Achieving Equitable Cancer Care Access in Texas

Much is known about what influences the health of a community, including individual health behaviors as well as social and economic determinants of health.[1] Health equity has been defined to mean that everyone has a fair and just opportunity to be as healthy as possible.[2] Being un- or under-insured puts people at serious disadvantage when it comes to access to healthcare and potential for positive health outcomes.

The Affordable Care Act (ACA, or Obamacare) provides an opportunity for states to expand health coverage to low-income families through the Medicaid program. Multiple recent analyses demonstrate that Medicaid expansion is having an especially positive impact in rural areas in expansion states.[3] Many expansion studies point to improvements across a wide range of measures of access to care.[4] Finally, research shows that Medicaid expansions result in reductions in uninsured hospital or other provider visits and uncompensated care costs, whereas providers in non-expansion states have experienced little or no decline in uninsured visits and uncompensated care.[5]

Texas is one of thirteen states that has chosen not to expand Medicaid. The majority of states not participating in Obamacare expansion are in the Deep South,[6] and these states are also the states in the lowest quintile in overall health as ranked by United Health Foundation.[7] (The State of Texas ranks 37th in overall health in the United States.[8])

That’s not to say the State of Texas doesn’t spend a lot of money on healthcare. According to the Comptroller’s office,[9] healthcare spending represents nearly half the state budget - $42.9 billion in fiscal 2015 – spread across various agencies. Seventy percent, or $30.3 billion, went to spending for Medicaid and CHIP. That spending also includes direct support of various institutions.

For example, the University of Texas MD Anderson Cancer Center, which markets itself heavily as “the nation’s top hospital for cancer care for 14 of the past 17 years”[10] and “one of the nation’s top two hospitals for cancer care every year since the [US News & World Report America’s Best Hospitals] survey began in 1990,”[11] has an operating budget of $5.2 billion and over 20,000 employees.[12] Of that $5.2 billion, 4% - $210.1 million – is general revenue appropriated by the State of Texas.[13]

As a radiation oncologist, I practice in the shadow of MD Anderson, even though I live 120 miles north of the Texas Medical Center. It is a long shadow. That shadow is often comforting, like an old friend. But it is a shadow that discriminates with strict financial barriers and selective insurance contracts. There is a joke in the medical community that the first and most important biopsy you get at MD Anderson is a wallet biopsy – no pay, no play.

MD Anderson does participate in the Texas Medicaid Program and has a financial assistance program for cancer patients who meet residency and certain financial eligibility requirements.[14] Uncompensated care in fiscal year 2018 at MD Anderson totaled only $170.4 million,[15] certainly less than the $210.1 million appropriated by the State of Texas and less than 3.3% of their operating budget. Modern Healthcare looked at the proportion of charity care provided by the country's 20 biggest not-for-profit hospitals and hospital systems by revenue in 2015 and 2016 and found that the average proportion of operating expenses devoted to charity care was 5.21%.[16]

In fiscal year 2017, MD Anderson provided care to a mere 420 people who primarily had no insurance and who met their financial assistance program requirements.[17] That is barely one unique patient a day at an institution that sees 141,600 patients a year.[18] MD Anderson’s first core value[19] is: “Caring: By our words and actions, we create a caring environment for everyone.” But not everyone gets in.

MD Anderson has a huge and wealthy donor base as well. As just one example, their Moon Shots Program,[20] launched in September 2012, has received $464 million in private philanthropic commitments so far.[21] In 2018 alone, 9.5% of their budget – $498 million – came from restricted grants and contracts and philanthropy.[22]

Let me say, I am in awe of the research that comes out of MD Anderson. They have every right to be proud of their #1 ranking and of having a Nobel Prize-winning scientist on staff.[23] The knowledge that comes out of an institution that sees 141,600 patients a year is staggering. The training of health care providers, including at Harris Health System facilities, is excellent. But I grieve when Texas residents who need the care MD Anderson can provide are prevented from going there.

Ultimately, quality health care is not just about rankings; it must be about access to care as well. As a state-supported institution, MD Anderson needs to loosen its requirements for providing uncompensated care and be willing to negotiate and accept reasonable contracts with insurance providers, especially Medicare Advantage and Obamacare plans. After all, a hospital cannot be “best” if it isn’t best for all. (That is not to let insurance providers off the hook. I have no doubt they shy away from contracting with MD Anderson, knowing less expensive care can be had elsewhere.)

