At least some of the secrecy of the mysterious RUC is revealed

See here for an enlightening article from WSJ that goes -at least to some degree- behind the veil of the powerful AMA brain child, the RUC.Well, at least we are told who is the current chairman of the RUC and that she gave out baseball hats with "RUC" on the front and organized bowling for team building. This is encouraging to those who felt a major problem with the RUC was lack of baseball hats and bowling.

Once again kudos to the tireless Dr. Roy Poses for his continuing efforts to shine light on the AMA's RUC which plays a key role in dividing up the Medicare physician payment money which itself is limited by the price controls in place since 1991. Go here for his latest review of that situation and information about some recent efforts that have been somewhat successful in revealing what goes on behind the RUC veil.

We have had central planning in place for Medicare physician payments for almost a decade and we continue to see the consequences,both intended and unintended,not the least of which is a shortage of primary care physicians.

Pay for performance (P4P)-Goodhart's law aside is it unethcial?

This is a re-edited and lightly re-written version of a posting I made several years ago. Several years have passed and P4P has gone from a trial balloon to a more and more generally accepted fact of medical life, even though there continues to be cogent arguments in opposition to it and the broader bogus concept of "quality" measures.

Dr. Edmund Blum, an internist from Brooklyn makes the argument that pay for performance (P4P) involves a "irresolvable conflict " with the ethical standards of the medical profession.( American Medical News,Nov. 6,2006 issue in their "Professional Issue Section.) My bolding.


He says that P4P rests on 3 flawed premises or fallacies the most important of which is that P4P is consistent with medical ethics. He argues that it is not. (The other 2 fallacies are:P4P rests on a valid statistical foundation and P4P will improve the safety and quality of patient care). To those I would add a 4th namely that Goodhart's law would not be operable in the medical care setting.It has definitely been shown to operate there as well.

I quote:

"[medical] standards derive from a core of fiduciary responsibility, in which one person, the patient, depends on the superior knowledge and skills of another, the physician, and places complete confidence in that person in regard to a particular transaction-in this case, medical care."

"The fiduciary is held to a higher standard of legal and moral conduct and trust than a stranger or a business person...[This] obligates the physician to do his or her best for the patient regardless of reward.The duty goes beyond the 'due care' standard or tort law to a higher level of loyalty and commitment that is not contingent or rewards or penalties."

The idea of P4P involves an assumption that "the fiduciary relationship is insufficient motivation for the physicians to do their best."

To accept P4P is to accept the notion that physicians have not already been obligated to do their best for the patient and to place patient welfare above financial rewards and that they have to be giving a tip or a bribe to do their job. Dr. Faith Fitzgerald was on target when she said

" We must not servilely accept gratuities for doing our duty."

A few decades ago,I began the transformation from a lay person to a physician. Part of what was branded into my limbic cortex in that several year long process was the responsibility physicians have for their patients, a responsibility to do what is right for the patient,a responsibility to place their welfare above personal financial concerns. That responsibility cannot be canceled by a purported imperative to somehow also act as a steward of "society's resources" and work for social justice as the New Professionalism Charter implores.(See here for DrRich's comments on what that Charter has done to medical ethics).The prime directive was-and still should be- an individual physician's responsibility is to the individual patient .

The acceptance of P4P is so antithetical to the basic medical ethical tradition that I cannot believe professional organizations of physicians are supporting it, but they have -almost all of them have at least expressed written support. Tacit support of and advocacy for for P4P is equivalent to saying the ethics and culture of physicians are not adequate and to provide good clinical care it is necessary for third parties to proscribe behavior and reward and sanction accordingly. To sanction such thinking, in the words of Dr. Blum, is to "push us farther down the slippery slope to professionalization".

I am more pessimistic.We may already be at near the bottom of the slope and I see effort being made by relatively few physicians to try and climb back up.

Not what Dr. Berwick might want but more market based health care

More clinics are appearing in drug stores and groceries across the country providing quicker and cheaper health care with much shorter wait times for appointments. See here. ( h/t to economist Mark Perry's blog,Carpe Diem)
There are said to be about 8,700 of these urgent care clinics in the country.


