the inefficiency of trainees, and the greater severity of illness among patients ($3.6 billion in 1992)13. The bulk of federal funding has not been tied to any targets for the number and mix of trainees, although there are small federal programs to encourage the training of family practitioners, general internists, and generalist pediatricians, among others. Funds to cover the costs of training have also been obtained from the private sector through higher reimbursement rates.
Under the Health Security Act, the federal government, acting through a national council made up of both providers and consumers, will make decisions about the number and mix of medical trainees, with the goal of substantially increasing the percentage in primary care (family practice, general pediatrics, general internal medicine, and obstetrics and gynecology). Slots will be allocated to training programs that will include academic health centers and other hospitals as well as ambulatory sites such as neighborhood health centers, HMOs, and the offices of physicians who work in networks. Both Medicare and private payers will contribute to funds that will pay training programs for the direct costs of education and academic health centers and other hospitals for the indirect costs. In aggregate, these funds will exceed the current federal contribution.
Academic health centers will receive substantial additional support. The Health Security Act calls for expanded federal support for research, especially in the areas of prevention and the use of health services. Federal funds will also allow academic health centers to work as part of regional professional foundations and develop programs for lifelong learning that will enable doctors and other health professionals to remain abreast of new knowledge and acquire the requisite skills to keep pace with changes in technology and society's needs. All health plans will be required to contract with one or more academic health centers to ensure that their patients have access to highly specialized and complex procedures. Health plans will also be required to contract for at least five years with academic health centers in underserved areas that are designated as essential community providers.
The change in regulations and the development of all-payer funding pools to pay for medical training signal clear support for academic health centers. These institutions have a critical role in research, training, and patient care that must be preserved. The allocation of training slots and funding to training programs and the need to coordinate programs of lifelong learning will probably stimulate academic health centers to develop closer relations with networks of community-based physicians who will refer patients for care, provide training for future physicians, and permit expansion of clinical research in community practice. These relations will be critical. Academic health centers will no longer be able to afford “town-gown” antagonism.
The Need for Change
Physicians have made it clear that they are dissatisfied with the existing medical care system. In a poll of 500 doctors taken in April 1993, 75 percent voiced support for fundamental changes or a complete rebuilding of the system2. The Health Security Act will change the landscape of health care, freeing doctors and other health professionals from many of the burdensome requirements that get in the way of their work every day. It will also change the nature of that work in some ways -- opening the way for doctors to form new partnerships with their colleagues, health care institutions, and consumers. The Clinton administration has sculpted its proposal to empower physicians to participate responsibly in the organization of health care and to enrich the patient-doctor relationship. As the debate goes forward, these goals must remain foremost in the minds of both doctors and lawmakers.
- References
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