What health care model is best for the economy? (Vermont)

Cost containment, digitizing medical records, and the shortage of primary care physicians are major issues on the health care industry’s 2009 agenda. Health care professionals, physicians and state policy overseers say unless more primary care physicians are lured to the state, and medical records made electronic, costs cannot be contained. Business will continue to bear the brunt of higher costs should the state fail to solve these issues.

Deborah Richter, chair of Vermont Health Care For All, a group advocating for publicly financed universal health care system and a primary care physician in Cambridge points to the seven percent annual rise in health care spending nationally and lays the blame squarely in the lap of our current multi-layered health care system.

“What is really disturbing is we waste a lot of the spending on administrative costs. Other countries don’t spend half of that. We need a system of uniform coverage and everyone covered. If we had that we could decrease by half what we spend on administration cost.”

Vermont spends $4.8 billion annually on health care and $1.48 billion of that is administrative cost. Nationally, said Richter, America will spend $2.5 trillion for health care.

“The amount we spend is more each year and that inflationary trend is faster than revenues to support it. Health Care is crowding out other priorities,” agrees Bea Grause President and CEO of the Vermont Association of Hospitals and Health Systems. America’s annual health care cost increase is “two to three times the overall growth in the economy.”

According to Grause, the general industry consensus is to slow the rate of growth in health care inflation. Slowing budgets by cutting provider payments, or fewer services are ideas that have been advanced. However, she argues, “If it doesn’t cut demand, it doesn’t do anything about overall cost.”

She said most proposals simply move money around. What is needed, she emphasized, are programs that reduce demand such as reducing cost “by helping people manage health and stay healthier.”

“Part of the overall strategy here is to reduce the rate of cost increase,” explains Hunt Blair the Assistant Director of Health Care Reform at the Agency of Human Services. He does not think it is “realistic to say we can reduce health care costs but we can reduce the rate of increase.”

Cutting cost is linked to finding more primary care physicians and digitizing medical records.

Primary care physician shortages are nationwide. Primarily this is due to the lower pay in this area of medicine. With the average graduate from medical school carrying at least $200,000 in debt more lucrative areas of doctoring such as specialties are appealing to those new doctors heading off to start their career.

Blair agrees there is a national shortage of primary care physicians, due to variation in pay scales for different specialties. In Vermont primary care physicians earn $100,000 a year or more. The shortage is most predominant in rural areas. He also sees an aging primary care doctor population in the state and notes that, “in Brattleboro and Rutland I’ve heard of a substantial number of doctors aging out of the positions and recruitment problems.”

Richter said primary care physicians receive “about half of what specialists earn.” She would like the federal government to pay for medical education for half the students with the mandate they go into primary care. The cost she said would be $2 billion a year roughly advocating that, “you pay primary care physicians a decent salary for their 60 hours a week.” According to her, this carrot approach worked in England “and reversed their shortage in a few years.”

“We do not need as many specialists as we have,” argues Richter. She would limit the number of specialty residency training programs. “If we want to control costs we need public stewardship of the system. Do we call it a “socialized army” she suggested, discussing military service.

Currently Vermont has 1800 practicing physicians and about 150 are in primary care. About half are employed by hospitals and half have their own practices. “Certain parts of the state including Chittenden Co. have a sufficient number of primary care and specialty doctors,” said Paul Harrington at the Vermont Medical Society in Montpelier.

“The real shortage of physicians is in primary care,” he agreed. However, he said, some specialties with shortages include orthopedics, urology and ophthalmology.

Grause is linking a growth in the number of primary care physicians to the Blueprint for Health, a pilot program now running in three counties that, if successful, should improve health care, cut demand for services, and improve compensation for doctors.

Jim Hester, director of the Legislative Health Care Reform Commission believes a primary care physician shortage exists, “because we are asking them to do things they shouldn’t have to do.” Under the pilot Blueprint for Health Care, “the care team can handle other aspects of care. You spread work out to carry it out under supervision of the physician.”

