Shown in Table 1 is a breakdown of hospitals in the current health care delivery system. There are two categories: not-for-profit municipal and for-profit HMOs. The ones with asterisks are the traditional safety net hospitals, which care for patients who have no insurance both on an emergency basis and, in many instances, on a chronic basis. I think an excellent example of the role safety net hospitals play is in trauma care. Data from the American College of Surgeons Committee on Trauma shows that in the level I and II trauma centers, 21% of patients are self-pay, which is a euphemism for no pay. Medicare constitutes 17% of the trauma patients, and Medicaid constitutes 14%. Although the situation varies from trauma center to trauma center, it can be appreciated that it could amount to up to 52% of all trauma patients. Obviously, Medicare and Medicaid pay some dollars, but rarely pay for patients’ entire costs while in the hospital. However, economists and surgeons at the University of Michigan have shown that with excellent management, trauma patients can either break even for the hospital or actually bring in revenue [5–10]. Transplantation is another system of care that surgeons not only support but more often than not provide leadership for safety net hospital programs. These patients are often on Medicare or Medicaid programs. Some have full insurance. Under the ACA, there is no public option. One can only ask how this is going to play out in regards to where trauma care and transplantation are provided. Although one can argue that it takes tremendous supportive personnel to run either a transplant or trauma program, there are currently a few university hospitals run by for-profit HMOs.

Table 1 Health care delivery

a Safety net hospitals.

Another issue that will have to be addressed in the new health care system is what I call the Robin Hood effect within the safety net hospitals. It is well known that state governments, and to a much lesser extent the federal government, support medical education and research. At my medical school, the state contribution to medical education is a small fraction of the cost (2%) and our state-run medical school has a $35,000 + annual tuition cost. The elephant in the closet in these state universities is that the university hospital is the engine that drives the school of medicine, the school of nursing, and the school of dentistry. The dollar amount varies from state to state, but the average contribution is probably somewhere between $40 and $60 million. In contrast, in the European Union, college tuition is paid for by value-added tax, as well as advanced postgraduate degrees, such as medicine and law. There is nothing in our current reform bill that addresses this issue, thus students from poor families who want to study medicine will be dependent on obtaining grants, student aid, and scholarships. Sadly, it also continues the dependency on debt that is assumed by individuals taking advanced degrees and postdoctoral training. A related issue is whether CMS will continue to maintain GME and IME expenses as it has done in the past as discussed later.

As I pointed out in my previous article on health care reform, there are changes in health care policy by federal law that often turn out to have adverse and unintended consequences. An example of this is the Emergency Medical Treatment And Labor Act, also known as the Consolidated Omnibus Budget Reconciliation Act of 1986. Initially, this was designed to prevent dumping of indigent and uninsured patients onto other hospitals, particularly for emergency treatment of all kinds. After multiple lawsuits, this bill still remains and has actually ended up promoting dumping from hospitals to higher levels of care. If a call is received in our emergency department for potential transfer of a patient, the attending surgeon (for acute care surgery and trauma) is called to document the reason for the transfer. The call is recorded. Although some of these calls are truly legitimate, most are related to absence of insurance coverage, when the patient is an illegal alien or has no money. The referring physician or other health care professional will simply say, “We do not have the resources to care for this patient.” We have no alternative but to initiate the transfer. I want to emphasize that many of these transfer requests are not only reasonable, but are in the best interest of the patient. Equally important is that just as many of these requests are egregious misuses of EMTALA.

Another issue is the role that freestanding surgical centers will play under the new health care paradigm. According to the Joint Commission, 1 of 4 independent organizations that accredit ambulatory surgery centers, the number of outpatient surgical clinics has climbed 25% from 2001 to 2006. In 2007, it was estimated there were 4618 outpatient surgical centers registered with Medicare, which is estimated to be more than half of all centers [11]. The type of surgery offered includes Lasik, mole removal, cosmetic, gynecologic, urological, dental, and common cardiac and orthopedic surgeries. Traditionally, many of these centers do not take patients with Medicare or Medicaid insurance unless there are supplemental insurance plans.

There is a downside to such centers in that older patients with chronic medical conditions are increasingly choosing to have their surgery in these facilities. There is no problem if the surgery goes well, but if there are complications that aggravate patients’ medical conditions, they often have to be transferred to the safety net hospitals for intensive care. There is nothing to prevent these centers from instituting intensive care units if it is profitable. In an Archives of Surgery article it was reported that about 1 of every 200 patients who have an outpatient procedure at a surgical center or hospital end up being admitted for complications, such as bleeding, allergic reactions to anesthesia, and cardiac problems [12].

Another downside to these freestanding centers is the value they provide to the health care system. Many of the operations have not withstood the scrutiny of randomized, controlled trials. There are 1 million spine operations every year, of which 300,000 are done for back pain and usually implies fusion of the painful area. In a randomized, controlled trial in Sweden these operations were shown to have little benefit [13], and in a Norwegian study there was no benefit [14]. Another downside to these centers is that they take the cream of the private insurance policies. There is nothing to keep a freestanding center from adding other services, such as laparoscopic esophagectomies, hepatobiliary surgery, and even transplantation, if they have the ancillary services to support such care. The ultimate freestanding centers are those that are provided in Delhi, Bangkok, Singapore, and other surgical vacation entities.

