Last week, the influential New England Journal of Medicine published an article by Bruce Vladek entitled "Fixing Medicare's Physician Payment System."(1)  Although only identified as working for Nexara, a health consulting business, Mr Vladek was a former administrator of what was then called the Health Care Financing Administration (HCFA) of the US Department of Health and Human Services (DHHS), the part of the department that then ran the US Medicare program.  Vladek thus can reasonably be viewed as an expert on Medicare. 

Vladek identified two main problems with the current way physicians are paid by Medicare.  First,

Medicare is captive to an arbitrary, if elegantly conceived, formula for total payments to physicians — the sustainable growth rate (SGR). In the alternate reality of the Congressional budget process, the SGR will reduce Medicare's physician payments, which already trail those from private insurers, as far into the future as the eye can see.

Second,

there is widespread consensus that the relative fees in the current system are a significant cause of the growing imbalance in supply and utilization between primary care and specialty services in the U.S. health care system. That imbalance, in turn, is widely perceived as a major cause of both excessive costs and inadequate quality of care. This is not just a Medicare problem: the Medicare Resource-Based Relative Value Scale is used by most private insurers to set relative prices for physicians.

Vladek expanded on the second point as follows

the basic mechanics of the Medicare Physician Fee Schedule, which was supposed to change physician payment to increase rewards for primary care services at the expense of procedural and interventional services, appears to have gone totally off track. For various reasons, the fee schedule, which originally did increase the prices of evaluation and management services relative to those of surgery or invasive procedures, turned in the other direction through the process of annual updating of relative value units. Surgeons, radiologists, and some medical specialists are now paid two to three times as much per hour as providers of cognitive services, which is about where we began 20 years ago; this was the situation that the fee schedule was supposed to fix.

The question of the relative virtues of primary versus specialty care can be debated ad nauseam, but in other wealthy countries that serve their populations at least as well as we do, the ratio of primary care physicians to specialists is much higher than in the United States, and the gap in compensation is much smaller or the poles even reversed. Young physicians, burdened by increasing educational debts, may well choose a career path on the basis of a major difference in compensation, especially when the better-compensated positions require less ongoing responsibility for patients and offer better working hours.

This is about all that Vladek wrote about how the imbalance between how Medicare pays for primary care and other "cognitive services," and for procedures came about. Vladek, and many others have argued that this imbalance has lead to strong financial incentives that have been slowly destroying primary care, and strong incentives that have lead to the use of too many procedures, both strong drivers of rising costs in the most expensive health care system in the world.

Vladek noted vaguely that "through various reasons," the incentives were imbalanced by "the process of annual updating of relative value units."

However, as we have discussed in several blog posts, a lot more is known about how this process got "totally off track."

In fact, in 2007, an article by Bodenheimer et al in the Annals of Internal Medicine explained the problems in considerably more detail.(2)  As we wrote then, Its main points included

• Proceduralists are often able to learn how to do their procedures more quickly, and thus increase the volume of procedures done, while office and hospital visits can only be sped up so much.
• The process used to update the RBRVS system is biased towards procedures for three main reasons: 1. "specialty society influence in proposing RVU [relative value unit] increases," 2. the specialist-heavy RUC [Relative Value Scale Update Committee] membership," and 3. "the desire of RUC specialists to avoid increases in evaluation and management [that is, cognitive, or non-procedural] RVUs."
• Medicare now uses a formula to limit increases in overall spending. The use of this formula leads to across the board cuts in all reimbursements. Since cognitive services reimbursements were never high to begin with, and have rarely been individually increased, these cuts tend to have disproportionate decreases.
• Private insurers and managed care organizations tend to follow Medicare's lead in their reimbursement procedures, but tend to tilt the playing field even more in favor of procedures versus cognitive services. Several studies showed that such payers paid more for procedures than did Medicare, but about the same for office and hospital visits.

The role of the RBRVS Update Committee (RUC) is complex and in many ways mysterious.  As we wrote before, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the RBRVS Update Committee. The RUC is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are opaque, and the proceedings of the group are secret.

To expand on the penultimate point, the current page on the AMA web-site that describes the RUC only lists its members in terms of their specialties and organizational affiliation.  Their names do not appear.  A response to a previous post by me on the subject by the then Chair and Chair-Elect of the RUC suggested that the RUC membership is not quite secret. They stated that "a list of the individual members of the RUC is published in the AMA publication, Medicare RBRVS 2009: The Physicians Guide." This publication is available from the AMA here for a mere $71.95. However, the book is not on the web, or in my local or university library, and I have no other way to easily access it.  Thus, the RUC membership as at best relatively opaque.

