Editor's Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The opinions expressed here are that of the authors and not UBM / Medical Economics.
There is a national debate on restructuring healthcare in the United States. In 2016, healthcare spending was $3.3 trillion, representing 17.9 percent of the U.S. economy, according to CMS. The $10,348 U.S. per-capita healthcare cost is double that of other western societies that have far less regulation. A comprehensive overhaul of U.S. healthcare including Medicare, Medicaid, and private health insurance is required. This should include a critical look at the effects of regulation on healthcare cost. A shift in policy from regulating healthcare organizations and practitioners to healthcare consumers may incentivize an improvement in public health with a reduction in cost.
Healthcare regulations including Medicare, HIPAA, HITECH, ACA, and MACRA number over 212,000 pages. This is equivalent to 144 copies of my 1977 Gray’s Anatomy text and three times the volume of the tax code. This does not include state regulations. By comparison, the 1984 Canada Health Act, covering all Canadians, numbers 14 pages divided between English and French translations with medical care delivered by each province. In Alberta, for instance, there are 30 healthcare laws and 100 schedules totaling 2,227 pages presented on the provincial website. The 1946 British National Health Services Act, which established a national healthcare system, numbered only 94 pages. It was revised in 2006 to 273 pages. Recently the National Health Service imposed a measure of patient responsibility. Smokers must quit for six months and obese patients must lose weight for six months prior to receiving elective surgery.
U.S. healthcare regulation unlike healthcare services has no requirement to be evidence-based or cost effective. It therefore seems unlikely that more regulation of clinicians will make U.S. healthcare less expensive and of higher quality.
Some estimates suggest that up to a third of health spending is consumed in regulatory compliance. U.S. healthcare regulation increasingly mandates how physicians practice with an emphasis on expensive and inefficient information technology (IT) systems. A Medical Group Management Association survey of 3100 practices in 2016 found that HITECH Act compliance alone costs each physician $32,000 per year in expenses.
Members of the U.S. Senate have concluded that the government’s $35 billion IT investment to computerize private healthcare delivery has not achieved it goals. The American Hospital Association estimates hospitals spend $35 billion annually on overall regulatory compliance. Increasingly, IT costs go towards providing data to the government rather than delivering patient care. Between 2006 and 2013, CMS increased the number of quality measures from 119 to 822 and quality programs from 5 to 25.
Data-driven, “performance-based” compensation tries to link payment to patient outcomes. Outcome, which may be influenced by comorbidity, patient adherence, and medication coverage, is used as a surrogate for quality of care. Some new payment models such as Tennessee’s Episode of Care system provide “gain sharing” payments to physicians who provide inexpensive care and require physicians to refund payments for patients with excessive costs. This penalizes care of the most complex and least cooperative patients. It also creates a conflict of interest for physicians who now have personal financial considerations potentially influencing their decision making. Thus the government is seeking to reverse the philosophy of physician financial independence created in the pharma guidelines. It is concerning that financial penalties imposed by CMS for congestive heart failure readmissions has been associated with an increase in the short- and long-term mortality of Medicare patients. Perhaps financial incentives and penalties should be shifted from healthcare providers based on the cost of the care they deliver, to the patients based on their control of cardiovascular risk factors.