Another potential problem with our health care reform bill is what we do with immigrants, legal or illegal, and visitors to the United States. Under EMTALA, all patients have equal rights regardless of age, race, religion, nationality, ethnicity, residence, citizenship, or legal status. Congress has chosen to reform health care, but not our immigration laws. As I have stated before, “Clearly, if we allow people in the United States to work, either legal or illegal, we should address their health care” [1]. There are several other issues, such as malpractice and pharmaceutical costs, that also affect surgeons and I have also addressed these in my previous article.

But there are issues that are unique to surgery that have not been addressed, or at least mapping out a strategy that will solve the problems currently facing us. These issues involve the shortage of general surgeons in the rural areas, in the Department of Defense, and for the inner-city poor. These issues have been addressed by Cooper [4] and George Sheldon [15]. I have to emphasize these issues because the problems are aggravated with each year that we do not address them. The number of filled general surgery residency slots has decreased each year since at least 1994 and has been static since 1980. Similar observations can be made with neurosurgery residency and orthopedic surgery residency slots. Although orthopedics did increase their residency positions slightly in the early 1980s, they remain stable now. Decreasing or static numbers of residencies is unacceptable because the population during the same time period has increased by 77 million people. This shortage of surgeons would require many years to increase the number of graduates or an increase in medical schools. Furthermore, it would require finding more surgical positions within our graduate medical education programs.

Although not directly related to surgery, another shortage that is going to have an adverse effect on the delivery of surgery is the shortage of nurses. This shortage is estimated to be between 800,000 and 1,000,000 nurses by 2020 to 2025.

The ACA pays little attention to solving the general surgery problem. It does make allowances for general surgeons who choose to practice in rural areas. The reward would be a 10% bonus for Medicare reimbursement. This fix will kick in in 2011. This fix is also in jeopardy because Congress is not committed to the sustainable growth rate (SGR) known as the “Doc Fix,” which was created in 1997 [16]. The SGR formula has required reductions in physician payments every year since 2002; however, beginning in 2003, Congress blocked the reductions each year, requiring even larger reductions every subsequent year because of the accumulated shortfall from deferred reductions. The SGR formula would require a 23% reduction in 2012 payments and will increase every year the problem is not fixed. The 10% Medicare reimbursement reward for surgeons practicing in rural areas will be wiped out by any continuation of SGR. This continuation of SGR is one of the main recommendations in the report of the National Commission on Fiscal Responsibility and Reform [16]. Their recommendations include replacing the reductions scheduled under the current formula with a freeze through 2013 and a 1% cut in 2014. Alternatively, the shortage of general surgeons in the military could be addressed by continuing to pay bonuses at the time they sign up for another 3 years of military active duty or reserve duty. The most attractive incentive for surgeons to practice in rural areas or, for that matter, in inner-city areas serving the poor, would be to have loan forgiveness for every year of service in these two areas. Although this is recommended in the ACA, it is probably not going to happen [17].

In my opinion, the biggest failure of the ACA was congressional elimination of the public option. This public option is extremely important to safety net hospitals, particularly academic health centers. It is most likely under ACA that teaching hospitals will fall on hard times. It is not clear that teaching hospitals will receive adequate graduate medical education funding and indirect cost reimbursement. The commission recommends bringing these payments in line with the costs of medical education, limiting hospitals’ direct GME payments to 120% of the national average salary paid to residents in 2010 and updated annually, thereafter by chained consumer price index and by reducing the IME adjustment from 5.5% to 2.2%.

As previously noted, level I trauma centers in teaching hospitals are a safety net for severe injuries and must accept all patients that are being referred from other community hospitals (EMTALA). Thus, it may be impossible for hospital administrators to transfer monies to medical schools to pay for the deficits secondary to underfunding by state governments. Ostensibly there would be no patients without insurance under ACA, and most likely they would fall onto Medicare or Medicaid, depending on age. Nevertheless, this group of patients may already exceed 40% of teaching hospitals’ trauma budget. This strain on a surgical service will be even larger in the near future if the proposed acute care surgery programs are melded in with trauma care.

In the worst case scenarios, if the SGR is frozen as proposed by the National Commission on Fiscal Responsibility and Reform, and Congress sees fit to reduce GME and IME, the effects would be devastating on academic surgical programs that care for trauma, transplantation, and other high-risk surgical procedures. Under a public option, if it were to exist, it would be an opportunity for academic health care centers to contract with CMS for these high-risk health procedures and care. I am pessimistic that the public option will be restored, particularly with the recent elections and the House of Representatives now controlled by the Republicans, who actually favor private insurance and do not favor quasisocialized systems within academic medical centers. Finally, it should be noted that because the public option was not included, health care premiums have been rising over the past year. The average premium per employee is now 8.0% higher, the employee contribution is 12.4% higher, and the average employee out-of-pocket costs have increased 12.6%. Recently, there was an attempt by Blue Cross Blue Shield California to ask for a 59% increase in their premiums to their insured. I think that under ACA, insurance premiums will continue to rise out of proportion to their value to the economy. I think this situation is a result of no competition within the insurance industry. Furthermore, there is no real competition to health care delivery. Where can patients turn to get health care, naturopaths, chiropractors, or homeopathic physicians? Osteopathic and allopathic medical curricula are essentially the same. Many osteopathic surgeons, upon finishing their medical training, will favorably compete in allopathic residency programs.

