Free tuition in medical school is only one step toward producing the doctors America needs

The NYU School of Medicine shook the world of medical education recently by announcing that tuition would be free. The NY Times article about it says that ‘Rising tuition and six-figure loans have been pushing new doctors into higher-paying fields and contributing to a shortage of researchers and primary care physicians.’ Certainly, it is easy to understand that a $55,000 per year tuition bill is going to be way beyond the ability of most medical students and their families to pay, and that a total indebtedness that is often over $250,000 may well affect the specialty choice of medical school graduates. While physicians in any specialty make far more than the average American, compound interest makes the payments a lot more than $25,000 a year for 10 years; often more, indeed, than that average American income (think about the payments on a $250,000 home loan, which usually has a lower interest rate). This may tip the balance between choosing betwee, say, family medicine or anesthesiology, when the latter choice can be expected to result in an additional $7 million in lifetime income.

The other, presumably obvious, impact of free tuition could be the ability of the school’s admissions committee to take more students from lower income families than they currently do. Note “lower income” is not necessarily the same as “low income”, as 80% of medical students now come from the top 20% of income. And, yet, they still have a lot of trouble paying for school, tuition plus the Times’ estimated $29,000 a year in living expenses (in NYC). It is not necessarily true that ability to pay is a significant criterion in the admissions decisions of medical schools, but rather that there are confounders. A big one is that being from a high-income family is associated with having the higher grades and test scores that are so valued by medical school admissions committees (probably especially those, like NYU, that are very interested in producing MD/PhDs and other laboratory researchers). Free tuition, however, might mean that those students from lower-income families who do gain admission will be under less financial pressure to take paying jobs while in school (a really bad idea when trying to succeed in medical school). In addition, those students who have started their own families or whose families of origin have counted on them helping to support them, would have one big less thing to worry about.

We definitely need more family physicians and other primary care doctors than we are producing now (and NYU has produced one of, if not the, lowest number family physicians of all US medical schools). We also need far more students from lower-income and underrepresented minority and rural backgrounds. The reason is not just for ethical or moral, or making up for past practices. It is directly about providing quality healthcare to all the American people, because physicians are most likely to practice in settings like those in which they grew up and feel most comfortable. Thus, students from upper-middle and upper income, primarily white (and Asian) suburbs are most likely to practice in those settings – which are precisely those least in need of more doctors. Students from rural or low-income or minority communities are much more likely to practice in such communities, and these are the places most in need of more doctors. Of course, the correlation is far from 100%, but the trend is overwhelming. Thus, to the extent that free tuition can increase either of these goals, it would be a great thing.

So what is the problem? Well, it is far from certain that free tuition will lead to these desirable outcomes. This point is made by family physician (and NYU medical school graduate) Kenny Lin, MD, in his Common Sense Family Doctor blog. Although Dr. Lin’s 2001 class had only four graduates entering family medicine, it was a larger number than any class since. He points to the fact that NYU has never had a Department of Family Medicine (one of the few such schools, almost all of which are “elite” private and on the East Coast). He also notes that in terms of producing other primary care doctors (general internists and general pediatricians), NYU has also done very poorly.

More important, Dr. Lin cites a study published in the JAMA Network by Grischkan, George, Chaiyachati, et al., that demonstrates that students entering family medicine (one of the lowest paying medical specialties) have a higher average debt load than those entering fields such as radiology, dermatology, and ophthalmology. He writes

These findings suggest, paradoxically, that physicians with the highest debt burden are preferentially choosing a specialty with among the lowest income expectations - why on earth would that be? What it says, actually, is that students from less well-off backgrounds are more likely to be attracted to primary care in the first place.

This is a very important point. Dr. Lin, focused on the critical issue of producing more family physicians and primary care doctors, believes that eliminating tuition and thus taking students from more diverse backgrounds “will likely have a small, but measurable, positive effect on primary care.” He urges that NYU and other schools increase their “pipeline” programs to help students from less advantaged background gain the skills that they need to be both admitted to and successful in medical school. I agree, but I would go beyond that.

