A “dennis the menace” cartoon shows a little girl and her friend asking two little boys whether they want to play “primary health-care provider.” This curious bit of insurance company jargon that has been substituted for “doctor” — a phrase that internists and family physicians find so demeaning and depersonalizing — has now reached the comics pages and become common parlance. In a way, the joke made about primary care is emblematic of the crisis in which primary care now finds itself. The issues are important not only to physicians. To the degree that people are patients or consumers (however the two may differ), the outcome of the turmoil in primary care will determine what to expect at the most basic level of health care in the future.
Stephen Schroeder, a recent president of the $8 billion Robert Wood Johnson Foundation, notes that primary care has been on a roller coaster. In the early 1990s, managed care attempted to use primary physicians and nurse practitioners to improve access and quality while, at the same time, keeping costs down. There was talk of the primary physician as the coordinator of all medical care. It didn’t work, and the backlash resulted in a decline in prestige, job satisfaction, and income for primary physicians. Many of the young physicians who flocked to the field felt cheated and misled. At the same time, the average medical student’s educational debt has climbed to just under $110,000 today. More than 25 percent of students are burdened with a debt greater than $150,000 — a figure that further affects career choice for the next generation of physicians.
Graduates of American medical schools filled only 47 percent of residency training positions in family practice in 2002, a drop from 73 percent six years earlier. Similar trends are present in general internal medicine. The reduction in satisfaction that affects most branches of medicine is worst in primary care, according to Schroeder and others. Both the public and physicians in training are fascinated by new technology, and this is increasing interest in medical and surgical specialties at the expense of primary care. Income differentials are considerable and increasing.
These details are of more than academic interest, even though, as an editor once put it to me, “The public has trouble empathizing with physicians because it is difficult to identify with them.” Nevertheless, walking the proverbial mile in the moccasins of both primary and specialty physicians can provide insights available no other way.
“Anatomy of an Internist”
Speaking of “my doctor” typically has meant a primary physician with generalist training. In the United States, however, patients with such diseases as arthritis, diabetes, lung disease, or heart disease would often choose corresponding medical specialists — rheumatologists, endocrinologists, pulmonologists, or cardiologists — as their principal physicians. Since all medical specialists have had training in internal medicine, they often came to fill the dual role of specialist and generalist, most often for patients with ongoing illnesses in their specialties. This brought considerable depth and expertise into primary care. It also narrowed the specialist/generalist divide that is characteristic of medicine in the rest of the world.
Managed care managed to disrupt this arrangement. Whereas specialists predominate in the United States by a margin of 2-1 (the reverse of the ratio in most other Western countries), managed care typically forced physicians to declare themselves either specialists or generalists, and it was easier and more lucrative to be a consultant rather than a jack-of-all-trades.
What began as a desire for administrative simplicity by health insurance carriers (and no doubt as a way to obtain care more cheaply, since specialists tend to use more resources) had the perverse effect of weakening primary care and contributing to a reduction in the work force. Patients were forced to change physicians without being entirely sure why. Some were dropped when their doctors decided to limit their practices to a specialty, but others with ongoing diseases had to find a different specialist when their doctor decided to register with a given hmo as a primary physician. Such decisions were, and continue to be, made specifically with each insurance carrier. Thus, where formerly the doctor filled both roles, a confusing matrix of practice limitations resulted. Sometimes physicians were in effect required to continue to do both jobs, but to be paid for only one.
The quest for price and volume efficiency by managed care has brought an increasing number of nurse practitioners and physician extenders into the role of “primary care providers.” The three-way relationship between physicians, these non-physician providers of care, and patients is unusual. They are well-accepted by patients, and they help busy physicians. But they also create competition for physicians and probably lower their earnings to the degree that professionals with less expensive training can replace them. Though consumers surely appreciate a brake on fee increases, non-physician providers can’t really offer the full range of services for which physicians are qualified. How this complicated relationship will work out over time is uncertain and not often discussed.
Another managed care anomaly is the assigning of a primary physician to all hmo patients. Traditionally, patients chose a physician on their own when they wished to. An entire popular literature developed in the 1970s and 1980s describing how to make that choice wisely. Patients who opted not to have a physician or who neglected to choose one often met their future primary physician upon their first need for care. It could have been for something as trivial as conjunctivitis or as serious as a myocardial infarction. (Both situations were common in my own experience in internal medicine and endocrinology.)
Alternatively, a clinic or an emergency room served the same function, but with the patient’s loyalty attached to an institution rather than a particular physician. The distinction is not perfect; Kaiser Permanente patients often responded, when asked the name of their physician, “Kaiser,” even when they had their own physician within the organization.
But being asked either to name a primary physician or to have one assigned is new. Doctors consequently become names arbitrarily printed on patients’ insurance cards, a process that engenders little respect for the doctor. Furthermore, naming the primary physician as a “gatekeeper” whose approval is required by hmos before patients can see a specialist suggests more of an obstacle than a caregiver. Personally, I have never encountered rudeness like I saw from hmo patients who came to see me because they were required to do so rather than because they wanted to. This is especially true when they had no interest beyond obtaining a referral slip to see a specialist whom they had already chosen themselves. It is difficult to know how to feel toward such patients and to function properly as a physician for them.
Blurred role definition affects internists in particular. For more than 50 years, internal medicine has struggled to define itself. The American Society of Internal Medicine, an organization created by practicing internists, coined the term “personal physician.” But in reality, the internist was defined more by what he or she didn’t do (no surgery, obstetrics, fracture-setting, or young children). A casualty of increasing fragmentation caused by the separation of medical sub-specialists into their own organizations, the asim merged with the American College of Physicians in 1998.