These are not exactly the ACOs that are being heralded by some of the self appointed medical elite, the "leaders with ideas". The mini-clinics business models is somewhat simpler and more transparent than the Under Ware Gnome business plan of the ACOs.

ACO and HMO,A distinction with or with/out a difference -Are ACOs an example of Underware Gnome economics?

The current concept of an Accountable Care Organization (ACO) seems to have arisen at a 2006 meeting of MedPac and Dr. Elliot Fischer of the Dartmouth Atlas.See here for the 400 page transcript of the meeting.

A good place to begin an inquiry into HMOS v.ACOs is this entry by Jason Shafin,Phd Economics,on his blog Health-care Economics who discusses three difference between the two.

Dr. Robert Berenson,of the Urban Institute and of the Center for Studying Health System Change (HSC) and now a vice chair of the soon-to-be a very important player in health care ,namely the IPAB) co authored this article which is barely luke warm in its support of the ACOs and is even skeptical. See here for more on this center for HSC.

A later article he co-authored with two colleagues from the Center For Study of Health System Change went further and issued the warning that large vertically integrated organization such as ACOs can actually drive up health costs and offered the suggestion that price caps ( aka price controls) might be necessary.ACOs are, of course,said to be a means of increasing quality and decreasing costs at the same time.


A terse characterization of ACOs was offered by Dr. John Goodman in a comment to Dr. Shafin's above mentioned blog entry - " An HMO on steroids"

Two big issues with ACOs are market power and anti-trust concerns.So Far the FTC is still mulling over the rules of the game. See here.

I suggest a major difference between HMOS and ACOs is that the legal aspects of HMOs are well defined as are the regulatory rules while the rules for ACOS are yet to be written. There is so much uncertainty around almost every aspect of ACOs I am reminded of the South Park 's Underwear gnomes whose business plan is as follows:

Step 1.collect people's underwear
Step 2.???
Step 3.Make money

with ACO's business model being

Step 1.set up ACO
Step 2.???
Step 3.save money and increase quality of care

or perhaps

this version of the business plan of ACOs from WebMd is a more accurate description:

Step One: 'Provide connectivity and a full suite of services to the healthcare industry that improve administrative efficiencies and clinical effectiveness enabling high-quality patient care.'

Step Two:

Step Three: Profit.

Yes, step two is blank.

"The Secretary (HHA) shall determine"...can we all have a waiver?

According this editorial from Investors Business Daily, about one million workers have been spared a loss of their employer sponsored"minimedical" insurance, at least for the next year or so, until long after the November 2010 elections.

That is number whose insurance coverage has been "saved" by the waiver given by the Secretary of HHS.This includes 115,000 from McDonalds and 350,000 from the United Federation of Teachers Welfare Fund and according to IBD some 28 other companies or entities.

Quoting from IBD:

"How do you get a waiver from a law, anyway? This law was passed by elected representatives of Congress. How can unelected bureaucrats say some must obey this law but some don't have to?

Well, in lieu of specific guidelines in the law, it is riddled with the phrase "the Secretary shall determine." Which means we serve at the whim of the secretary of health and human services, currently Kathleen Sebelius."

Rule of law or rule of whim or of political expediency. This is likely just a sample sample of the many determinations that will be made by the HHS Secretary as ACA unfolds.

More welcome light shined on the problems with the"New Professionalism"

Kudos to Doug Peredina over at the blog roadtohellth with this commentary on medical nannies,the activities of CVS Caremark alone those lines and the broader topic of the problems with the new medical professionalism, also known as the "new ethics", a topic of considerable concern to me and one about which I have ranted repeatedly.See here and here.

Dr. Peredina discusses a lawsuit filed against CVS . Dr. Troyen Brennan is the CMO and executive vice-president of CVS Caremark. The following is a quote from the book "New Rules" which was written by Dr. Brennan and the current head of CMS Dr. Donald Berwick. They are discussing the physician patient relationship and say the following:

"Today, this isolated relationship is no longer tenable or possible… Traditional medical ethics, based on the doctor-patient dyad must be reformulated to fit the new mold of the delivery of health care...Regulation must evolve. Regulating for improved medical care involves designing appropriate rules with authority...Health care is being rationalized through critical pathways and guidelines. The primary function of regulation in health care, especially as it affects the quality of medical care, is to constrain decentralized individualized decision making.”