Medical schools should train the doctors America needs. This means fewer subspecialists, and more primary care doctors. This means a smaller percentage of doctors practicing in the suburbs of big cities, and a larger percentage practicing in rural areas and underserved inner-city communities. This is not going to happen if we keep taking the same students we currently do, no matter how nice they are, no matter how high their grades are, and no matter how much they are like (or often are) the children of the faculty of the medical school. If you don’t think this is important, a recent paper from the National Bureau of Economic Research by Alsan, Garrick, and Graziani titled “Does Diversity Matter for Health? Experimental Evidence from Oakland” (reported in the Times article “The Secret to Keeping Black Men Healthy? Maybe Black Doctors”) demonstrates that it does: a significantly higher percentage of black men received important tests, took medicines, and made lifestyle changes when advised to by a black doctor rather than a white or Asian one. Importantly, this comes from more than a knee-jerk reaction to the race of the physician; it has a lot to do with how they were treated. While the ‘white and Asian doctors often wrote comments like “weight loss,” “tb test” and “anxiety” — cryptic notations that referred to medical recommendations…black doctors often left more personal notes, like “needs food, shelter, clothing, job’. This goes beyond race, and suggests that both our overall medical curriculum focuses too much on the disease and not the person, and further that minority physicians may be more likely to realize that it is a person who needs to be treated, and identify the social determinants of health.

Indeed, Elisabeth Rosenthal, the editor of Kaiser Health News, argues in an Op-Ed in the Times that medical school should be free only for those who make a firm commitment to entering specialties and practicing in areas that have real need:

…if a student chooses to become an ear, nose and throat surgeon in suburban New York or a private cardiologist in Miami, fine. He or she can pay back what has been borrowed. But if that doctor chooses to deliver babies in rural Oklahoma or practice pediatrics on the South Side of Chicago, then he or she should get to keep every penny of salary.

I agree, and believe that to make this likely, medical schools, both private “elite” schools like NYU, and certainly state-supported schools, need to take a much higher percentage of students from the lower half of the family income scale, from rural areas and from groups that have been historically underrepresented in medicine. And not just a few more, not just a pilot program with 2% or 5% or 10% of the class. These programs must be far more extensive. The entire classshould be composed either these groups of students or of students who, while perhaps from wealthier, whiter, more suburban backgrounds, have demonstrated an extended commitment to service to others. Extended, like the Peace Corps, or Teach for America, or VISTA, or working abroad for years in service programs, not a car wash fundraiser one Saturday.

Some, and sadly this may include many in the administration of medical schools, particularly “elite” ones, will say this can result in the exclusion of the “best” applicants. It may, in fact, lead to the exclusion of some of those with the highest grades, and may even require additional work on the part of the faculty to help students with less rigorous academic preparation. Or, perhaps, elimination of much of the nonsense memorize-detail coursework of the pre-clinical curriculum. But while “best” can mean many things, if the definition is not “most likely to make a positive difference in the health of all the American people” it needs to change, and soon.

Free tuition, at NYU, or other private schools, or state-sponsored schools, may be a terrific idea, and one that should be widely imitated. But it is only one part of an overall strategy, including changes in the selection of applicants, the curriculum of the schools, and the reimbursement of primary care, to significantly change the kinds of doctors that are produced so that they meet our nation’s needs.

Insurance coverage and access to care in the US

In the New York Times’ “Upshot” of October 24, 2016, Dr. Aaron E. Carroll discusses “Why the U.S. Still Trails Many Wealthy Nations in Access to Care”. He notes the increase in insurance coverage of the American people since Obamacare, but also that insurance coverage is not the same as access to care. He cites the most recentCommonwealth Fund survey of international health systems to demonstrate that, compared to most of the other ten wealthy countries that were studied, Americans have greater difficulty getting an appointment and being seen. (Canada is worse than the US in many of these measures, but not all; see discussion below.) Indeed, he also notes that when the populations of these countries are divided up between above-average and below-average incomes, the folks with below-average income in most of these other countries have better access than the above-average in the US.

