U.S. Health Spending Hit $3.3 Trillion in 2016 and the Cost of Physician Burnout

health diner991With all the discussion regarding taxes and cutting of taxes, especially from the rich corporate greedy people and the replacement of the Affordable Care Act one has to wonder how we are going to pay for healthcare. Especially when we consider the cost of health care.

National health spending decelerated a bit in 2016, with a growth rate of 4.3% — versus the 5.8% growth rate seen in 2015, according to figures released Wednesday by the Centers for Medicare & Medicaid Services (CMS). But spending growth slowed by 1.5 percentage points from year before.

The increase in 2016, though smaller than the previous year, pushed per-capita spending on healthcare over $10,000 for the first time.

The slowdown in spending growth “was broadly based — growth slowed for three major payers: private insurance, Medicare, and Medicaid,” Micah Hartman, a statistician at the CMS Office of the Actuary said at a briefing sponsored by Health Affairs. “The slower growth in Medicaid and private insurance reflected slower growth in enrollment, as most of the impact in the ACA [Affordable Care Act] coverage expansion occurred in 2014 and 2015.”

Spending slowdowns also occurred in the majority of medical goods and services, led by prescription drugs, he said. In particular, growth on spending for physician care and other clinical services dropped to 5.4% in 2016, compared with 5.9% the year before, said Anne Martin, an economist in the CMS Office of the Actuary.

Physicians and clinical care spending “slowed slightly but remained relatively strong,” Hartman said. “The main drivers of slower growth in 2016 were Medicaid and Medicare. The deceleration in Medicaid was due in part to slower enrollment growth, [while] the deceleration in Medicare was driven by a slowdown in Medicare Advantage physician expenditures.”

The growth in non-price factors such as service use and intensity of services increased by 3.8% and drove spending in 2016, albeit at a slower rate than the 4.5% increase in 2015, he added.

Untitled.cost of healthcare.1Hospital spending increased by 4.7%, to $1.1 trillion, which was a 1-percentage point drop from the 2015 growth rate. “In 2016, hospital utilization … showed a decline in the number of inpatient days and hospital discharges,” said Hartman. “At the same time, hospital prices were up slightly from 0.9% growth in 2015 to 1.2% growth in 2016 … From a payer perspective, Medicaid and private health insurance spending [on hospital care] slowed in 2016, mainly driven by [slower] enrollment growth. Medicare hospital expenditure growth remained flat for the fourth consecutive year.”

In addition, spending on retail prescription drugs increased 1.3%, to $328.6 billion, a large drop in the rate of growth compared with the 2015 increase of 8.9%.”The slower growth in 2016 was driven by fewer new drug introductions and less spending for new drugs to treat hepatitis C,” Hartman said on an afternoon phone call with reporters.

At the briefing, Martin noted that the decrease in overall spending for hepatitis C drugs “was about $3 billion from 2015 to 2016, according to outside sources, so there is still over $10 billion being spent on hepatitis C patients.”

She added, however, that “in the first 2 years when the drug first came out, that’s when they were reaching people who needed treatment the most, and once they cured the patients they reached, the utilization dropped off so fewer patients were being treated in 2016, and there was also some price effect because manufacturers were offering higher rebates.”

Despite stories about large price increases and eye-popping prices for new cancer treatments, “some of the drugs … showing up in the news lately are relatively smaller in utilization and the number of prescriptions dispensed, and some are generics, which are less expensive, so they haven’t been moving the needle,” Martin said. “Higher-priced specialty medications such as [the hepatitis C treatment] Harvoni have come in over $10 billion per year for the last 3 years, so those are the ones impacting spending growth.”

As for how the healthcare dollar was divided up in 2016, 32% went to hospital care, followed by 20% for physician and clinical services and 20% for “other spending,” according to the report. Prescription drug spending accounted for another 10%, while “government administration and the net cost of health insurance” accounted for 8%.

Despite the slowdown in spending growth, total healthcare expenditures still grew faster than the overall economy, so healthcare’s percentage of the gross domestic product increased, rising from 17.7% to 17.9%, Hartman said.

