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Health System Reform: What Does the Future Hold?

Aug. 5, 2009

Florida Hospital
Medicine Grand Rounds
Orlando, Florida
Werner Auditorium

Cecil B. Wilson, MD
American Medical Association

Dr. Hsu – thank you for that gracious introduction. It is a pleasure for me to be here today for two important reasons.

First, as I begin my journey as the AMA president-elect, it is so important that I remember where my roots are.  Some of you may know that I have been in private practice right around the corner in Winter Park for more than 30 years.  During this time, I’ve served as president of the Orange County Medical Society, and of the medical staffs of the Winter Park Memorial Hospital and Florida Hospital Medical Center. I’ve seen the Florida Hospital campus grow from a single hospital to where it stands today.

It’s impressive and important that there are new residency programs in surgery and emergency medicine; family practice; and I’m told an internal medicine residency will begin soon.  And with the new medical school right here in our own home town, we’re making tremendous strides for our city.  I’ve seen this city grow and rely on our hospital; on our doctors; our nurses; and all of the health care professionals that continue to serve our community.  My roots have been – and will always remain – right here, and I’m not just proud to represent you, I am humbled to have this tremendous responsibility.

The second reason why I believe it’s so important that we talk together today is because of the health reform debate going on across the nation. As I’ll explain during the course of my talk, a lot of the details are still up in the air and may have even changed from this morning.

But what hasn’t changed – what’s actually becoming more and more clear – is that the AMA remains committed to working with Congress, to working with the Obama administration, and to representing patients and physicians to the best of our ability every step of the way.

So, in the time I have with you this afternoon, I will briefly describe the AMA’s plan for health system reform; paint a picture of the Washington scene as it relates to health system reform; and describe the AMA’s strategy for representing our profession and the patients we serve.

In our testimony before Congress and our discussions with the White House, we are following a clear framework for health system reform.
Health system reform must protect the sacred relationship between patients and their physicians – without interference by insurance companies or the government.  Our vision for effective reform is a system that provides affordable health insurance for all through a choice of plans and eliminates denials for pre-existing conditions.

It should focus on promoting quality, prevention and wellness initiatives; repeal the Medicare physician payment system that harms seniors' access to care. And it should ease the crushing weight of medical liability and insurance company bureaucracy.

Through it all – and this is key – we have to keep in mind that the reforms we seek today must be fiscally responsible for our nation.  That means they have to be sustainable for today – and the long-term.

No one said that achieving meaningful health system reform this year was going to be easy. Here’s one reason why it is needed.  The current system is unsustainable and is bankrupting our nation’s future. If you think costs are high today – in 10 years they’ll be more than four trillion dollars. There’s no question we have to do something about it – and that’s exactly what we’re doing.

We call it “bending the curve.”  The AMA recently joined with five other organizations in the health sector to outline initiatives to help achieve President Obama’s goal of decreasing the health care cost growth rate by 1.5 percent, saving 2 trillion dollars or more over the next 10 years. We are committed to action to help achieve greater value from our nation's health-care spending. We want to help bend the spending curve and move forward on health reform.
Our proposals focus on making sure people get the right care at the right time, addressing appropriateness of care, over-utilization of some services and avoidable hospital readmissions.

A powerful group that is helping get this done is the AMA-convened Physician Consortium for Performance Improvement – the PCPI. The PCPI is a consortium. It has more than 100 state and national medical specialty societies who develop measures to improve health-care quality and value.
Efforts to reduce unnecessary utilization include the following PCPI-selected topics for development of overuse measures this year: surgical and non-surgical management of back pain, percutaneous coronary intervention for chronic stable coronary artery disease, induction of labor/Caesarean section, antibiotics for sinusitis and various types of diagnostic imaging.

The bottom line is this: All Americans – doctors, patients, insurers, everyone – can help in the effort to keep health-care costs down. The combination of large-scale national initiatives and efforts by individuals to engage in prevention and wellness efforts is key to reducing spiraling health costs, preventing chronic disease and keeping America healthy.

Speaking of the president, at the AMA Annual Meeting in June, he said to a standing ovation that "you did not enter this profession to be bean-counters and paper-pushers. You entered this profession to be healers – and that's what our health care system should let you be."

When I went to medical school, I knew there would be challenges, and as a solo practice physician just up the road, I’ve had my fair share of experiences with managed care – or sometimes mis-managed care.

