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The recent Beyond Flexner postings and social mission articles have revived interest in Academic Medicine's Season of Accountability and Social Responsibility by William T. Butler, M.D. Dr. Butler gave this address to AAMC in 1990 and expected a response - one that never came.

The following are predominantly Dr. Butler's words with an update regarding the lack of progress regarding his calls to action.


Public Concerns About the Overall Health Care System

Dr. Butler declared that academic medicine had entered a new and stormy "season" of accountability and social responsibility, due to public concerns about the overall health care system. His recommendations are followed by comments regarding academic medicine addressing these concerns or not.
  • Public concerns have continued. There has been no progress in this area. The political arena has been a distraction, but the concerns continue. The same types of headlines listed not only are seen in the media headlines, but also across social media and numerous Business, Health Info Tech, and other journals and magazines.Medicine has lost respect and physicians have lost substantial ability to shape health care design. 
  • Academic designs have made matters worse for those who deliver basic health access. The partnership between managed care and accountability researchers resulted in micromanagement. This movement has added countless billions in additional health care costs based on assumptions and lack of evidence basis for health outcomes improvement. 
  • Worst of all is that the design changes have made it more difficult for the team members that deliver the care. Some physicians cry out, often those older who experienced much better environments, but not associations or academic designers.
Butler then reviews earlier seasons of academic medicine and the responses. He recommends how the AAMC can achieve several near-term solutions to pressing demands of the current season, such as the needs to manage academic medical centers more efficiently and to restore public confidence in the integrity of biomedical research.
  • Efficiency and confidence are lagging still. Academic centers push for more lines of revenue and fight to keep the highest reimbursement in each line - designs that they largely shaped and maintain. 
  • 1100 zip codes in 1% of the land area have top concentrations of physicians at 45% of physicians in places with 10% of the population. Over half of health spending is transferred to these settings making it difficult for half of the nation to receive even the basic care.
  • The graduate medical education design results in only 6.5% of residency positions found in 2621 lowest physician concentration counties with 40% of the US population. 
  • The expansion of GME is a primary example of the problems of academic medicine - lack of efficiency, training failure, and continued promotion of funding that widens disparities in dollars, workforce, and access. 
  • Residents in their fellowship years are paid only $60,000 and have small levels of benefits but often generate as much as subspecialty physicians paid $400,000 or more with some of the most lucrative benefit packages. More residents at these fellowship
Next, Butler focuses on proposals for academic medicine to provide leadership, through the AAMC, in two major areas: preparing more generalist physicians, and assuring greater access to health care for those who live in underserved urban and rural areas. Butler flat out states that generalists are the cornerstone of the medical profession.
  • Generalists have substantially failed due to academic medicine and academic influences that prevent true health care reform - more support for cognitive, basic, office services. 
  • Generalists and general specialties are shrinking as a function of US academic medicine, primarily because generalists, general specialties, and health access are prevented by the designs that academic medicine continues to shape.
Butler describes models of existing, successful programs.
  • The WAMI model looked good because it existed when the financial design for primary care was better 1965 to 1980. Since that time the model and other training models are limited by the financial design and the inherent suppression of generalists - particularly family medicine. 
  • The models that Butler promoted in the article were limited to only a small influence regarding solutions for underserved rural or urban practices. 
  • The financial model prevents any MD DO NP or PA training solution. 
  • The Deans Lies and the GME lies continue across MD DO and NP. No promises of improvements in primary care, health access, and care where needed should be made until academic medicine promotes true payment reform - more fuel for the generalists and general specialties.
The author concludes by proposing to create a "National System of Regional Medical Care." He urges the AAMC to continue its leadership by designating a task force to examine how such a regional system could be established within this decade.
  • States used to do statewide and regional planning, but this is largely left up to the largest systems and practices that control the health care dollars. 
  • The regional plan failed to progress.
  • Regional primary care officers in positions above hospitals could actually help to hold hospitals and hospitalists accountable for not coordinating care with primary care offices.
Most of the school and program successes we still revere are really about the one period of time with substantially improved finances - a time when the US steadily sent more dollars to lowest physician concentration counties. This was due to early Medicare and Medicaid 1965 to 1980. An improvement in the financial design shaped improvements in workforce and in access. The rush for schools, programs, special incentives, and pipelines to claim credit obscures the obvious reason for improvement.

Dollars injected into the care of those poor and elderly were specific to lowest physician concentration counties then as now, if we chose to do so. The original designs are not the same and the dollars are unlikely to go where needed as determined by designs from the 1980s to the present.

There are those who can point to "their program" or curricula as successful, but a rearrangement of the deck chairs type of success is failing 200 million people as will more easily be seen in 2040. As is often said it is amazing what can be accomplished if no one cares about who gets the credit but it is also true that those who claim credit falsely distract from the investments of time, talent, and treasure that do make the difference.

We are already a decade too late in workforce improvements specific to these counties to be in place by the 2040s. True reforms specific to most Americans by 2050 seem even more distant.

Care for most Americans left behind requires an entirely different financial design. This is the only way that the traditional health professional education design will to work for MD DO NP and PA. 

Anyone who promotes anything other than major financial reform as a solution is giving false hope. Health care interventions that do not improve patient outcomes and can worsen them are condemned, for good reason. The same should be true for those who promote any solution for health access that does not substantially improve the financial design.
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The transformation of primary care requires payers and players. The payers have said no so the players are too few and are often overwhelmed where the players are most needed. Primary care needs fuel and a more efficient financial design, especially in the small and rural practices and those where care is most needed. The controversies continue to hold primary care hostage, especially primary care where needed where half of Americans will reside by 2040.

