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Seven years ago, when writing my book on American health care, I met Dr. Jack Mahoney, then with Pitney Bowes. Dr. Mahoney had had a colorful career, including stints in the White House (as the physician personally assigned to President Ford) and then in the corporate world.
On a cool November morning, shortly after President Bush won reelection, I spoke to him about his efforts to tame his company’s health expenses. Dr. Mahoney, then the Pitney Bowes’ corporate medical director, oversaw a small army of employees tasked with pouring over the data generated by the 46,000 American employees and their families.
Dr. Mahoney had a frustrating job. In the mid-2000s, health costs rose at double or even triple general inflation.
The soft-spoken physician explained that his team had found several reasons for the rise. He had a long list, with many things that were unsurprising: Americans and their doctors like diagnostic tests; an aging population requires more care; Americans smoke too much, eat too much, and drink too much.
What made the conversation intriguing, though, was that he was dealing with real-life problems. This wasn’t a discussion confined to the think tank conference world, filled with opinion and ideology. Rather, Dr. Mahoney was looking at real data. And, in doing so, he and his team found some curiosities. Hospital costs would soar in a state like California year to year, not because employees ended up at, say, the LA County Hospital with more frequency than in the past, but as the result of aggressive hospital mergers, which gave hospitals greater negotiating power.
While Pitney Bowes’ employees were all across America, many were in large centers. And in cities like Los Angeles and New York, ER visits were frequent and expensive.
From a distance, this may suggest a raft of accidents. The problem, though, wasn’t mail room mishaps or the like, but rather the challenges of accessing primary care in those big urban centers.
In New York, he noted, family doctors offices often close at 5 P.M. Families find themselves in other settings for their primary care – like ERs.
“It’s one-stop shopping,” he told me. His argument was obvious: families can get all the tests and consultations needed in one visit when they go to an ER – and not take time off work. Sure they may pay more of a co-pay, but they save in wages and convenience.
Of course, not everyone saw it that way. For Dr. Mahoney, the ER was the expensive choice: costing the company roughly $700 for the ER, as opposed to a more modest $75 for the GP.
So goes Pitney Bowes, so goes New York. In a 2006 study of New York ER visits, researchers found 40% of visits could have been dealt with in a primary care setting.
Pitney Bowes has attempted to address the issue by offering their own primary care, through a network of office-based health clinics. But company employees are stretched across the country, often working in the offices of other companies. In other words, Dr. Mahoney could identify the problem but couldn’t really offer up a solution.
* * *
American health care is wonderfully large and complicated – indeed, the health economy of the United States is larger than China’s entire economy. And as we look to solutions for one set of problems, it’s easy to neglect another area.
Last week, I was reminded of Dr. Mahoney’s comments. My friend and colleague Paul Howard of the Manhattan Institute wrote a report considering primary care in New York City, in the light of health-care reform efforts.
Howard considers a delicate question: what to do about primary care?
For the right – eager to see a market-alternative to Obamacare – more primary care options could mark the beginnings of a more functional market for health services. For the left – hopeful that last March’s East Room signing ceremony will result in full implementation of Obamacare – expanding primary care is key to providing care to millions of newly insured Americans.
Yet, despite the common interest in primary care reform, little work has been generated from think tanks or academics in the last couple of years, as experts have turned their attention to the increasingly bitter debate over Obamacare.
Howard isn’t exactly a fan of the President’s efforts, but recognizes that the number of insured Americans is likely to rise in the coming years. He also sees a potential Massachusetts’ problem, where a big health-care reform effort resulted in a big glut of insured people unable to find primary care.
As Howard notes:
In July 2010, Massachusetts released data showing that use of emergency rooms in the state increased by nearly 10 percent from 2004 to 2008, disappointing hopes that broader insurance coverage would reduce it. The same report noted that “expanded coverage may have contributed to the rise in emergency-room visits, as newly insured residents entered the health-care system and could not find a primary-care doctor or get a last-minute appointment with their physician.”
What then is to be done with the potential of 32 million Americans joining the ranks of the insured?
Howard sees part of the solution to be found in Wal-Mart – or rather, the retail clinics that are often found in Wal-Mart, Walgreens, and other stores across the country. Retail clinics, typically staffed by nurse practitioners, offer a variety of services at low costs.
Need a flu shot? The solution can be found off aisle 12.
