Healthy Industry Prepares for Obamacare

By Michael Silverstein

I live in Philadelphia. The city has a large convention center that hosts major trade and professional get-togethers. Sometimes I request and receive press credentials to these events. I find them not only learning experiences, but entertaining ones as well.

That proved true with the recent RIMS [Risk and Insurance Management Society] Annual Conference & Exhibition in Philly that ran from April 15-18. I went there to get a business and insurers perspective on certain aspects of health care, with a particular focus in how the soon-to-be announced Supreme Court Decision on PPACA (aka “Obamacare”) might be viewed. I also came to have some fun.

If, like me, you’re in attendance primarily to cover just two or three of the dozens of offered presentations, these events can be a real hoot. Indeed, for a freelance journalist, they offer freeloading opportunities that are among our very few surviving work-related perks.

Walking the exhibit floor, equipped with a large black carrier provided by RIMS to all attendees, I was easily able to scarf up a decade’s worth of ball point pens; a collection of oddly shaped rubber doowadies that could be squeezed to keep one’s forearms well toned; a take home photo of myself sitting next to a model in the front seat of a top-of-the-line Mercedes; a half dozen handy carry-alls, all tastefully imprinted with the name of corporate exhibitors; and a truly precious acquisition, a white stuffed animal in the shape of Snowflake, Wells Fargo’s legendary pony.

Free espressos and lattes were given out all day on the exhibit floor. Bagels appeared after lunch. Promptly at 3 p.m. locally brewed beers began to be dispensed. Virtually all exhibitors had a fishbowl at their booth into which one could place a business card for a drawing for an iPad or Kindle. The odds of winning were small, of course. But this was Philly, I’m a Philly guy, and Rocky took a chance.

I bought in and printed up a bunch of one-time-only business cards, dropping several in every fishbowl to edge up the odds. It didn’t help. Perhaps I should have remembered more clearly details of the first Rocky movie. Remembered that Apollo Creed beat up Rock, and Philly’s local hero and role model ended up marrying a barely articulate woman who cleaned parrot cages and came in train with a half-wit, parasitic brother whose earning sideline involved selling meat market ads on boxer dressing gowns.

My feeling of loss, however, was somewhat eased by a free evening’s entertainment. If you can deal with the garage bands that always seem to get hired for these after-hour treats, there’s generally an open bar, finger food, and sometimes even enough edibles that approximate a decent meal.

The excessive servility of servers working these businessmen’s outings also allows one to feel — at least after a few free drinks — part of America’s new trickled up tier. The first work session I attended was titled “Impact of Health Care Reform.” It was presented by Liberty Mutual Insurance and Genentech, the latter part of the Roche Group since 2009.

This session’s stated aim was to outline the effects Obamacare would have on businesses. There was also some commentary about what might happen if the Supreme Court struck down part or all of Obamacare. The verbal presentations and the accompanying charts and tables covered a lot of ground because, quite obviously, Obamacare as currently structured (before a Supreme Court decision anyway) will have enormous future consequences for businesses. Areas touched upon here included the choice employers will face when the Act is fully implemented; incentives for them and their employees to get health insurance from state exchanges; how grandfathered plans are exempted from many Obamacare requirements; why Obamacare makes self-insured plans more attractive, and Cadillac plans less so; the projected effect of Obamacare on medical inflation and workers compensation costs; the parts of the country where medical inflation is likely to be greatest in the wake of the Act’s full implementation (the South and West, in states with lowest insured rates and fewest doctor per capital); and projected post-Obamacare waiting times for medical care.

One thing that came to mind immediately in digesting this presentation was that its conclusions seemed overly negative about Obamacare’s effects on businesses, their employees, their insurers, and even for employment generally. What I found deceptive about such analysis was not that all of it was necessarily wrong. It was that a number of assumptions about what might happen when Obamacare is totally in place were presented as certainties — or even fudged.

Would wait times be longer, for example, as was presented here, because as consumers pay less for their care they demand more treatments while the supply of doctors remains limited?

Maybe so. But wait times in emergency rooms will likely be much shorter because so many people will no longer have to use them as their primary health care facilities. And there was no mention of that likelihood. A whole packet of facts that showed that a fully implemented Obamacare would end up costing businesses and government a lot more money rang true. But there was no mention of how much more would have to be spent by both without such a reform, and the likely surge in health care inflation if Obamacare is trashed by the Supreme Court.

This struck me as akin to a doctor telling a patient about the possible dangers of major heart or cancer surgery, without mentioning the possible consequences if the operation weren’t done. The above criticism was not the most striking thing I took away from this session, however. What really struck me here was the extraordinary effort, the research, the vast number of man- and woman-hours that must have gone into researching what was presented, regardless of the merits of some of the conclusions reached.

It was a kind of work replicated to a larger or smaller extent by literally hundreds of thousands of hospitals and medical practices and corporations, all working madly in search of cost effective ways to comply with/and or profit from Obamacare since the law was enacted.

