Wednesday, July 22, 2009

RTRP: CommentaramaCare Part II, Reforming The Medical Profession

PelosiCare is dead. . . for the moment. But CommentaramaCare lives on! In the first part of our proposal, we took on tort reform. Today, we reform the medical profession itself.

The medical profession needs to be reformed (1) to improve oversight and ensure quality control, (2) to decrease the number of preventable medical injuries, (3) to decrease the number of medically unnecessary tests/procedures, and (4) to reduce costs.

To a degree each of these goals is related. As noted before, the primary factor in causing health care costs to skyrocket is over-treatment. The primary cause of over-treatment is lack of knowledge of the standards of care. Lack of knowledge of the standards of care also contributes significantly to the large number of preventable medical injuries. Improving oversight over the profession can lead to improved compliance with the standard of care and can reduce the number of preventable medical injuries.

Thus. . .

Reform One: The Federal Medical Board

CommentaramaCare proposes federalizing the oversight/regulation of the entire health care profession (doctors, nurses, psychologists, therapists, hospitals, etc.) under a new Federal Medical Board.

Right now, the medical profession is regulated by individual states. To practice within a state, a provider must obtain a license from that state’s licensing board and then comply with whatever regulations/requirements that state imposes. This system suffers the following defects:
• This system makes it very difficult and expensive for providers to move between states. This disrupts the ability of suppliers (doctors) to satisfy demand (patients), limits the available treatment for “disfavored” or "medically under-served" regions, and prevents creative business structures that could expand patient options.

• State boards are under funded, lack the personnel to conduct effective investigations, and often lack the expertise to promulgate effective regulations or enforce them consistently.

• State boards are highly politicized. Indeed, statistically, doctor disciplinary rates vary from state to state far beyond what one would expected from a “fair” system.

Moreover, anecdotally, I have seen hospital administrators admit (under oath) to holding up the expansion plans of competing hospitals by filing unwarranted objections with state regulators. I have seen license applications delayed or denied to protect local interests from competition. And I have seen medical boards allow highly dangerous, but politically-connected doctors to continue practicing unsupervised, while simultaneously revoking/suspending the licenses of out-of-state providers for minor infractions.
Thus, state regulation should be replaced entirely by one, consistent federal regulatory scheme to be organized under a Federal Medical Board (“FMB”). The FMB will have three functions: (1) medical licensing, (2) establishing standards of care and best practice guidelines, and (3) regulating medical education:

1. Medical Licensing

The FMB will be charged with handling all aspects of medical licensing. To that end. . .
• The FMB will set up expert panels (one for each field of medicine: doctors, nurses, psychologists, etc.), who will establish standards for issuing medical licenses.

• A second set of expert panels will review license applications. If a candidate satisfies the requirements, that candidate will be granted the relevant license, allowing them to practice anywhere within the United States.

• A third set of panels will conduct disciplinary proceedings. This panel will have the power to investigate all complaints against providers, to conduct hearings, and to discipline providers as needed.

All disciplinary proceedings should remain confidential unless the provider is disciplined, in which event the details should be made public. To encourage full participation, all licensed providers will be obligated the report any violations of the standard of care (as previously discussed).

All panels will consist of five licensed professionals from the relevant profession, i.e. doctors, nurses, etc. (except for the disciplinary panel which also will include one expert from another medical profession and one layperson) -- no lawyers, no politicians. All panel members should serve three year staggered terms, appointed by the President and approved by the Senate, to reduce the ability of any one administration or Congress to influence the panels.

2. Standards of Care/Best Practices Guidelines

Standards of care represent the minimum level of care that physicians should provide to patients in a given situation. Several studies have shown that providers often do not know the appropriate standard of care. This is the primary cause of both under-treatment and over-treatment.

Right now medical standards are essentially set by juries after the fact. CommentaramaCare proposes using another set of expert panels, again within the FMB, to establish standards of care in advance for each aspect and speciality within the medical profession, e.g. nursing, GPs, cardiologists, OB/GYN, etc.

These panels would have the power to hear proposed standards, to investigate those proposed standards, and to establish those standards after public hearing, where a broad consensus exists within the specific field of medicine that the relevant standard of care represents the generally accepted method of treatment.

If no consensus exists, the panel should refrain from declaring a standard, though it may instead issue a best practices guide for educational purposes.

When a standard is issued, doctors may treat that standard as a legal safe harbor. In other words, if they comply with the standard, they will know they cannot be sued for failing to provide adequate care. Thus, for example, if the standard calls for doing an MRI, a patient could not sue the doctor for failing to order a dozen other tests that might also have found the problem, but which are not required by the standard.

