The Impact of Health Care Reform on Surgery

Published on 09/04/2015 by admin

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The Impact of Health Care Reform on Surgery

Donald D. Trunkey, MD

Department of Surgery, Oregon Health & Science University, 3181 SW Sam Jackson Park Road, Portland, OR 97239, USA

E-mail address: trunkeyd@ohsu.edu

I recently had the opportunity to critique the 2010 Affordable Care Act (ACA) [1]. I documented that the 3 pillars of health care delivery—quality, cost, and access—were flawed in the old health care model. Unfortunately, the ACA does not adequately address these 3 issues. I also pointed out that cost is the number one problem, not quality. Cost is negatively affected by the bureaucracy of our health care system because of waste, fraud, and loss of value. The cost of the medical bureaucracy is staggering. In the United States, it is $1059 per capita per year. In contrast, in Canada it is $307. In the US health care system, administrative workers account for 27.3% of total health care costs. In Canada this figure is 3.1%. If the United States had a single-payer system, this would save $375 billion a year in health care costs according to a 2003 article in the New England Journal of Medicine [2]. The authors of this study estimated there are 1 million workers (specifically middlemen) who are doing unneeded work.

There is support of the previous points from the Congressional Budget Office (CBO), which in December of 2008 printed “Key Issues in Analyzing Major Health Insurance Proposals” [3]. Administrative costs are addressed, which are restricted to marketing costs, medical activities, and general administrative costs. By their calculation, administrative costs totaled $90 billion in 2006, of which $24 billion was for marketing and related costs, roughly $14 billion was for medical activities, and about $52 billion went toward general expenses. The CBO also documents variation of administrative costs, which vary significantly by the size of the firms, from about 7% for firms with at least 1000 employees to 26% for firms with 25 or fewer employees. They do not address the issues raised by Himmelstein and colleagues [2] in the previous paragraph.

Another issue that was not completely addressed by the current health care reform bill is access. The new health care reform bill will not completely address the 44 to 50 million people who have no health insurance; in fact, there will be at least 12 million people who will not have access to the new health care system except through the emergency room. One of the more contentious aspects of the health care reform bill is the mandatory component that forces Americans who are self-employed or cannot get health insurance to buy it through the open market. There will be some subsidies for such insurance. Nevertheless, it is estimated that at least 12 million people will still not have access. This number is distorted because it does not include the immigrants and illegal aliens who are in our country and have difficulty in getting access to health care. Another group of people who have difficulty with access has been documented by Dr Richard Cooper of the Leonard Davis Institute of Health and Economics at the University of Pennsylvania [4]. He points out that the inner-city poor not only do not get access on a timely basis but also have variability in their care, which leads to bad outcomes, usually at higher costs.

We can only speculate on the quality of health care under the new paradigm. Based on the old system of health care, the for-profit health maintenance organizations (HMOs), such as Hospital Corporation of America and Tenet, were guilty of fraud and other marginally ethical systems of care, such as call centers and so-called NightHawk reading of radiographs. In some instances, these programs have attempted to delay care to patients or charged for care that did not impact patients’ emergent condition.

I would now like to address those issues that will affect surgery in the near future. These issues include the safety net hospitals; the role that university hospitals currently play in charity care; Emergency Medical Treatment and Active Labor Act (EMTALA); the future of general medical expenses (GME) and indirect medical expenses (IME); the so-called freestanding surgery centers; the issue surrounding immigrants both legal and illegal, and visitors to this country; malpractice; and the already changing health care insurance industry. Finally, I will address the lack of a public option in the new health care plan.

Safety net hospitals

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

Not-For-Profit municipala For-Profit HMO
Statea
Federal hospitals
Universitya
Cooperativea (such as Group Health)
HMO		 University
Freestanding clinics

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]

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