The acp has also taken its turn at redefining the internist and in 2001 settled on “Doctors for Adults.” Once again, it is hard to be sure what this means, because all other specialists except pediatricians also treat adults. And it still isn’t clear how the internist can be involved in general medicine and still be a specialist. This is probably a legacy from pre-World War ii days when internists were often called “diagnosticians.” The highly intelligent and knowledgeable medical sleuths of the past (and also recent years) now have to compete with more precise diagnostic tests such as ct, pet, and mri scanners — to their disadvantage.
Nevertheless, the brilliant physicians who held forth in what doctors refer to as “The Days of the Giants” are sorely missed. No matter how precise our new machines are, they still lack perspective and the human dimension that were the hallmarks of the great physicians of the past. These skills are hard to define, harder to measure, and even harder to compensate in an age in which computers and statistic-generation seem to dominate policy. Perhaps this contributes to their apparent shortage nowadays.
I never could bring myself to display the wall chart that the acp created to make the meaning of “internist” clearer. “Anatomy of an Internist” portrays a sad, elderly female face atop a skeleton, surrounded by images of half a dozen internal organs and descriptions of 13 internal medicine sub-specialties. The composite effect is neither uplifting nor accessible. Though internal medicine is the largest primary care specialty in the United States, internists are still sometimes confused with interns — doctors in the earliest phase of their hospital training.
Physicians and hospitalists
Internal medicine arose at a time when general practitioners had only one year of training after medical school. The requirement that all physicians take a three-year internal medicine residency following a one-year internship contributed greatly to increasing the quality of medical care. And internal medicine was an integral part of the march of modern medicine into even the smallest towns in the years after World War ii — something that many Americans take for granted, but which is hardly standard around the world.
In 1968, traditional general practice was significantly upgraded when the American Academy of Family Physicians established its own three-year residency program plus a requirement of recertification every six years after entry into practice. The organization then embarked on a highly successful advertising campaign to market the new family practitioner. The appeal of the old general practitioner was brought up to date with the assurance of better and continuing scientific training.
The subsequent years have seen a steady convergence between internal medicine and family practice, particularly in urban and suburban areas. In more remote places, one is still able to find general internists who insert cardiac pacemakers and pass endoscopes into the stomach and beyond, functions that are performed in more populous areas by cardiologists and gastroenterologists. Rural family practitioners may do more surgery and orthopedics than their urban and suburban counterparts. In addition, pediatricians give primary care to children, and obstetrician-gynecologists frequently extend their focus on women’s health to include other primary care services for women of childbearing age and older.
All these nuances are confusing to patients, and they continue to evolve. One unique feature of American medicine — patient care by the same personal physician both in the office and in the hospital — is slowly disappearing. New residency programs are turning out “hospitalists,” and both private and community hospitals are seeking to employ them. These 7,000 to 8,000 physicians treat only hospital in-patients, and more than 80 percent have training in internal medicine. A few primary physicians who are tired of the pressures of running office practices also become hospitalists.
Primary physicians who remain in practice, but who believe they can no longer afford the inefficiency of working both in the office and in the hospital, are voluntarily turning regular patients over to hospitalists. This is especially prevalent in areas highly penetrated by managed care, where the economic pressures on physicians are greatest. Furthermore, some hospitals make such transfers mandatory. Hospitalists do tend to get patients out of the hospital sooner and to save money for the hospital. (This happens because Medicare and many hmo contracts pay a fixed amount for each diagnosis treated regardless of the length of patient stay.) Given present trends, having one’s own doctor in attendance during a serious illness may become as much a luxury in the United States as it is in Europe, where physicians tend to work either in the hospital as specialists or in outpatient clinics and offices as generalists.
San Mateo County, California, is one place where portents of the future may be seen. Restructuring of health care is proceeding slowly but steadily in response to the economic pressures of managed care and the top-tier cost of living. There is a trend toward bigness. Mills-Peninsula Hospital in the northern part of the county has affiliated with Sutter Health, a network of more than two dozen northern California hospitals and other health facilities. The large multi-specialty Palo Alto Medical Clinic has also joined the network, presumably seeking both greater market share and a better bargaining position with large insurance carriers. “Bulking up” is being replicated elsewhere in the country.
Primary care is a necessary, but not dominant, activity in the health care institutions in San Mateo County. Greater size and resources and the promotion of state-of-the-art specialty care are important in competing with both the centralized Kaiser Permanente managed care system and university-based Stanford Medical Center. Primary care tends to get swept along, but there are intriguing eddies of smallness around the edges of growing bigness. Small office-based primary care practices stubbornly persist in the face of the high cost of regulatory compliance, office administration, and insurance, with only limited ability to adjust fees upward to offset rising expenses. A handful of physicians are even leaving the large institutions and setting up their own practices, desiring more influence over how they provide care and a more personal and less bureaucratic relationship with patients. (Kaiser Permanente has recognized this phenomenon and in response has embellished its amenities while putting an emphasis on patients building a relationship with the same physician rather than repeatedly using drop-in clinics.)