Retail clinics aren’t the solution to all of our primary care needs, but they could be part of the solution. Howard notes study after study suggesting high satisfaction rates from patients, good adherence to clinical guidelines (frankly besting family docs in the treatment of sore throats), and overall cost effectiveness.
So, a quick review: a win-win for consumers and the system. But retail clinics aren’t much found in big cities like New York, and Howard tries to explain why.
The problem? Howard finds a raft of regulations stand in the way of these clinics. He focuses on New York City, of course, but the problem is all too familiar to people in other large cities.
Take Certification of Need (CON). In order to offer the good people of Soho, a low-cost option for, say, their flu shot needs, clinic owners need to get city approval, showing that the clinic is “needed.” (Imagine if we held Chinese restaurants or convenience stores to that standard.)
CON regulations date back to the 1970s, when health planners worried about a medical arms race and hoped to temper health inflation. Today, these rules still exist often championed by vested interests. (A few years ago, I was nominally involved in the Crist administration’s attempts to overhaul Florida’s CON law. The administration’s chief opponent? The hospital lobby.)
Howard concludes his insightful study by offering some practical suggestions for increasing the number of New York retail clinics – good advice for policy-makers that will benefit New Yorkers and today’s Dr. Mahoneys.
But Howard’s work also speaks to the incredible challenges that reform efforts will face in the coming years. Republicans and Democrats need to take note. Yes, there are problems with access, cost, and uneven quality. But American health care also suffers from decades of hyper-regulation, making even modest changes difficult. And while it’s wonderful that the left champions Obamacare and the right favors empowered health savings accounts, the example of retail clinics in New York City speaks to limitations of both approaches until this hyper-regulatory environment is addressed.
The healthcare bill contains funding for thousands of local health centers to do just this, are you ignorant?
The GOP has voted to defund those health centers. Are you ignorant?
I was thinking the same thing, but kept wondering if I had missed something important in HCR, if something fundamental about the provisions within Obamacare for primary care facilities had changed.
Thanks for bringing me upright. Was feeling crazy for a second.
I confess to ignorance. Can you give me details about these local health care centers, how they will be staffed, funded (startup and ongoing), and who will control their operations. Will their services be coordinated with existing services?
You rail against a bill that you have no idea about. Read the bloody thing.
http://dpc.senate.gov/healthreformbill/healthbill04.pdf
“Improving Access to Health Care Services:
The Patient Protection and Affordable Care Act authorizes new and expanded funding for federally qualified health centers and reauthorizes a program to award grants to states and medical schools to support the improvement and expansion of emergency medical services for children needing trauma or critical care treatment. Also supported are grants for coordinated and integrated services through the co-location of primary and specialty care in community-based mental and behavioral health settings. A Commission on Key National Indicators is established.”
” The Patient Protection and Affordable Care Act will create a new program to develop community health teams supporting medical homes to increase access to community-based, coordinated care. It supports a health delivery system research center to conduct research on health delivery system improvement and best practices that improve the quality, safety, and efficiency of health care delivery. And, it support medication management services by local health providers to help patients better manage chronic disease.”
“The Act authorizes important new programs and benefits related to preventive care and services:
For the operation and development of School-Based Health Clinics.
For an oral healthcare prevention education campaign.
To provide Medicare coverage – with no co-payments or deductibles – for an annual wellness visit and development of a personalized prevention plan.”
“A $50 million grant program will support nurse-managed health clinics.”
Now, now. Asking a question hardly constitutes railing, does it?
By the way, your link goes to a 14 page summary of one of the two bills that constitute the full health care reform package, not the 950+ pages of legislation itself.
I’ve previously puzzled over the 950+ pages and am still confused about the details of my questions.
I thought that a firm supporter of the reform could clear things up, but I perhaps I was wrong.
Thank you for your help, though.
While I support comprehensive health care reform and universal coverage, I’m in full agreement that the regulation of health care delivery has strangled options for people to actually see a medical professional when it is necessary. In my hometown of close to 100,000 people, there is only one convenient care clinic that I know of, and there are no urgent care centers. You’re limited almost entirely to primary care physicians (whose walk-in clinics are mostly open during business hours) and the ER. And if you have a problem in the middle of the night, your only option outside of waiting for morning is the ER. I’d bet even money that a major reason for that is because regulation prevents the easy development and marketing of these alternative centers.
