Changes in Medicine affecting the Doctor-Patient relationship

Medicine today and the paradigm of medicine has changed drastically.  Years ago, a doctor took care of a patient and the sacrosanct relationship of doctor to patient was paramount.  Based on that was trust.  A family if two or three generations was taken care of by a doctor who also trusted them.  The Health Maintenance Organizations or HMOs eventually developed and enticed physicians to join panels for a little less income but more patients.  In order to facilitate taking care of more patients, which we are trained to do.  Some patients were not on the plan and neither were doctors, and so, therefore, it separated them and their trust leading to ER’s as the purveyors of healthcare.

Unfortunately, with the advent of insurance, profitability and Medicare the economic sustainability of a medical business is in question.  What a physician makes is irrelevant because a medical business must have enough income to be able to keep the lights on, pay the overhead, pay the staff, pay the computer, electronic health records, etc.  This downward trend in the last fifteen to twenty years has been quite disturbing and I have watched this since 1985. I am reminded of the movie the Best Exotic Marigold Hotel which says “it will always get better in the end but if not better yet, it is not the end”.

The changing paradigm of medicine, as I mentioned earlier, does not preserve the doctor patient relationship.  Healthcare is not insurance or a hospital but every one of us physicians and our relationship with patients.

The Medicare Act of 1965 mandated certain payments which were not constrained. Regular insurance came along in the 1940’s tied to employment like the Kaiser Plan in California.  The diagnosis related groups were an effort by Medicare in the early 1990’s to put a handle on the costs generated by hospitals and targeted certain hospital procedures for fixed reimbursement to limit costs.  The SGR, Sustained Growth Rate Formula, was a bucket of money that everyone took their surgical fees out of, Medicare Part B.  This was put together with the Contract for America in 1996 by, Newt Gingrich.  He said he would change it but he never did because he was no longer there.  The more people do surgery out of the same bucket of money, the less money per surgery and what happened was, it trickled down to an economically unsustainable amount of money.  This was rescinded in 2015 and substituted by the Meaningful Use Criteria, the Merit Based Incentive Payment System, and finally the Medicare Access and Chip Reauthorization Act of 2015, or MACRA as we know it and the strings and attachments and constraints in this with electronic medical records has begun making things worse for physicians and their care of patients.

The Affordable Care Act of 2010 threw another wrench into the system with forced legislation with no Republicans voting for it and there was significant collusion of the government with hospitals, insurance companies and pharmacies.  Hospitals and insurance could get on board because their Medicaid payments were subsidized by the government but pharmacy would not get on board until the Affordable Care Act offered them 115% of retail.  So now we have the government pulling the wagon with insurance, hospitals and pharmacy in it and doctors behind.  A Bitter Pill is a book written by Steven, Brill, a Time Magazine writer who, in his book, underlined that big pharma agreed to participate when offered 115% of retail to participate in the ACA.

Another thing that happened in the last twenty years is the business of narcotics.  Narcotics in the late 1990s grew and the short version is when pain was discussed in a New England Journal of Medicine article in 1980 as the 5th vital sign.  No one should be in pain and no one in pain become addicted.  Suddenly the green light came to produce stronger medications, specifically OxyContin.  At the same time, some of the more benign narcotics like Darvocet were dropped off the market with some fictitious argument that they cause cardiac arrhythmias.  In my community, with four or five cardiologists, none of them ever saw an issue with Darvocet.  So, the pain measurement scale of smiley faces and sad faces form a 1 to 10 scale came into being.  OxyContin cause abuse.  Pill Mills occurred because of simultaneous reduction of medical doctor’s reimbursement, using Medicare as the default reimbursement standards.  Prescriptions led to dependency and then the pill mills which were eventually stopped here in the State of Florida thru Legislation.  The dependency of the patient became paramount and they went to a cheaper drug, Heroin, and now Fentanyl, and the EMTs have used Narcan sometimes 6-8 times a day to try and save lives.  So, the epidemic of narcotics was by government dictum essentially and it spawned companies making billions of dollars in the Forbes Top 20 from narcotics, like Purdue Pharmaceuticals.