Many private physicians have begun to abandon the lowest-paying managed care contracts with insurers. This involves not only hmos, where primary physicians are often paid a fixed monthly fee to care for their patients called “capitation,” but also the Preferred Provider Organizations (ppos) that are fee discounters. So far, there has been little disaffection with Medicare, except for that portion which has fallen under the hmo umbrella and in high-fee areas with little managed care. A small number of primary physicians have established “boutique” (sometimes called “concierge”) practices. These doctors promise ready access and more personal service in exchange for complete elimination of contracted third-party payment. Clients either pay a monthly retainer fee or make other arrangements based on the services they receive. Other physicians accept insurance as partial payment.
It is not simple to gather information on how these different arrangements, which appear to coexist uneasily, work in practice. I encountered considerable concern with being quoted and offending competitors, especially when now-independent physicians had formerly been members of institutional staffs. Even considering that doctors are generally very busy and unprepared to be observed in action, the institutional bureaucracies I approached were lackluster in their cooperation. Thus, learning what to expect when trying a new style of primary care practice remains, at least in my own experience, a matter of obtaining information by word of mouth — possibly from advertising, but also by trial and error. Ironically, this is very far from the collusion that is often attributed to “the medical establishment.”
The trends that are fragmenting the delivery of medical care outside integrated large clinics are increasing the professional isolation of primary physicians. Not going to the hospital to care for patients also means not meeting new physicians in the community, not catching up on local professional matters, and not buttonholing colleagues for the curbstone consultations that contribute to patient care without cost or requiring them to make an appointment. Isolation, in addition to the continuous pressure to do more, may well be a contributor to the burnout and declining morale reported among primary physicians.
Voicemail is a new kind of isolation that is familiar to non-doctors but has had a special impact on primary care. Voicemail frequently greets physician calls to other doctors or even the hospital laboratory. One physician who experienced this indignity once too often, orthopedist Ned Grove, avows, “Voicemail has killed civilization.” He has a point. Too many people consider it demeaning to pick up the phone directly. But not doing so makes callers waste an enormous amount of time. For doctors under constant time pressure and for whom information and communication are essential to their work, voicemail can be especially frustrating. So too with being kept on hold. Grove found it quicker to locate and talk with a physician in New Zealand than to reach a doctor across the street.
Planned unavailability debases our lives. Patients may be surprised to learn that it may be as hard for doctors to find some doctors as it is for them. In addition, pharmacists may be too busy “counseling a patient” when physicians call with a prescription. Nurses no longer come to the bedside to jointly attend patients on rounds, and nursing home staff often don’t know the patient we have come to see — and often don’t seem to care. Altogether, the effect on the primary physician, who depends on so many other people, is one of being left to do a tough job with nobody to help.
Perhaps the most irritating events are 4:00 and 5:00 am telephone calls from the nursing home informing the no-longer-sleeping physician that a patient has slipped to the floor but shows no signs of injury — in other words, calls that are inconsiderate and pointless, other than to satisfy a bureaucratic requirement of California law that the doctor be contacted for any potential “injury” at any hour. These encounters are particularly alienating because yielding to the temptation to respond other than by saying “thank you” would unleash feelings that would prevent any chance of falling asleep again.
I dwell upon these details because they convey a flavor that could not be appreciated otherwise. It was not always thus. The past four decades have seen a transformation from a cooperative to an adversarial set of relationships in health care. According to health policy scholar Deborah Stone, insurance carriers, using financial carrots and sticks, blatantly manipulate physicians in order to reduce their own financial liability and to mold physician behavior. Until the late 1970s, carriers would call physicians’ offices to get missing information in order to pay insurance claims more quickly. Employers prized prompt and pleasant servicing of their employees’ claims and might intercede with the insurer when there was a problem. Any such assistance would be surprising today.
Rising financial pressures
Probably the greatest factor to affect the availability, character, and quality of primary care will be the health benefit reform measures that Congress adopts in coming years. The wrangling over the $400 billion Medicare outpatient drug benefit of 2003 is illustrative. Intense lobbying by drug manufacturers has won a Medicare payment increase for more than 100 drugs used in hospital outpatient procedures while Medicare physician fees were scheduled to decrease by 4.2 percent in 2004. A failure to keep up with rising practice expenses, now subject to political horse-trading, will disproportionately affect primary care. That is because its many low-dollar services still require expensive administration and are provided at the physician’s own expense in the office rather than at the hospital.
Health care is also becoming something of a zero-sum game in which a benefit obtained here results in a loss somewhere else. In this, both patients and physicians are impinged upon. The technique of rationing expensive drug use through inconvenience, which has been perfected by managed care, is certain to extend to any Medicare drug benefit. Prior approvals, limitations, and queries over clinical justification are inevitable. Farsighted physicians, while happy that their patients stand to obtain help with drug bills, shudder at the daunting task of complying with the expected regulations. Once again, primary care will be hit the hardest because of the large number of prescriptions and wide variety of medications associated with primary care practice. As the lowest earners among physicians, and without access to capital for expensive technology and extra staff, this may even affect willingness to see Medicare patients.
Given rapidly rising health costs and the larger share of those costs that employers are transferring to employees in the form of higher deductibles and co-payments, the financial pressures facing physicians are certain to evoke more than the usual amount of skepticism. Protecting physician incomes is not a high priority for most people. Indeed, a Kaiser Family Foundation telephone poll found widespread concern over the cost and quality of health care over the next six months — to a degree that exceeded fear of losing a job, losing money in the stock market, or becoming the victim of a terrorist attack.