The State of Texas should require minimum levels of charity care and insurance plan participation when hundreds of millions of state dollars are being allocated. State legislators, in view of the substantial economic[24] and health[25] benefits associated with the expansion of Medicaid, should invest in increased health insurance coverage in Texas via the Affordable Care Act. And finally, health care ranking organizations like US News & World Report should include access to care and charity care metrics when ranking hospitals.[26] These are the right – and equitable – things to do.

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[1] https://www.angelinaradiation.com/blog/county-health-where-do-we-begin

[2] https://www.rwjf.org/en/library/research/2017/05/what-is-health-equity-.html accessed 7/5/19

[3] https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/ accessed 7/5/19

[4] https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/ accessed 7/5/19

[5] https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/ accessed 7/5/19

[6] https://familiesusa.org/product/50-state-look-medicaid-expansion accessed 7/4/19

[7] https://www.americashealthrankings.org/learn/reports/2018-annual-report accessed 7/5/19

[8] https://www.americashealthrankings.org/learn/reports/2018-annual-report/findings-state-rankings accessed 7/5/19

[9] https://comptroller.texas.gov/about/media-center/news/2017/170131-health-care-spending.php accessed 7/3/19

[10] https://www.mdanderson.org/newsroom/md-anderson-ranked-no-1-for-cancer-care-in-national-survey.h00-159226512.html accessed 7/1/19

[11] https://www.mdanderson.org/patients-family/becoming-our-patient/why-md-anderson.html accessed 7/1/19

[12] 2019 Quick Facts report of fiscal year 2018 data https://www.mdanderson.org/documents/about-md-anderson/about-us/facts-and-history/quick-facts.pdf accessed 7/1/19

[13] 2019 Quick Facts report of fiscal year 2018 data https://www.mdanderson.org/documents/about-md-anderson/about-us/facts-and-history/quick-facts.pdf accessed 7/1/19

[14] https://www.mdanderson.org/about-md-anderson/business-legal/office-of-health-policy/uncompensated-care-program.html accessed 7/5/19

[15] 2019 Quick Facts report of fiscal year 2018 data https://www.mdanderson.org/documents/about-md-anderson/about-us/facts-and-history/quick-facts.pdf accessed 7/1/19

[16] https://www.modernhealthcare.com/article/20170424/BLOG/170429935/how-much-charity-care-do-not-for-profit-hospitals-provide accessed 7/7/19

[17] https://www.mdanderson.org/about-md-anderson/business-legal/office-of-health-policy/uncompensated-care-program.html accessed 7/4/19 How does MD Anderson serve the low-income population?

MD Anderson has a long tradition of providing quality cancer care for many low-income residents of Texas.

In FY17, MD Anderson provided care to 420 people who primarily had no third-party insurance and who qualified for partial or full financial assistance under MD Anderson’s patient financial assistance program. The estimated unreimbursed cost associated with these patients was $17.5 million.

In addition, MD Anderson provided care to 3,717 people whose primary source of insurance coverage was a state or locally sponsored governmental program such as Medicaid, CHIP, Harris County Hospital District or other Texas county-specific indigent program. The estimated unreimbursed cost associated with these patients was $12.5 million.

MD Anderson’s combined estimated unreimbursed costs for these two categories of patients in FY17 was $30 million.

For the past 23 years, MD Anderson also has provided cancer services at Lyndon B. Johnson General Hospital for low-income Harris County residents. This program is staffed by MD Anderson faculty physicians, nurses and others at an annual cost to MD Anderson of $4 million. The MD Anderson program at LBJ General Hospital more than 1,000 new patients and had more than 12,000 follow-up patient visits in FY13.

[18] https://www.mdanderson.org/documents/about-md-anderson/about-us/facts-and-history/quick-facts.pdf At MD Anderson, everything we do revolves around our patients. In Fiscal Year 2018, more than 141,600 people sought the superior care that has made MD Anderson so widely respected — 45,000 of whom were new patients.