The primary care financial design begins with only $500,000 to $600,000 in revenue per primary care physician as the fuel to propel the activities of primary care physicians, clinicians, and teams for a year. Unfortunately the fuel supplied is lower where primary care is most needed and is higher where contracts gain annual escalation clauses for those largest, most organized, and in locations of least workforce need. 

Recent blogs have illustrated just how much fuel is stolen and how inefficient primary care delivery has become. True Reform    Equity    Paid Less for Doing More Where Needed
Business Models for Primary Care Small vs Large       Discrimination in Payment

Associations, foundations, institutions, journals, and others cry out for solutions to workforce deficits, maldistribution, and costly inefficiencies.
  • But often their solutions such as expansions of graduates add to runaway health care costs and overutilization as primary care is fixed in place and expansions add more workforce and more costs for non-primary care areas.
  • The financial design does not allow distributions of dollars to the places where generalists and general specialties provide 90% of services. Only a true reform in cognitive vs procedural would redistribute dollars. This true reform has the added effect of supporting primary care, mental health, and basic services to go with better dollar distribution.
  • Changes in the financial designs are opposed by the payers and the non-primary care players that do well by the current design.
  • Only 6% of health spending for 55% of services in the area of primary care
So Let Us Begin the Dialing Down the Dollars Countdown - the Destruction of Health Access

About $500,000 to $600,000 in revenue is the main fuel source. About 50 - 60% of the primary care budget is personnel costs. Increases in the non-personnel areas act to decrease personnel. Increases in personnel to do non-clinical care reduces the clinical personnel area. Overall declines in revenue, increasing costs of delivery, and impacts upon productivity all hurt primary care viability and adversely impact primary care delivery capacity.

Family medicine member surveys indicate worsening of revenue with less revenue from hospital/procedural and non-office payments to go with fewer patients seen a week in the office. 

Declining Revenue and Less Payment and Lower Collections

Small practices, rural practices, practices in lowest physician concentration counties receive 10 - 20% less for the same office codes. This puts them down $50,000 to $100,000 in revenue compared to largest and most organized such as those propped up by hospital outpatient payment and those with 5% annual escalation clauses via negotiated insurance contracts (if these include primary care). 
As the percentage of family medicine in a county goes up, the concentration of physicians goes down and the payment goes down for Medicare (2011) for 99214 code from $74 down to $64 as seen in the last blog graphic. Where family physicians are over 30% of the local workforce, Medicare concentrations are highest (1.3 multiplier). Payments for private insurance also tend to be worst in these settings. 

The AAFP member surveys indicate that FM is rapidly increasing in Medicare and Medicaid proportions - not surprising because the people of lowest physician concentration counties have been fading in age and in finances. This impacts 36% of FM docs in these counties with 40% of the US pop.

Where most Americans most need care, primary care revenue adjusted for payments results in only about $500,000 per primary care physician. Equity in payment would boost this to $600,000.

$500,000 and Counting Down

Collections failure where care is most needed is a $30,000 to $50,000 greater loss per primary care doctor ($15,0000 to $25,0000 per NP or PA) as less is collected. 

This leaves...

$450,000 and Counting Down

Maintenance of Certification is $1000 to 2000 a year but has been increasing rapidly and without justification. The losses triple when considering lost revenue.

$432,500 and Counting Down

The listing of costly expenses lacking in evidence basis is long, prestigious, and heavily promoted. Digitalization and regulation has long been adding $15,000 to $40,000 per doc per year. Some years have been more costly than others:

  • $400,000 and Counting Down - MGMA indicated $32,500 for HITECH over a 1 to 2 year period
  • $370,000 and Counting Down - Additional digitalization, HIT, security costs, updates, maintenance
  • $290,000 and Counting Down - MACRA added $40,000 for a bigger increase than usual - Health Affairs
Obviously these costs are more than can be sustained, so practices have had to sell out, close, or merge. Outside supplementation is required. Smaller practices with physicians near retirement offer few options. The populations involved are not attractive to large systems or others who might take over.

The countdown will continue to illustrate the serious issues with the design.

Turnover costs are small for the large and over $100,000 a year per doc for most needed. NP and PA turn over twice as fast compared to PC docs but this may not apply in high turnover settings. Lesser payment for NP and PA services has long contributed to departures from primary care and care where needed. 

Only 22% of physicians are in lowest concentration counties with 40% of the US along with 23% of mental health providers and 26% of active NP and PA.

The $300,000 cost of turnover for each primary care doctor with losses about each 3 years includes recruitment, retention, marketing, locums, orientation, low volume early on, adjustment costs for new physicians, benefits lost or insurance payouts.

For the purposes of countdown, half of this turnover cost of $100,000 per year results in $50,000 a year loss to the practice. This leaves

$240,000 and Counting Down

Note that communities are no longer able to prop up small practices. Hospitals have often closed or are closing - resulting in less ability to prop up primary care. Hospital losses decrease local physician concentrations - leaving mostly family practice.

$160,000 and Counting Down

PCMH is $40,000 per PC physician for the largest and 2 - 2.5 times this for smaller practices which tend to be critical for access where needed. The cost for a small practice in a needed location would be $80,000.

The countdown has obviously resulted in inability to support primary care - a reason for too few and overwhelmed.

Costs Are Increasing in the Usual Practice Budget Areas 

Costs are obviously increasing faster than inflation and in multiple dimensions. For decades supplies and equipment have increased faster for medical practices. Supplies are higher cost for the small in some part due to discounts given for those largest, most organized. Insurance goes the same way.

Payment Equity - the True Payment Reform

ACA did not take on the most important reforms such as balancing payments between basic services and those considered procedural, technical, or subspecialized. 

The academic/association/foundation/institution/corporation designers have not pushed this reform - critical for basic access to care and the ability of any training intervention to work for access improvements.