Relevant details are therefore in order. Operating a primary care office is estimated to cost between $150 and $200 per hour per physician. In my own practice, with very careful attention to expenditures, I could not get below those numbers. Primary physician overhead — the amount that must be collected to cover professional expenses — has gone from one-third to two-thirds of revenue in the past two decades. The meter ticking — the appetite of the office for staff, salaries, insurance, supplies, licenses, and the like — whether I was there or not made me reluctant to attend medical meetings because there would be no revenue to offset expenses. My own net income fell from what seemed to be a good living in return for hard work to too little for even harder work. These sentiments are typical of physicians in high managed care areas, especially the West Coast and parts of the East Coast as well as scattered enclaves elsewhere.
Physicians leaving practice report amazement at the sense of release they experience. Typically, they say that they loved seeing patients but not practicing medicine. Volunteer clinics have consequently become popular with retired physicians — whenever malpractice insurance can be provided to protect them. The physicians of Samaritan House in San Mateo, California, for example, are enthusiastic about treating patients who are too poor to afford regular care but too well-off to qualify for Medicaid. Working only part-time, they seem to find medicine a wonderful profession now that they are no longer trying to earn a living in practice.
Of course, unconcern with income is not a solid foundation for the future. The days of noblesse oblige and indifference to income that occurred when wealthy families supported their sons during long years of training and the early years in practice (or longer) are unlikely to return. Great Society thinking reduced charity medical care to a near-sin because it was thought to be demeaning to the poor. Consequently, a single payment scale was created for Medicare and Medicaid patients, and it was based on “usual, customary, and reasonable fees,” a sum that was accepted by most physicians and private insurers.
Ultimately, this became unaffordable for the Mediplans. Fees were ratcheted down, and all pretense of keeping up with market rates ended during the Nixon administration with the imposition of a fee freeze. After 1991, Medicare actually reduced physician fees four times, causing them to fall 14 percent below practice cost inflation. Commercial insurers found it advantageous to follow suit and, with both the private and governmental insurance sectors cutting back to arbitrary take-it-or-leave-it fee schedules, American medicine fell under the sway of third-party payers. No longer were doctors free to exploit paying patients. But neither did medicine remain a free and liberal profession. With constant haggling over fees and details of coverage, the sense of participating in a noble enterprise was clearly under assault. Altruism in primary care became especially difficult to maintain because primary care is not a matter of isolated selfless gestures but consists, rather, of repeated contacts with the same patients. One may donate an operation, which is complete once it is done, but a free visit to diagnose diabetes is of less benefit to the patient unless it includes lengthy follow-up.
The moral dimension
There is a moral dimension here that has received insufficient attention in the mechanistic analyses that create deep gulfs between doctors and non-doctors. Commentators often portray medicine as a monopolistic system in which the American Medical Association deliberately used the report of Abraham Flexner in 1910 to close quack medical schools in order to limit the supply of physicians. Supposedly, this was an attempt to control the market and eliminate competitors exclusively for financial gain, and nothing has changed since then. Indeed, Milton Friedman has spoken of abolishing professional licensure in order to enhance competition. There is evidence to support these positions. Medical Economics income surveys showed that between 1930 and 1980 physicians increased their constant-dollar income enough to move collectively from the lower-middle into the upper-middle class.
Nevertheless, this physician recalls that in the 1960s and 70s, physicians who earned high salaries were not highly respected by their peers. Star surgeons and “society doctors” were not the objects of envy and emulation that celebrities have become today. In fact, there was something slightly disreputable about making too much money. A conscientious surgeon told me at the time, “A good doctor worries about his patients.” The physicians I worked with in a suburban practice near San Francisco were cautious in raising prices and generally prized their reputations for professional excellence. Nurses, pharmacists, hospital administrators, and the rank-and-file medical assistants and clerical personnel who staffed our clinics, hospitals, and offices mirrored this attitude. Self-interest was always present, but it did not run rampant.
The 1980s introduced business into medicine. Cost-effectiveness and a “businesslike approach” were newly deemed appropriate, even essential, to health care. New financing schemes such as hmos and ppos combined with utilization review and other management tools to enhance productivity and control costs. Hospital administrators became executive vice presidents. Physicians formed new organizations to meet the new era, and doctors became their chief executive officers. Contracting for access to groups of patients replaced unorganized word-of-mouth referrals.
This legacy continues, and it has created severe strains within medicine. The business ethic and the medical ethic coexist most uncomfortably. Real-world financial considerations do allow the more businesslike actors in health care to abuse those who are less businesslike. The necessary delicate balance between humanism and rational economic behavior has yet to be achieved. I say this with full awareness that medicine was never totally blind to business considerations, nor were physicians saints. But joining management was not the road to professional success that it has become.
Moreover, patients sense that something is very wrong. Physicians are supposed to contract with insurers, whose job it is to enroll them into networks for the lowest price they will accept either individually or through organizations that evaluate the contracts on their behalf. Naturally, physicians are not happy with this arrangement, but in high managed care areas, few physicians can function entirely outside the prevailing structure. The initial idea was for physicians to drop their prices in exchange for an increased volume of patients attracted by the lower prices. In order to determine true market rates for reimbursement, however, physicians must reject contracts that they think are too onerous while insurers continuously test the market with lowball offers until it becomes hard to find takers. Patients benefit from the resulting lower prices, provided the prices are not so low that they drive the doctors away and restrict the availability of services. It’s all gotten very complex. (So complex that a Harvard game theorist visiting the Hoover Institution told me there are too many variables to even try to model the process.)
