COMMENT FROM CALIFORNIA ON THEIR MEDI-MADNESS

Paved with good intentions, California's proposed road to Universal Health Coverage will lead straight to chaos. The Governor's January 8th, 2007 proposal aims to provide relief for Californians suffering under a healthcare system in desperate need of repair. It does not lack noble goals. What it lacks is common sense.

Achieving a workable solution first requires that we understand the problem. For 4.8 million uninsured Californians, no further explanation is necessary (the often-cited figure of 6.5 million refers to those uninsured "at some point" during the prior year, including many who are currently covered). But for the rest of us, some background information is essential.

The cost squeeze

While medical spending has skyrocketed, doctors have been caught in a vicious cost squeeze. Health insurance premiums have risen at an unsustainable rate for consumers over the past decade, peaking at a 10.5% increase in 2002. Faced with rising costs, employers have been unable to maintain coverage, leaving workers with limited or no employer-based health insurance.

But the cost to physicians of providing medical care has also skyrocketed over the same period. Increasingly expensive medical equipment, office supplies, staff salaries, Malpractice/Worker's Comp/Liability insurance premiums-all squeeze the bottom line for doctors trying to keep their doors open for patients. Federal and State taxes excise an additional share of shrinking revenue.

Reimbursement for physicians has lagged far behind inflation. Medicare, after years of pay declines and freezes, has committed to a 10% pay cut for doctors in 2008, to be followed by a 5% cut for each of the successive six years. Doctors who care for Medicare recipients will pay a price for it. Given that private health insurance plans base their reimbursement on the Medicare-fixed prices, the cuts are magnified.

The situation is worst for doctors who accept Medi-Cal, California's version of Medicaid. This top-heavy State program, subsidized by the Federal Government and run by nearly 6,000 Sacramento-based bureaucrats, spends nearly $7,500 yearly per patient. This money could fund a private Blue Cross-type plan for every man, woman and child that Medi-Cal currently covers.

Because doctors are so badly paid by it, California physician participation in Medi-Cal is the lowest of any state sponsored program in the country. Medi-Cal payments to California physicians rank 49th in the U.S. The rates are based on 1969 data, with only a single increase in 20 years. Medi-Cal reimbursement often does not even cover the cost of keeping a doctor's office open during the patient's visit. Accepting Medi-Cal is the surest way to destroy the viability of a California medical practice.

The Governor's proposal ignores these realities. Medi-Cal and similarly inefficient programs would be expanded, not replaced or even diminished. The program inevitably will run into the law of supply and demand. The current shortage of physicians for those enrolled in Medi-Cal will worsen. Patients will not get more care, they will get less if there are fewer doctors serving them than before. And despite the finest intentions, that is likely to happen.

The $12 billion proposal supposedly addresses the problem of low reimbursement for doctors who care for Medi-Cal patients. Despite the fact that the Governor's 2006-07 budget included zero increases in Medi-Cal reimbursement (and faced a court battle when he attempted to force a 10% cut to doctors who accept Medi-Cal), the proposal promises to increase rates "significantly" for providers, hospitals and health plans. This proposed increase, however, is tied to new and unspecified performance measures. It is also tied to doctors' adoption of health information technology (HIT) such as Electronic Medical Records and e-prescribing.

This "carrot and stick" approach defies logic. Portable, universal, affordable HIT that adequately safeguards patient privacy currently does not exist. So the conditions mandated by Governor's Medi-Cal reimbursement plan are like requiring the paving of a road that is not yet on the map.

Violating federal and state mandates

While claiming to create "more efficient health care delivery," the governor's plan includes the "expansion of lower-cost models." This language actually means that patients will be treated by independently practicing Physician Assistants and Nurse Practitioners instead of doctors-a violation of current State and Federal statutes. While this practice may provide cost savings, it is certainly not Universal Coverage.

Moreover, limiting Californians' care to "Physician Extenders" without adequate Physician supervision contradicts the stated goals of improving patient safety. While Physician Assistants and Nurse Practitioners play a valuable role in caring for patients, they will newed supervision, which costs time and money. Patient safety cannot be traded for "efficient health care delivery," no matter how cost-effective. Patients deserve better.

The doctor and hospital tax

It is a basic economic principle that you get less of something when you tax it. The supply of medical services to will be diminished by the imposition of new taxes on the key actors: hospitals and doctors. The Governor proposes that all hospitals and doctors pay a new tax. According to the Governor's healthcare team's "State Fiscal Impact Summary," the tax will generate $3.5 billion. The same report reveals that the projected Medi-Cal reimbursement increase is $2.2 billion. Therefore, even if one assumes that any increase in payments is provided as the reward for caring for uninsured and underinsured Californians, doctors and hospitals will be forced to finance $1.3 billion in net new taxes. While supposedly delivering more care, they will take home substrantially less. This tax is in addition to the Governor's proposed "Pay or Play" 4% payroll tax on California employers, which doctors and hospitals will also face.