The worst part is that doctors are complicit in this because they don’t want their patients seeing medical personnel outside of them for fear of fragmenting their care. Why we don’t establish a national EMR system to keep all doctors in the loop on what care a patient has received is beyond me.
The ACA specifically funds primary care development and the administraton has had other initiative like the stimulus program to standardise and computerise primary care record keeping, and yet all these have been fought tooth and nail by Republicans and organizations like the Manhattan Institute. Needless to say Gratzer ignores all this and believes the answer lies in less regulation of medical providers despite the fact that there are regularly scandals in this area of medical incompetence or malfeasance, and Medicare fraud.
Urgent care centers are one step up from retail clinics, in that they typically have physicians available to deal with more difficult cases, not just nurse practitioners.
These types of centers can deal with most acute illnesses, such as colds, boils on skin, sprains and strains, etc.. And now, most major private insurers encourage patients to patronize urgent care centers. In my locale, HealthStop delivers good urgent care on a walk-in basis.
In fact, it might be a good idea for the medical establishment to list a bunch of conditions that can be readily self-treated. If you catch cold, for example, you don’t even need a retail clinic. Just go to WebMD or Wikipedia on the Internet and follow their suggestions. (Doctors should periodically review that information for timeliness and accuracy.) Stop wasting the doctors’ and nurses’ time with your colds.
“In my locale, HealthStop delivers good urgent care on a walk-in basis.”
that’s certainly what people need … rural regions, especially as the demand for elder care rises nationally, face an additional layer of problems caused by distance
I wonder how soon applications like IBM’s Watson might help guide patients to the right level of medical skill. After it kicked our human brains in Jeopardy, in the words of James Whitcomb Riley,’Katy bar the door.
and while Dr. Gratzer from the Manhattan Institute comes with a collection of valued insights, I prefer that the questions and solutions of groups like Mayo Clinic set the debate
http://www.mayoclinic.org/healthpolicycenter/
Sinz:
“In my locale, HealthStop delivers good urgent care on a walk-in basis.”
I have access to many urgent care facilities in my area, as well, but this isn’t necessarily primary care. It’s emergent care done outside of a hospital setting at far greater cost to both the insured and non-insured than a regular visit to a primary care doc.
Without mentioning the assault by the non-insured to hospital ERs causing them to close, then this article is just fluff.
Why do you care about that? Aren’t you one who wants Obamacare repealed, and all its protections and provisions for those currently uninsured and using ERs as primary care thrown over the side with it?
Law abiding taxpayers want no part of Obamacare and its reparations agenda (forced redistribution of wealth).
Onward to November 2012.
I live in Pa. and there are a number of clinics nearby, so I am fairly ignorant of the lack of them other places (whenever I go other places on vacation I don’t exactly count the number of urgent care facilities) so I agree it makes sense that this should be standard. I also agree with the other posters it would have been wise for Gratzer to acknowledge the ACA does increase funding for them.
A few other criticisms: American health care is wonderfully large and complicated – indeed, the health economy of the United States is larger than China’s entire economy.
This is horrendous. Wonderfully large and complicated? Wonderfully? Are you on crack? Japan pays half of what we pay as a percentage of GDP and has better outcomes because it is NOT complicated.
Sinz, don’t oversell self diagnosis and self medication. I had an Uncle who did that and was dead in a week. Yes, a stuffy nose is no cause for an ER visit, but even a low grade fever can be, especially for children. My infant son had walking pneumonia while I just thought he had a persistent cold (or one cold that migrated to another cold being he has older school aged brothers). He is fine now but we are not doing any more self diagnoses anymore. (and my wife is a Nurse)
The Congressional Budget Office has delivered an official estimate of what repealing the Affordable Care Act would do to the federal budget. According to CBO’s estimates, the deficit would rise by $210 billion in the first decade:
H.R. 2 would, on net, increase federal deficits over the next decade because the net savings from eliminating the coverage provisions would be more than offset by the combination of other spending increases and revenue reductions.
In total, CBO and JCT estimate that H.R. 2 would reduce outlays by about $604 billion and reduce revenues by about $813 billion over the 2012-2021 period.
This is twice the estimate the CBO made last year, when it projected the effects of a similar repeal bill. Why the difference? Because it’s a year later and the projection period extends through 2021 rather than 2021. Remember, the law is designed to save more money as time goes on.