To expand on the ultimate point, as Goodson(3) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review."

The fog surrounding the operations of the RUC seems to have affected many who write about.  We have posted (here, here, and here) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC.  In 2010, post the US recent attempt at health care reform, the RUC seems to remain the great unmentionable.  Even the leading US medical journal seems reluctant to even print its name. 

Thus, as we noted before, however, the mysteries about it remain:

• How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.
• Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?
• How did the RUC become de facto in charge of this process?
• Why does the AMA keep the membership on the RUC so opaque, and give no input into the RUC process to its general membership?
• Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?
• Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?

Without discussing how the incentives for physicians became so unbalanced, do we really expect we can fix them?  In this case, the persistence of the anechoic effect seems to be doing real damage to the discussion of the critical issues we in the US face today.

References

1. Vladek B. Fixing Medicare's physician payment system. N Engl J Med 2010; 362:1955-1957. (Link here.)

2. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link here.)

3. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310.  (Link here.)

We have posted frequently about the role of the RBRVS Update Committee (RUC) in fixing the rates at which Medicare pays physicians. These payment rates have been much more generous for procedures than for "cognitive" services, (that is, services including interviewing and examining patients, making diagnoses, forecasting prognoses, recommending tests or treatments, and counseling patients.) Several authors have suggested that how the RUC fixes payment rates is a major cause of the decline of primary care. (See our previous posts on this here, here, here, here, here, here, and here and important articles by Bodenheimer et al,[1] and Goodson.[2])

An Interview with a former Medicare administrator

Health Affairs just published an interview(3) with Kerry Weems, a recent administrator of the US Center for Medicare and Medicaid Services (CMS) under the Bush administration, who had some remarkable criticism for the RUC.

Iglehart: The last question I wanted to ask you relates to the Specialty Society Relative Value Scale Update Committee [RUC] of the American Medical Association. The AMA formed the RUC to act as an expert panel in developing relative value recommendations to CMS. The twenty-nine-member committee essentially determines, through the relative values it establishes for the codes that form the basis of Medicare payments, how much doctors will earn from providing services to beneficiaries. In recent years the RUC has come under criticism based on the view that its specialty- dominated composition undervalues primary care services and, in some instances, overvalues specialty services. I have two questions, Kerry, regarding the RUC. You have been in government for twenty-six years; have you ever heard of an administration that has seriously questioned the RUC process, and whether CMS ought to somehow internalize it or delegate it to another body?

Weems: I think there is a general consensus that the RUC has contributed to the poor state of primary care in the United States. In many ways the supposition behind the RUC process, behind the whole relative value scale, is incredibly flawed. It's an input measurement system, so it asks, What's the cost of my inputs, and that's how I'm going to price my outputs. It has no relationship to perhaps the market value of what you might buy. So because it's highly procedure based, it's prejudiced against just standard primary care evaluation and management [E&M] visits, because in an E&M visit it's hard to document what happens in the same way that it is when you remove a mole, or perform some other procedure.

So the process itself is flawed. I don't think that we can make a change without a statutory change giving us the ability to do that. But it's something that is drastically needed. You know, it's funny that we talk about better coordination of care and creating the medical home. Well, the place where this can occur is in an E&M visit, which has been highly undervalued by the RUC.

Iglehart: You say that the RUC process is seriously flawed and needs to be overhauled. Was there ever any discussion during the eight years of the George W. Bush administration about doing that?

Weems: There were a number of discussions, but it's a hard nut to crack. Those discussions never ripened to the point where we could say we've got something better.

Iglehart: But you'd anticipate under the Obama administration that those discussions will continue?

Weems: Sure. And, you know, you can even see the early attempts at trying to crack that. Representative [Pete] Stark [D-CA] introduced last year the so-called CHAMP [Children's Health and Medicare Protection Act] bill, in which he proposed to develop a new payment approach that would have provided more money to primary care physicians. He split it up into several different categories. This probably wasn't the right approach, but again, he was trying to work through the problem, trying to provide more money for primary care. His heart was in the right place.

There are a number of important points here.

