How it got the way it is

I do private medicine because I want to work for you.

The best transaction for both of us happens when you hire me to take care of you and in return you pay me the fee we decide is fair to both of us.

It looks as though that kind of relationship between doctor and patient won t be easily available for the foreseeable future. How did we get away from it? That we did get away from it is a crime ? but there are no criminals.

Simple doctor? patient relationships were the rule  prior to World War II. Most medical treatment was given in the home or office. Much of the surgery of the day was done in the office or home. New technology rapidly entered medicine at the end of WW II. More technologists and equipment were required. The costs of the new technology required larger organizations and bigger budgets,

Surgery and medical treatment shifted from office and home to the hospital. The more elaborate the technology the bigger the hospital and the hospital budget. Hospitals changed from serving as occasional implements for a doctor to use in the care of his patients. They became a major ? originally silent? party to the relationship itself.

Good things came of the move of patient care into the hospital. Seeing all of the different medical treatments side by side enabled practicing physicians to compare results and continue to offer those that seem to work and drop those that seem not to. Surgical
procedures became safer because of the specialized support teams developed in the hospital operating rooms.

Standards of medical care to which conscientious medical practitioners could aspire began to evolve. No holds barred peer discussions of management decisions in individual cases became a primary method of medical self improvement. The hospital chart became the basis for exhaustive discussions of the details of the patient‘s course. Regular review conferences, known as “grand rounds,” featured elegant and exhaustive analyses, and became the high point of the practice of medicine.

The term "standard,” however, attracted the legal profession with chilling effect on open discussion of any individual case. By the mid 1970 s, grand rounds faded out as patient care discussions. The hospital record became less a chronicle of thoughts and events
than a shield against suit. The physician no longer wrote in the record to inform peers. He wrote to thwart a disappointed or vengeful patient‘s attorney.

Accreditation bodies of diverse kinds came to inspect the record and judge "quality of care" ? still undefined.

A medical version of the "military? industrial complex" developed. The medical record room and  the JCAH (Joint Commission on Accreditation of Hospitals) came to need each other as does the clergyman the devil. The hospital chart now weighs the same, regardless of whether the patient spends two hours as an outpatient or two days as an inpatient.

How is all of this paid for? When medical care was home and office based the costs were, with good will,  manageable on a household budget. A visit to the doctor might cost as much as a week’s groceries and a surgical fee as much as a sofa. The move into the hospital changed all that. Charges for hospital services  representing multiples of monthly income appeared and created problems for patients the insurance industry had seemingly solved in other areas. Medical insurance emerged.

The term “medical insurance” is a bad one. Insurance is a hope by the purchaser and a bet by the insurance company that a particular event won't happen. Think of automobile or life insurance! Health care insurance is purchased purposely to be the payment tool for our medical needs.

The doctor has traditionally been a very poor businessman. As credit transactions became common in managing more and more of the household budget,  medical obligations joined the trend. The computers in the hands of large merchandisers rapidly made ever
smaller credit transactions affordable.

The  doctors’ s primitive billing systems couldn't keep up. His collection techniques caused him to fall behind the billing efficiency of his suppliers. At first he simply raised fees to make up the difference between the previously agreed upon value of what he had done and what he could expect to collect for doing it. Government would make extensive use of the doctors’ s techniques for raising fees later.

Medical care costs were also passed through to an outside world without competition from our industrially prostrate former enemies, or, for that matter,  from our equally prostrate former allies. Medical fees floated up, totally detached from the doctor patient relationship. Monetary numbers became accounting abstractions, as real as the numbers describing the national debt. The poor minority of patients who might receive a bill personally usually needed resuscitation. Such numbers flowing by convinced the public that the healing hand had the Midas touch. There were brief  moments of financial windfall for the doctors as the system jolted along during the early 60 s. Legislators, though, had already begun to exploit the chaos to noble purposes.