Untitled.cost of healthcare.2

One unusual feature of this year’s numbers was the slowdown in growth among all three major categories of goods and services (hospital care, physician and clinical services, and prescription drugs) and the spending by all three major players — Medicare, Medicaid, and private insurance, Micah said on the phone call.

“The most recent time we saw all three major categories of goods and services slow [at once] was in 2010, but I don’t think we’ve seen recently the three major services and the three major players slow down,” he said. “We saw two major things in 2014 and 2015: an enrollment expansion that impacted both Medicaid and private health insurance, and rapid spending growth in retail prescriptions drugs. When you add people to the rolls of private health insurance and Medicaid, they’re going to be using all types of medical goods and services, and when that starts to wear off, you see the slowdown we saw in 2016.”

And the cost of the physician burnout??? This is adding ot the cost of healthcare. An  article from Reuters explains how gardening, Yoga and personal coaches really haven’t done anything to stop the rising rate of physician burnout.

Some leading healthcare executives now say the way medicine is practiced in the United States is to blame, fueled in part by growing clerical demands that have doctors spending two hours on the computer for every one hour they spend seeing patients.

How are these people called “leading executives” if they are just figuring this out now?  Sounds like they are idiots to me because they have been told for years what was happening.  And the only reason these executives, and the hospitals they consult to, care is because they just realized it is costing them money.

Experts estimate, for example, that it can cost more than a $1 million to recruit and train a replacement for a doctor who leaves because of burnout.

Kelly reports form the Washington Times that “Around six million Americans today have clinical Alzheimer’s or some other form of dementia, with that number expected to more than double in the next 40 years,” researchers projected in findings published online Dec. 7 in Alzheimer’s and Dementia: The Journal of the Alzheimer’s Association.

And according to the NBC News website, investigators arrived at these projections after collecting “all the data they could find from studies of Alzheimer’s disease,” then examining studies involving people with current cases of Alzheimer’s and mild cognitive impairment.

Imagine adding these patients to Medicaid and Medicare, especially when Senator Ryan stated that this coming up this coming year they are going to look at cutting Social Security, Medicare and Medicaid to reduce the deficit increase created by this new tax reduction bill. Is this really fair, ethical and does it make any sense??

I think it is important that we need physicians who are business leaders. Davis Liu reviews this important concept. “Does physician leadership matter?” asks cardiologist and author Dr. Sandeep Jauhar in his New York Times opinion piece “Shouldn’t Doctors Control Hospital Care?” He opens his piece with the termination of the elected leaders of the medical staff office at the Tulare Regional Medical Center due to poor performance. He answers his rhetorical question with the obvious and simple response that doctors should control hospital care. Though he cites physician-led and well-respected healthcare organizations, like the Cleveland Clinic and Mayo Clinic, his conclusion begs a different question. In the past, doctors were in control of hospital care, so why the shift to businesspeople running hospitals?

The issue lies in the false dichotomy Jauhar and others often create by asking whether physicians or businesspeople should ultimately be responsible for hospital care. A complete answer would be the importance of physicians leaders embracing both medical and business perspectives.

Physicians leading alone are not enough.

Today, it takes more than a medical degree to lead a healthcare organization. Physician leaders must embrace the new expectations of doctors, patients, and purchasers. Insurers, regulators, and employers demand more transparency on quality outcomes, preventive testing and screening rates, as well as costs of tests and procedures. Data needed to be collected, analyzed, and reported. Process improvements plans need to be implemented to close care gaps. Patients, who decades ago would have died or survived surgery, now recover but are more complex with more comorbidities and illnesses. The clinical care needed requires a multidisciplinary, team-oriented, and systematic approach. With all of these demands, doctors and staff are facing epic levels of caregiver burnout and stress.

Is it possible that physician leaders delegated these challenges, reporting, process improvement and management tasks to businesspeople? Doctors went to medical school to be clinicians and care for patients. Even today, medical school education is essentially unchanged from decades ago. Few schools offer the business training and the mindset needed to enter this new era of higher expectations of improved access, better quality at lower cost with increasing levels of physician, and staff disengagement. Is it possible that since few physicians had an interest, desire, or training in these areas that businesspeople consolidated more power?