[19] https://www.mdanderson.org/about-md-anderson.html accessed 7/4/19

[20] https://www.mdanderson.org/cancermoonshots.html accessed 7/5/19

[21] https://www.mdanderson.org/documents/about-md-anderson/about-us/facts-and-history/quick-facts.pdf accessed 7/5/19

[22] https://www.mdanderson.org/documents/about-md-anderson/about-us/facts-and-history/quick-facts.pdf accessed 7/5/19

[23] https://www.mdanderson.org/newsroom/nobel-prize.html Jim Allison, PhD

[24] https://www.perrymangroup.com/media/uploads/reports/perryman-economic-benefits-of-expanding-health-insurance-coverage-in-texas-03-2019.pdf accessed 7/7/19

[25] https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/ accessed 7/5/19

[26] Why did U.S. News adjust for socioeconomic status? In 2014, the National Quality Forum, an influential standard-setting body, recommended considering socioeconomic status in certain evaluations of hospital performance. Since our objective is to enable a patient who is consulting our ratings to make apples-to-apples comparisons among hospitals, it follows that we should adjust for patient attributes such as age, sex and socioeconomic status. https://health.usnews.com/health-care/best-hospitals/articles/faq-how-and-why-we-rank-and-rate-hospitals accessed 7/4/19

Money, Insurance, and Health: An Unfair Relationship

Money doesn't buy happiness, or so they say. But money can buy better health. Add one more difference between the haves and the have nots.

There are many determinants of health. Some behaviors are more under our individual control than others. The Big Three, as I like to call them – smoking, diet, and exercise – would, at first glance, seem to be entirely personal choices. That would be untrue.

Social and economic factors are a major determinant of health. These factors include education level, employment, income, family and social support, and community safety. Each of these factors is correlated with financial well-being. In fact, these social and economic factors as a whole are more important even than individual health behaviors, such as tobacco use, diet and exercise, alcohol and drug use, and sexual activity, since health behaviors also correlate strongly with educational level, employment, income, etc. In other words, we cannot address health behaviors in isolation; we must simultaneously address education, jobs, social services, and community safety if we are to improve health.

Another significant determinant of health – the one that gets the most national attention – is access to and quality of healthcare. In the United States, that access is governed primarily by insurance coverage. Every country rations healthcare; in the United States, we just happen to ration it by separating the insured from the uninsured, and that is very much along economic lines. A privileged few are wealthy enough to be able to pay out of pocket for whatever care they need, but they rarely need to. They have insurance. Good insurance. They can afford to pay their deductible, however high it may be. The working poor, however, have some income but little or no savings and often no health insurance coverage at all. They are the ones who get hit with the entire, undiscounted bill for their care. Bankruptcy is an all-too-common result.

Our healthcare system does make some patchwork provision for the truly indigent, but no one should kid themselves that charity care is in any way equivalent – either in breadth of coverage or ease of use – to what we want for ourselves. Even those with insurance are burdened with astronomical deductibles and copays that most simply can’t afford. These persistent financial burdens can force patients to choose less expensive procedures or to go without care altogether.

And then there is Obamacare.

Implementation of the Affordable Care Act, aka Obamacare, started in 2010, when 16% of the US population – more than 40 million people – were uninsured. Healthcare provided since the advent of Obamacare is, as promised, both more affordable and more available. The percentage of people without health insurance has been cut in half.

The dirty little secret is that many healthcare providers don’t take Obamacare plans, funneling patients into inadequate primary care networks and forcing them to drive long distances for more specialized care. In other words, even under Obamacare we continue to ration care with money-related barriers. No question, Obamacare is far from perfect, but it is still better than nothing.

Ray Perryman, considered by many to be the Texas economist par excellence, issued a report in April 2019 titled Economic Benefits of Expanding Health Insurance Coverage in Texas. In this report, Dr. Perryman states, "Health care needs do not simply go away because individuals do not have insurance coverage. Instead, medical issues tend to escalate and lead to higher costs and worse outcomes. Texas would gain over $110 billion in new Federal health spending during the first 10 years." For the callous who are only interested in the economic benefit accrued to the state’s coffers, this report delivers that in spades.