Promising medical care to all in the form of Medicaid was noble. Not paying for it was cheating. Legislatures bestowed "entitled" care to all. As the politicians hoped, the doctors turned once more to raising fees to those who did pay to make up for those who
wouldn‘t ? now referred to as "cost shifting". The insurance industry developed a bureaucracy to handle medical claims. The government developed a bureaucracy to handle Medicaid claims. The doctor hired a new person to deal with insurance and credit.
Neither the bureaucracies or the new employee contributed care to the patient... who paid for it all.

Hospital administrators noticed that as more services were added, more money came in. Ancillary departments such as Respiratory Therapy, Physiotherapy, and Speech and Audiology were organized, expanded, and promoted as sources of positive cash flow ?profit centers. Quality of care came to be defined by the process audit....whose welcomed principal  was: more care equals better care. A nationally mandated review program, the PSRO(Professional Standards Review Organization) pushed the process audit from the Federal level during the 1970 s. All of this monitoring activity was wonderfully free of any concern for outcome.. ? did the patient get better? The ancillaries became organized, at first academically, then operationally, and demanded independent access to the medical dollar.

The speed of change in the medical system no longer permits genteel evolution by age and attrition. Prepaid medical groups called HMO s (health maintenance organizations) had been developed as a 1940 s response by both industry and physicians to the demands of a few industries for long term stability in workers pay. The HMO industry grew as medical groups signed discounted contracts with insurance companies for the exclusive right to take care of their enrollees. The HMO physician had handed off all of his financial concerns to the insurance companies. He acquired peace of mind at the cost of percentage of income. The physician initiators of the HMO's had practiced in the simpler modes doctor/patient  relationship, and knew the value of what they were giving up and the value of what they were getting in return. Those who succeeded them have grown up professionally in the closed HMO system. They must rely utterly for information on the same administrative personnel in their organizations with whom they must negotiate for their own salaries as when they pursue their advocacy of their patients  needs. The practice style in a closed panel HMO also fosters patient identification with  the organization rather than with the individual physician.

Physician discomfort in the hospital setting combined with improved treatment methods to return the management of many disorders out of the hospital back to home and office. Hospital bed occupancy fell rapidly in the post Viet Nam period. The hospital
bureaucracy continued to grow but finally  realized the problem. Too many bureaurocrats... not enough beds. The solution was shifting into the doctors’ “income stream.” The results are the development of the MSO (Medical Service Organizations) which provide the management in  managed care plans. The simple office transaction between doctor and patient now acquired multiple layers of control and second guessing. The physician was forbidden to raise fees by contract. He needed even more secretarial help to comply with the patient’s plan’s procedures. Finally,  the physician was paying to see his patients.

Government bureaucracy is most comfortable with medical systems in which it can see itself. Shared language compels organizations of like structures...a kind of bureaucratic narcissism. The federal drive to promote HMO type medicine is a manifestation of this narcissism in the private sector just as the VA and the public health systems are the public sector  manifestation. Yet, there remains no convincing evidence that they are a practical plan to deliver generally acceptable health care more economically.

The emphasis on preventative medical care advocated by the plans favored by the bureaucracies are more of a management fantasy than a readily attainable practical and significant advance. Major advances in preventative care have occurred for the last century in the form of improvements in the cleanliness of the water supply and sewage disposal systems. Nearly universal vaccinations for childhood infectious diseases were another milestone.

The major health threats facing this country today include cancer, complications of a arteriosclerotic vascular disease, aids, and accidents. Other than the clear cut relationship between smoking and lung cancer, most other cancers which affect large numbers of people remain unexplained. The exact cause of arteriosclerotic vascular disease remains obscure. It is difficult to see what physicians can do other than nag about the life? style changes required to control sexually transmitted diseases, in giving up cigarettes, eating less and exercising more. Heredity seems to be the major factor in cancer and heart disease. Much more in the way of pure research will be required before simpler methods of dealing with these diseases will emerge. From an economic perspective alone, preventing death leads to more elderly and more costs!