The type of physician leader matters.

But businesspeople don’t understand medical care any more than physicians understand the science and discipline of business. Often both camps don’t respect enough the other’s unique language, perspective, and focus to solve the common issues. This has to change. Despite caricatures in healthcare, there are mission-driven charitable businesspeople and greedy, unethical doctors.

Many great clinicians don’t aspire to become physician leaders. Yet, partnering and helping businesspeople understand our challenges, embracing the science, perspective, and discipline of business to solve problems — and overcoming these biases and obstacles — are the keys to success for organizations like the Mayo Clinic, which Jauhar highlights for excellence. Doctors at Mayo Clinic are expected to take on leadership responsibilities during their time there, work collaboratively with businesspeople, and still be practicing clinicians. As noted in Management Lessons from Mayo Clinic: Inside One of the World’s Most Admired Service Organizations, ” … physicians must distinguish themselves in their specialties before assuming leadership roles … [leaders] are asked by their peers to make a sacrifice for the good of the Clinic.” By taking on these roles, most of these leaders “confess they have a sense of loss as a result of sacrificing at least a part of the clinical and academic careers they have already established.”

However, these chosen “reluctant” leaders are precisely the ones needed to make Mayo so successful. The organizational culture at Mayo is such that “if physicians appear conspicuously ambitious for high positions in leadership, their chance of rejection is high.” In addition, physician leaders are supported by administrators who also “must be team players” and who are willing to join the Clinic even though “the top positions all go to persons with the title of ‘MD.'”

A study at Mayo found that “behaviors of physician supervisors have a direct impact on the personal well-being of the physicians they lead,” but that “physicians often receive little training in how to be an effective leader” and that “new strategies are needed to identify potential physician leaders and better prepare them to lead.”

It is clear that, at Mayo, physicians are in charge. Those who lead are doing so for the greater good of the entire organization with the strong support of businesspeople.

Physician leaders need to ask the difficult questions to make care better.

A recent article in STAT, “Not even the mattress pads were spared: An inside look at a Brigham and Women’s Hospital’s struggle to cut costs,” highlights the skills needed for physicians leading hospitals. It is about trust and understanding the needs of doctors and staff.

When CEO Dr. Ron Walls faced a shortfall of tens of millions of dollars, his team reviewed expensive assets like ORs and MRIs to see if they were being used effectively.

Though surgeons were seen as the “key power center of the hospital” and OR schedules were considered so sacrosanct that hours are written into employment contracts, Walls and his team wondered if they could improve on the OR utilization which ran in the low 70 percent range. This meant that a significant number of OR times were staffed and available but unused because cases were not scheduled. To maximize OR access and with the support of Brigham’s chair of surgery, individual surgeons agreed to give up unused reserved block time ten days in advance for other surgeons to use. In return, they were guaranteed that they would also have access to the OR at the last minute. This change required a level of trust that comes only from physicians leading physicians.

A couple of months later, ORs were running at 85 percent capacity. The number of surgical cases increased, patient access to the OR improved, and the hospital closed its financial gap.

The future is bright if doctors lead.

At the recent Permanente Executive Leadership Summit, senior physician leaders of all the Kaiser Permanente regions affirmed their commitment to the following:

We are here to make a difference in people’s lives.

  • To practice what we believe, and to fulfill the promise of medicine
  • To serve, to heal, to do right by our patients, and to bring compassion, dignity, and humanity to healthcare

Jauhar was partially right. If physicians wish to maintain our autonomy and professionalism, then we must embrace the importance and role of physician leaders. Physicians must lead and control hospital care. However, they will need to embrace the duality of both the science and discipline of business and medicine if they are to be successful. Like the physician leaders of Mayo and Permanente, this is an added burden, responsibility and sacrifice past and current physicians weren’t necessarily trained or expected to do. Yet, no one else is better suited to make the changes needed to make care better, more affordable, and accessible and improve professional satisfaction than physician leaders.

Next we should consider the various single payer systems to be considered. Let’s start with the famous Bernie Sanders and his solution to the health care problem.

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