Recently the media has featured several -- often grossly distorted -- stories that infer that the American public is not receiving "value" for physician services rendered. More government oversight and payment changes are being promoted. What should the public know to sort things out?
Value is nothing more than a measure of the quality of the goods/service received for the amount expended, i.e., cost. It can be described in qualitative terms, e.g. good-bad, or quantitative, e.g., 20 percent increase in indicator compliance/satisfaction per unit of expenditure. Quality can be assessed in "performance" and/or "outcome" measures.
In areas such as the provision of fine cuisine or primary medical care, standardized and valid quantitative, composite measures of "outcome" quality and value are often difficult to define and elusive. Thus, practitioners, patients, quality auditors and patients' payer agents (e.g., Medicare) might arrive at different composite quality and value determinations. For example, what is the value of retaining my physician who I trust?
Several major media outlets recently featured a Mayo Clinic study published in the Journal of the American Medical Association that surveyed more than 2,500 physicians regarding which stakeholders bore major responsibility for the high cost of health care. Although 59 percent of physicians felt they had some responsibility, they targeted trial lawyers, insurers, hospitals, drug and device makers and patients themselves as the "major" contributors. An accompanying editorial by Dr. Ezekiel Manuel and Andrew Steinmetz called the results evidence of "a denial of responsibility" and certain media sources claimed physicians were dodging responsibility for reducing costs. Who is right?
It depends. If one is measuring costs and value in terms of the quality of procedural "performance" the critics may be justified that physicians share greater responsibility. However, if costs, value and quality are weighed in terms of health status "outcomes," the physicians prevail. The University of Wisconsin population health model attributes about 20 percent of health status outcomes to the access and quality of clinical health services, and physician services constitute about 20 percent of national health-care expenditures. Even if physicians could improve the effectiveness and efficiency of services rendered by 10 percent, outcome value would increase by a few percentage points and major outcome value gains must come by addressing these other major factors.
A July 21 front page story in The Washington Post by Peter Whoriskey and Dan Keating badly butchered the concept of "relative value" to essentially accuse physicians of mass fraud by artificially inflating the value of their services. To assist patients' payer agents, the AMA operates a mechanism to assess the "relative" time, intensity and expenses of performing certain services compared to that of performing others. These are rough "comparative" procedural values absent any dollar "payment" amounts, with the full appreciation that they could vary for individual practitioners, locations and other factors.
To bolster their inferences, the authors introduced and mangled other factors, such as the Sustainable Growth Rate, physician incomes and "technology." They note certain instances where technology has improved the efficiency of certain procedures and therefore infer the procedural time and cost should always decrease. In certain instances they are correct, but technological advances can also increase equipment costs, training requirements, service intensity and other factors that greatly improve the effectiveness and value of the services but also the cost. Improvements in eye surgery associated with markedly advanced artificial lenses and the LASER are examples.
The authors also infer that the high earnings of certain physician specialists support the fact that they are overcharging by using this mechanism. This is despite the fact that no payer is obligated to use these comparisons to decide what they will pay for a certain service and no physician is obligated to use them to determine the charge or price of any service. Professional ball players, lawyers and others are free to charge for their perceived value of their services and no individual or agent is compelled to buy them.
The authors then claim that even when patients' payer agents disagree with the relative values suggested and want to lower payments, they are prevented from doing so because the physicians have successively lobbied yearly over the last decade to have the provisions of the SGR "suspended" to avert a decrease in payments. Not only do they not understand the SGR issue but they are simply wrong. Patients' payer agents, including federal agencies, have reduced the payment for certain services in recent years in several specialties.
The issue of the SGR -- also the subject of numerous recent media reports -- has little to do with relative value of certain procedures but rather the overall volume and intensity of services provided across the board to certain federal patient populations. The SGR was a flawed attempt to limit "total" outlays by reducing physician reimbursement if the limits were reached. It failed to adequately consider the significant increase in the demand for -- and quality of -- certain services, e.g., knee replacements, and the increased practice cost attributed to inflation, automation and expanded regulatory compliance requirements.
Certain federal populations, e.g., Medicare recipients, military dependents, not physicians, are the major losers if the mechanism is not fixed, Congress and the administration agree it is badly flawed, and ironically, in the context of this article, are proposing to replace it with a "value based" reimbursement system. I wish them luck.
Felsen, of Great Cacapon, is a retired public health physician.