Hester’s commission does not see they physician shortage as acute. “We have a pretty good distribution of primary care,” he argues, “but less students are going into this field and the problem is in the future.”

Problems do exist with nursing. Hester said it is difficult to retain nursing faculty at UVM and other state college nursing programs because “we can’t pay them enough so they go back to actual nursing.” The commission is thus looking at current loan programs to see what can be done to improve them and how to raise teaching salaries.

Recruiting primary care doctors is the job of the Bi-state Primary Care Association in Montpelier. Vermont and New Hampshire work with this association to fill slots in this important field. Spokeswoman Stephanie Pagliuca said a primary care physician just out of training without any job experience would earn $130,000 to $160,000 in the New Hampshire/Vermont area.

“It sounds great but their training debt is on average over $200,000 and they have many overhead costs and financial considerations as they are relocating from elsewhere,” she said.

One of the problems advocating against luring young doctors here, Pagliuca explains, is that training programs in larger cities, and big city hospitals often offer substantial incentives for these fledgling doctors to remain. Urban hospitals generally pay more than rural ones, and they provide signing bonus and stipends for residents in training who commit to stay for a job later.

BPCA’s recruitment effort, admits Pagliuca, is “really hard.” It focuses on a national marketing program extolling the benefits of working in the region and tries to lure “those with ties to northern New England, or those fed up with the larger cities.”

There are other barriers to getting doctors to come here, she said. One major problem is helping the spouse find employment.

Currently BPCA is looking at reshaping the messages it is sending out to doctors about why they might want to practice in Vermont. “We are selling the fact that Vermont is a leader in health care reform. Try to get them more acquainted with the state, and with the clinical and cutting edge things we do here.”

Yet another challenge the state faces in getting new doctors, said Pagliuca, is that nearly half of the doctors in resident training in the US are not citizens. For places like Vermont this can be a limitation, as diversity here is not as easily surmounted as in an urban area. A Pakistani or Indian born doctor, she said, “Are culturally very different from the typical person here.” Also, these doctors are in America on a J1 visa to study here and can get a waver to work in underserved areas. However, she notes, “it is difficult to get Vermonters to feel comfortable with these clinicians.”
The Blueprint for Health

“The Blueprint for Health,” a pilot program currently operating in St Johnsbury, Bennington and in Chittenden County could become a model for primary care throughout Vermont. Currently it involves about 30 doctors and their staffs in care coordination teams. Funding is from state and federal monies. About $3 million comes from the state as part of the health reform initiative paid for by the cigarette tax and employer assessment. Even with the recession and tight fiscal restraints of declining revenues, said Hester, “so far some budgetary reductions have occurred but the overall program is still going forward.”

Grause at VAHHS said the program is designed “to help physician practitioners improve care to their patients.” Under this pilot they will practice “evidenced based care,” and will receive enhanced payments in this pilot from the major commercial health care players in the state which are Blue Cross Blue Shield, MVP, Cigna and the state government under Medicaid and for this program Medicare patients as well.

The plan is, according to Blair, “to try to realign payments. It’s on the order of $30,000 to $40,000 more per physician per year. The hope is to make primary care physician positions more attractive with higher pay.”

Blair sees the blueprint as “better management for folks with chronic disease that has morphed into a broader initiative to transform the health care delivery system.” He said it focuses on “developing new payment methodologies for primary care medical homes.” Medical homes, he explained, is “an idea current to have your primary care doctor as the center and organizer of care.”

Also, the blueprint uses health information technology “to make sure all lab results get sent back to primary doctor who helps organize care.” Under the blueprint medical homes combine with community care teams and the team provides support for doctor and patient.
The Push For Electronic Medical Records

Electronic record keeping for the medical profession is the buzzword heard at the national and state level. Money to upgrade the nation’s medical record keeping is part of the American Recovery and Reinvestment Act commonly referred to as the “stimulus.” The Obama Administration is a prime mover in digitizing medical records. For the most part, those interviewed for this article agree, and are looking forward to the day when all medical records are housed in computer databases.