First, a former CMS administrator charged that the RUC has a substantial role in the decline of primary care in the US. Such charges have been made by well-reputed academics who have analyzed the role of the RUC from the outside. But as we have said before, aspects of what the RUC does are obscure, especially because the proceedings of RUC meetings are not made public. But now someone more directly involved has made the same charges.

Second, a former CMS administrator has called the "RUC process ... incredibly flawed." Even the second Bush administration felt these flaws were sufficient to have "a number of discussions," but found "it's a hard nut to crack." Hence he said that although there is something fundamentally wrong with the "RUC process," the government could not easily fix it.

Yet RUC leadership has repeatedly said that the RUC is merely a private advisory committee which gives recommendations to CMS using its rights to free speech and to petition the government. (Note also that above, Inglehart first said that the RUC was formed as "an expert panel" to make "recommendations." But then he said the committee "determines ... how much doctors will earn.") If the RUC is simply an advisory committee, and CMS did not like the advice the RUC was giving, why couldn't CMS leaders simply ignore the RUC?

Weems' remarks do not make sense if the RUC is merely an outside private group providing advice. But they do make sense if the RUC is acting like a government agency.

So this interview once again raises the question: why does CMS rely exclusively on the RUC to update the RBRVS system, apparently making the RUC de facto a government agency, yet without any accountability to CMS, or the government at large?

A response by the Chair of the Board of the AMA

Within days of this interview, Dr Rebecca Patchin, the Chair of the Board of Trustees of the American Medical Association (AMA), wrote a response to the Weems interview. (Amazingly, the response appeared as a blog post on the Health Affairs Blog.)

First, she implied that a former CMS administrator did not know what he was talking about when it came to the RUC.

In the interview, inaccurate statements were made about the role of the AMA/Specialty Society RVS Update Committee (RUC), which advises CMS regarding the relative levels of reimbursement for different medical procedures performed by physicians.

Now I feel like I am in good company. The leaders of the RUC have charged that I made inaccurate statements about the RUC as well (see post here).

However, Dr Patchin failed to identify any particular statements by Kerry Weems or his interviewer as inaccurate, much less provide any evidence to that effect. Note that while the RUC leaders also charged me with making inaccurate statements, they did not specify any particular statements as inaccurate, much less produce evidence in support of their contentions.

Next, Dr Patchin wrote:

Every time the RUC has been asked to review payments for E&M (evaluation and management) codes, the RUC has sent CMS recommendations that would lead to higher payments.

This may be so, but it ignores an important issue. While the RUC may have made some recommendations to increase payments for cognitive services, it has made many more recommendations to increase payments for procedural services. Furthermore, while payments for individual procedures went up, and the volume of procedures also went up, the global budget for physicians' services, called the Sustainable Growth Rate (SGR), resulted in across the board cuts. Since raises for procedures were larger and more frequent than raises for cognitive services, the net effect was that payments for procedures increased relative to cognitive services.

Even more important, it begs that question: what has the RUC done at times when no one asked it "to review payments for E&M ... codes?" After all, the RUC leadership has argued again and again that it is only a private advisory committee (and see below for another such argument). As such, it should be able to choose how often it deals with payments for cognitive services. It should not have to wait to be asked to review them. So why wasn't the RUC reviewing these payments more frequently?

Then, Dr Patchin reiterated:

To clarify: The RUC makes recommendations to CMS, and then CMS makes its payment decisions.

and again,

Bottom line: the RUC makes recommendations, CMS makes payment decisions.

This, once more, begs the questions. Why didn't the RUC make more recommendations to improve payments for cognitive services? Why doesn't CMS get recommendations about payments to physicians from sources other than the RUC? Why doesn't CMS make the process for setting physicians' payments, and updating and revising the RBRVS system more broad-based and transparent? Why did the administrator of CMS feel unable to change or ignore the "RUC process?"

I don't have the capacity to find out the answers to these questions. Answering them might take some investigative reporting, or even a Congressional investigation. Given that physicians' payments are key incentives driving the health care system, and that payments favoring procedures are likely to be a major cause for rising volume and costs of procedures, which, in turn, is likely to be a major reason our health care system is so expensive, why do we know so little about how these payment rates are set?