Guess what, though? According to the Perryman Group report, expanding health insurance coverage in Texas also would result in enhanced “health and wellbeing of individuals directly affected by receiving coverage” as well as “reductions in the numbers of uninsured, fewer emergency room visits, improved health outcomes, enhanced employment and productivity, and other desirable developments.” That is a win-win, my friends.

There has been little political appetite to expanding coverage in Texas for fear of “socialized medicine” and an ever-more-intrusive Federal Government. I get it. We can have differences of opinion about whether and how much healthcare is a “right”, how much “responsibility” is required along the way, and the role of government in healthcare. But, leveraging $9.00 in federal resources for every $1.00 in state funding that results in improved health and return on investment is a bet I would make any day of the week.

Our individual and community health depends on many things. Money – or lack thereof – is the most insidious factor. Improving the health of an entire county, as measured by the Robert Wood Johnson County Health Rankings, will require a concerted effort on both the public and private sector fronts and with both large and small scale efforts. Expanding health insurance coverage in Texas via the Affordable Care Act would be an impactful place to start.

The Crockett Hospital’s Painful Demise

June 30, 2017 was a sad day for Crockett, Texas, our neighbor just 47 miles to the west. Little River Healthcare ended its management affiliation with the Houston County Hospital District that Friday, effectively shuttering the Crockett hospital. Nearly 200 employees are affected by the closure.

The simple sign taped on the front door said, “HOSPITAL CLOSED” and directed people to either call 911 in an emergency or to go to Palestine Regional Medical Center, the closest hospital 39 miles away.*

Though this seemed like a sudden event, in many ways it was a slow death over many years. The 49-bed Crockett hospital – most recently known as Timberlands Healthcare, under the management of Little River Healthcare since April 18, 2016 – had danced with several management partners over the last several years. Little River Healthcare didn’t even last 15 months. 

Prior to Little River Healthcare, CHC (Community Hospital Corporation) was brought in June 1, 2015 to run the Crockett hospital for an interim period after the hospital’s messy divorce from East Texas Medical Center (ETMC) in Tyler. ETMC ran the hospital for 10 years. ETMC claimed to have invested $27 million in facility and technology upgrades in Crockett, but for a hospital in the 21st century, that was a paltry amount when spread out over 10 years. 

So why didn’t Little River Healthcare succeed?

According to published news reports, Little River Healthcare blamed Blue Cross and Blue Shield for not paying $32 million it was owed; BCBS would not comment. Little River stated that when it took over the Crockett hospital, the hospital had been “cash flow negative for a long time,” but that they thought they could turn it around.

It was a helluva lot to turn around. Payroll alone was $1.5 million per month. To keep the hospital running in its current state would have cost $2.7 million per month. The Houston County Hospital District board had already increased property taxes to the max amount and even borrowed money in an attempt to keep the hospital afloat. 

LRH Co-Owner Ryan Downton was quoted as saying, “We came to the conclusion the patient volume just isn’t there in the town anymore.” The problem was not volume; it was reimbursement. You can double or triple the number of patients you see, but if you don’t get paid adequately, you are just digging a deeper hole.

Crockett is a dying town. According to the Census Bureau, its population is around 6,500 and shrinking. 39% of the population is living in poverty. Only half of those 16 years of age and older are employed. A mere 17.2% of the population 25 years and older has a bachelor’s degree or higher (and 22.4% don’t even have a high school diploma). 27.4% of the population under the age of 65 has no health insurance. In today’s medical climate, no hospital can survive with this demographic. No hospital district can squeeze enough taxes and reimbursement out of an uneducated, poverty-stricken, unemployed, and under- or un-insured demographic to keep a hospital afloat.

What happened in Crockett is, unfortunately, not unusual. At least 15 rural hospitals have closed across Texas over the last several years. Dozens of counties in Texas have just a single physician – or none at all.

I grieve for Crockett. My brother and his wife live there. I have had the privilege of treating many dear patients from Crockett over the years. We share a compassionate state representative, Trent Ashby, whose rural upbringing cannot be far from his mind in a situation like this. Trent has said he is “committed to working with all of the involved stakeholders to mitigate the loss of existing jobs and help move forward with a plan to increase access to healthcare in our area of the state.” I don’t doubt it one bit. But to be honest, there’s not much he can do. CHI St. Luke’s Health Memorial Lufkin leadership was over in Crockett even before the closing to assist some with employment, but even they can’t come close to softening the impact of nearly 200 jobs lost.

