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Can President Obama Really Reform Healthcare System for Physicians?

Barack H. Obama is sworn in by Chief Justice John Roberts as the 44th president of the United States.  (Photo by Mark Wilson/Getty Images)
Barack H. Obama is sworn in by Chief Justice John Roberts as the 44th president of the United States. (Photo by Mark Wilson/Getty Images)

Bill Clinton made an effort, albeit unsuccessful, to advance his healthcare reform agenda.  George W. Bush didn’t get very far, either.  Now, after outlining plans during his two-year campaign, it’s President Barack Obama’s turn to try to implement his vision for healthcare reform.

Healthcare reform as a campaign platform is intended to appeal to the largest possible audience while providing sound bites that are easily learned and repeated by the affected public.  But for physicians, who are often overlooked in the major bullet points, how will President Obama’s initiatives directly affect them and their practices?  And, most importantly, will change finally come to our healthcare system?

“No Presidential candidate’s health reform plan has ever been implemented in the United States,” said Jeff Bauer, Ph.D., a medical economist and partner in the management consulting practice of ACS Healthcare Solutions.  “Today’s economic crisis will almost certainly prevent President Obama from pursuing goals that he stated on the campaign trail.”

One of those campaign promises was to ensure coverage for all children and expand eligibility for the State Children’s Health Insurance Program.  A few days prior to the inauguration, the House passed a major expansion of SCHIP, which will be open to families up to 300% of the federal poverty level.

However, there is language buried in the bill that would place limits on physician owned hospitals. The restrictions included in the House version of the bill will not allow hospitals to grow, seriously hampering them economically. Also, there will be no protection offered for hospitals under development and no physician investors in hospitals built after January 1, 2009 would be allowed to care for Medicare or Medicaid patients in these facilities.

There are currently 199 physician-owned hospitals nationwide, five of which are located in Pennsylvania: Westfield Hospital in Allentown, Diversified Specialty Institutes in Bucks County, Surgical Specialty Center at Coordinated Health in Bethlehem, Edgewood Surgical Hospital in Transfer, and Surgical Institute of Reading in Wyomissing.  According to the Health Economics Consulting Group, the net economic impact to Pennsylvania is nearly $118 million per year. 

“We are extremely disappointed in the House action,” said Molly Sandvig, Executive Director of Physician Hospitals of America. “Physician-owned hospitals provide high quality health care to many Americans. Ironically, the current language will mean that even the children SCHIP is supposed to help will be prevented from access to many of the country’s best hospitals. Affected doctors are asking Leadership to remove the anti-physician language so that Congress can pass a clean SCHIP Bill for children.

In his inaugural address, President Obama said that his administration “will restore science to its rightful place and wield technology’s wonders” to boost the quality and reduce the cost of health care.  As a candidate, Obama often spoke of electronic medical records as a major step toward improving efficiency and reducing costs in the U.S. healthcare system.

“I cannot imagine meaningful health reform without electronic medical records and related tools of digital transformation as centerpieces of the effort,” said Dr. Bauer, whose most recent book, Paradox and Imperatives in Health Care, examines new ways for health care providers to survive and increase net revenue against the obstacles of the current system and the economic crisis. “All practitioners, providers, and payers will need to have open, interactive systems if we are ever to produce efficient and effective health care in the United States.”

Eric Morgan, CEO of medical billing software company AdvancedMD, suggests that “if Obama’s health care reform truly implements an effective transition to electronic medical records and practice management solutions, then physicians would find that they could actually save both time and money improving the availability of affordable healthcare.”

The Obama healthcare reform plan, as outlined on President Obama’s website, lists as a top priority investing “$10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records.”  The plan cites “a study by the Rand Corporation found that if most hospitals and doctors offices adopted electronic health records, up to $77 billion of savings would be realized each year through improvements such as reduced hospital stays, avoidance of duplicative and unnecessary testing, more appropriate drug utilization, and other efficiencies.”

“Physicians would see a large return on their investment by implementing more efficient technologies to assist them in reimbursement, coding, etc.,” said Mr. Morgan. “However, fewer than 10% of American hospitals have implemented health information technology; while a mere 16% of primary care physicians use EHRs.”

Many primary care physicians lack the necessary resources to implement a new system, but would likely be the greatest beneficiaries in the profession.  Dr. Bauer says that “if reforms are to nurture a much-needed restoration of primary care as the base of medical practice, (the Obama administration) will need to reallocate money from specialty care to primary care and to provide earmarked resources for increasing the productivity and satisfaction of family practice. 

In addition to the introduction of a standards-based or interoperable electronic medical record system, the Obama plan mentions tougher antitrust laws to prevent insurers from overcharging physicians for their malpractice insurance.  Although this part of the plan, which has not progressed in previous administrations, does not provide further details or discussion of the frivolous lawsuits that often lead to increases in premiums.  Rather, the discussion returns to how EMRs may lead to fewer physician errors.

 If electronic records are key to introduction of reform, when can we expect to see any results of the Obama plan?

AdvancedMD currently offers a web-based solution set and has seen its clients revenues increase 10% – 30%.  While a uniform system is not necessary for healthcare reform to succeed, “interoperability is crucial,” says Mr. Morgan.  “All health care records could become electronic within 2-3 years, if individual hospitals and medical practices were motivated or mandated to do so.  

Dr. Bauer cautions the administration to properly define its objectives before proceeding.  “I fear that too much emphasis will be placed on payment “reform” and too little placed on improving the performance of our delivery system.  We will not be better off as a country if everyone has access to an inefficient and ineffective health care.” 

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