I know how regulations and administrative hassles can bog doctors down; take time away from caring for our patients.  But I always remember that the relationship between a patient and physician is the heart of health care. And the AMA is committed to supporting reforms that preserve that relationship and keep medical decisions in the hands of patients and physicians.

In other words, we support the tradition and foundation of American medicine. That’s what guides us in our daily practice, so it’s only natural that it also guides us toward reform in Washington.

That said, I think we all know that the road to the White House has many avenues. But here’s what’s really key – the major stakeholders are hard at work.  Here’s what is happening right now.

On July 16, we announced our support for House Resolution 3200 – “America’s Affordable Health Choices Act of 2009.”

The negotiations intensified, and news reports of agreements and back-and-forth deals ran pretty wild.  Then on July 31, the House Energy and Commerce Committee worked late into the night, and on August 1, the committee voted 31 to 28 to approve H.R. 3200.  This bill includes provisions that are key to effective, comprehensive health system reform.

But keep in mind – this is just the latest step, not the final step – in a long process of passing a health reform bill.

There’s a lot of good in this bill.

For starters, the nonpartisan Congressional Budget Office – the CBO – has estimated that the bill will ensure that 97 percent of the legal, non-elderly population will have health insurance. In other words, 37 million uninsured Americans will have health insurance coverage who do not have it now.

There also are key insurance reforms in the bill.  Insurers will no longer be able to deny coverage for so-called pre-existing conditions. 

H.R. 3200 expands Medicaid eligibility to non-elderly adults and families up to 133 percent of the federal poverty level.  H.R. 3200 increases payments for primary care services

And it sets up a health insurance exchange to provide choice of plans to uninsured, self-insured and small business employees; as well as improving coverage for preventive services

These are some of the reasons why the AMA supports H.R. 3200.

Additional reasons we support H.R. 3200 include some common sense reforms that will help physicians, help patients, and overall – help our health care system.

First is the repeal of the flawed Medicare physician payment formula.  I’ll talk more about this in a few minutes, but this is key because under the current Medicare payment system, seniors’ access to care is threatened because Medicare year after year reimburses less and less for care that grows more costly to provide.  If it costs $10 to provide a service, but Medicare only reimburses $5, pretty soon you’re closing the doors and shutting off the lights for good.  H.R. 3200 fixes that problem.

It also erases the SGR debt and substitutes more favorable expenditure targets for Medicare physician updates.  And it increases Medicare primary care payments without offsetting cuts in reimbursement for other physician services.

H.R. 3200 also moves in the right direction on medical liability reform.  It offers the states financial incentives for enacting medical liability reforms, such as certificate of merit requirements and early offer programs.

There are many, many other provisions in H.R. 3200.  In this 1,000 page bill, there are a host of insurance reforms, provisions concerning Medicaid and SCHIP, and more.

Some people have asked me if the AMA got everything we wanted.  Like I said, this is a work in progress.  The House Energy and Commerce Committee work was the third panel to vote on the bill.  Now, all three versions need to be combined into a single bill for consideration before the entire House of Representatives.  The Senate is a slightly different story, but the negotiations between the key senators is ongoing.  It’s a long road. We’re making good progress.

There’s certainly been a lot of talk about the “public plan.” But like so many other things in Washington, you’ll get different answers for “What is the public plan?” depending on who you talk to.  So let me tell you what the public plan actually is in H.R. 3200 – and what the AMA believes the public plan should be.

First, it’s not mandatory. The Secretary of Health and Human Services will be required to negotiate payment raters.  Physicians and other health care providers can opt out.  Choice is a bedrock principle to the AMA, and we fought hard to ensure it would be included in H.R. 3200.  Choice is about more than physicians, however,

We believed that patients enrolled in a public plan should be able to receive care from the physician of their choice.  Under H.R. 3200, they can.
Second, the public plan should be subject to the same regulations as private plans. We call that leveling the playing field.

And third, the public plan should be self-sustaining, which to the AMA means that the public plan should not rely on federal subsidies.  I might add that Florida’s own Representative Cliff Stearns successfully offered an amendment that would prohibit taxpayer bailouts to subsidize the public plan. 
So at the end of the day, here’s what I know.  When Congress returns after the August recess, we need to focus on the common ground we share to reach the end goal.  We need to continue to work for affordable, high-quality health care for all.  We need to continue to emphasize an even better health-care system for patients—and the physicians who care for them.