In some ways, contracting for physician services resembles a labor negotiation, in which the doctors play the role of labor, but there is a crucial difference. Physicians who drop a contract drop the network connection they have with all the patients in that plan. It’s an unintended consequence, but total loyalty to patients now means accepting any contract that’s offered no matter how bad or unaffordable it is. Patients who lose their doctors — or who lose the ability to see them for the most favorable “network” prices — are not happy; they, or the news media acting on their behalf, may become abusive when this happens. In one instance, the Oregonian ran a front-page Sunday feature about Oregon doctors who drop out of hmo contracts. The newspaper accused these doctors of abandoning their patients. As one physician put it, “The concept that the docs did not leave the patients, they left the insurance . . . just didn’t register.” The option of continuing to see the same physician out of network for a higher fee was not promoted as an acceptable alternative.
This kind of relationship-destroying confrontation is most significant for primary care. Losing frontline doctors, who are patients’ entry point into the health system, is an especially unwelcome surprise. Half of all outpatient visits are made to the one-third of doctors who practice primary care, according to the National Ambulatory Care Survey. When specialists decide not to renew contracts, fewer patients are immediately affected. Consequently, primary physicians must be prepared to confront significant anger when they leave health plans. It is a far cry from turning down a shipment of mattresses because of a price disagreement. The fiduciary relationship distorts the underlying economics.
Is the picture as uniformly bleak as I have painted it? Not entirely. The majority of new physicians opt for employment rather than establishing their own independent practices. This shields them from many of the difficulties facing medical practice today. And while medical school enrollment is dropping, there is no overall shortage of physicians or of qualified applicants to medical school so far.
Still, primary care does not repay the time and money invested in training in comparison to careers in law or architecture, and this is expected to impact future manpower. The Martin Fletcher 2003 Survey shows that a family physician can expect to earn from a low of $130,000 to an average of $155,000. The corresponding figures for internists are $140,000 to $179,000 (though the latter numbers are inflated by the inclusion of some higher-paid medical specialists). Nevertheless, internist compensation in large medical groups fell by 2 percent in 2002, and median pediatrician income dropped by 4 percent. Specialty training remains a good investment, however, and physicians, as a group, remain relatively high earners.
The bloom is off the rose for primary physicians in terms of prestige as managers of managed care services. While not eliminating primary physicians as “gatekeepers” whose approval is needed for hmo referrals to specialists, public backlash against the constraints imposed did reduce their prestige. At the same time, the gap in earnings between primary and specialty physicians has widened from 30 percent 40 years ago to more than double in many cases now. Fletcher reports average anesthesiology income at $282,000. Average cardiology compensation is $325,000, and orthopedic surgeons earn $387,000. These discrepancies reinforce a long-held belief that simply seeing patients, the principal activity of primary physicians, does not pay for itself. Procedures and operations, whether low- or high-tech, are far more rewarding. This has been called the “cognitive-procedural” differential, and it has become more acute as the ready availability of medical information in the media and on the internet cheapens the value of medical advice, typically the purview of the primary physician, and enhances the relative value of “doing things.”
In areas where there is a relative shortage of physicians, incentive bonuses and income guarantees have long been offered. Now, the same is true in places where managed care has made medical practice less desirable than elsewhere. Specialists are the most sought after and usually command the largest sums. However, primary care physicians are also being offered monetary inducements in the San Francisco Bay Area. Despite the national survey results, general internists can expect offers of only about $80,000 to join private practices in San Francisco. This contrasts with $70,000 to $90,000 for physician assistants and $95,000 or more for beginning pharmacists. Hospitals and health systems in the surrounding communities offer better opportunities. However, not all primary physicians receive the support they request, and they then face a real struggle to establish themselves. Supply, demand, and political factors presumably make the difference.
Declining competition
It is not clear that lower earnings are the principal problem in the falling popularity of primary care, particularly of internal medicine. Incomes for generalists have always been lower than incomes for specialists. In the early days of internal medicine, however, internists served as consultants for complex cases, gaining a little in income but much more in status as compared with family practitioners. More recently, various specialists have taken over most of the consultations, and the prestige of the internist has fallen along with earnings. To a lesser extent, the same has happened to pediatricians.
In my own practice, income fell 40 percent in the past five years (which is not unusual in the area in which I work), but this actually troubled me less than the fact that overhead has progressively risen to nearly two-thirds of earned income. Like high taxes, this leads to a sense of working for everyone but oneself. It also takes hard work to pay for $20,000 or more monthly in office expenses. Furthermore, financial pressures make other problems less tolerable. Conversations with colleagues from around the country and the correspondence sections of medical magazines suggest that this is more the rule than the exception.
Managed care has particularly hampered primary physicians by sharply curtailing internal subsidization. Traditionally, when an emergency room in the hospital, for example, was losing money, that loss might be made up in the laboratory. Something similar occurred with physicians. Extra time for complicated patients, time in the library and for other continuing education, care given at inconvenient times as well as to non-paying patients — all were subsidized by more lucrative activities such as comprehensive examinations (annual physicals) and diagnostic tests. If the mix came out right, the internist was satisfied.
Currently, insurers and government seek the lowest price for every service. There have been drastic cuts of two-thirds or more for electrocardiograms, breathing and hearing tests, and blood and urine analysis. This is the supermarket equivalent of putting every item on sale at the same time — highly unusual and probably unsustainable. Moreover, hmos and some ppos restrict physicians from performing any lab work (and sometimes other diagnostic testing) on patients they cover. Contracts are made with outside facilities based on competitive bidding. This lowers costs to the health plan, but it delays treatment and is inconvenient for patients as well as time-consuming and costly for physicians. In general, doctors do not have the option of either submitting bids of their own or offering to accept the negotiated rates paid to outside facilities.