A major reason that Carroll cites for the poor access is the low percent of primary care physicians in the US, a fact supported by data from the Organization for Economic Cooperation and Development (OECD, the “rich countries” group). It is true. There are not enough primary care doctors -- family physicians and general internists and general pediatricians -- to meet the access needs of the people of this country. There are plenty of excellent specialists; in fact, in many major metropolitan areas there are too many of them, sometimes leading to too many interventions that both increase the cost to the system and the risk to patients. Traditional “supply and demand” economics would suggest that limits on demand would force a constraint on the number of specialists, but it hasn’t happened yet; none of them are starving. This is because, in medicine, supply often drives demand rather than vice versa. When are people finally getting enough procedures, and when does it cross into too many? People don’t understand medical care, what is “good” for them and what is “too much”, much less the cost-benefit ratio. Indeed, doctors usually do not. But they do know what they know how to do, and that it will make them money.

This is a major area that having sufficient primary care physicians would help. If everyone has a family doctor that they can trust, whose income is not tied to procedures or referrals, they can help you to understand these complex issues. But there are far from enough; less than 30% of doctors in the US are in primary care, compared to 50%+ in other wealthy countries, and that is dropping as fewer students choose primary care careers. Many reasons for this are cited by studies (the culture of academic medical centers, status, work-life balance, etc.) but the real bottom-line reason is the bottom line: primary care physicians earn way less than most other specialists. Not just a little, but often half or a third as much as the highest paid specialists. Pay for primary care is going up with demand, but 10-15% increases will not change specialty choice; between income increases for primary care and decreases for specialties (heaven forfend!) the ratio needs to be at least 70%. Specialists know this; they want primary care doctors to do all the things that they themselves are not able or don’t want to do for their patients and are not opposed to primary care salaries going up -- although of course they themselves don’t want to see their own incomes go down.

Getting the care you need is a combination of having enough providers for you to be able to find and get in to see, and adequate coverage. Insurance, as we have long seen even before Obamacare, is not all the same; there is good insurance (although hardly, any longer, great insurance) and lousy insurance, and there is no insurance that is both cheap and of high quality (although, again, there are plenty of plans that are costly and of poor quality). Premiums are the tip of the iceberg; deductibles (how much you have to pay out of pocket before your insurance kicks in), co-pays (how much you have to pay each time you access care), co-insurance (what percent of “covered” care you have to pay) also impact on out of pocket costs. As, of course, does the overall cost of care (by providers) and drugs (by drug companies), and what services are not covered by your insurance.

As an example, if you are over 65, try figuring out what plan to buy for your Medicare Drug Coverage (“Part D”). There are the monthly premiums. And the deductibles. And the co-pays. And those vary by type of drug (generic vs. brand-name, preferred vs. non-preferred), and sometimes they are by a fixed $-per-prescription amount and sometimes by a percent. And if you order by mail it is different. On the bright side, most vendors offer you a calculator into which you can put the drugs you take, and it puts it all together and tells you which is cheapest for you. Until, of course, the drugs you take change.

This is insane, of course, but only if you happen to care about what works best for actual people, and not what makes the most money for private for-profit companies like insurers. Drew Shenaman, cartoonist for the Newark Star-Ledger, in the accompanying editorial cartoon, makes it very clear what the real reason is that insurers are pulling out of Obamacare. Their interests are not our interests. Surprise!

 

So we have excellent quality medical care available in the US, if you are geographically and financially able to access it, except sometimes it is not needed and done anyway. We have too many doctors in some specialties and far too few primary care doctors, and even they are not distributed well across the US. We have insurance companies that are focused on making profits, rather than on providing access, and sell complex, difficult-to-understand products that often have a “gotcha” at the point when we are most vulnerable. While access to appointments may be a little better in the US than in Canada (but not other countries), cost to the individual is way higher in this country than in Canada; access to care has both financial and non-financial components.