Not that you needed more proof that the GOP’s deficit hawkery is a sham, and a scam. In the wee hours of Saturday morning, they voted to block funding to the ACA. Which means they voted to increase the deficit by $210 billion in the next decade. These are not people to be taken seriously, and Senate Dems and the White House need to remember that when it comes negotiating time.
“These are not people to be taken seriously, and Senate Dems and the White House need to remember that when it comes negotiating time.”
In November 2012 we will have a Republican President and Senate, so your point is moot.
Yeah, and we all know how well THAT worked out in 2001-2006. If Smarg is right, expect 1-2 more wars we’re unprepared to fight and pay for plus the total collapse of the U.S. economy.
I think one of many problems is that Americans think they need to see a specialist for every little sniffle. When I was working for a Wall Street bank we had a health center in the building with nurse practitioners. They were very good at basic things and more than happy to refer me to a doctor if I actually needed to see one. They were also equipped to do things like flu shots. I found the office amazingly underutilized. It was convenient and there was no fee (even for contractors who were not insured through the company).
Snarg: “Without mentioning the assault by the non-insured to hospital ERs causing them to close, then this article is just fluff.”
The ER is about the most expensive way to be treated. It costs the insurance companies far too much and is a money-loser for hospitals since many patients never pay. But what do you propose the uninsured do? Die?
And for full disclosure: what kind of insurance do you have and did you get it through the government, an employer or privately?
“In July 2010, Massachusetts released data showing that use of emergency rooms in the state increased by nearly 10 percent from 2004 to 2008″
This is an indictment of Romneycare – I’d ask the question of the statistics, what are they being compared to? Emergency room usage increased during that time period by an average of 2.5% per year. What was the usage between 2000 – 2004? What happened in emergency room usage in other states between 2004 – 2008? Is it clear that this is due to a lack of other treatment options or could other factors be at work?
Other than that, the article is correct about managing costs away from ER’s and speciality toward more cost effective options. Of course, that means less revenue for the more expensive options who have a vested interest in keeping their funding (BTW, who thinks all of the television shows that feature these gleaming beautiful medical facilities and competent beautiful doctors who order every test known to man to ferret out the insidious disease that is miraculously cured in an hour long show – who thinks that maybe the medical/pharmacological/medical device community may be really behind it all – not sayin’ it’s a conspiracy…).
It would be a tough pill for Conservatives to swallow that our health situation may be better served by restricting choice of location for treatment, types of tests and services performed (whether medically neccessary) or not, etc.
Dr. Mahoney is, indeed, dealing with real life problems-I give him that. But the questions he asks, while comprehensive, don’t address all of what’s driving costs up.
I’d be interested to see the correlation between the increase in health costs relative to the increase of retail advertising by pharmaceutical companies. These companies are creating market need within and speaking to a group of consumers who cannot purchase their products without visiting a licensed medical professional, who ALSO has been sold by Big Pharma on their products as well as being offered incentives to prescribe the product.
I just saw this at Politico and thought it interesting from a budget meeting with Terry Dougherty Managing Director of MassHealth – the Massachuessetts Medicaid program with 1.3MM participants:
“Dougherty noted that MassHealth, by far the largest program in state government, spends just 1.5 percent of its $10-billion-a-year budget on administrative costs – compared to about 9.5 percent by the private market, according to studies by the state Division of Health Care Finance and Policy”.
He also said after his experience he would personally prefer a single payer system as compared to the difficulties of the marketplace.
As Rep Ryan said following the State of the Union, cutting the federal budget is a moral issue. it’s not about the money or what the public needs, it’s about a moral philosophy that says each person should take care of themselves; that government has no place is society; and you should be strong enough to never ask for help. Essentially that every man (or family) is an island unto themselves.
The commons doesn’t exist in Ryan and his cohorts ideological moral philosophy.
“Both parties agree that health consumers need alternatives to big city ERs.”
But then what would the usual parasitic portion of our society do when their proxy primary care clinics close? Invade the private clinics and hospitals?
Coincidentally, yesterday the Feds arrested a bunch of people in Florida running Gratzer’s Wal Mart style clinics in Mall’s etc which had been inadequately regulated. These sort of street corner walk in, primary care clinics have a role but to suggest they should be loosely regulated is totally irresponsible particularly coming from an MD although I believe Gratzer is a Psychiatrist. Nor are they necessarily cheap, it’s a long time ago but when my daughter was a kid and had a bit of an accident on vacation we took her into one of these places and the bill was astronomic.