I walked out of the session asking myself: Could it really be possible that three days of hearings by nine Supreme Court judges with no particular expertise in a field that cries out for great depth of knowledge could blow this thing out of the water? That a mere five of the nine could actually pick among conflicting legal and historical precedents, chose their favorites slippery slope analogies, throw into the decision mix channeling with long dead Founding Father who never even heard of the germ theory of disease, and then decree that the country had in effect to start all over again on health care reform?

Could that really be possible?

Oh, yes. Because another chart titled “SCOTUS may strike down part of all of PPACA” was sub-headed: “The betting markets price a 60% chance of SCOTUS striking down the individual mandate.” Cry the beloved country.

And what ever happened to separation of powers anyway? Off I went to the next session. This one titled “Quality and the Employed Physician.”

I’ve long known, of course, that health care is a business. The evolution of that business from the Doctor Welby, neighborhood private practitioner model to its present increasingly corporatized configuration, however, was something I hadn’t given a lot of thought. Silly me.

I was thus going to learn some important things at this session. About how and why so many doctors have been scooped into corporate folds, and the rather surprising (at least to me) way that some hospital chains define “quality.”

The two presenters at this session were from HCA (Hospital Corporation of America) and LifePoint Hospitals. The former is a mega health care company with 164 hospitals and 111 surgical centers in 20 states and England, with annual revenue of $30 billion; the latter, a much smaller entity, with 55 hospitals in 18 states, most in rural markets, and revenue of $3.5 billion.

HCA currently employs directly 4,000 doctors — providers with employment agreements. This number had been increasing dramatically for years (though not so much in the last year or so for reasons noted below). Such increases in doctors working for large corporations, rather than in their own practices, is an accelerating national trend.

The reasons are not hard to fathom. A lot of patients can’t pay for their treatments and private doctors then get caught in treat-me-for-free relationships they can’t long afford.

Large malpractice insurance costs are also easier to bear inside a corporate cocoon. And if one graduates medical school with a huge debt that has to be repaid, having a regular salary with a deep pocket employer can seem very appealing.

Is the resulting corporatization of medicine a bad thing? Not necessarily. It often leads to more accountability, more opportunities for training, less direct involvement in the business end of medicine, more access to leading edge technology.

Though I’m not old enough to personally remember when President Truman tried to bring a British-like version of socialized medicine to this country in the early 1950s, I know the effort was beaten down by an infamous AMA-sponsored ad campaign featuring a mythical “Dr. X” whom the ad implied would treat you instead of your friendly family doctor.

I wondered now: Have we ended up with “Dr. Y” instead? Have we ended with bureaucratized corporate hirelings doing for-profit corporate medicine instead of bureaucratized government employees whose own medicine has to fit into national budgets?

Dr. X versus Dr. Y. Where did Doctor Welby go?

The LifePoint presenter reported that his own company’s “recruiters” (this term was used a lot at this session) were still focused on increasing the number of in-house employed physicians because his hospitals were mostly in rural areas where these professionals were much needed. The HCA presenter, however, indicated her company’s own employed doctor totals have leveled off in the last year or two because of less emphasis on recruiting new hospitals and practices, and a greater focus on “quality.”

It’s a term rather like “pornography” in that while you can’t quite define it perfectly, but you know it when you see it.

There are nonetheless several traditional measures long used in the field to gauge the quality of care provided a hospital, a practice, and an individual physician. These include accreditation by professional groups; state or consumer ratings; experience with various medical conditions; a facility’s own efforts to improve its treatment standards; patient safety measures in place; reported patient satisfaction; technology employed for treatments, etc.

Naturally, before companies such as HCA and LifePoint even embarked on an expanded program to improve quality with additional measures, they employed all these traditional ones. What I found so interesting in the new quality emphasis described at this session by the HCA spokeswoman is that it looks more closely at malpractice liability, at malpractice costs and claims, as a quality quantifier either before hiring, or in their own underwriting for a practitioner’s insurance rates.

What came to my mind hearing about this new emphasis? First, that the speed at which large medical corporations increase their employed physician rolls may depend more and more in the future on the state of malpractice laws in this country. It made me wonder why so many insurers, commercial ones and in-house medical corporation risk managers, have been saying such nasty things about tort lawyers all these years, when these lawyers can be viewed as such important suppliers of quality measurements.

I carried away from my coverage of the recent RIMS Annual Conference & Exhibition in Philly a greater appreciation of the enormous efforts so many sectors of our national health care establishment have put into preparing for the challenges and the opportunities created by Obamacare. A vision of what might occur if the Supreme Court neuters the law by voting its mandate provision unconstitutional. A better understanding of why American medicine is being so rapidly corporatized, and even greater wonder about why the end result of this trend is deemed more appealing by so many Americans than a government run model of health care. Why Dr. X, in other words, is still so much more feared than Dr. Y.

A greater respect for the work of tort lawyers who sue for malpractice, a respect much undermined by a recent reading of John Grisham’s latest novel, which treats this sector of the bar rather harshly. And of course, all those freebies I picked up at the exhibit floor.

Michael Silverstein is author of the comic novel Fifteen Feet Beneath Manhattan. See

From The Progressive Populist, June 1, 2012

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