“You won’t get the performance we need from the health care delivery system as long as there is critical clinical information sitting in paper charts,” argues Hester. “You need to be able to use that information and on paper you can’t use it.”

The problem, as he sees it, is that there are too many tests and variables to not have all the information at the ready for doctors to access. By having what he called “patient portals,” there will be more engagement and doctors will be more easily able to share patient records with the care team.

Vermont hospitals, which VAHHS represents, said Grause, are ahead of most areas of the country. Recently, Fletcher Allen Medical Center received a certificate of need to install electronic health records for their entire organization and this should be accomplished by next spring. FAMC is the state’s biggest medical provider. Rutland Medical Center is also preparing its certificate of need to install electronic health records. Stimulus funds, said Grause, will help hospitals accelerate the adoption of electronic health records.

Blair believes that technology will help spend medical dollars more effectively. The saving comes through efficiency and by reducing redundancies by calling for fewer tests, lab procedures or duplicate tests.

The new record keeping technology works in conjunction with the change in emphasis to disease prevention and wellness as a means to cut costs. As he sees it, instead of paying for volume where “every doctor gets paid by the more people they see and procedures they do,” which is “not a system set up to pay for prevention and wellness,” the focus will be on disease prevention and wellness. This said Blair is, “getting people before they get sicker.” He sees health screening, education and monitoring helping people avoid more costly treatment and hospitalization. Such is the case with diabetes patients. If everybody in the state has their own doctor, he argues, instead of going to emergency room for primary care treatment, which is the most expensive route, then that will lower the cost. Electronic records help coordinate this care because doctors and their teams will have better access to patient information and can more easily alert other doctors of patient needs.

Because there is money in the stimulus package for this technology with a seven-year implementation time frame, Blair believes the money will have a long-term impact on health care in the state.

Harrington at VMS supports electronic record keeping but is concerned about the cost to physicians. “The difficulty is the cost of about $40,000 to buy the technology for a doctor’s office. They have to incorporate that into the practice but have to reorganize their practice and that can be a disruptive change.”

For many physicians here with workloads of 12 hours a day seeing patients and reviewing paperwork, he wonders when they will find time to incorporate the new technology into their day.

Also, Harrington foresees the need for loans or grants to purchase the electronic health records and extended assistance to the doctors with practice redesign to utilize the system.

Richter is also not sure of the impact of electronic medical records.

“Electronic medical records may be good for reducing mistakes, but no studies show they will contain costs.”

Who is going to pay for them? She asks. “This is for quality not cost containment.”

“I’m not opposed, but it should phase in for electronic prescribing,” said Richter. As a proponent of single payer health care she said “it’s hard to do this without a uniform health care system,” in place.

Richter argues that technology in general is driving medical costs. “All of us want high quality medical care but we don’t have a way to test to see if it works. These are very expensive things and the cost is mostly fixed.”

She believes technology investments should be made only “in what the population needs.” Machines such as MRIs are needed but, there are too many and “when they exist they are over utilized.”

According to Richter, America needs “a system of health planning. We know roughly how many people will need certain things like an ICU. We need to establish health care as a public good. We pay for it through taxes, this is instead of the premiums and out of pocket payments we now pay.”

Vermont, said Hester, is working on the issue of putting health records into electronic form and laying the groundwork for making these records easily exchangeable on the information highway with VITL (Vermont Information Technology Leaders,) a 501 C3 non-profit.

The state has designated it responsible for the statewide health information exchange. It will also help doctors install medical records. Currently staffed by eight, Hester said the federal stimulus would put $20 billion overall into health information technologies and VITL is expected to grow significantly.

The state has its own health IT fund, paid for with a .2 percent tax on paid medical claims. It is expected to raise $30 million over seven years. The funding passed in 2008 and the tax began last fall. Also, said Hester, federal monies under the stimulus bill will now match the state’s fund and Vermont could receive a five to one match that could raise as much $150 million.

The IT fund and other technology programs in the medical field have good job creation potential according to Hester. “The potential is there for a couple hundred new information technology, good paying jobs in the next three to four years by 2013.”

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