References

1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. Link here.
2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. Link here.
3. Iglehart JK. Doing more with less: a conversation with Kerry Weems. Health Aff 2009; http://content.healthaffairs.org/cgi/content/full/hlthaff.28.4.w688/DC1

On July 7, President Obama appointed Dr. Donald Berwick as Administrator of the Centers for Medicare and Medicaid Services (CMS). Dr. Berwick, a pediatrician, is well known as the CEO of the non-profit Institute for Healthcare Improvement (IHI), which "exists to close the enormous gap between the health care we have and the health care we should have — a gap so large in the US that the Institute of Medicine (IOM) in 2001 called it a 'quality chasm'.” Dr. Berwick was one of the authors of that IOM report. His IHI has been a major player in the patient safety movement, most notably with its "100,000 Lives Campaign" and, more recently, its "5 Million Lives Campaign."

Berwick's CMS gig is a "recess appointment": it was made during the Senate's July 4th recess period, without a formal confirmation hearing---although such a hearing must take place before the end of this Senate term, if he is to remain in the position. A recent story suggested that Obama made the recess appointment in order to avoid a reprise of "last year's divisive health care debate." The president had originally nominated Berwick for the position in April, and Republicans have opposed "Berwick's views on rationing of care," claiming that he "would deny needed care based on cost."

A "Patient-Centered Extremist"

If there is a problem with the appointment, it is likely to be roughly the opposite of what Republicans might suppose: Dr. Berwick is a self-described "Patient-Centered Extremist." He favors letting patients have the last word in decisions about their care even if that means, for example, choosing to have unnecessary and expensive hi-tech studies. In an article for Health Affairs published about a year ago, he explicitly argued against the "professionally dominant view of quality of health care":

I think it wrong for the profession of medicine—or any other health care profession, for that matter—to “reserve to itself the authority to judge the quality of its work.” I eschew compromise words like “partnership.” For better or worse, I have come to believe that we—patients, families, clinicians, and the health care system as a whole—would all be far better off if we professionals recalibrated our work such that we behaved with patients and families not as hosts in the care system, but as guests in their lives. I suggest that we should without equivocation make patient-centeredness a primary quality dimension all its own, even when it does not contribute to the technical safety and effectiveness of care.

A new definition. My proposed definition of “patient-centered care” is this: The experience (to the extent the informed, individual patient desires it) of transparency, individualization, recognition, respect, dignity, and choice in all matters, without exception, related to one’s person, circumstances, and relationships in health care.

Does this mean that Dr. Berwick would also eschew professional, i.e., expert, judgment in favor of patients' wishes? In a word, yes:

Evidence-based medicine sometimes must take a back seat. First, leaving choice ultimately up to the patient and family means that evidence-based medicine may sometimes take a back seat. One e-mail correspondent asked me, “Should patient ‘wants’ override professional judgment about whether an MRI is needed?” My answer is, basically, “Yes.” On the whole, I prefer that we take the risk of overuse along with the burden of giving real meaning to the phrase “a fully informed patient.”

Dr. Berwick is not so naive as this opinion might suggest. He envisions a "mature dialogue" in such a case, and argues that "if, over time, a pattern emerges of scientifically unwise or unsubstantiated choices...then we should seek to improve our messages..." He also admits that there might be an occasional patient whose demands are so unreasonable that "it is time to say, 'No'." That exception, he argues, should not dictate the rule.

There are situations in which most civilized people would agree with Dr. Berwick's view of 'patient-centeredness'. In both the Health Affairs article and in his recent address to the 2010 graduating class of the Yale School of Medicine, he offered real examples of petty, arbitrary hospital rules causing unnecessary sorrow for patients and their loved ones. It is in such contexts that he makes a convincing case that health professionals ought to behave "as guests in their lives." In an interview for the New York Times, he argued:

We don’t have a standard of services or processes that are comfortable for patients. We have built a technocratic castle, and when people come into it, they are intimidated.

Nothing to disagree with there. To create that standard, moreover, would not undermine settled medical practice ethics---it would celebrate them, even as it rightly embarrasses the profession for having taken so long to do so.


Enter the Woo

Eschewing the scientific basis for modern medical practice, however, is another matter. In February of 2009, Dr. Berwick gave a 'keynote' address at the IOM and Bravewell Collaborative-sponsored Summit on Integrative Medicine and the Health of the Public. He shared the podium with Mehmet Oz, Dean Ornish, Senator Tom Harkin, and other advocates of pseudoscientific health claims. I wrote about the conference at the time, mainly to call attention to its misleading use of the term "integrative medicine": literature emanating from the Summit characterized it as "preventive" and "patient-centered," whereas the only characteristic that distinguishes it from modern medicine is an inclusion of various forms of pseudomedicine.