Ultimately, this falls far too heavily on the shoulders of the local Houston County Hospital District board to find a solution. They can’t pull money out of thin air or tax property any higher. And they certainly can’t get paid for healthcare when no insurance coverage or safety net exists. I hope the hospital district board can reassess and reallocate resources to focus on providing comprehensive primary care and prevention services to the citizens of Houston County, at a minimum. They also need to strengthen relationships with surrounding regional hospitals to provide higher level of care services where needed. 

Those of us outside Houston County need to open our eyes. Without a much deeper, systemic and national change in how we allocate and pay for healthcare in this country, what just happened in Crockett is going to be replicated in more and more communities around the country. Let’s help Crockett, but don’t think it can’t happen to us.

*Will Johnson, Senior Reporter for the Messenger News in Grapeland, and Caleb Beames with KTRE-TV have done an excellent job reporting on the hospital closure, and I am indebted to them for some of the details and quotes in this column.

What I Would Like to See in Healthcare Reform (Part 2)

Last month, I wrote about the bloated, incredibly inefficient federal bureaucracy that eats up hundreds of billions of dollars annually in administrative costs. I mentioned that Obamacare was not, in my opinion, true healthcare reform and did not address these inefficiencies; rather, it simply added people to the rolls of a broken system.

In this column, I am not intending to argue for or against Obamacare or whether we “repeal and replace” or go with “Obamacare Lite”, whatever that might be. I am simply pointing out areas where I see daily a burden for both patients and providers. My dream would be for simplification of much of the process of valuing, coding, and billing for healthcare services. Whether any of these thoughts are achievable or affordable, I don’t know.

Let’s start with that dreaded hospital bill. Medical billing is indecipherable. Even patients with advanced degrees can spend hours trying to interpret the bill they receive for a hospital stay. And that bill is obscenely higher than what either the hospital or the providers are going to get paid. What’s ironic is that bill often has no correlation with the actual cost of the care received or the value that the federal government (or the insurance company) places on that care. We must simplify how we charge for medical care and how hospitals and providers get paid. Unfortunately, the only patients who get stuck with the full, inflated bill are those without insurance – the ones who can least afford to pay it. That is unethical.

The overall cost of care (and your bill) is determined by coding every aspect of care, from the Kleenex and bedpan to the heart valve. For every cancer patient I treat, there are dozens of separate codes submitted for reimbursement covering all different aspects of planning, designing, QA’ing, and delivering treatment. I have no doubt that much of that could be combined into, say, a fixed reimbursement for treating prostate cancer. The problem is, when the government wants to bundle procedures together, they do it to cut overall reimbursement immensely. We still do the work; we deserve to get paid. Why can’t we work out a way to simplify, cut administrative costs, and make it a win-win both for the providers and the payors?

Along the same lines, consider a simple office visit to the doctor. The complexity required to determine whether I get paid a level 2 or level 3 office visit – which reimburse only $25 and $50 – is outrageous. These so-called Evaluation and Management (E&M) codes – and there are many of them – are based on four different possible levels of complexity of three aspects of the patient encounter: history, examination, and medical decision-making. Take history, for example. The proper level of complexity is determined by the presence or absence of documentation for four sub-elements: chief complaint, history of present illness, review of systems, and past, family, and/or social history. Do you see where I am going with this? Documentation of these encounters (consultations, follow up office visits) often takes longer than the encounter itself! And, any "error" in billing is considered fraud and abuse. It is common to hear patients complain that their doctor never looked at them, but was always looking at the computer screen. We need to simplify coding and put physicians back face-to-face with their patients.