In 2007,Dr. Brennan,then the executive vice president of Aetna cowrote an article in JAMA entitled "Managing Medical Resources. A return to the medical commons" which I blogged about ( see here) and I said in part:

"They speak of an abstract hypothetical " medical commons" and how the current emphasis by the physician on the welfare of the individual patient will spoil the commons much as the farmer who selfishly grazes his cattle on public land without regard for depleting the resource will destroy the resource.Physicians are implored to "reconstitute the medical commons" and think in terms of resource conservation and allocation so at the end the greatest medical good can be done for the greatest number of patients.They admit there is not currently such a commons. There never has been so I am unsure how a return is possible."

With this increasing constraint of decentralized individualized decision ( translation-individual docs advising individual patients about a course of action) someone else must make those decisions. Do you think the folks at insurance companies and pharmacy management companies might enjoy that role? Isn't it interesting that the head of CMS and the vice-president of a pharmacy management company share the same view of the "proper"role of the physician?

Also kudos to DrRich at his blog Covert Rationing Blog with this thoughtful and important criticism of the new medical ethics, in which the traditional physician patient relationship with its fiduciary duty of the physician is being replaced with a nebulous duty to society . Also DrRich-in his real life persona of Dr. Richard Fogoros- hosted a discussion on Sermo which from my vantage point was well received and he did an admirable job in fielding a variety of questions. It is instructive and worrisome that a number of the physicians writing in had not even heard about the New Professionalism. If you have not, go here to read about it in the original.

Also kudos to Dr. Beth Haynes at the blog Blackribbonproject for this entry concerning various aspects of the attack on the traditional physician-patient relationship.

This important topic deserves all the attention it can get.

Is government by whim the social justice that Obama advocates congratulate themselves about?

Obamacare mandated a percentage of premiums be used by health insurance company for patient care. Several large employers ( McDonalds and others) complained that would not allow them to continues to offer low premium health coverage to their lower paid employees.( It should be noted that there is some controversy if McDonald really complained or not, but that is not the major point).

The point is that the Secretary of HHS, Kathleen Sebelius waived the requirements for one year for certain employers and one large union welfare fund.

Ed Morrissey made this comment regarding this incident:

The Rule of Law depends on an environment with clear regulation and unbiased enforcement. From the start, ObamaCare lacked any clarity in regulation. Congress filled the bill with the phrase "The Secretary shall determine" in place of establishing rules and regulations for the massive regulatory regime Congress created. Now, the White House has added arbitrary enforcement to uncertain regulation and opaque processes. This is not the Rule of Law, but the Whim of Autocracy.

Obamacare contains hundreds of pages with anything but clear regulation and to expect unbiased enforcement is to believe in the power of fairy dust so much power being given by the four little words found throughout the bill "the secretary (of HHS) shall determine".

Both the AMA and ACP have congratulated themselves for their support of the bill because it served "social justice".

Are the actions of the HHS secretary an example of this social justice? Social justice by favoritism (catalyzed by the proximity of the upcoming election in this instance) is what they got.

What else they ( and all of us) may have gotten is more regime uncertainty. This is a term or concept developed and emphasized by the economist Robert Higgs. Higgs's thesis is that at least an important element in the prolongation of the great depression was the business uncertainty brought about by the actions of FDR. Simply put they were afraid to invest because they didn't know what the administration in Washington would do next. See here.

Higgs suggest a similar situation exist now. We have had some but not all major financial institutions bailed out with tax payers money,we have had some auto manufacturers bailed out and we now have some employers exempted for some provisions of a massive new law with powers so sweeping that one of its major effect is a deep and wide uncertainty.

Nancy Pelosi's comment that we have to pass the bill to find out what is in it was only partly true.When enforcement or administration of law is arbitrary we will be finding out piece by piece what it means with no way of predicting what will happen next.