Why Promote Inequity When Equity in Payment Is Required?
Why Promote Higher Cost of Care for No Gain in Outcomes - Lower Value By Design?

Associations most connected with primary care and care where needed such as American Academy of Family Physicians (AAFP) have promoted regulation, innovation, and certification rather than opposing these measures that destabilize primary care and primary care where needed - where family physicians (and NP and PA in family practice positions) are most likely to be found. Even when family medicine residency graduates have fallen from 90% office based to less than 65% office based with worse to come, there is not a protest. Internal medicine has collapsed for primary care with hospitalist careers mopping up those who do not go on to do one or more fellowships. Even with NP and PA falling to lower proportions in family practice positions (their dominant primary care contribution), there is little protest. Even when expansions fail to result in actual primary care increases as measured over the careers of the greater numbers of graduates, there is no protest.

Accountable Care Design for Most Americans...

... requires accountability for the above for any hope of improvement for most Americans behind by design.

As the financial model fails, so does the ability of training to address deficits of workforce. This worsens turnover costs, lowers distribution, and increases the costs of incentives.

Bailouts for the Few But Not Most

Banks, large corporation, and Wall Street firms have had bailouts but there is little help for agriculture failures, manufacturing failures, and cutbacks that have contributed to economic stagnation or decline. 


There has been no bailout for 30 - 40% of Americans - no extension of unemployment. Most Americans do not rate investments. Few Americans receive the most investments. SNAP, disability, Social Security, and similar cuts represent cuts in what supports most Americans, leaving more benefit for fewer by design


Fuel is failing where fuel is most needed
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Four decades of attempts to address overuse have not only failed to rein in overuse, the efforts have contributed to under-utilization and more Americans left behind by design.

Overuse has long been 2 to 4 times higher in highest physician concentration counties. Overuse supports too much workforce for few and results in too little for many. Overuse steals the workforce needed elsewhere and makes it appear that there are deficits of workforce with the need for more graduates - when the problem remains overutilization.
 
Payment Design Plus Profit Motive Plus Political Power
Overutilization is largely the result of the payment design and profit motive and political power. The payment design results in too much paid for highly specialized services and too little for the basic services (primary care, mental health, basic specialties). 
 
Profits are best supported by the march to ever more types of procedures and technologies that are paid the most because they are newest and most subspecialized. The profits by those most organize pave the way for political power - power that prevents true reforms such as more for cognitive, office, and basic services as well as services where most needed for those smallest and least organized. 
 
Too much for too little result, too much profit over the basics, and too much power vs too little - these are what drive the US health care design the wrong way.

Payment Design Diverts Workforce
 
Nurse practitioners and physician assistants have followed the higher payments to new specialties with more added in each specialty. The dollar distributions shaped by payment policy would not allow more primary care physicians, clinicians, or team members.
 
The effects of payment upon the physician workforce are obvious - and this pattern is being repeated in the rapid changes seen in NP and PA workforce. For decades NP and PA were promoted as solutions for primary care, care where needed, and efficient care. 
  • It is obvious that there is no solution for care where needed as the deficits remain despite massive expansions. 
  • Primary care similarly remains stagnant by design.  
  • The NP and PA "efficiency" advantages claimed in primary care did not work out in lowest paid primary care paid even lower. 
NP and PA advantages have best been seen in non-primary care. As the specialty and subspecialty barriers all fell away, the NP and PA advantages shaped new career options. The NP and PA graduates helped highly specialized practices 
  • to capture more market share, 
  • to handle the basics with NP and PA graduates
  • to shift highest paying procedures and services to subspecialty physicians for maximal revenue generations, 
  • to allow care delivery in multiple sites (office, different hospital sites), and increase utilization of existing testing equipment and personnel. 
This has allowed largest systems and practices to cut expensive subspecialty physician costs to the minimum while maximizing services, testing, and billing.

Expansions Facilitate Increases in Workforce, Services, and Overutilization
 
Massive expansions of PA from 1500 to 9000 annual graduates a year and NP 1500 to 20,000 a year since 1980 have substantially contributed to increasing utilization, higher costs, and overuse. 
 
Recent doublings of NP, PA, and DO graduates have not contributed to more primary care as expansions are negated by fewer remaining in primary care.  MD primary care results are shrinking despite expansion - as fewer remain in primary care. There is no other choice. The numbers of positions are limited by the revenue - minus the other costs of delivery and more limited by delivery costs that have been increasing.

Blocked from primary care by the annual revenue limitation of 160 - 180 billion for primary care or 6% of spending (minus expenses), NP and PA and DO and Caribbean and MD expansions have fueled the massive increases in non-primary care workforce.

The workforce design compliments the increased utilization of highest cost services and penalizes basic services. Expansions of graduates cannot improve access as the basic services are all prevented from expansion by payment design. 
 
Suppressing the Basics Accentuates the Highly Specialized
 
Even worse, the deficits of primary care and access facilitate greater utilizations of higher cost services - emergency care, specialty care, subspecialty care, urgent care, and convenience care.

More graduates translates to more workforce and more highly specialized workforce - leaving the basics far behind.

Ever Higher Health Care Costs Are Unopposed

Runaway health care costs have followed 
  • From rapid ever purer expansions of non-primary care workforce
  • Plus rapid expansions of administrative costs 
  • Plus digitalization costs
  • Plus micromanagement costs
The increases in administrative and non-delivery costs have been significant. These include more personnel in administration and management, managed care efforts, managed cost interventions, and managements of high risk patients which have added about the same costs as would have been saved by management efforts (The CBO was right). 
 
The consequences of spreadsheet cost cutting have been significant. Physicians have often told the cost cutters of the consequences, but they are long past listening. The cuts look good on paper but translate poorly to the real world where complex interactions between individuals, groups, and society are difficult to capture. The CBO was right, the White House and Steven Brill Were Wrong by Kip Sullivan.
 