However, it must be stressed that these standards represent only minimum levels of treatment and, as such, do not limit the types of treatment that can be provided. In other words, just because a standard exists, does not mean the doctor is prohibited from providing additional treatment. Thus, in the MRI example above, the doctor could order those dozen other tests if the doctor believed they were appropriate.

3. Education

Finally, the FMB would be responsible for the regulation of medical education. This encompasses two aspects:
• First, the FMB will be responsible for disseminating all standards and practice guides to providers. It will also implement and regulate continuing medical education and training.

• Secondly, the FMB will be responsible for certifying medical schools as offering acceptable programs for licensing candidates. It will also be charged with studying (1) whether the current system trains providers adequately, and (2) finding ways to lower the cost of medical education to students.

Reform Two: Alternative Business Structures

CommentaramaCare also proposes freeing providers to arrange their business and billing practices in more creative ways. Right now, doctors are often rigidly controlled by state regulation, which prevents them from offering new and innovate ways to provide better care at lower cost.

For example, last year, I discovered a local doctor who has done something innovative. He decided that he was wasting too much effort dealing with billing issues. His response was to calculate his monthly costs, estimate his number of patients, and offer a plan whereby he charges a flat monthly fee (well below $100) to anyone on the plan. Under the plan, the patient can see the doctor any number of times in that month, free of charge. Moreover, any procedures that can be conducted within the facility (e.g. cultures, blood tests, etc.) also are free of charge, as are certain generic medications (others are provided at cost).

This innovative plan has proven highly profitable to the doctor, has saved me a fortune, and could probably dramatically cut the costs of preventive and run-of-the-mill health care in the United States. But here’s the catch.

When this doctor first opened his doors, he was immediately shut down by the state because local insurers complained his flat monthly rate constituted insurance. He was even criminally charged twice for selling insurance without a license. When he finally beat those charges, other local doctors brought complaints against him with the state medical board, which took another year to resolve. Now he has a run-away success on his hands, but it took him two years and several hundred thousand dollars in legal fees to break through the hurdles put in his path. (His attempts to franchise the idea to other states have met similar resistance.)

By eliminating the state regulations that local interest groups use to tie up their competitors, CommentaramaCare hopes to free doctors to come up with innovative new ways to run their practices -- like flat rate plan or others not even considered at this point.

Reform Three: Open Pricing/Single Bill

Finally, to control health care costs, we need to allow the disciplines of supply and demand to function (more in next article). To achieve that, buyers must be made aware of the prices they will be charged. This requires two reforms:
• First, we must require open pricing. In other word, providers must make available to any patient or potential patient, in advance, a price list for all procedures that they offer, so that potential patients can compare providers and seek competition. Right now, patients don’t learn the cost of procedures until well after the procedure is finished (if ever).

• Secondly, we must end the virtual shell game of allowing multiple providers to bill separately for their involvement in the same procedure. If you have an operation right now, you will be billed separately by the doctors, the hospital, the radiologists, the anesthesiologists, etc. Requiring one joint bill per procedure, not only is necessary to allow patients to accurately assess the costs (a necessary ingredient for competition) but likely will also cause providers to look for lower cost suppliers/partners or to seek more competitive rates.


Taken together, these reforms should (1) improve the quality and consistency of oversight, (2) improve compliance with the standards of care, which should decrease the incidence of over-treatment and under-treatment, and reduce the numer of preventable medical injuries, and (3) reduce medical costs by allowing market discipline and innovation to restructure the doctor/patient relationship.


Writer X said...

Andrew, another interesting piece. Thank you!

I agree (albeit reluctantly) about the need for federal reform. I say I'm reluctant because every time I hear the word "Board," especially in the same sentence as "Federal," I start to get a twitch. Still, having each state have their own doesn't make a whole lot of sense and I never really thought about it until you started writing these opinion pieces.

As an aside, the doctor who started the creative billing practice reminds me years ago when lawyers wanted to advertise. It was a very big thing here in AZ. There was a lot of resistance, particularly by other attorneys. Has that turned out to be a good thing? Depends on who you ask, but it did reduce costs (I think) for clients in routine cases like auto accidents and bankruptcy. It also paved the way for "legal document preparers" (non-attorneys).

BevfromNYC said...

Very interesting and I will read it more carefully when I have more time today. But one overriding question: Has anyone ever known of a Board or any governing body that could be purely objective and not political?

