2006 Installation Address
by David M. Bookout, MD
2006 DCMS President
CHALLENGES AND TEAMWORK
The preparation for tonight and the upcoming year has stimulated me to reflect on my personal and professional challenges, and how important teamwork has been in any success I have had. Many of you have had similar experiences.
In my early years, I attended multiple schools, and this taught me about adapting to new situations. Then there was marriage, medical school, and raising a family while surviving Parkland and Dr Pritchard. I realized that teamwork was the key to success. In 1970 Dr Estess and I started our medical careers at Presbyterian Dallas. Neither of us realized the challenges of building an office and starting a practice. The importance of that early experience before managed care was that it taught the value of competition. To build a practice, we had to provide a better service at a competitive price. We’d been in practice 20 years when managed care was introduced in the Dallas area, and that proved the value of the early adaptive skills I had learned. When managed care began, physicians fell into three groups.
(1) The older physicians who were not willing to adapt simply retired.
(2) The younger physicians who had no significant practice experience and were already adapting faced few changes and did well.
(3) The middle group who had significant commitments to lifestyle, children’s education, etc, but even they learned to cope with managed care, although with much pain.
Much of the success in the early years of managed care was the teamwork of the hospital systems and physicians in negotiating with the providers.
After 15 years of managed, care what is the problem? I propose that our medical system is broken and change is necessary. The next years will present challenges that will mandate teamwork with hospitals and physicians to impact the design and implementation of the system.
For indicators of a broken system, just look at the cost of medical care in the United States. In 2003, it was $1.7 trillion. Every year, healthcare expenses grow 2 to 3 times the GNP. In 1960 healthcare expenses were about 5% of GNP.
Major reasons for the increase are the Medicare system, the separation of service from payment, and new technology.
The question is how to provide an important service to all at an affordable price. The lack of a comprehensive health plan leaves about 20% of the US population without health insurance. Many other individuals are inadequately insured in a complex array of financial arrangements that results in heavy administrative costs. Because financiers have largely taken over the financing and management of health services, they have become politically potent forces in maintaining the current chaotic but largely profitable system. Physicians and patients alike are held hostage to decisions of the profit insurers.
Increase in profits for the major health plans in the third quarter of 2005 over the third quarter of 2004 ranged from 3% to 138%.
PROVISION OF HEALTH CARE
Medicare. In the last decade, the number of physicians willing to care for Medicare patients has decreased. Recent surveys indicate that 38% of physicians plan to lessen the number of Medicare patients they see. Another poll suggested that 40% of physicians plan to stop accepting
Medicare patients. In California, 60% of primary care physicians refuse to see Medicare patients. Certainly the reimbursement issue is an important aspect of this problem. It can be anticipated that these patients will require more ancillary personnel and facilities. The Medicare population is increasing because of improved healthcare and longer life. Also, the large baby boom population will enter Medicare soon.
Projections are that Medicare will be depleted 23 years before Social Security is depleted. Unless Congress acts, reimbursement to physicians will decrease by 26% over the next 6 years. During this same period, the office overhead is projected to increase 15%. By 2011 physicians’ reimbursement will decrease to less than half of that paid in 1991 for the same service.
Indigent Care. In Dallas indigent care largely is provided through Parkland hospital, but also in emergency departments around the city. Even though Parkland is a city-county hospital, many residents of other counties receive care there without any reimbursement from the surrounding counties. This needs to change.
Working Uninsured Population. In the last five years, the number of people without health insurance has increased. In 2000, 39.8 million people were without insurance, or 14.2% of the population. Since then the ranks of the uninsured have increased more than 1 million per year. Because of Dallas’ proximity to Mexico and the demand for low-cost labor in this area, our growth in illegal aliens exceeds that of most other areas.
Project Access Dallas, with which many of you volunteer, has been important in providing care to these patients. Because of the private physicians who volunteer their time and skills, and the generous donations from hospital systems, Project Access Dallas continues to expand its services. However, this system is incapable of caring for the entire growing uninsured population.
What about small business? Provision of health care insurance is a sought-after benefit for most employees, but providing this benefit has become exceedingly difficult. Many of your practices, as has ours, have agonized over the increasing cost of health insurance. The results have led to negotiating less than satisfactory rates for a limited period. Even more important to all involved is the increasing use of the HDHPs, or high-deductible health plans with high copays. These plans have many ramifications, the most important being that people are less likely to obtain preventive health care and are twice as likely to not fill prescriptions. This ultimately will increase the cost of caring for those patients as they will have more severe illnesses when they do present for care. More cancer, hypertension, and serious heart disease is to be expected.
Healthcare Benefits. The provision of healthcare benefits also has become a major issue for employers. One survey found that 90% of companies placed controlling healthcare cost as their top priority. General Motors is one example. The union agreed on healthcare cuts after GM published data suggesting that the cost of each car included $1500 more for employee health care than did other companies’ vehicle. This benefit made it impossible for GM to compete with other US and foreign automakers.
Retirement Benefits. For many people who have worked for large companies, health benefits are part of their post-employment benefits package. There is no federal insurer for retirement health insurance. The fact is, the retirement promises that government and corporations made decades ago formed a giant pyramid scheme. A review of data from 282 of the S&P 500 companies revealed than only 22% of their obligations have funding.
This is not a pretty picture; however, it is not an insurmountable challenge. It is a challenge that will require teamwork at a level we have not previously known. Physicians, hospital systems, and patients will need to cooperate. As has been said, “When the elephant dances, the chickens beware.” It should be obvious that the physicians and patients are the chickens.
My pastor, Dr Clayton Oliphint, has told of attending a worship service in a small Mississippi church. The minister announced that he was preaching on the 4 G’s: Gospel, Ghost, God, and Greenbacks.
As a profession, we have been guilty of donations at the coin level. To build an effective team, greenbacks will be needed to compete with the financiers of healthcare.
We work in a challenging environment, but it is worth the fight. The type of medical care our patients will receive, and the manner in which you and I will practice medicine are at stake.
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