Additional and substantial tens of billions a year have been added by HITECH to ACA to MACRA to value based. The Pay for Performance additions are some of the worst, adding higher cost of delivery for no significant change in outcomes (Annals of IM review) while discriminating against those who provide care to more complex patients with inherently lesser outcomes as noted in increasing numbers of studies past 15 already. Pay for Performance has delayed needed reform - especially cognitive vs procedural.
 
The obvious result of so much more for little or no gain in outcomes has been failure in value. The US has obviously been moving the opposite direction from value. This is another reason why attempts at value basis are misguided at best.

Consequences of Cost Cutting (Caused by Overutilization and Costs Too High)

Overutilization has been bad, but innovation and regulation and certification efforts have made the situation worse. Cost cutting has been a very non-specific tool with a four decade history. The collateral damage has been greatest 
  • in primary care with 55% of services delivered
  • in basic services care where needed where margins are thinnest
  • in small practices where cost of delivery increases are most
Those largest, most organized, and most powerful are in the best position 
  • to prevent adverse legislation
  • to reshape regulation is desired ways
  • to influence implementation 
Those doing best are the largest and most organized in places where workforce is most concentrated.

Good business decisions require that essential areas not be cut and may even need to be given increases because they are essential - but this has not happened. Even worse the basics have continued to fall relative to those highest paid and overutilizing - dragging more team members, clinicians, and physicians this direction.

Those smallest, least organized, and most basic have steadily been left behind as overutilization, overregulation, overadministration, and overcertification have continued while costs have worsened, outcomes have worsened, value has worsened, and access has worsened - with the worst impacts on increasing proportions of Americans - your choice of 30 to 50% and increasing.

Closures and compromises of small practices and small hospitals continue where care is most needed, where populations are growing fastest, where fewest health care dollars go already, and where more dollars are required to be shipped to higher concentration settings - by each new permutation of the health care design.

Only those immersed in higher concentrations could fail to see the situations, conditions, environments, and compromises.
 
Research Immersed in Concentrations Results in Policies Rewarding Concentrations
 
The research base has long been immersed in the places and practices and systems that are largest and that most overutilize. The latest designers from managed care to Dartmouth to the present have continued to base their assumptions on this top 20% most concentrated. The research has long ignored those who fail to access services. The data is also distorted when the populations involved have difficulty accessing care in places where insufficient workforce and other access barriers exist - where underutilization is a major problem.
 
The research differences promoted widely have largely been the result of comparisons of different populations - not the various clinical interventions that have gained press.
 
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Students and residents should focus AAFP upon equity. Equity in payment would be a good start. Dollars are maldistributed in health care and this contributes to inequities in workforce, access and outcomes as disparities drive social and other determinants of health the wrong way.

AAFP wants to present the best case scenarios to students and residents, but there are major issues that must be addressed. Equity is indeed and important theme worthy of discussion

Equitable payments for primary care, mental health, and basic services should be most important for student or residents that truly hope to deliver these basics - especially in places with half of Americans where inequity and disparities dominate.  There should be no deception that most Americans are doing well. American health, education, and economic outcomes indicate that few do very well and most are left behind. Future family physicians deserve to know the big picture as family physicians are most likely to care for those left behind in multiple dimensions.

Inequities Cognitive Vs Procedural

Basics including cognitive and office services should be paid more and procedural, technical, subspecialized should be paid less to obtain equity in workforce and equity in distribution of workforce

Inequities Higher Vs Lower Concentration Counties

The designers have created for themselves multiple lines of revenue and the highest reimbursement goes to those in highest concentrations of workforce. Inequity is over 50% of health care spending going to 1% of the land area in 1100 zip codes with just 10% of the population but 45% of physicians. So much for so few in few locations makes equity impossible. Since outcomes are minimal at high cost, value is low across US health care.

Attempts to address inequities in payment are vigorously resisted by the academic, association, institution, foundation, corporation designers.

Equity Translates To...



Equity would translate to equitable access, equitable distribution of workforce, and equitable payments. Equity in payment is required so that training interventions can result in equitable distributions of workforce.

Even if students or residents want to provide primary care or care where needed - the designs make this most difficult. Too few positions are supported.

Equity in Access

Access is impaired by 2 to 3 times less local workforce for 40% of Americans in 2621 lowest physician concentration counties - counties that receive less than 13% of health spending and only have 22% of primary care workforce. The only equitably distributed workforce is family medicine with 36% of family physicians to match up best to this 40% of the nation. All other specialties concentrate in counties with higher to highest concentrations of physicians - leaving most Americans behind along with higher concentrations of elderly, Veterans, disabled, and others most complex and least served.

The 2621 lowest physician concentrations have lowest concentrations of MD DO NP and PA workforce because the counties have concentrations of people with the worst paying plans. They also have concentrations of people with lesser social determinants in places with least economic impact.


These 2621 counties only get about 40 billion in primary care revenue each year. Payments are 15% lower for the same services. This translates to 6.6 billion less in payment. Equitable payment would go a long way to support primary care teams and higher functions - denied by design. Collections issues result in 5 - 10% less for 2 to 4 billion less.

HITECH to MACRA has diverted 8 to 10 billion that can no longer be used to support care delivery. In fact it never gets a chance to circulate locally as it comes in and goes out before it can help address jobs, economics, or social determinants. The design concentrates health care dollars in higher concentrations and results in less equity for lower concentration counties.


Payment inequities make matters worse. Payments are lower for primary care and are 20% lower for the same services in these lowest physician concentration counties. HITECH to MACRA has resulted in over $100,000 per primary care physician in uncompensated cost of delivery increases. Payments lower, costs of delivery higher, and complexity of patients greater is the opposite of equity.