Our goals are clear and the table’s been set. However, I have to come back to a word of caution.

Despite the progress we’ve made, we have a tremendous amount of work remaining.  So who are the key players we’re working with to get to the finish line? It’s always dangerous to make a list, but it’s safe to note that we’re working with all of the major players you see in the news – in Congress and the White House. With our own Senator Ben Nelson and other members of Florida’s delegation. The point is that organized medicine is deeply involved.

I know there are critics of the AMA – probably some right here in this audience – but that’s why involvement is so critical.  If you’re not involved, you’re not at the table, which reminds of the old Mark Twain quote, “Everyone complains about the weather, but no one does anything about it.”

If you’re a member, thank you.  If you’re not a member, I urge you to join; to challenge us; to move us in the direction you feel is necessary.  The AMA takes its direction from its members.  If you want to see health reform in this country move, join us.  Help us get it done. 

I’d like to go into a little more detail about what the AMA is for.  We believe any meaningful reform effort in this country must begin with covering the uninsured. The AMA remains committed to this cause.

Last year, we spent more than 15 million dollars on our Voice for the Uninsured Campaign to highlight the issue.  It’s not that 46 million uninsured Americans were a secret, but we wanted to ensure that they received attention from the presidential candidates. That was one key part of our strategy. Today, you’re seeing the other key – efforts to cover the uninsured.

Consider the consequences of being uninsured.  About 57 million Americans were in families that had problems paying medical bills in 2007. That’s 2007.
Slightly more than half of Americans say their household cut back on health care due to cost concerns in the past 12 months. Working mothers and fathers are putting off seeing the doctor and going to the dentist. Parents are being forced to decide between paying bills or filling prescriptions. Working men and women are cutting pills in half or skipping doses to make a prescription last longer.  In short, the uninsured live sicker and die younger.
That’s not health care.  That’s a prescription for disaster.  And that’s just the reality.

I say “at least” 46 million uninsured because since the recession began in December 2007, more than 5 million jobs have been lost, according to the U.S. Bureau of Labor Statistics. And according to the Kaiser Family Foundation, job losses since 2007 have led to an estimated 9 million fewer Americans receiving health coverage through their employer.

Where do they go?  Medicaid is one place, but do you think state Medicaid budgets can truly handle an extra 3.6 million people?

And what about the 4 million who don’t qualify for Medicaid? Can Florida’s state budget handle more Medicaid recipients?  Can any state budget?

I truly believe that most employers would like to offer insurance, but when the choice is between offering benefits and closing the doors, something’s got to give.

The AMA has a plan to cover the nation’s uninsured.

We want all patients to have health insurance, with subsidies in the form of tax credits or vouchers for those who can't afford it.

We want patients to be in the driver’s seat rather than government or employers. We want families and individuals to be able to choose from a variety of affordable health insurance options. We want those choices to be more affordable than they are now, and insurance market reforms are needed to make that happen.

Patients must retain the ability to choose their own doctor and be permitted to enter into private contracting arrangements with their physicians.

Medical decisions should be made by patients and their doctors, using the best possible information.

No one should be denied health insurance because of pre-existing conditions.

Ideally, we want patients to own their health insurance even if it's financed through their employer, so if they leave that job, the insurance isn't lost, just paid for differently.

But let’s remember that covering the uninsured is just one part of our plan. The AMA also supports efforts to improve quality.

In fact, since our founding in 1847, the AMA has been at the forefront setting standards for medical practice and patient care to help ensure that patient care was based on the best medical science available rather than peddlers with their snake oil.

More than 160 years later, we’re still doing it. I think people sometimes forget that this is brutal, hard, complex stuff we do every day.  Think about it – there are more than 60,000 diagnoses; 11,000 surgical procedures; and at least 4,000 drugs. 

The pressures on physicians are intense, and we welcome that responsibility. But we also have to recognize that we can do better.
Through the AMA convened Physician Consortium – the PCPI I mentioned a few minutes earlier, the medical profession will continue and intensify efforts to develop evidenced-based guidance for quality improvement.

Providing physicians and patients with real time data for decision-making at the point of care should be the driving force for quality improvement. This can also help reduce the rate of growth in health care spending.

We also need to reform government programs such as Medicare.

Physicians face yearly cuts while the cost to provide care and run an office go up each year.  The disparity between actual medical costs and what Medicare actually pays are like the open jaws of an alligator.      