Re: I’m in full agreement that the regulation of health care delivery has strangled options for people to actually see a medical professional when it is necessary. In my hometown of close to 100,000 people, there is only one convenient care clinic that I know of, and there are no urgent care centers
Could this be a state thing? The places I have lived (SE Michigan, Akron OH, St Pete FL, Fort Lauderdale FL and now Baltimore MD) have all been served by a number of urgent care and walk-in clinics. Many people seem unaware of their existence, but they are there, and I’ve used them myself on occasions when I needed medical attention and could not wait a day or two for an appointment with my regular doctor.
I’ve lived in several places in the states also. I’m now on the CT shore and even my little town has a walk in clinic. Baltimore which you mention and where I lived for quite a time is full of them. In fact an acquaintance of mine a doctor owned a couple, and very profitable they were. My daughter had a minor accident in FL years ago and we took her straight to one after consulting Yellow Pages. I’ve no objection to their existence and they certainly haven’t been strangled by regulation as Gratzer and this commentor claimed (where’s his evidence?) judging by the existence of masses of them. The idea that medical providers should be loosely regulated is as idiotic as the idea that banks should be loosely regulated.
I just retired after working in health care for 30 years. I suggest we bring back General Practitioners or Primary Care Physicians. They were forced out of the field in lieu of specialists. This was a mistake. Previously, patients would go to “their doctor” and he would decide what was needed, and refer them out. There was trust. This is gone. People I talk to now don’t know where to go. Many times they end up in the wrong place. There is no central health care physician overseeing their care. This also effects the type of medications they are taking. Many people are on multiple drugs prescribed by various physicians who are not in contact. This is very dangerous and adds to health care costs when they end up in the ER with side effects from the interaction of the many medications they take.
It is near impossble for Primary Care Physicians to survive and support their families. If you look at fees for malpractice, maintaining an office with health care personnel and overhead while trying to collect reimbursement from insurance companies in a timely manner, the Primary Care Physician cannot survive. This has been a hugh loss. No one talks about it. It’s time to address it. I know physicians who went through all the training to become a physician and realized they could not survive in this milieu after years and hugh malpractice payments. Some of them went to Wall Street. It’s a lot easier and the pay is better.
Nurse Practitioners are trying to fill this void. It has not happened yet. It’s tough to survive in a private office in New York City. Learning the rules for running a health care setting are endless.
It’s tough.
You’re a doctor and I’m not so you have the advantage of me but I’d say it was a bit of an exaggeration to say the primary care physician is a vanished species. In my little town of 12,000 people (doubles in the summer) there are three practices I believe. I go to one. I know there is something of a shortage of primary care doctors but when I’ve talked to my existing doctor, my previous one (now retired) and a couple of doctor friends they assign the principal cause to the higher incomes available in specialities which many young doctors need because of the cost of training. Many also find the work more interesting than diagnosing often minor ailments. I don’t dispute there are problems in running a doctoring business because this is basically what it is but to say they can’t survive strikes me as overstating things a bit.
Interesting post and interesting information in many of the comments. Thanks folks.
My brother is a head PA in a cardiac surgery unit. My uncle is on the board of directors for one of the largest hospital groups in my area of the country. Judging from the info these guys provide, the economics of care delivery at a hospital in my area are truly dismal. They don’t know when they will get paid (dealing with the insurance companies sucks). They charge different amounts for the same procedures (depending on the insurance or lack thereof). They vastly mark up certain items and procedures for the well-insured to make up for free ER care they provide to the uninsured (under force of law). They have unspoken policies of denying expensive potentially-beneficial care to uninsured and poorly-insured patients (yes, I thought twice before writing that, but it is the honest truth). They swim in a sea of regulation. They deal out expensive ER care for easily-preventable ailments. It is a real mess.
Both of these guys are lifelong Republicans like me. Both recommend exploring single payer options similar to the rest of western civilization as well helping primary care doctors by implementing tort reform and decreasing regulation. From their vantage point, a large amount of pressure on ERs and hospitals could be shifted back to preventative care and primary care physicians where it is cheaper for consumers and where it is shown to produce better healthcare outcomes in the long-run. Eliminating the nightmare of HMOs and insurance providers would make these guys dance for joy.