Not everything can be reduced to dollars, but a lot can. The money spent on health care in this country should be spent on providing health care, not on profit for insurance companies, providers, drug companies, and the like. If private insurance is to be part of the system, it needs to be non-profit and highly regulated. There need to be more primary care doctors, and the way to make this happen is for them to get paid much closer to the same amount of money for the work that they do as other specialists. Medicare can and should lead the way on this. Physician distribution should be fixed by augmenting the incomes of doctors in rural areas, not punishing them. None of this guarantees quality care, but without it quality is a pipe dream.

Obamacare was good insofar as it went. It didn’t go far enough, and now we need to fix it.

Medicare payments to doctors: the big issue is the underpayment for primary care

The Center for Medicare and Medicaid Services (CMS) just published how much money individual doctors get paid from Medicare. This initial version is without names, but undoubtedly the names will eventually be revealed. Enough information is available for Reed Abelson and Sarah Cohen, who wrote the article for the New York Times on April 9, 2014 “Sliver of Medicare Doctors Get Big Share of Payouts”,   to identify many of the specialties and locations. About ¼ of all Medicare payments, the article tells us, go to about 2% of all doctors. “In 2012, 100 doctors received a total of $610 million, ranging from a Florida ophthalmologist who was paid $21 million by Medicare to dozens of doctors, eye and cancer specialists chief among them, who received more than $4 million each that year.” The largest amount of money was accounted for by office visits, $12B, but this was for 214M visits, with an average reimbursement of $57, in contrast to the Florida ophthalmologist, or to the “Fewer than 1,000 radiation oncologists, for example, received payments totaling $1.1 billion.”

Much of the discussion in the article, and in the comments attached, relates to why so few doctors get so much of the $77B Medicare pays out each year. There are, obviously, concerns about fraud; not only is Medicare seemingly fixated on looking for fraud everywhere but there is good evidence that it has occurred, at least historically. For example a highly paid (by Medicare) Florida ophthalmologist is apparently linked to a previous Medicare fraud scandal in which there was some implication of New Jersey Senator Robert Menendez. “The Office of Inspector General for the Department of Health and Human Services, which serves as a federal watchdog on fraud and abuse for the agency, released a report in December recommending greater scrutiny of those physicians who were Medicare’s highest billers.” I would have to say that this is a much wiser, fairer, and probably more productive strategy than simply trying to find largely unintentional errors in coding for outpatient visits, or checking each hospital admission to see if it could have been an “observation”, which is reimbursed less because it is considered outpatient status, as is done by Medicare’s Recovery Audit Contractors (RACs, or as I have called them, bounty hunters). Also, as I have previously discussed, these efforts are harmful to the patient in a direct financial way; as an “outpatient”, a Medicare recipient in the hospital has much higher out-of-pocket costs than if they are admitted as an inpatient. This is, of course, why CMS wishes to limit some stays, but if a person medically needs to be in the hospital, Medicare should pay for a hospitalization, and not play these games that not only financially penalize the hospital and doctors but more importantly the patient.

The other big area discussed is whether, if not exactly fraud, there is substantial difference in practice (e.g., getting CTs before each procedure, using more expensive drugs, etc.) that some specialists who are highly reimbursed by Medicare are doing more of than others. In addition, the question is “are they doing more procedures” or doing procedures with less strict indications? It is worth looking at; there is no guarantee that, even if some doctors are doing more procedures, having looser criteria for them, using more expensive drugs and tests, that this is not the better way to practice, but there is no guarantee that it is the better way to practice. If some doctors are outliers in their specialty, and their practice characteristics “happen” to end up making them a LOT more money than others, then this is certainly a reasonable basis on which to look more closely at how they are practicing, and what is the evidence basis of appropriate practice.