Pain is a symptom; it is not a diagnosis and I use the analogy if a car does not start you don’t just go change the battery.  You find out what is wrong.

I believe the failure of the AAOS leadership to help us to assert control of government dictums have led to problems today.  The AAOS should have spoken up when Medicare started reducing rates.  I live in a community in South Florida where Medicare is the top payer and insurance companies pay 70-80% of Medicare.  Medicare has reduced 70% the past 30 years.  Dr. John Tongue, in 2011, sent an urgent appeal out to lobby congress not to remove our ancillary businesses, MRI’s, durable medical equipment, physical therapy, etc.  This was a mandate for smart, bright and intelligent doctors to make up the difference in what they were not making and so we had difficulty defending that because we could not make a reasonable amount of economic sustainability doing what we were trained to do, IE: surgery.  The fact that the healthcare industry spends more on lobbying than aerospace, defense, gas, and oil combined, shows where the money is going.

The education of physicians to the problems and responses of this by our organizations is paramount.  Many doctors are being trained today without the understanding of what I Have just outlined.  The AAOS PAC in Washington DC is in the top 10 with almost four million dollars now and we are progressing with 25% participation.  At this point in time, we have an audience in Washington.  Having been to the NOLC for the last eight years, the asks are sometimes soft and should be harder but without a check in hand and without spending of money for various issues, we have no say.  The old saying that if you are not sitting at the table, you are what is for dinner, is true.

Medicare, is the reimbursement standard and is reduced 70% in the last 30 years.  You go to and you can find an article I wrote on Medicare reimbursement by the Economic Committee that I put together in the Board of Counselors several years ago.  This has brought forward and outlined the reduction of Medicare reimbursement, demonstrating Medicare sustainability which has been reduced 70%.  An alternative payment is put together by Cuomo of New York when he found United Healthcare, was using a company called Ingenex to down-code their CPT codes.  This was essentially fraud, he sued them and got tens of millions of dollars to put together a not-for-profit called which outlines what legitimate reimbursement is.  Our consumer price index has doubled in the last 30 years and with reduction of Medicare, has destroyed economic sustainability of private practice.  This affects young doctors in debt to $200,000 plus, facing employment.

Another thing that needs to be discussed is the medical loss ratio, MLR.  It is a ratio of claims insurers pay out to hospitals, doctors and other to collected premiums.  You have a hundred million dollars in insurance collected and eighty million dollars are paid out, twenty million dollars is the profit.  The medical loss ratio is 80%.  This is now an affordable care mandate whereas before, many companies did not spend the full 80%.  Therefore, small checks were returned to people during the Affordable Care Act.  In other countries, the medical loss ratio is 95% with 5% administration and Medicare is 99% with 1% administration.  Unfortunately, people have found loopholes with Medicare which has created the fraud we see here in Miami.  A low medical loss ratio equals a higher profit and should be applicable to every hospital for transparency.  The SGR cut fees proportionately for doctor’s income and never increased during the healthcare boom.  Doctors are targeted as the prime drivers of cost.  If you are having trouble with this logic, there is no logic.  Physicians only get 8 cents of the medical dollar.  The rest goes to hospitals and insurance companies.

The relative value units, RVUs, with CPT codes translates open surgery with blood, tissue, bone and screws to a sterile number that can be devalued and computerized and suddenly the value of what we do in the operating room is diminished and not understood by non-medical people.  We need to participate in legislation with political action committees and proactive with hospital systems and education of what happens in the operating room.

We are economically removed from participating in the reality of business.  55% of doctors nationwide are now hospital employees and 25% or more are orthopedists.  In South Florida, indemnity, or liability or malpractice insurance is unattainable because we have been removed economically from participating and the cost is beyond a private practice income.  Healthcare Insurance has eliminated real pricing, therefore, there is no competition.  A price competition would make prices plummet with a free market.