This lack of competition in health care brings up a more fundamental economic paradigm. As I have stated before, most economists think medicine should be considered a public good, similar to the military, firefighters, and police [1]. Pure public goods are both nonexclusive and nonrivalrous. National defense is a classic example. Once it is provided, it covers everyone regardless whether they have paid, and an individual enjoying national defense coverage does not interfere with others enjoying the same coverage. Public goods are not provided sufficiently by private markets because people do not account for the positive effect on others, thus avoiding paying their fair share. Therefore, the government usually collects taxes and pays for public goods even if they hire a private company to do so (such as roads). Many economists would interpret medicine as a public good, where government is responsible only for emergency care, similar to police and fire departments, and elective care or surgery is the responsibility of patients. An alternative interpretation is that all health care should be provided by the government. The government paying for health care does not solve the problem of cost issues of some of our care, which has no value, nor does it solve the problem of the cost of bureaucracy (it could make it worse). The problem with any universal health care is cost overrun. Anything provided free will be in excess demand and to control costs most models of universal health care have exclusions of types of care, limitations, and forms of rationing.

In my previous dissertation on health care reform, I pointed out that one-third of US health care spending produces no value. In 2008, the RAND corporation gave as examples unnecessary services, duplication of tests, lost opportunities for early intervention, and inefficient delivery of care [17]. That was corroborated by the Institute of Medicine [18]. A third study from the Congressional Budget Office in 2001 also looked at value in an article entitled, “Research on the Comparative Effectiveness of Medical Treatments” [19]. Why is it when a mother takes her child to a pediatrician for a cold or flulike syndrome, the patient is started on antibiotics? Antibiotics are not effective for viral illnesses and actually contribute to bacterial resistance. Why is it that approximately one-third of deliveries in the United States are by cesarean section, whereas the cesarean section rate is a fraction (4%) in the rest of the world? Why is it that Congress has prevented CMS from negotiating with pharmaceutical companies for the price of medicines? Another example of “where is the competition?”

I have already addressed another reason that the cost of medicine is so high in the United States and that is the bureaucracy in our health care system (see the first paragraph). In addition to a ponderous bureaucracy we also have waste and fraud. These latter two issues are addressed in my original article [1].

There are some additional issues, however, raised by the report of the National Commission on Fiscal Responsibility and Reform. It pointed out that the Affordable Care Act requires CMS to conduct a variety of pilot and demonstration projects in Medicare to test delivery system reforms, which would have the potential to reduce costs without harming quality of care. The commission would look at bundling for postacute care services and other programs in paying for performance. At the same time, they also want to pass on more costs to the insured individual by restricting first-dollar coverage in Medicare supplement insurance, specifically Medigap plans. Medigap plans cover much of the cost sharing that could otherwise constrain overutilization of care and reduce overall spending. The Commission would have the option to prohibit covering the first $500 of enrollees’ cost-sharing liability and limit coverage to 50% of the next $5000 in Medicare cost sharing. They also would recommend similar treatment for Tricare, which would affect military retirees, federal retirees, and private employer-covered retirees. Interestingly, the commission did not address negotiation by CMS for fair prices for medicine from the pharmaceutical companies. Instead, they recommend extending medication drug rebates to dual eligibles in part D. Another recommendation is that they would do away with Medicare reimbursement to hospitals and providers for unpaid deductibles and copays owed by beneficiaries. These hidden costs are ubiquitous and the taxpayers pick up the tab [20–22].

In summary, the Affordable Care Act of 2010 is far from perfect. The Republicans have suggested that it needs to be repealed. I think that it needs to have a major tune-up and changes in the motor. In the next 2 years, it is highly unlikely that it will be repealed because of the Senate or the president’s veto. I have made my recommendations on how it should be altered and improved in my previous article. This article addresses the impact of the current ACA on surgeons. Some of the ACA provisions are not specific to surgeons, but nevertheless there is no question that there will be an impact. Furthermore, ACA does not adequately address the shortage of surgeons that now exists and it will only get worse. In many ways, the National Commission on Fiscal Responsibility and Reform is right on. It does address debt, but some of the things they recommend are draconian. In my original article I suggested there should be a dedicated value-added tax of 3% on all goods and services to pay for health care reform. This tax would pay for emergency care and would also allow eventual inclusion of nonemergency care, provided that the addition has value that has withstood scientific scrutiny. Any addition has the caveat that we will not go into debt in adding it to the health care package. I strongly support fiscal responsibility. However, I think the major concern is to reform the Health Care Act and not repeal it. Recent public polls show the American public wants a health care bill.