:: Follow The Money – An Assessment Of Health Care Trends Based Upon Funding Allocations

May 30, 2008 · Posted in Uncategorized 


From Jan. 1, 2007 through March of this year, people and political action committees in the health sector have contributed $42 million and to Democratic candidates for congress and the presidency, compared with $34.6 million to Republicans . . . The biggest donors are the American Dental Association, the American Hospital Association and PACs and people associated with Pfizer.

Health Industry Donations Favor Democrats Over Republicans, Jacob Goldstein, The Wall Street Journal (May 28, 2008)

The special interest groups investment in the Congress and presidential candidates has proceeded apace with a significant shift to the Democratic side of the aisle. Mr. Goldstein at the WSJ notes that the contribution levels make sense for two reasons. First, the Democrats are likely to retain control of Congress. Second, both Democratic candidates have committed to huge investments in the health care industry. Mr. Goldstein observes: . . . on the presidential level, we’d point out that both Democratic candidates have called for a big expansion of health insurance coverage that would pour an additional $100 billion a year in federal funds into the health sector — plenty of new money to spend on health-care goods and services. John McCain’s health-care proposals, by contrast, wouldn’t put significantly more federal money into health. “Snarling Dogs Fighting Over A Bone”

Meanwhile, as the hammer and tong of federal and managed care physician reimbursements cutbacks continue to reshape the profile of the medical profession, we find physicians engaged in an unseemly contest over fees. One physician compared the battle over Medicare resources to that of dogs fighting over a bone. The contest pits the primary care doctors against the surgeons as Congress looks at “budget neutral” means of increasing reimbursement of primary care doctors’ rates.

From Surgeons Oppose Plan to Pay More for Primary Care, WSJ (May 29, 2008):

Plenty of people are saying the U.S. should ante up for primary care. But where are we going to get the money? A couple of months back, the group that advises Congress on Medicare funding suggested raising payments for primary care in a “budget neutral” way. Translation: Somebody else’s payments would be reduced. Surgeons aren’t too happy about that.

More Patients, Less Care

The primary care doctors’ take on the issue finds personal expression in an editorial by a primary care physician in the Boston Globe.

From One Less Primary Care Doctor, WSJ (May 29, 2008):

She describes walking into an exam room and introducing herself to a patient — only to be told by the patient that they had met before. “Patients are angry,” she writes, describing the impersonal treatment, long waits, rushed visits and lacking follow-up that are typical elements of a trip to the doctor. “We are not offering high-quality care.”

Note: From the payer’s perspective, the question of what is being paid for should be a central concern. Regardless of promises of access to health care, the availability of quality health care services will make the critical difference in whether such promises are empty or meaningful.

An increase in the population of primary care doctors at the expense of specialists would be consistent with a migration of the U.S. health care model toward a Canadian model. That shift will, of necessity, entail a rationing of access to specialists and procedures such as joint replacement, bypass surgery, MRI’s and other procedures that U.S. patients take for granted.

Given the prospect of substantial increases in health care investments promised by the political candidates, it is clear enough that the contributors to their campaigns expect to have a say in how those dollars are spent. As government funding of health care initiatives increases, so will its influence over the physicians patients will encounter, with regard to both availability and practice specialty.

At the same time, the burgeoning government role in health care funding will concomitantly crowd out the smaller private sector payers. Furthermore, if current trends continue, physician services will be delivered via larger practice groups for various reasons, not least of which will be the need to negotiate for governmental funding and bargain for reimbursements from the flourishing managed care companies. The MCO’s will, in turn, straddle both the public sector, as fiscal intermediaries, and what remains of the private sector.

This will all take time to develop, of course, and these predictions are based on current trends which could change. These trends have some legs under them, however, from a historical perspective and the economics point in their favor – particularly when the influence of lobbyists is taken into account.
Statistical Trends – For those interested in the physician demographics, this data comes from the ACS letter on CMS reimbursements:

The Bureau of Health Professions (BHP) has cited significant workforce challenges across the surgical specialties. Between 2000 and 2005, the number of surgeons in full-time practice in the United States increased by only 3.3 percent (4,520 nationwide) whereas the number of practicing primary care physicians increased by 6.4 percent (13,850 nationwide); when obstetrics and gynecology, which is often classified as a primary care specialty, is excluded from this calculation, the actual number of practicing surgeons increased by only 1.7 percent.

In addition, between 2000 and 2005, the number of general surgeons and thoracic surgeons decreased by 4.4 percent and 4.7 percent respectively. BHP’s projections for the future of America’s surgical workforce are even more troubling: Between 2005 and 2020, BHP projects an increase of only 3 percent among practicing surgeons; if obstetrics and gynecology is excluded, the number in full-time practice in all other surgical specialties will decrease by 1.7 percent—with projected declines in thoracic surgery (-15%), urology (-9%), general surgery (-7%), plastic surgery (-6%), and ophthalmology (-1%). Over the same time period, BHP projects that the number of practicing primary care physicians will increase by 19 percent.