We need to put transparency into hospitals and insurances and the medical ratio should be applied to hospitals.  This comes from an article by Steven Weissman in the Miami Herald on 02/12/2016 and underscores the issues that we are dealing with.   Further information from that article revealed that the Affordable Care Act and the medical loss ratio of 80% has legally enshrined higher medical costs as the only means for the insurance industry to grow profits.  So, higher hospital bills with contractual arrangements with insurance companies equals higher premiums which equals a higher 20% profit.  Insurers benefit from higher costs while patients cannot protect themselves from lack of a clear price.  With real transparent prices, patients should be empowered to shop for value and not price and never face punitive out of network prices.  We have all the responsibility now and none of the control and it is like rearranging the deck chairs on the Titanic.

The free market economically is working to the negative.  As I mentioned, 55% of doctors are employed, as of four years ago, nationwide 25% of orthopedists are employed. The AAOS needs to vigorously step up to the plate as they well may become an organization of employed physicians having little allegiance to the organization that will be a certification and education entity only.  To quote Malcolm Gladwell, a write for the Boston Globe, “you don’t train someone for all those years of medical school and residency, particularly people who want to help others, optimize their physical and psychological health, and have them run a claim processing operation for insurance companies.  Let’s prevent a race to the bottom”.

So, where do we go from here?  The opportunity for sustainability has evolved into self-payments for doctors, concierge services, ambulatory surgery centers and physician owned hospitals, hospital employment and medical tourism to name a few.  What are my colleagues to choose to do?  The direction is up to each of us and the revered profession of orthopedic surgery is fragmented into a technical exercise.  With our hopes with the new administration, Tom Price and the revamping of the Affordable Care Act, the focus needs to be restoring the Doctor-Patient relationship.  MDs have been in the backseat.  The only reason hospitals and insurance companies exist is because we practice medicine.  “Healthcare” is us, not the for-profit insurance companies or the profiteering hospital.  We train for twelve years and now we are forced to work for those entities, relinquishing our sovereignty.  The compliance by doctors is guided and insured by our organizations, the AMA, the AAOS, North American Spine Society, etc., being agreeable and interpreting and feeding us the constant onslaught of regulations, which are onerous.  One cannot open a solo or small group practice any more in South Florida and be economically sustainable to make it work.

The expensive healthcare in Miami-Dade County is the highest in Florida and is the highest county in the United States according to Florida Hospital Association on NPR recently.  The cost is not doctors, who receive eight cents on the medical dollar, it is the business if medicine.  Our Florida Orthopedic Society has been chipping away at retroactive claw back of reimbursement from insurance companies statewide through legislation, a great start.  How can organized medicine support and return us to the position of independence apart from insurance and the hospitals and take back control of our practices?  Elimination of Maintenance of Certification is a good start.  How can the AAOS push forward to elevate our profession to not be controlled and restore sovereignty and establish an economically sustainable practice.  I will reiterate my article called “Medicare Reimbursement” in 2012 in AAOS Now outlines the economics of the problem and can be googled, putting my name next to it.  Restoration of the doctor patient relationship is needed.  All MDs working for hospitals work to build relative value units, necessary to justify salary numbers and affecting judgement and indications and doing questionable surgeries and poor quality of decision making even in academic institutions with professors and residents.

Pressure by administrators forces more volume and more lucrative surgeries.  How can AAOS reshuffle the paradigm to give us this change?  Recently, I was asked by my office manager if I was available for a peer to peer phone call at 2PM several Fridays ago to talk to someone at an insurance company about a spine fusion and its indications for surgery that I had scheduled and they failed to approve.  Who gave them the control?

I have been doing legitimate surgeries for thirty-five years and in just the past years have been subjected to this difficulty.  What can the AAOS do to change this?  These are just a few thoughts and maybe contributions by our readers would be helpful.

Respectfully yours,

John C. Nordt, MD