Healthy medical competition in primary care has diminished as the opportunity to build better mousetraps has been seized by insurers. There is a reduced ability to find better ways to provide ordinary services and, instead, a temptation to add costly high-tech substitutes in the form of more complex diagnostic procedures to preserve revenue in the face of rising expenses. It also seems as if the locus of competition has shifted from physicians to insurance companies. Formerly, patients chose doctors based on availability, reputation, professional manner, and the amenities of their offices. Now insurance carriers exert considerable control over the provision of care. Lists of network physicians limit choice. Additions and subtractions are frequent. So are changes in insurers by employers, again changing the composition of lists of available physicians. Consequently, many patients choose their personal physicians at random from lists. In response, physicians feel less attachment to patients.
Insurers are attempting to counter this by keeping scorecards on doctors’ performance in getting their patients to comply with accepted clinical guidelines. Sometimes, patient satisfaction is also monitored. But physicians resent being judged by computers and personnel with less understanding of medicine than their peers. The trivial (e.g., 5 percent) performance bonuses being offered by some carriers are as likely to offend as please the physicians who receive them. And given their history of dubious financial tactics in contracting with physicians, there is little trust that such “quality-enhancing” programs will be more than a shell game in which money is taken away from some doctors and given to others, sometimes unfairly.
As professional freedom and the confusion of dealing with the changing requirements of many insurance companies continue, there has been a role reversal between small-office and large-clinic physicians. Doctors in the Kaiser Permanente system sometimes chafed under the restrictions imposed by large group practice. Private physicians, in contrast, felt free because they set their own office policies. Now Permanente physicians have to deal with only one set of restrictions — their own — while community physicians must deal with as many restrictions as there are insurers with whom they contract. A survey of 1,000 physicians conducted by Stanford University and the San Mateo County Medical Association showed that the vast majority of doctors in the county are unhappy (independent of income considerations), but that Permanente physicians were less unhappy than physicians in private offices.
If physician individualism is now being battered, independent primary care physicians are at a special disadvantage in having to deal with many different taskmasters while still trying to please patients. Time and money constraints have dramatically degraded the ability to cope and the quality of professional life. Larger organizations have the advantage of being able to spread the cost of complex software and hardware and technical experts over a larger base. They can also do their own internal subsidization to keep the supply of internists, family practitioners, nurse practitioners, and physician assistants in balance with the corps of specialists. Thus, Kaiser Permanente now has a competitive edge by offering new primary physicians higher salaries than surrounding private practitioners can afford to pay their new associates. This is the reverse of the historic situation. It is also telling that the very large Veterans Administration and Kaiser Permanente systems are currently in the forefront of adopting the latest information technology.
Until now, Americans have had a wide selection of practice styles to choose from. Small, independent offices have created the image of the family doctor. Yet the powerful forces of managed care are predicted to spread further because the economic logic appeals to employers, who fund most non-governmental care. They can use insurance carriers (who must do their bidding or ultimately lose the employers’ business) to alter physician behavior and lower costs. Individual practices and small partnerships are endangered species in this conflict, and where the conflict is intense, their number is shrinking. California, a bellwether state in social and economic trends, has been a leader in adopting managed care and is consequently a leader in experiencing the fallout from such “private regulation” of health care.
Lately, insurers have trimmed the heavy-handed and labyrinthine procedural controls that have saved money but interfered with care and infuriated patients. Instead, restricting utilization is being replaced by increasing the patient’s share of the cost of care. Higher annual deductibles of $1,000 or more (triple the national average) and co-payments of $35 to $40 for office visits are becoming common. In addition, the availability of traditional “indemnity” coverage, based on what the physician actually charges rather than what the carrier chooses to pay, is shrinking rapidly. This move away from inflationary first-dollar coverage leaves patients surprised by unaccustomed financial liability despite controls on physician fees.
The effect on primary and specialist physicians is subtler. Specialists continue to find their expensive services largely covered by major medical insurance. This accords well with consumers’ desire to be protected against the rapidly rising costs of catastrophic medical events. In contrast, primary care is being rendered, to a greater extent, in the window of deductibles and co-pays, leading primary physicians to seek an increased proportion of reimbursement from the patient rather than the insurer. The resulting (usually non-interest-bearing) bills must compete with expensive credit card debt for payment priority and will therefore tend to go to the bottom of the pile. Depending on how far this trend continues, the solvency of primary care will be further undermined.
This prospect leads some physician-managers to predict a coming split in American medicine. Frustrated primary physicians may well abandon the last vestiges of independence and join together with non-physicians and activist academic physicians in promoting single-payer national health insurance. (At present, there are only a few thousand physicians committed to this change.) Specialists will have no such compelling motivation. Neither will large health systems like Kaiser Permanente or the Mayo Clinic and other well-known institutional practices that have long thrived by charting their own destiny. It is telling that once go-it-alone Kaiser Permanente, the institution upon which the original hmo Act of 1973 was modeled, now actively promotes participation by its physicians in organized medicine because it sees its future linked to the viability of private health care alternatives.
Looking forward
There seems little likelihood of passage of national health legislation now, but that could change. In that event, the freedom to innovate and the variety of health care choices that have been available to American consumers would be likely to diminish substantially.