Then there is the ever-increasing burden of deductibles and co-pays. We have such a mishmash of healthcare plans, each with their own deductibles and co-pays, that it is virtually impossible to keep it all straight. At the beginning of every year, doctors’ offices and hospitals cringe. Did a patient change insurance plans, or did their insurance lapse? What about the deductible for the new year? What about co-pays? More than half of Americans have less than $1,000 in savings. Deductibles for individuals enrolled in the lowest-priced Obamacare health plans will average more than $6,000 in 2017. Can the majority of Americans afford that? Certainly not! This is an unfair burden both on patients and on providers, who end up providing that care for free. Why? Most of it gets written off, but only after we spend a lot of personnel time and effort proving we try to bill for what we can’t collect in order to avoid the appearance of fraud and abuse. Those patients who are forced to pay may rack up credit card debt, get sent to a collection agency, and/or go bankrupt. Some go without the care they need rather than add to their debt. I truly believe co-pays and deductibles are a vestige of a bygone era. I would like to see the dollars saved by decreasing the administrative burden of healthcare go to actually paying hospitals and providers what they deserve and earn, and do away with co-pays and deductibles. There should be one price for a procedure or encounter, and that cost should be paid 100% by insurance.

What about insurance companies? In the best of circumstances, they pay fairly and quickly. But too often they can and do delay patient care and prevent patients from getting the care they need in a timely manner, if at all. They do this through a process called precertification or prior authorization (read: denial). And sometimes when they do give prior authorization, they still deny payment. This ought to be illegal. But it happens without recourse because the state insurance regulations are written in favor of the insurance companies. We need to loosen the precertification grip on the practice of medicine, and we need to be able to hold insurance companies accountable to their agreements. A preauthorization is a contract to pay.

The two hospitals in Lufkin (Woodland Heights Medical Center and CHI St. Luke’s Health Memorial) have spent tens of millions of dollars on electronic health records, not to mention what individual and group physician practices have spent, all mandated by the federal government. To what end? This was supposed to be about “quality”, but that emperor had no clothes. There is precious little improvement in communication between providers and hospitals than before electronic health records. The various doctor’s offices use a number of different vendors, and each hospital uses their own separate vendor. None of them share information with each other. I dream of a truly universal electronic health record language with seamless interconnectivity between offices and hospitals, but I sure don’t want to live through the incredible expense, time and effort it would take to get there. But I do dream.

Finally, let’s talk about rights. I have never felt that free or universal healthcare was a “right”. Hear me out. No one has a "right" to healthcare without some responsibility. That responsibility may be in purchasing insurance, but that is not the only way to contribute. The most glaring, but not the only, example is smoking. Half of long-term smokers will die of a smoking-related illness. If you smoke, the rest of us are burdened with some (or all) of your healthcare costs. On average, a pack of cigarettes in the US costs a smoker $5.51, while the combined medical costs and productivity losses attributable to each pack are approximately $18.05, according to researchers. This is where consumption taxes are attractive, but only if the tax truly goes to help offset the cost of healthcare. How we balance rights and responsibilities in healthcare is a good subject for a doctoral dissertation.

As well all hear about and read about proposed healthcare changes over the next year or two, look for what they are really trying to change, and ask yourself, are they really improving the system, or are they just trying to squeeze more people under a broken umbrella? Can they do both? Let’s hope they try.

What I Would Like to See in Healthcare Reform (Part 1)

I often tell people that if all I had to do was take care of patients, life would be grand. It is the countless hours of dealing with the administrative aspects of healthcare that have practically ruined the practice of medicine for many physicians. You should care; it takes away from our time with you.

TheHill.com, noted that physicians and their staff spent over 15 hours per week complying with quality reporting requirements and that for every hour a physician spends with patients, an additional two hours are consumed completing administrative tasks related to the visit. This meaningless (to physicians, anyway) work has costs in both time and money, leads to burnout, and is increasingly mentioned as the reason for early retirement. I, for one, found myself daydreaming in a committee meeting the other day and I calculated that it was 3361 days until my 65th birthday. That's 9 years, 2 months, and 15 days. No, am not planning to retire early, but sometimes I sure wish I could. Healthcare needs reform.

The average person thought Obamacare WAS healthcare reform. In reality, Obamacare did nothing to actually improve the healthcare system; it simply added more people to the rolls. Don't get me wrong. Having more people insured is not a bad thing. But we need more than just additional enrollees in a broken system.

After Trump was elected, there was an initial, overly optimistic assumption that Obamacare was on its last leg. Recent infighting among policy makers suggests Obamacare may be more like the proverbial cat with nine lives. I only hope true reform is part of whatever "replacement" or "repair" Congress and the President come up with.