Widening Inequities By Design - Does Family Medicine Care?

These 2621 lowest physician concentration counties are growing faster in population and in numbers of counties:
  • Inequities in payments for basic services continue to result in small and rural hospital closures which decrease local workforce
  • Specialties other than family medicine exit counties without hospitals to add more counties to the 2621 lowest concentration counties.  
  • Small practices are more common in lowest concentration counties and small practices are also being compromised by payments too low, costs of delivery too high, and complexity increasing
  • Affordable housing is vanishing in higher concentration counties and most in these counties are paying too much already. The housing crisis picks off the most vulnerable in physical, mental health, and financial need. Many have no choice other than to move to lowest workforce concentration counties lowest in resources but often with better cost of housing, better cost of living, and better climate.
Inequities Made Worse By Design After Design

A few Americans benefit from financial designs that put more wealth into the hands of fewer leaving most Americans behind.

About 74% of top college positions go to children of top income quartile parents with only 3% arising from the bottom quartile and less than 13% from the bottom half in income.

Health care dollar distributions shape similar inequities. By 2040 half of the US population will reside in 2800 - 2900 lowest physician concentration counties because of hospital inequities, inequities in education funding, and inequities in housing that drive the most vulnerable in physical, mental, and financial capabilities to reside in lowest concentration counties with least resources, worst social determinants, and greatest patient complexities.

The top 79 physician concentration counties with 10% of the population receive over $30,000 per person in health spending while the 2621 lowest physician concentration counties receive $3000 per person in spending - ten times less. Highly specialized services added, more new and expensive drugs, precision medicine, increased administrative costs, more practice consultants, more software, and more health info tech all divert dollars from lowest to higher concentration counties.



Six states have top concentrations of physicians and residency training. Thirty states have lower to lowest concentrations of physicians and residency training. The 2621 lowest physician concentration counties with 40% of Americans only have 6% of residency training. Because these counties have too little spending, there is no chance that any training intervention can actually reduce inequities in distribution of workforce. The nurse practitioner and physician assistant maldistributions plus expansions actually worsen health spending disparities.

The leadership of AAFP often shapes the information going to students and residents, but students and residents should do their own exploration and analysis. They should pay close attention:
  • to their future 
  • to more equitable future for them and for their patients,
  • to a more equitable future for half of Americans left behind by design.
Should students focus on small proportions of the population or should they consider half of the US population a worthy cause to address?

Perhaps students and residents can help the Families of Family Medicine to understand that they need to reconsider innovation, regulation, and certification that make care more complex, add to costs of delivery, decrease productivity, and add to inequities in payments, workforce, and access - by design.


Family Medicine Must Move Beyond the 1960s Design to Address the 2040s

Business Models Large Vs Small Primary Care Practices 
 
The GME Lie Distracts from Payment Reform 
 
Veterans Not the Only Ones Driven Out of Housing and Out of Town
 
Focus on Change Agents to Change the Culture to Healthier

 
Why Are More Federal Dollars for Graduate Medical Education Still Not Able to Produce the Workforce Needed for Most Americans Now and Especially Not in the Future?
 
Insanity and Discrimination in Payment Design Help to Maintain Shortages of Workforce and Access Barriers

 


 

 

 


 

 

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Triple Aim, innovation, regulation, certification, cost cutting, and other changes have widened the gap between small primary care practices and large practices for the past 37 years. The treatment of small practices and those that they serve will some day be recognized as discrimination by design.

Revenue and Collections

The financial design for primary care has been an issue since the 1980s. Stagnant payments, increasing costs of delivery, and increasing complexity represent the Triple Threat to primary care. This threat is most prevalent in the smaller practices.
  • 15% higher payment are common in large vs small practices for the same office codes (Medicare Data 2011). This translates to about $65,000 less payment per primary care doctor.  This is shaped by a number of different factors such as being small or rural, not being associated with a hospital, being in the wrong state, and being less organized.
  • Large systems and practices often have 5% annual escalation clauses. Small practices have take it or leave it contracts that are burdensome to the practices and their patients.
  • Larger means the ability to strategize, to shift resources for best profit, to choose and adapt location, patient population, and health plan contracts for maximal revenue, maximal outcomes, least cost of delivery, and most local resources. This has not been so for smaller and less organized practices where revenue has been stagnant and practices are fixed in place, population, and location.
  • About 10% is lost to collections in large primary practices vs 15 - 20% for small. A 5 percentage point differential translates to $50,000 per doc per year.
  • Delays and denials can be more challenging for small practices and for the insurance plans more likely in small practices

    Higher Costs of Delivery Via Innovation, Regulation, Certification

    Rapid changes are more difficult for small practices with fewer and less specialized personnel. In the last decade a number of regulation, innovation, and certification changes have been thrust upon primary care. In general, the adverse impacts are more likely for small practices. Sometimes these changes have been implemented even when knowing these adverse impacts.
    • $32,500 for HITECH per doc (MGMA)
    • $30,000 at least for additional digitalization, HIT and similar costs
    • $40,000 for MACRA per doc (Health Affairs)
    • $43,000 for Primary Care Medical Home (PCMH) for large practices - $60,000 to $105,000 in other estimates (Annals FM) - likely higher cost for smaller practices
    The costs of the above may be greater for small practices although some small practices are spared (by MACRA) or are choosing not to spend the dollars. CMS has already published the expected problems for smaller practices via MACRA. 

    Productivity losses occur due to the above but these have been poorly studied. Additional time for documentation has been studied and extra hours a day per physician for documentation, messages, and internal reviews add up. Burnout, higher turnover, and morale problems have increased due to all of these above.