To improve and modernize Medicare, new approaches to physician payment that focus on care coordination and quality are needed. 

Medicare payment methods should incentivize better care coordination and disease management, which is particularly important for vulnerable seniors with chronic conditions who need access to high-quality, cost-effective care. 

Teamwork among physicians, hospitals and other providers can help prevent costly hospital readmissions and keep patients from cycling between nursing homes, hospitals and other post-acute care settings.

We also are working for additional reforms in the states. The AMA has worked with Utah, Georgia and Maryland to help enact private payer reforms.  We’ve fought hospital challenges to physician autonomy in Arkansas and Florida through the Litigation Center of the AMA and State Medical Societies. 
The case in Florida involved a hospital administration that wanted to change medical staff bylaws – unilaterally.  That’s unacceptable.  And that’s why the Litigation Center of the AMA and the State Medical Societies got involved.

The Lawnwood Regional Medical Center & Heart Institute, the largest hospital in St. Lucie County, had a long-running battle with its medical staff regarding enforcement of the medical staff bylaws.  

Over the course of several years, the hospital would violate the medical staff bylaws by removing elected medical staff officers and by suspending physicians on the medical staff without due process.  Each time, the medical staff was able to defeat these attempts in court.

But then things took a turn, a law was passed in Tallahassee that, imagine that, only applied to hospitals within St. Lucie County. This law essentially undid the earlier court decisions by providing that – and I’ll quote here: “in the event of a conflict between bylaws of a hospital corporation’s board of directors and a hospital’s medical staff bylaws, the hospital board’s bylaws shall prevail with respect to medical staff privileges, quality assurance, peer review, and contracts for hospital-based services.”

Not surprisingly, the hospital board proposed changes to the medical staff bylaws.  The medical staff and the hospital then sued each other, with the principal issue being the constitutionality of the Governance Law. 

Here’s what happened next: First, the trial court held in favor of the physicians. Then the Appeals Court ruled for the physicians. And then the Supreme Court ruled in favor of the physicians.

Through the process, the Litigation Center of the AMA and State Medical Societies – our team of lawyers and experts – helped by filing briefs with the appeals court and the supreme court. We worked with the Florida Medical Association, and we we also helped financially.
So what does it all mean?

The Lawnwood case is an important court victory which will prevent hospitals from encroaching on medical staff autonomy and becoming embroiled in a legal tug of war over the division of responsibilities within the hospital.

It means that yet again – when doctors enlist the help of organized medicine, the best outcome for patients and doctors can be achieved.
Think about that for a second. The AMA is at the table in D.C. We’re headquartered in Chicago.  And we help medical staffs right here in Florida.  You may not agree with everything we do, but I’ll bet you agree with a lot of it. And I’m even more sure of the fact that you benefit from our efforts. If you’re not sure, just ask the medical staff at Lawnwood.

I’ve mentioned “being at the table” a few times already, and it’s not just an expression. Here’s a recent photo where on the left side, you can see the AMA President, Jim Rohack, who just explained to the president that the AMA is committed to improving quality.  I also mentioned the PCPI a few minutes ago, and that’s one of the things that Dr. Rohack highlighted to the President. But Jim also emphasized that even when physicians follow best practices – even when we work to reduce unnecessary care – those efforts do not necessarily provide us with any protection in the courtroom.
Jim stressed the need for liability reforms, such as safe harbors when we do adhere to guidelines.  Here’s what is kind of interesting.  In response, even though President Obama has said he does not support caps on damages, he publicly told us that he is willing to consider ways to reform the system so we do not have to practice while looking over our shoulder.

President Obama told us, and I quote: “I recognize that it will be hard to [reform the health care system] if doctors feel like they are constantly looking over their shoulder for fear of lawsuits.”

The AMA believes that medical liability reforms will reduce costs by reducing the practice of defensive medicine. We urge policymakers to authorize health courts, administrative compensation systems, early offer models, and “safe harbors” for physicians who follow best practice guidelines, and to adopt other proven medical liability reforms. The president understands the fear we feel.  And we look forward to working with him on reducing the burden of medical liability.

Along the way – when we see the opportunity to remind people of the millions of dollars spent on the wasteful medical liability system, including the cost of defensive medicine, we will do so. This letter in the July 15 Hartford Courant was in response to a trial lawyer suggesting there is no such thing as defensive medicine. Oh really?