Paying for more care

If more care is required, taxing the supply of care will not do. If business owners, doctors and hospitals aren't forced to subsidize this program, what are the alternatives? What kinds of funding sources would do less damage? One answer might be foreign remittances, the payments immigrants send back to their home countries.

The most attention-getting aspect of the Governor's plan is that California's undocumented immigrants will receive health coverage under it. The reasoning is that California's doctors and hospitals already provide it-largely unreimbursed-so paying for their healthcare makes economic sense. Is this a sound premise? Consider these statistics:

Yet California's undocumented immigrants sent $9.6 billion back to Mexico in 2004. From 1960-2003, the amount sent increased by an average of 12.8% yearly. It is projected that by 2010, the total remittances sent by undocumented immigrants will reach $25 billion. According to Mexico's former President Vicente Fox in September 2003, remittances from Mexican nationals residing in the U.S. "are our biggest source of foreign income, bigger than oil, tourism or foreign investment."

A conservative estimate of California's undocumented immigrant population is four million. Using 2004 statistics, the annual remittance to Mexico from a family of four in California is a minimum of $2,400. The figure may well be higher, given the difficulty of tracking demographics in this population and the fact that the newest statistics are not yet published. The sum of $2,400 easily covers a basic family healthcare plan.

California's taxpayers are asked to fund health insurance for undocumented immigrants, a group with up to $3,000 in disposable income on average. Why should they not accept some financial responsibility when California's legal residents already struggle to do so for them. The logic that informs the Governor's proposal is elusive, if not simply unsound on this elementary point of social justice.

There is no question that uninsured and underinsured Californians do need help. But in order to treat them, doctors want to keep their office doors open and serve their communities. And so do hospitals. California hospitals, particularly trauma centers and Emergency Rooms, are overwhelmed by patients after the closure of scores of facilities across the State. Business owners want to provide for their employees, but are frustrated when constantly increasing costs force them to choose between offering health insurance and keeping their businesses solvent.

The Governor's proposal should be applauded for its good intentions. But it should not be enacted in its current form. What is needed now is not a new or expanded bureaucracy that will shuttle uninsured patients into State programs without the resources to provide quality, sustainable medical care. Nor will our critical problems be solved by empty promises of economic relief. The answer is not to levy a $3.5 billion tax on those who are already subsidizing care not covered by the State. Further burdening California's employers is an equally poor path. We can succeed, but only if we rely on sound economic principles, simplicity, accountability and-above all-ethical aims. The right road is not covered with unrealistic promises...it is paved with common sense.

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The British medical bureaucracy is great at hounding good doctors but bad doctors? Forget about it!

See yesterday's postings. And note that even the vastly harmful Roy Meadow got off scot free and that IVF pioneer Steptoe was very nearly stopped by the British medical authorities. A lesser man would have given up

Rogue doctors and thousands of other health professionals who have been struck off for misconduct in other European countries are able to work in Britain because there is no mechanism in place to warn employers. In a letter to The Times today, ten leading medical regulators have expressed grave concerns about the vetting procedures.

The number of professionals - including doctors, nurses, dentists and chiropractors - from the European Economic Area registering to work in Britain has doubled in three years. The regulators said that although most were of benefit to Britain, a small, poorly trained minority were exploiting the system and could put patients at risk. The letter's signatories, members of the Alliance of UK Health Regulators on Europe, cite several examples, including two nurses identified in the past year who had been banned from working in Ireland and a Dutch doctor who was allowed to work in this country despite being convicted of rape in his homeland.

The alliance says that there is no system in place to test fitness to practise or language skills or to flag up those found guilty of professional misconduct or criminal offences or otherwise considered to be a danger to patients. They add in their letter that due to loopholes in EU legislation an unknown number of incompetent or convicted medical professionals could be working in Britain.

A healthcare professional from another EU state needs evidence only of recognised medical training and a "certificate of good standing" to work in Britain. Different countries apply different standards, making assessments unreliable. The alliance is calling on the European Commission to impose a legal duty on all European medical regulators to share information about professionals who transgress national codes of conduct. "In 2005, over 7,000 practitioners from the European Economic Area (the 27 EU states plus Iceland, Liechtenstein and Norway) came to Britain to register with our regulatory bodies and find work," their letter says. "While the UK undoubtedly benefits from this high level of mobility . . . there may be a minority who exploit free-movement rights and put patients at risk." It adds: "Regulators in Europe must be given the tools to enable them to facilitate this free movement while at the same time ensuring the safety of patients and the public."

Signatories to the letter, including the heads of the General Medical Council, the General Dental Council and the Nursing and Midwifery Council, call for sweeping reforms to facilitate proper checks on qualifications, experience and employment history. The letter is also endorsed by the General Optical, Osteopathic and Chiropractic councils, the Health Professions Council and the Royal Pharmaceutical Society of Great Britain. The alliance is due to present its findings to the European Commission today.

At present, British medical regulators apply strict performance tests, measuring practical skills and proficiency in English among other things, to professionals from outside Europe who wish to work in Britain.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Pages are here or here or here.

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