    The bottom line has been shave so much that personnel have not been added to address these areas. More burden is placed on fewer taking more time and effort for little in the way of apparent gain.

    Value based and other forms of Pay for Performance have already been reviewed for adverse impacts. Smaller practices tend to have patients that are inherently less healthy which will result in lesser payment.

    Another assumption of the micromanagers is that larger providers are better. Actually larger practices have different and better finances, advantages in team members, and patients with inherently better plans and outcomes. 

    There is an assumption that larger practices and systems will absorb smaller practices for their own good. Why would an insurance plans, systems, or practices absorb practices where patients are more complex and have lesser outcomes and fewer resources. Many that do have better finances in mind, not the care of the patients in the small practices. Small practices are focused locally and actually had better outcomes in studies by Casalino. These better outcomes for practices smaller than 10 physicians and especially for 1 and 2 person practices were a surprise to researchers - who were looking for worse.

    Why blast small practices away, and local focus, and community orientation for dubious benefits, if any? Much of what is published has dubious value despite the focus on "value based."



    Even worse is the discrimination inherent in innovative "accountable" payment designs. Underserved practices such as seen in Community Health Centers have had direct studies demonstrating the discrimination inherent in Pay for Performance (Hong, JAMA). Pay for Performance Fails to Deliver

    Higher Costs of Personnel Turnover 

    Buchbinder indicated $225,000 cost for primary care physician turnover years ago. A reasonable update of the costs of recruitment, retention, locums, lost productivity, orientation costs, and adapting to the practice and patients and team members would be $300,000 for the turnover cost of a lost primary care physician. This translates to $100,000 per primary care doctor per year with turnover about each 3 years.
    • Smaller practices face over $100,000 per primary care turnover per year with less than 3 year averages and higher costs of recruitment, retention, advertising, orientation, lost revenue, lost productivity, and other adaptation costs
    • Larger practices may face little in the way of turnover costs as recruitment and retention incentives, advertising, and gaps can be filled by minor adjustments of existing personnel and physicians. 
    Small practices that run short on workforce end up losing patients to other practices because they cannot schedule new patients or return established patients to care. This represents a future problem with revenue and more difficulties balancing personnel to revenue. A poor financial design worsens this common scenario. If revenues decrease it can be hard to replace a physician assistant, nurse practitioner, or a physician. Large practices can make up gaps by shifts among remaining workforce.

    A sudden decline of 2 physicians, physician assistants, or nurse practitioners in a small practice requires substantial management to restore revenue and stabilize existing and future workforce.

    Recent studies in Annals of FM regarding rural practice indicate that higher turnover is seen around metro areas and in places lowest in concentrations of physicians. These are where small practices are more prevalent. Larger practices are often sought by new graduates or by those departing small practices.
    • Twice the turnover and half the revenue generation limit nurse practitioner and physician assistant contributions. Scope of practice and complexity of patient care can be challenging for new graduates. Expansions of NP to 20,000 annual graduats and PA to 9000 acts with the poor financial design to set up a revolving door situation resulting in limitations in new area such as primary care experience. 
    • Many of the short and long term effects of the current financial design have not been considered or studied.
    • The value of a long term primary care physician retained for 10 - 15 or more years is recognized, but again studies have failed to consider the positive contributions while the negative assumptions continue to be published and promoted.
    Higher Costs in Non-Personnel Areas of Primary Care
    Supplies, equipment, and insurance costs are discounted for large practices and practices in large systems. Some largest can even negotiate to result in no waste as the suppliers are responsible for the supplies. Only the supplies used are charged to the practice. Size dictates negotiating power for higher payments and lower costs as document in studies of insurance, systems, and practices. The costs for non-personnel areas run about $40,000 to $50,000 per primary care physician. Savings from size were estimated at $10,000 per primary care physician. Very efficient large practices can save substantially in discounts and less waste. Smallest practices end up paying for these discounts as suppliers recoup their losses.

    Physical Plant Costs

    Cost of office space, utilities, maintenance, and property taxes are higher for large practices. Best locations with best patients and best insurance plans are costly. However this increased cost is offset by better payments, depreciation, investment, and contributions. Small practices often receive support from hospital or community although support is limited by federal laws and poor finances inherent in small hospitals and small or lower income communities.

    Additional Limitations for Small Practices 
     
    Small practices are often located where patients are more complex and have more chronic diseases and fewer resources. Medicare, Medicaid, disabled, poor, fixed income, and vulnerable populations are often more concentrated in small practice settings. Poor payment, poor support, and poor design make greater complexity of practice, patient, and community even more difficult.


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    Once again the designers are promising a solution for shortages of physicians that cannot work. The expansion of graduate medical education will not send more physicians to counties short of physicians. Expansions of MD DO NP and PA have all resulted in steadily higher concentrations in fewer counties that already have higher concentrations. The evidence is already in the databases. Until the financial design is fixed with more dollars for basic services, there will be no solution for care where needed.




    MD DO NP and PA are finding more ways not to go into primary care and this pathway is all about dollar distributions, or lack thereof.

    Under the current financial design there is no way that any GME, MD, DO, NP, or PA expansion can actually address shortages. GME is 94% in the wrong counties with only 6% found in counties lowest in physicians, health spending, economics, and health outcomes. Residents are 154 per 100,000 in 79 top physician concentration counties. The 2621 lowest physician concentration only have 115 active physicians per 100,000 and this may be shrinking further. Residents are concentrated at a ratio of 24 to 1 or 154 per 100,000 in top concentration counties to 6.4 in lowest physician concentration counties.