Third party contrived schemes ultimately fall short because the doctor patient relationship is at its core intimately and inescapably person to person. HMO marketing themes recognize this factor and ultimately must promise what they cannot deliver. Government medical decision makers have been successful in making personal physicians available to a smaller and smaller percentage of people. Continued layering of allocation and control programs between patient and doctor siphon off ever more of the health care dollar. Physicians, nurses and administrators spend as much time ? often more time ? documenting and reviewing health care as they do delivering health care.

Private medical care may go the way of other kinds of personal craftsmanship. As the industrial age matured, homespun personally tailored clothes were a mark of backwardness, displaced by machine manufactured ready? to? wear. The tailors did not disappear. Custom made clothing is now valued in market place terms far more than it was at the time it was the only source of clothing. It is not only scarcity or novelty that has made it so but the new appreciation for the quality of the product when seen against its mass? produced competition. In the worst case, an similar development will take place in private medicine. It need not be so if the distortions induced by the multitudinous manipulators of the doctor patient relationship are prevented by the public from driving the private practitioner into the periphery of the health care market place.

The private physician continues to evolve. The amenities and technology in private practice are far better than those available in cost conscious price driven group medicine. The strength of the private medical practitioner depends on the security of having many individual buyers of one s services. Each patient offers the satisfactions of meeting a medical challenge, and also is respected as a potential source of future patient referrals. Medical interests and practice development interests coincide and reinforce each other to the ultimate advantage of the patient.

The speed of technological evolution in high quality care favors the flexible. As the well trained primary care physician demands the best for his patient his freedom of choice drives his network of specialists to excellence. Group medicine uses fixed specialty referral lines. Although the fixed referral network is predictable ? the highest administrative virtue ? it cannot remain more economical because it has no reason to evolve efficient medical practice. The  management of large groups work to isolate the entire group culture from the private practice world to eliminate discord and slow change. Isolation magnifies the effects of inexperience with market driven practice innovations. These observations would be minor internal sour grapes if the government wasn’t involved behind the scenes in herding the public into HMOs, despite their history of lackluster performance in satisfying patients. They achieved no more than 40-50% market share even with that backing.

At the moment, the public is being treated to the spectacle of the medical profession, egged on and encouraged by the private insurers, distracted and conflicted within itself over how to divide up the reimbursements provided by the insurers..who first deduct their own generous fees..from the patient’s premium payment The insurance companies have actually succeeded in getting the physicians to do the insurance company’s job..accept risk and
allocate payments... by accepting  ‘capitated’ fees. The insurers forced physicians to bid against each other for these contracts. Once the insurers  reduce fees to the level which causes the supply of physicians to dwindle, they will switch back to fee-for-service
billing in the form of PPO. These  plans mandate access for the patient to any physician, but at rates equivalent to the capitated rate. Never mind that fee? for? service billing requires more overhead dollars than fee-for-service care. To the patient, they look like the old fee-for-service.

The foreseeable outcome of this evolution will be a medical profession whose practitioners will have to come from the moneyed elite.  Don’t expect them to have week-end or evening hours, or to be available for the off hours emergency.

A reasonable solution to our current dilemma might be some version of the Hawaiian solution, based on employer health insurance. The government might provide underwriting for the catastrophic portion, say above twenty or more thousand dollars. Private insurance would have a place in providing menus of optional coverage below the national plan, with first dollar coverage strongly discouraged. Malpractice awards for pain and suffering would be limited. Of course, some limitations on medical fee growth and hospital charges would be a part of the package, which would be to the advantage of all parties. Politicians could begin to address the issue of why we spend more of our GNP on cosmetics than healthcare.

And so I am still here, my welfare committed to yours. The turmoil in medical care has driven the more timid of my colleagues to the large organized groups. Those of us who are out here in private practice are fiercely independent, proud, and seasoned in  making  decisions which combine your interests and getting and obtaining the benefits of the highest quality of current medical thinking for the least expenditure of your money. Look for us in the Yellow Pages.