Proponents claim that increased efficiencies will generate sufficient funds to cover the uninsured and that this alone justifies the adoption of a single-payer model of health care for the United States. National health insurance might serve to resurrect traditional primary care, restoring long-term relationships and decreasing the many complexities that bedevil current practice. But even that is far from certain. It would make sense, for example, to centralize preventive medicine such as mammography for breast cancer and colonoscopy for colon cancer. The same is true for immunizations. Reminders and follow-up are also done more efficiently in large numbers. Primary physicians could then focus on the treatment of illness and become more involved in the promotion rather than the delivery of preventive services. On the other hand, similar centralization of preventive services is also possible without national health insurance. For instance, Blue Cross has opened centers for periodic screening laboratory tests, and Aetna has sent out cards for checking the stools of new patients for occult blood. Insurers already keep track of the frequency of preventive services. There might be significant economies of scale in such ventures, but at the risk of loss of convenience for patients and a reduction in privacy.
Replacing (or resurrecting) the traditional internist’s role as the coordinating physician for the care of patients with complex illnesses is also problematic. Hospitalists have had only limited success in fulfilling this need because they do not know the patients. If internists shun the hospital as unaffordable, then perhaps some hospitalists will become consultants who are hospital-based and who may even begin to see ambulatory patients in clinics. Internal medicine might then bifurcate into consultant and non-consultant branches. However this goes, some type of primary physician will remain essential to counterbalance specialists’ inclination to perform more specialty care without necessarily considering the global needs of the patient. The cost of neglecting this aspect of the total picture could be very high.
Non-physicians as providers of primary care are sure to increase in number and in the scope of services that state governments, which license them, will permit them to offer. Physician assistants, who usually receive two to two and a half years of training after completing college, and nurse practitioners, who begin with a degree in nursing and then usually take an additional nine months to two years, should flourish regardless of how health care is financed. Patient acceptance and the allure of lower prices and more time during visits will remain attractive in any event. Expansion of an already existing movement to practice independently will ultimately lead to a turf war between physicians and non-physician providers.
While there is every likelihood that patients without chronic illnesses will receive more of their primary care from non-physicians, patients with chronic illnesses may fare somewhat differently. This is because the success of specialty care for ongoing medical problems is partly dependent on the quality of ancillary primary care. Should able general internists become less available or less interested in handling complex cases, specialists may have to return to their traditional role as the principal physicians for patients whose underlying chronic disease is within their purview.
There are suggestions of movement in these directions for both types of patients. First, some California medical groups already give independent billing to nurse practitioners as primary care providers alongside primary care physicians. Presumably, they will address the less complicated patients. Second, specialists are complaining that under managed care, many of their patients hardly ever see their primary physicians, whom they may not even know.
As specialists have, by default, consequently become principal physicians to patients with chronic illnesses, some have hired nurse practitioners and physician assistants to do something that comes close to primary care under their supervision. It would not be much of a leap for a group of specialists to go on to hire primary physicians to provide even more extended care within their own practices. The creation of integrated groups within medical specialty practices would facilitate professional synergy and enhance the overall quality of care. Patients would find care to be more convenient and better coordinated.
Entrapment upon entrapment
Unless national health insurance is adopted with a monolithic approach to care, there will be a need for continuing innovation to assure the availability of a variety of styles and prices in medical practice and to avoid one-size-fits-all solutions. Two decades ago, I wrote in the Journal of the American Medical Association about the value of the nearby Kaiser Permanente hospital and clinic to me and the value of private practitioners, including me, to Kaiser Permanente as competitors. Both offered slightly different but overlapping products and served slightly different but overlapping clienteles. Our healthy competition kept either option from being the only game in town, and the public benefited as we competed on price and service.
Since that time, deliberate obstacles to free-market competition in medicine have been imposed. It is not the “medical establishment” that is creating them. Given the vehement support for national health insurance by some members of Congress, of whom Senator Ted Kennedy is most prominent, and a similar attitude among senior Medicare officials over the years, there is reason to believe that a succession of measures adopted have more than one goal. Regulatory hamstringing of private practice, while ostensibly aimed at protecting the public, also undermines rather than facilitates healthy growth of the existing system, thereby paving the way for national health insurance.
In 1981, for example, Congress authorized civil monetary penalties (cmps) for Medicare fraud and abuse. Since then, according to a Centers for Medicare and Medicaid Services bulletin, “Congress has dramatically increased both the number and types of circumstances under which cmps may be imposed.” The secretary of health and human services has wide discretion to impose additional assessments to the mandated fines and to exclude offending physicians from participation in the Medicare program for significant periods of time.
The fines are massive: $10,000 per item or service in noncompliance and up to three times that amount for some violations. Aggregating many small items makes the fines potentially hundreds or thousands of times greater than the charges for the disputed services and far greater than penalties for nonmedical infractions. Physicians often feel singled out for special punishment, especially since some of the 35 reasons for prosecution involve matters of interpretation on which reasonable people may differ.
Few people are aware that their own civil liberties are also at issue. Currently, the circumstances are limited, but the courts have upheld the right of Medicare to restrict services, even if beneficial to the recipient, if there is a general advantage in doing so. So, based on federal law, a Medicare patient who requests an assistant surgeon during a cataract operation is participating in an illegal act, even if he is willing to pay out of pocket for the service. Medicare has a blanket prohibition against payments to assistant cataract surgeons (Section 1842(k)), and the patient who desires the extra security of another person in attendance is simply out of luck. The request would be perfectly legal one day before age 65, but once one is on Medicare that right is lost — unless, that is, the patient is willing to give up all other Medicare benefits, a truly grisly penalty for noncompliance.