    Residents tend to locate in the same state and same county or nearby county after graduation - another factor in poor distribution. The US has 6 - 7 top concentration states and 30 left behind. The same is seen in counties with 79 top physician concentration counties and 2621 lowest physician concentration counties - essentially the Red Counties and about 50 rural counties with majority African American, Hispanic, or Native American populations.

    Workforce goes where the dollars go and the dollars dictate higher and lower concentrations of physicians. Family practice positions filled by MD DO NP and PA are the only population based distribution with about 36% found in lowest concentration counties with 40% of the population. All other specialties concentrate as physician concentrations increase as seen below. The Ratio is a measure of concentration. It takes multiple times more graduates to result in a lowest concentration physician. The higher the ratio, the more it takes.

    More correctly, the limitations in dollars going to these counties limit the workforce as seen in the 2010 data on NP and PA and the 2013 AMA Masterfile.

    Active Physicians Per 100,000 in 2013 Counties By Physician Concentrations
    Top Concentration to Lowest Ratio Top to Lowest Top Higher Middle Lowest
    % of US Population 10% 20% 30% 40%
    Counties in Category 79 152 286 2621
    Primary Care Best to Worst Distribution Ratio of Top to Lowest 32 million people 64 million people 96 million people 128 million people
    Family Medicine 1.18 30.77 33.08 29.19 26.03
    NP/PA Fam Practice Position 1.18 Estimated
    FM then Geriatrics 2.57 0.36 0.31 0.23 0.14
    General Ob-Gyn 3.42 20.48 15.21 10.99 5.99
    Medicine Pediatrics 3.44 2.58 1.75 1.01 0.75
    General Pediatrics 4.13 32.55 22.16 15.79 7.88
    All Active Physicians 4.14 468.12 304.77 222.06 113.05
    Internal Medicine 4.31 64.79 42.72 30.85 15.03
    Internal Med Geriatrics 7.46 2.81 1.63 0.98 0.38
    Physician Assist NPI 2010 2.71 43.73 28.94 25.05 16.13
    Advanced RN NPI 2010 3.21 104.06 66.55 45.98 32.41
    Other Specialties
    General Surgery 2.75 11.69 7.82 6.12 4.25
    Gen Orthopedics 2.86 9.08 7.19 5.57 3.17
    Physician Assist Not FP 3.70 Estimated
    General Urology 4.08 5.41 3.63 2.67 1.33
    Otorhinolaryngology 4.20 5.42 3.42 2.57 1.29
    Intervent Cardiology 4.45 1.39 0.99 0.70 0.31
    Ortho Sports Med 4.58 1.10 0.71 0.55 0.24
    Advanced RN not FP 4.60 Estimated
    Ophthalmology 4.93 11.20 6.98 5.03 2.27
    Anesthesiology 4.94 24.03 16.54 12.57 4.87
    General Radiology 5.26 16.64 10.65 7.29 3.16
    Gastroenterology 5.40 8.71 5.31 3.88 1.61
    Gen Cardiology 5.53 14.12 8.65 6.02 2.55
    Radiation Oncology  5.58 3.01 1.80 1.29 0.54
    General Pathology 5.69 7.07 4.04 2.93 1.24
    Physical Medicine 5.89 5.44 3.74 2.61 0.92
    Nephrology 5.90 5.97 3.58 2.57 1.01
    Other specialties have worse distribution




    Nurse practitioners and physician assistants are also not the solutions as claimed. If anything, they are more flexible with substantial movement following the payment dollars to more support, less complexity, and higher salaries. More specialties are added with more added to each new specialty - leaving primary care and family practice positions behind. Turnover is higher in NP and PA, previously twice as high as for physician primary care. Moving from lower support to higher support is a move away from morale issues, burnout, higher turnover, and more to do with less to do it - such is the power of the financial design. More to do in areas such as primary care includes the rapid changes of innovation, regulation, and certification. It is hard to design as many obstacles to care as team members in primary care where needed have faced - with more to come.

    Note how geriatrics is not a solution. Too few enter and too few distribute. This is also the result of a crippled financial design with payment too little and complexity too high. In kind donations are needed to support geriatrics usually by academic institutions, largest systems, or nursing homes. The result is a 7.46 ratio for extremely poor distribution.

    The elderly and their cardiac, lung, cancer, and diabetic conditions are concentrated with 45% found in lowest concentration counties. High ratios are seen in these specialties. Endocrinologists are 10 to 1 against lowest concentration counties where 50% of diabetics are found and only 12% of endocrinologists. Smokers, obese Americans, and those with mental illness are concentrated in lowest concentration settings along with preventable deaths.


    The Newer Graduates Have Worse Distribution

    The oldest physicians are seen in lowest concentration settings. This is an indicator of lack of replacement by newer physicians. It is also a predictor of worse to come. Hospitalists and emergency physicians have registered increases in lowest concentration counties - but have greater growth in higher concentration settings. Even worse, these tend to be family physicians who were often previously in primary care. Indeed, the family medicine contribution has decrease from 90% office family practice to less than 70%. The levels are even lower in newer graduates. Soon, entire graduating classes at FM residency programs will be avoiding office family medicine as has been the case for internal medicine and pediatrics for some time.

    No Expansion of MD DO NP and PA Can Work for Distribution

    No expansion of primary care or surgical residency positions can result in more serving in primary care or general surgical specialties as too many move on to additional fellowships or other careers. Internal medicine is over 85% not primary care. Pediatrics is one-third primary care. New FM graduates may be 60% primary care and could break the 50% level without payment change. PA is down to less than 20% and NP will soon be there too. There simply is not enough payment to provide the care and the team members and the support for such complexity. General surgery, general ob-gyn, general orthopedics and other general surgical careers are not chosen by graduates who have must better support, less complexity, more team members, and locations similar to their exclusive origins by taking one or more fellowships.