In particular, let's hope some of that reform will significantly scale back a bloated, paranoid bureaucracy that sucks hundreds of billions of dollars out of healthcare that could go to those who actually care for patients. And, perhaps, some could go back into the taxpayers' pockets.

Back in 2012, Berkshire Hathaway CEO Warren Buffett called healthcare "the tapeworm of the American economy". To be more accurate, the federal government is healthcare's tapeworm. In an online article in Medical Economics last year, Ryan Gamlin, who studies what drives inefficiency, waste, and harm in U.S. healthcare, found that "as countries spend a larger percentage of their healthcare dollars on administration (as opposed to public health, or providing patient care, for example), things get worse for patients and healthcare providers. High administrative expenditures seem to be associated with negative experiences of providing and receiving healthcare." That is a nice way of saying there's a ton of money wasted going to paper pushers.

Helen Adamopoulos, writing in Becker's Hospital Review in 2014, noted that US hospital administrative costs account for more than 25% of hospital spending, more than double that of Canada, for example, where hospitals receive global, lump-sum budgets. In contrast, US hospitals must bill per patient or DRG (diagnosis-related group), requiring additional clerical and management workers and specialized IT systems. They also have to negotiate payment rates with multiple payers with differing billing procedures and documentation requirements, driving up administrative spending. Not to mention all the personnel, time, and IT required to satisfy CMS’s (the Centers for Medicare & Medicaid Services) monstrous appetite for "quality" and "safety" data, with the ever-present threat of fraud and abuse hanging over every unintentional misstep.

What should be a simple process of billing for services provided is a minefield. And anyone who has ever tried to understand a hospital bill knows it is an impossible task. Aliya Jiwani, writing in BMC Health Services Research, notes that billing and insurance-related (BIR) administrative costs in 2012 were estimated to be $471 billion and that fully 80% of this spending, which provides little to no added value to the healthcare system, could be saved with a simplified financing system. Jiwani predicted that greater use of deductibles under Obamacare will likely further increase administrative costs, stating, "Empirical evidence from similar reform in Massachusetts is not encouraging: exchanges added 4% to health plan costs, and the reform sharply increased administrative staffing compared with other states."

A CNBC report of a Health Affairs study tagged the extra administrative costs of Obamacare at more than a quarter of a trillion dollars, an average of $1,375 per newly insured person, per year, from 2012 through 2022. The Health Affairs blog authors reported, " The overhead cost equals a whopping 22.5 percent of the total estimated $2.76 trillion in all federal government spending for the Affordable Care Act programs during that time."

What do I wish we could be different in our healthcare system? In March, I will discuss some specific changes that would reduce the administrative burden on healthcare providers and, in many ways, return us to a simpler, more direct, and frankly better transaction of healthcare.

What’s Coming in Healthcare Reform in 2014?

My middle daughter is a graduate student in opera at Eastman School of Music. After October 1, if I go to hear her sing in an opera and get injured while there, a specific code must be used if my healthcare is to get paid. That code is Y92.253: “Opera house as the place of occurrence of the external cause.”

Perhaps I will be at Ellen Trout Zoo and get “Bitten by turtle, initial encounter” (W5921XA). And if, for some reason, I am stupid enough to get injured again by said turtle, there is a code for that, too:  “Struck by turtle, subsequent encounter” (W5922XD). But the current favorite new code among pundits has to be V9027XA: “Drowning and submersion due to falling or jumping from burning water
-skis, initial encounter.” Really? Who comes up with this? Is this a sick joke?

Our current system of coding for clinical encounters in healthcare is ICD-9, which has been in use since 1979. ICD-9 contains around 13,000 diagnosis and 3,000 procedure codes, arguably more than we need already. But get ready, because ICD-10 jumps to 68,000 diagnosis and 72,000 procedure codes, including the ridiculous ones noted above.

The change to ICD-10 illustrates the problem of government involvement in healthcare. First, complexity increases exponentially while usefulness – what I call the common sense factor – plummets. Then, the government tightens the rule belt, so that if you do not code correctly (how did I know you were bitten by a turtle before!), you do not get paid. Not only that – and this is what really galls me – if you don’t do it correctly, as narrowly and obscurely defined as only the federal government can do it, it is labeled fraud and abuse.