AndrewPrice said...

Writer X, thanks. Like you, I almost always choose state power over federal power. But in this instance, the current system just makes no sense. The system is ineffecient, corrupt, and anti-competitive. And the only way to change that is to federalize it -- otherwise all you do is add additional regulation on top of the existing problems.

It should be noted that most everything I propose above is already done to various degrees at the state level. Thus, this proposal isn't all the radical. But it does add some key radical changes -- particulary, the national license and the issuance of standards (which the law already claims are national in scope, but really aren't because it's left up to juries to decide).

The legal profession is a whole nother ball of wax that is already partly state run and partly federal run, and needs serious reforms. I am particularly concerned with class action suits -- the ads you tend to see on television. Those are particularly abusive to industry and clients. But that's for another day.

AndrewPrice said...

Bev, the answer is "no," but here are some points to consider:

1. Any political influence on this agency already exists in a higher intensity at the state level.

2. Many expert panels established by the government do have a fairly good track record of being apolitical -- the problems usually come with the political appointees at the top of the agency.

3. Because these panels would be drawn from the national pool of doctors/nurses/etc., they will be less inbred. Thus, unlike with state boards (which currently perform these same tasks), when you file a complaint against a doctor, you aren't filing that complaint with people who went to school with the doctor, who belong to the same social groups with the doctor, and who possibly even practice at the same facilities as the doctor.

Similarly, when you apply for a license, to be a cardiologist for example, there is no limit on where you can practice, thus you don't have every other cardiologist in town calling their friends on the board asking that your application be delayed.

When you get a chance to read this in greater detail, please let me know what you think.

Tennessee Jed said...

As a former insurance guy, I agree with you Andrew that in this case, federalization is the lesser evil. It adds an incredible amount of cost to an insurance product having to deal with 50 different state regulatory agencies.

Is it true that there will still be some politics played in the advise and consent of appointees? Absolutely, but that can never be 100% avoided if the government is involved (and oversight is a legitimate function of government. They just need to do a lot better job than they did overseeing the financial industry or many other things they regulate.

Getting all the various providers is worthwhile although would probably prove to be somewhat cumbersome. It may actually initially add some cost into administration, but is still worthwhile because it is the right thing to do.

Tennessee Jed said...

I should have better proofed my original comment although hopefully the intent was clear. My last comments were reference to the Commenteramacare proposal to require multiple providers to single bill the patient for the same procedure. I support it although some initial admin. costs to implement.

AndrewPrice said...

Jed, I got your meaning.

I agree that it will cause some initial difficult to get the single-bill in place, but it really does make sense and it needs to happen if people are going to be able to understand what they will be charged for procedures.

I also see this issure being related to a mindset in the pricing of health care that I think needs to be broken -- and this is one way to break it.

Right now health care largely gets billed on a "cost-basis", which is the same system that used to get DOD the $1000 toilets. Slowly but surely, the government switched to commercial pricing -- catalog pricing, off the shelf purchases, etc. .... the same way that you or I buy hamburgers or have our cars repaired.

Everyone said it couldn't work. But it has been phenominally successful in reducing costs (for all parties), increasing flexibility, and in making everyone happy.

I think the same thing can be achieved in health care, and I think that the two billing reforms mentioned, along with the increased freedom to use innovative business structures, will bring about that kind of change and can work miracles on the costs.

(By the way, the next article will deal with reforming coverage.)

Unknown said...

Andrew: Your Reform #2 is definitely my favorite.

WriterX: I'll jump in here on your question, since I've just supported Andrew's Reform #2. Your situation in Arizona is the result of Californication of the legal profession. Advertising in its current sad state was the result of the U. S. Supreme Court decision in Shapero v Kentucky [Bar Association] (1988). Each state had some form of regulation of lawyer advertising, ranging from zero to no-holds-barred. The Supreme Court decided that so long as the advertising was "truthful," it could not be banned in any state. But the simple fact is that the "advertising" has little to do with the "performance."

The relaxation, and in some states the near abandonment, of other formerly high standards of admission and practice produced a bumper crop of incompetent and unethical lawyers (and California led the way long before Shapero). At the time I was licensed, a lawyer could hang a shingle (literally) that was no larger than 8 inches by 10 inches, and anything else was considered a serious ethical violation (self-promotion). But that shingle still told you nothing about the qualifications of the attorney. All shingles were equal, but it didn't mean all lawyers were equal.