    Even targeted MD DO NP and PA interventions for rural or underserved or Teaching Community Health Centers cannot work. These graduates may fill needed positions at higher levels. Good for them and for their program. But this only displaces other graduates from such positions. Such is the dominating power of the financial design. Only so many dollars go to these positions in places of need. Lowest concentration counties do not need a rearrangement of the deck chairs and more games playing by academics - they need real solutions.

    Too few dollars equals too few positions. 

    But designers are not looking to add dollars in any place or service. It has been cost cutting as the dominant policy since the 1980s. Even worse, the basic services and the practices least organized and most distant and smallest have been ignored. 

    It's the Economy Stupid - The Economics Fail to Measure Up

    It is the financial design that is broken with too few dollars designed to go to the places shortest in MD DO NP PA and RN. It takes more dollars going to 2621 lowest concentration counties to actually begin to redistribute workforce, services, and dollars. These are counties with services that are 90% lowest paid generalist and general specialty services. Only increases in office, cognitive, mental health, basic, primary care services can redistribute funding. 

    Real Solutions


    • A 15 - 20% boost to the same payments as higher concentration settings. These are practices paid 20% less for the same service delivered.  Primary care should be separately and equitably paid - not more marginalized where care is already most marginalized.
    • After equity, a 20% boost in payments for basic services represents a 40% boost for care where most needed - this would need to be maintained from 2018 to 2040 with adjustments due to any additional cost of delivery increases (regulation, innovation, certification) to hope to provide care for 45% of the population in these counties in 2040. We are already 10 years behind in a process that takes 20 years.
    • Primary care is only about 6% of spending for 55% of services - a small boost in dollars represents a large gain in terms of primary care team function. Michigan did not get a boost from Primary Care Medical Home. Blue Cross invested in primary care with more dollars to get the boost. It takes more dollars for more and better team functions including higher primary care functions.
    • Reduction in cost of delivery - HITECH to ACA to MACRA has added more than $100,000 cost of delivery per physician. This is at least a 16% cut in revenue for another 20% lost considering productivity and other consequences. 
    • Turnover is up to $300,000 per lost primary care physician and may be higher in these lowest concentration counties with more consequences and higher turnover. This is at least $100,000 a year that has to be paid by the practice, a local facility if it exists, or the community. None of these has the dollars to spare where dollars are least concentrated.
    Acceleration of Growth of Population in Lowest Physician Concentrations

    Hospitals are important for the support of physicians. Without a hospital the emergency room and hospitalist positions go away - the only growth seen in recent years. The general surgical specialties also tend to go away. This leaves primary care behind and tends to erode the internal medicine leaving family medicine behind. The financial design has most eroded family practice MD DO NP and PA - most important for counties without a hospital.

    In the next decade, more counties will be added to the lowest concentration counties. At closures of 15 hospitals per year in these counties, the number could easily reach 2800. They are already paid less. About 40% of rural hospitals have negative margin. Readmissions penalties hit them harder - 2 to 3 times harder. But there is worse to come.

    CMS just announced that it will be taking away the disproportionate share funding beginning as early as October. They have already announced cuts in support for high cost medications. The combination of ACA and the current administration plus potential cuts by Congress will worsen matters. 

    Health access practice is about the population. What happens to the population shapes access and also health outcomes. Losses of SNAP, housing, utility support, and disability funding will hit lowest concentration counties hardest. This will add to the costs and complexities of delivering care where needed.
    • Lily Tomlin — 'Lady, I do not make up things. That is lies. Lies are not true. But the truth could be made up if yo know how. And that's the truth.'
    The Deans Lie, the GME Lie, the Innovation Lie, the Regulation Lie, and the Certification Lie - all need to come to the light of day as we turn to exposing the truth. No matter how many times the medical and nursing deans and leaders and associations claim to be a solution, the truth is seen in failures over decades and over major expansions.

    Payments Are Broken and Are Being Made Worse


    A return to evidence basis is indicated, as in the end of pay for performance schemes that are known by major reviews of the evidence basis not to result in improvements in health outcomes. From P4P to Readmissions Penalties to Value Based, these have been costly and discriminatory - especially for the providers that take on the challenge of serving where most needed where patients inherently have lesser outcomes before and after care, regardless of care.

    And even worse, the payment designs all lead to fewer dollars going to these counties - resulting in worse outcomes. Health information technology promotions are rampant these days, but these are cash transfers from lowest to highest concentrations - the formula for greater disparities and worse outcomes in lowest concentrations.

    The GME Recommendations Are Self-serving 

    GME expansions cannot solve the physician shortage. It cannot get physicians to places where physician positions are not supported by the financial design.

    GME expansion promotions also have a distorted literature base - as seen in international medical graduates promoted as a solution. This was exposed in the recent rural location and retention study from the Graham Center. Not surprisingly there was no headline or promotion of this fact. My studies using the cross section Masterfile have long indicated poor contributions from IMGs. The international graduates overall have some of the worst distribution - right there with Harvard, Yale, and other most exclusive US MD school graduates. Only a few states benefit. Only graduates from a few nations contribute above average. About 20 - 30% leave the nation after training. This is but one major flaw in these studies. Only studies of the first few years demonstrate distribution - which is actually limited as well. 

    Cherry picking results is promotion, not the truth.

    The Logic Is Undeniable

    If GME leaders truly think that expansions are the solution, then we must graduate 3 to 7 times more to solve shortages. Obviously graduating many more is destructive to those who find themselves deep in debt and at the mercy of employers during a time of a glut of MD DO NP and PA. This time may not be too far away.

    No MD DO NP or PA Expansions can fix shortages that are actually about the financial design. Too few dollars to too few places supporting too few positions is the real problem. Reversing the financial design is the only true solution.
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