I noticed that Dr. Berwick was on the speaker roster, which I found disappointing: I imagined that he had either gone over to the Dark Side or, perhaps, was sufficiently naive about the topic to have been duped; or, more likely, that he had cynically accepted the offer to further his ambitions. I didn't bother to listen to his speech until the CMS appointment was announced a few days ago.

It is troubling, to say the least. Dr. Berwick did not argue, as he had in the NYT piece, that "If we doctors feel a person is going to make unwise choices, we have to take on the responsibility of being teachers, educators and informers." Rather, he praised his fellow speakers, most of whom were spouting nonsense, for their "reach" and "eloquence." He praised the IOM for its "glorious record...in pursuit of better designs in health care...traditional, allopathic curative care and now migrating into this distinguished and important new arena." He mentioned homeopathy and acupuncture, not to wonder why they should be promoted as effective, but merely to warn that they will fail---presumably in some economic sense---if they try to compete with each other for reimbursement.

Such language, and Dr. Berwick's very presence at the Summit, were a far cry from advocating "patient-centeredness." What they amounted to was a generous endorsement of pseudoscientific practices and of the socio-political movement that promotes them. Even granting some naivete on his part (he called himself "an amateur at this topic"), he must have known this. Such an endorsement, unlike tearing down the "technocratic castle," has ethical implications at least as profound as those that Dr. Berwick tacitly or explicitly relies upon to support his arguments for patient-centeredness.

"Physicians have no Immunity to Moral or Ethical Constraints"

The relevant medical ethics treatises (reviewed here) are in substantial agreement that it is unethical for physicians to prescribe scientifically implausible methods or to refer patients to other practitioners for the same purpose. They are also in agreement that it is unethical to prescribe a placebo to a patient while claiming that the treatment has specific biologic activity---a point that has been vigorously argued in the UK this year, with regard to homeopathy. These ethical tenets are not mere odes to nerdy, sciency thinking; they are matters of honesty and integrity---fundamental bases for ethical interactions between physicians and patients.

In 1983, philosophers Clark Glymour and Douglas Stalker published an article in the New England Journal of Medicine titled “Engineers, cranks, physicians, magicians.” They framed modern medicine as follows, comparing it to what was then called "holistic medicine" (the article is quoted extensively here):

Medicine in industrialized nations is scientific medicine. The claim tacitly made by American or European physicians, and tacitly relied on by their patients, is that their palliatives and procedures have been shown by science to be effective. Although the physician’s medical practice is not itself science, it is based on science and on training that is supposed to teach physicians to apply scientific knowledge to people in a rational way.

The practice of medicine in the United States and in other industrialized nations is a form of consultant engineering...

That statement is just as accurate now---even more so, in this era of Evidence-Based Medicine---as it was nearly 30 years ago, even if some might find the likening of medicine to engineering displeasing. Nor is it at odds with almost any definition of "patient-centeredness," other than one that presumes that the patient's desires trump the physician's ethics:

A physician engineer can act as consoler; nothing in either logic or social psychology forbids it. But certain combinations are impossible or extraordinarily unlikely. A physician engineer cannot honestly claim powers of magic or occult knowledge. The principles governing scientific reasoning and belief are negative as well as positive, and they imply that occult doctrines are not worthy of belief. Moreover, physician engineers have no immunity to moral or ethical constraints. On the contrary, they are by training and by culture enmeshed in a tradition of rational thought about
the obligations and responsibilities of their profession.

Dr. Berwick---if he really believes what his presence and words at the "Integrative Medicine" Summit imply---is playing with ethical fire. (If, as I hope, he doesn't really believe those things, he's playing with ethics of another kind). Will we begin to see pseudomedicine "integrated" into Medicare and Medicaid? That is certainly the expectation of those who observed Dr. Berwick's performance at the Summit, and who appear intent to hold him to his word.

KA

Two other blogs that have addressed this issue are:

Dr. RW: Not only evidence based medicine but science based medicine may take a back seat in Donald Berwick's vision for patient centered care

Dr. David Gorski: Dr. Donald Berwick and “patient-centered” medicine: Letting the woo into the new health care law?