However shabby I may think TV advertising is, let alone direct solicitation of targeted individuals or groups, what you see on TV is related to the quality of the lawyers, not to the advertising. A bad lawyer is a bad lawyer, just as a bad doctor is a bad doctor, and it's the responsibility of the licensing boards to control the quality of the professions, not the advertising. Advertising the fee structure of a doctor or medical group is a decent exercise. Billboards and TV ads saying "Dr. Quack is the best aorto-bifemoral bypass surgeon I've ever known" is reprehensible. But the two concepts actually have very little to do with each other. I want to know Dr. Quack's fee structure, and I'll have to trust medical standards to determine if his actual performance is professionally adequate.

CrispyRice said...

I think I've got the same twitch Writer X has, LOL. But everyone's counterpoints are good - this is being done in a more arbitrary way all around the country. And I've seen the results in certain states that seem to have more lax standards than others.

This sounds like the beginning of a workable program, Andrew. How do we get you elected to implement it?

YoYo said...

Excellent, excellent article, as always. I seriously think the average American citizen has more coherent thoughts on how to fix this entire mess than anyone in Washington D.C.

AndrewPrice said...

Lawhawk, In my opinion, the fixed price idea is fantastic, but like I said, the struggles this guy has gone through just to be allowed to do it have been epic in nature (criminally charged twice, both resulting in convictions, two appeals, both overturned).

Also, it should be pointed out, without the first reform proposed above, the second reform simply can't happen, except in rare circumstances where you get a doctor like this one willing to risk jail and bankruptcy and loss of license just to change the way he practices. The second reform allows us to clear the path for guys like this.

AndrewPrice said...

Thanks CrispyRice! You're 100% right your assessment.

If you want to get me elected, send $20 million dollars to Commentarama, care of the Elect AndrewPrice Committee.

YoYo, I agree. I think that the politicians listen too much to the lobbyists who come at them with these pre-written proposals that don't fix things so much as they fix them.

Unknown said...

CrispyRice: Be sure to make the check out to "Lawhawk--Treasurer, Elect Andrew Price Committee."

Anonymous said...

I wish Congress would read this series.

USS Ben USN (Ret) said...

• First, we must require open pricing.

I concur, Andrew. However, patients must be aware that pricing in the medical field can change rapidly, in some cases.
But doctors and their staff can educate patients as to why (for example) an
x-ray might cost more this month than last, due to an upgrade.

The rate that technology is going is one of the reasons for higher costs, but we all want the very best care available, don't we?

Of course there are some cases where higher technology may not be needed, and those options should be made available and explained.

For instance, medications. Let's say you're taking an allergy medication and it works fairly well.
Then you hear or read about a new one, but being new it will cost more. Should you try it, or stick with the cheaper one that works fairly well?
These are questions a patient should consider and discuss with their doctor.

One thing patients should keep in mind, just because something is new doesn't necessarily mean it is better for them.

Another example might be that an x-ray might work just as well as a CT scan or MRI for a broken or fractured bone. If the cheaper x-ray is sufficient why pay more?

It can work both ways, and hopefully, your doc will be good enough to know what the best (and cheapest) course of treatment is, and not rip you (or your insurance) off just because she/he can.

Outstanding post, Andrew!

USS Ben USN (Ret) said...

And speaking of technology, I have read the Ezekial Emanuel, Rahm's brother and one of the three doctors that Obama wants to head his healthscare plan, has said he wants to slow down medical technology to lower costs (among other despicable things a doctor of all people should never support).

That is unacceptable. Because no matter how much a new technology costs, be it a wonder drug that cures AIDS, or cancer or a new diagnostic machine that can accurately diagnose certain mental illnesses, I'm sure most people would want it.
Besides, the cost would drop, eventually.
That's simply a road we ought never to go down. Period.

It's horrifying that any doctor would even entertain such a notion and against all that the hippocratic oath stands for.
Although it's not surprising that Obama appears to have no problem with it, considering his record on late term abortions.
It's not even a slippery slope but rather a freefall into medical tyranny. The anti-doctor, so to speak. Dr. Death has nothin' on this scumbag.

AndrewPrice said...

Thanks Ben!

I think its shameful that they would try to slow the pace of medical invention because it costs too much. That's the problem with the "command economy" (i.e. socialist/communist) model. When you get a small group of people making the decisions, there is no guarantee that they will value the same things as the public will when the public is allowed to make those choices for themselves.

That's why communism failed. A small group of people just can't take enough information into account to make the right decisions for everyone else.

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