Let me just say this: The AMA continues to advocate for liability reforms that help physicians implement best practices in patient care and reduce unnecessary health costs.  Reforming the broken liability system is something we know too well here in Florida, and unfortunately, it’s something that our colleagues in Connecticut and across the country also know too well.

That’s another reason why the AMA is not just active here in Florida – we’re engaged wherever we believe we can make a difference to set the record straight; and to help physicians help patients.

One of the ways we’re also trying to help reduce costs is by working more effectively with health plans.

That’s the story of our National Health Insurer Report Card, which rolled out a year ago and has turned into a win-win between the AMA and the national payers to simplify and improve claims payment.  And just to be sure that we keep the insurers’ attention, and we continue to improve our relationship with them.

We’ll also continue to use the AMA Heal the Claims Process to help insurers make significant improvements to their claims adjudication process.  Aetna, CIGNA, Humana and UnitedHealthcare all participated in regular, productive discussions that have led to real improvements.  Our Private Sector Advocacy staff said this has been more successful than they had hoped for.

Do you remember when there were advertisements for “More Doctors Smoke Camels Than Any Other Brand?” Thankfully, you won’t see this type of advertisement any more.  This was just one of the ad campaigns from the 1950s and 1960s promoting tobacco use.

Unfortunately, the tobacco industry was pretty good at getting young people hooked.  And we’ve been fighting for a long time to educate young people as well as emphasize cessation and prevention for current smokers.  More than 400,000 Americans die needlessly every year as a direct result of tobacco use.  The sad truth is that tobacco-related deaths are the number one preventable cause of death in the U.S.

Our job hopefully will be a little easier with the passage of a new law that was signed by President Obama at the end of June that gives the FDA important new authority to regulate the manufacture, sale, distribution and marketing of tobacco products.

Without question, the new law represents an important break from the past.  It signifies broad acceptance that nicotine is a drug harmful to people’s health. Tobacco companies will now have to disclose ingredients and use stronger warning labels.

The law provides for new bans on all outdoor tobacco advertising within 1,000 feet of schools and playgrounds and on tobacco-brand sponsorships of sports and entertainment events.  This will help keep tobacco advertising away from children. Current data show that approximately 1,000 children become new, regular smokers every day.

With continued emphasis by us – and with these new marketing restrictions – we can do more to help keep our children away from cigarettes so they can become healthy adults.

Reforming the nation’s health care system is more than just tobacco. It also means increasing the nation’s focus on wellness and prevention overall. This is not simply telling our patients to back away from the triple bacon cheese burger.

We want greater investment in prevention and wellness, so that preventable diseases attributed to obesity and smoking are avoided, thereby lowering future costs. We want everyone to take responsibility for their own health, insurance protection for their family, and choosing a personal physician. We want everyone to make and carefully document their wishes about end of life care – even those who are now young and healthy.

We also support making public investments in education, community projects and nutrition.  And we strongly believe that everyone – physicians and policy makers – need to do our part to eliminate racial, ethnic and gender disparities in health care.

And you should also take a look at the AMA Healthier Life Steps program. This is a physician-patient partnership designed to help physicians help patients eat more healthfully, be more physically active, and avoid tobacco use and alcohol misuse.  It’s no secret that these health behaviors are the leading causes of preventable morbidity and mortality in the U.S. 

But what’s great about the Healthier Life Steps program is that it provides a structured format to help physicians encourage and support their patients in a time and cost-efficient manner – and we’ve designed it so it’s easy to implement.  In addition, the resources are available online, free of charge, to both health care providers and patients.

Before I take your questions, I want to come back to one of the themes I’ve discussed – involvement.

As physicians and health care professionals, we know that there’s no apathy when it comes to providing high quality patient care.  You put yourself on the line every day to care for the healthy, the sick, the injured, young, old and everywhere in between.

Why then, is there apathy when it comes to becoming involved in organized medicine?  Why is there apathy when it comes to picking up the phone and calling your state or federal representative and telling them to support health care reform – reform that you know is needed – reform that the AMA, the FMA, and others support.

I know that at the end of the day, we’re all going to ask, “How will this affect me?” That’s only natural.  But let me suggest that one of the main reasons we all turned to health care was because we all believe that it’s not just about us. 

It’s about helping patients. It’s about caring for the future of our profession. It’s about securing the future of our nation. Thank you for your time and generosity in having me speak with you today.  I’d be happy to answer your questions.