Someone asked me, as I explained this to them, “How will the government know if you didn’t do it correctly?”

Simple. They contract out to firms that employ high school-educated workers to go out and look for “fraud and abuse”. These firms get paid for what they find – whether or not what they find is really accurate – and then the government takes back those “fraud and abuse” payments from the provider (the doctor or the hospital, for example). Then, the provider has to fight multiple levels of appeal in order to get their money back, if they can afford the appeal process.

This is how our federal government is “saving money” with healthcare reform: make the hoops impossible to jump through; only pay you if you manage to make it through the hoop; then take back what they pay you because someone else with an unfair incentive claims you didn’t really make it through the hoop after all.

Our healthcare system truly needs to be reformed, but so far, very little is happening that gives me hope that we are headed the right direction. I foresee an explosion of job opportunities starting October 1, and anyone with expertise with how to code under ICD-10 will be golden. Orthopedic surgery, for example, will see one code under ICD-9 – 821.01 Fracture of femur, shaft, closed – expand into at least twenty four possible codes under ICD-10, depending on laterality, displaced or non-displaced, location, fracture type (greenstick, comminuted, transverse), type of healing (routine, delayed, non-healing), malunion, nonunion, open or closed, and encounter type (initial or subsequent). Those who can play the game successfully will survive.

At a time when payment for healthcare services needs simplification, we are taking a major step in the wrong direction. Now, is that step left, or right? There’s probably a code for that.

What a Hospital Should Be

Healthcare reform may be the most polarizing issue today. Depending on your point of view, you are either eagerly anticipating or just dreading the changes that are happening. Either way, we can all agree there is profound upheaval in the system. We are in the middle of an earthquake waiting for the ground to stop shaking.

While the focus on Obamacare has been on the individual’s access to healthcare, we need to remember that our hospitals are feeling the earth move underneath them as well. When hospitals are merely trying to survive may not the best time to consider what a hospital is and does, but I believe it is exactly when we need to take a step back and focus on mission.

A hospital is, first and foremost, an institution to take care of the sick. The Latin root for hospital is the same root for hospice and hospitality. Hospices in the Middle Ages were way stations for pilgrims who needed a place to rest/ Today, hospices are known for end-of-life care for those on their final journey. And the word hospitality denotes kindness and generosity. What a great family or words! Hospitals should provide comfort for travelers on a journey – a journey from illness to wellness. And that hospitality should be extended to all.

We, as a country, have decided that healthcare is not a universal right, in that not everyone (even under Obamacare) will have free care. Yet, we can’t seem to decide what level of individual responsibility (either in terms of healthy lifestyle choices, like smoking, for example, or huge deductibles which the average person cannot afford) goes along with whatever care we do receive. That leaves us with a broken system of inflated billing and inadequate reimbursement that continues to leave a good number of our sick not only without resources but with outrageous bills.

And, unfortunately, the government is placing more and more burden on the hospital to make sure that patients not only receive high quality care in the hospital, but are taking their medicine and seeing their doctor once they are back at home. The hospital is now supposed to be Big Brother. If a patient is readmitted to the hospital too soon after being discharged, the hospital does not get paid for that stay, even if it was because the patient was noncompliant with their own care outside the hospital. One can argue the fairness of regulations such as this, but all hospitals are required to play the same game now, and some will be better at it than others.

I would argue, some will have better results than others in the new quality outcomes paradigm because they “cherry pick” their patients based on ability to pay. That brings me to my main point: We must not let a divided system of care (non-profit versus for-profit) keep the sick from accessing care.

As a non-profit institution, Memorial has a mission to provide care for all, regardless of ability to pay. In an era of declining reimbursement, for-profit institutions – who report to investors – are increasingly turning away those without insurance (except in emergency situations, where federal law requires care to be administered to stabilize a patient). All hospitals operate on a tight margin, and non-profit hospitals (especially those outside of metropolitan markets) are increasingly feeling the pinch. We in Lufkin have an ongoing obligation to provide non-profit care locally so that OUR mission of compassion in Lufkin can continue. It is what our community forefathers established. It is what hospitality demands.