The physician version of this conundrum is deciding to “opt out” of Medicare. This involves a complex and hazardous procedure in which the physician agrees to exclusion from the Medicare program for no less than two years. Only then is he or she free to contract with patients, formally or informally, for services that are mutually agreed on but may not fit the web of Medicare criteria as spelled out in 125,000 pages of regulations.
A physician seeking such freedom, perhaps in order to charge more than Medicare allows, can expect close monitoring and severe punishment for infractions. But the same is true when independent-minded physicians wish to charge less than Medicare would pay and pass on the administrative savings to their patients. One doctor in the latter category points out the consequences of standing apart. Having voluntarily excluded himself, neither he nor his patients can submit bills to Medicare for his services, even if only to partially reimburse the patient. In addition, the doctor is not allowed to work for anyone who does any business with Medicare. Thus, he cannot legally help out in the emergency room of the nearby hospital to relieve a severe shortage of er doctors, as he would like, even though he has earned board certification in internal medicine and emergency medicine. Opting out makes a doctor virtually unemployable.
And as if that were not enough, doctors must remember to “re-opt out” every two years. Failure to do so automatically and involuntarily re-enrolls them in the Medicare program, subject to all its restrictions and sanctions. Forgetting to re-opt out criminalizes all the services the physician has billed to his willing patients thereafter. As usual with Medicare violations, physicians are subject to conviction without any need for the government to prove criminal intent. The fines collected are being used to hire more investigators: entrapment upon entrapment upon entrapment.
The creeping control of Medicare has found its latest expression in new proposals to criminalize charging Medicare more than the lowest price paid by anyone else. This would be added to current criminal penalties for providing free care to anyone covered by Medicare without adjusting downward what is charged for all other patients (on the grounds that any free care necessarily lowers the doctor’s composite “real” fee and Medicare should therefore share in the “reduced rates” and pay other bills on a discounted basis). The inability to help a colleague or a relative without invoking legal jeopardy is so bizarre that it serves as the basis for considerable physician paranoia in dealing with Medicare.
The fetters placed on physicians who wish to offer services that are legal but who cannot escape the ever-constricting regulatory snare — which is both private and public — also impact patients. The restrictions decrease physicians’ efficiency and sap their energy, quite beyond the awareness of patients, and quietly invite eventual surrender to total control. It is intriguing that civil libertarians do not appear to consider the compromising of physician rights to be of any concern or any threat to the civil liberties of others. It is also noteworthy that socialized medicine in multiple European countries permits private alternatives to national health systems to thrive side by side. This is quite unlike the situation in the United States, where Medicare exerts significant control over nearly all citizens over age 65 and virtually all patients with renal failure, the single disease state-covered by Medicare at all ages.
Seniors who are considering boutique care as a way to purchase primary care services that Medicare restricts may also fall into a regulatory trap. Representative Henry Waxman has asked for an investigation into the legality of providing increasingly popular boutique care to Medicare-covered patients, specifically with regard to violations of the False Claims Act. No clear guidelines have emerged after administrative review and a commentary by Health and Human Services Secretary Tommy Thompson. The legal complexities are exploding, and the long list of “questionable” or “dubious” services may well have a chilling effect on their availability. Medicare has done a great deal of good for the elderly. However, its regulatory history is a cautionary tale for what can be expected from any further extension of federal control over health care.
Even so, the struggle to integrate increasingly potent and costly scientific advances into affordable medical care is a worldwide problem. As more people become aware of the dilemmas that physicians face, the aggressive consumerism of recent years appears to be abating and is far less strident, but the view from the Capitol has not evolved apace. Medicine remains the focal point for a long list of societal conflicts.
Medicine and the American character
Looking back, it is easy to wax sentimental about a time when all these concerns were unimaginable. That period includes patients and physicians who could relate the medicine of television’s Marcus Welby, M.D. to their own doctor-patient relationships. Faith and strong personal bonds, while once the essence of primary care, may no longer be appropriate to our own era, with all its sophistication and its powerful centrifugal forces.
One of the penalties of losing the innocence of a time when “doctor knows best” is the need for much broader participation in health care policy development without the comfort and security (no matter how illusory) of a paternal figure. To replace the all-knowing physician without succumbing to the siren songs of quick fixes and inflexible ideology will be no small task. The scientific and humanitarian traditions of medicine together with the uniquely entrepreneurial and compassionate American character offer a template that should guide us.
The first principle is pluralism. Imposed one-size-fits-all and one-fee-fits-all solutions are incompatible with the American tradition and will not work. Choice and diversity must be maintained if American medicine is to remain vibrant, creative, and attractive as a career.
Second, the regulatory and legal distortions that run so counter to the American “can-do” spirit must be reversed; oppression is never healthy. Charitable impulses, on the other hand, are healthy and should be encouraged rather than scrutinized as potential violations of trade laws that were never intended to deal with charity.
Third, economic distortions must be addressed. Too much of the health dollar is spent on paperwork. Too many list prices have been inflated to joust with managed care and Medicare and are no longer real — unless they are billed to the uninsured, who are then grossly overcharged. Insurance carriers and governments also impose too many administrative costs on the providers of care.
Finally, space for both small business and big business within medicine must be preserved and encouraged. Information technology that will allow even the solo physician to cope with medical and insurance complexities can be used to accomplish this, but the high costs of creating and maintaining information systems must not be allowed to price individual physicians and small groups of physicians out of the market. New ways of financing medical practice must be found if we are to maintain the diversity of choice on which American patients have come to rely.
All of this will take inspired political leadership. Otherwise, we will continue to drift and to tinker.