A third issue is that many of the recipients of the most money from Medicare, particularly oncologists (cancer doctors) and ophthalmologists are using very expensive drugs, which they have to buy first and which Medicare reimburses them for. Thus, this skews their reimbursement upward even though the money (or most of it) does not go to the doctor, but rather to the pharmaceutical company. The article refers to a drug called ranibizumab, injected into the eye by ophthalmologists monthly for age-related macular degeneration. It is very expensive, as are many drugs which are made through recombinant DNA (a lot end in “-ab”) used by oncologists, neurologists, rheumatologists, and gastroenterologists as well. One comment notes that he as a physician only makes 3% on the drug. While it can be argued that this is a significant markup (for example, making $3000 on a $100,000 drug), and that this doesn’t include the doctor’s fee for administering it (substantial), it is unfair to count the full cost of the drug as income for the doctor. Of course, it is income for someone (the pharmaceutical company) which suggests there needs to be substantial investigation into pricing of these drugs. And, of course, if a physician is found to be using a lot of a drug where he (or she) makes a 3% markup rather than prescribing an equally effective drug (if there is one) where there is no markup profit, this would be a bad thing.

However, the most important thing revealed by this data, I believe, is the enormously skewed reimbursement by specialty. It is an excellent window into the incredible differences in reimbursement for different specialties, with the ophthalmologists, radiation oncologists, etc. making huge incomes while primary care doctors (and nurse practitioners) are making $57 for an office visit. This is major. The fact that Medicare pays so fantastically much more for procedures (and, as a note, it is likely that all of the doctors, including the 202 family doctors in the highest-paid 2%, are getting it for doing a lot of procedures) leads to private insurers paying similarly more. And makes these specialties very attractive to medical students because they are lucrative (and often, though not in the case of many surgical specialties, involve fewer hours of work). Which leads to fewer primary care doctors, and a dramatic shortage in this country.

Medicare could change this. It could dramatically, not a little bit, change the reimbursement for cognitive visits to be closer to the payment for these procedures. If it did, so would private insurers. If the income of primary care doctors was 70% of that of specialists (instead of say, 30%) data from Altarum researchers and from Canada suggest that the influence of income on specialty choice would largely disappear. More students would enter primary care, and in time we would begin to see a physician workforce that would be closer to what this country needs, about 50% doctors actually practicing primary care.

It is fine if CMS and the OIG look at these highest billing doctors to make sure that they are not committing overt fraud. It is also fine to look at them and see if they are using criteria for procedures that are not supported by current evidence, or doing too many other tests, or taking kickbacks. It is also a good idea to look at the cost of drugs, especially the portion going to the drug company, as well as the markup for physicians, and to re-present the data excluding that portion of the money the doctor does not get (goes to the pharmaceutical company) from their income.

But the most important result of this report should be to be shocked at the way Medicare enables the continued practice of reimbursing for procedures at such high levels, and to kickstart a complete revision of the Medicare fee schedule to bring reimbursement for different specialties into better balance.

That would be a great outcome!

Integrating health systems must be to improve quality, not increase cost

The February 13, 2014 article in the New York Times by Elisabeth Rosenthal, “Apprehensive, many doctors shift to jobs with salaries”, more or less just presents the facts. It notes that the medical placement firm, Merritt Hawkins, says that 64% of jobs this year are salaried as opposed to 11% in 2004, and that it expects it to go up to 75% in the next two years. She cites AMA figures that “…about 60 percent of family doctors and pediatricians, 50 percent of surgeons and 25 percent of surgical subspecialists — such as ophthalmologists and ear, nose and throat surgeons — are employees rather than independent.” In some places it is more dramatic; in Kansas City, there are no longer any cardiologists (a type of internal medicine subspecialist) who are not employed by hospital systems, and oncologists (cancer specialists) are not far behind.

So, is this a good thing? The article suggests yes, but maybe not entirely. It states that “Health economists are nearly unanimous that the United States should move away from fee-for-service payments to doctors, the traditional system where private physicians are paid for each procedure and test,” and I agree, and that “When hospitals gather the right mix of salaried front-line doctors and specialists under one roof, it can yield cost-efficient and coordinated patient care. The Kaiser system in California and Intermountain Healthcare in Utah are considered models for how this can work,” with which I also agree. However, not all health systems are Kaiser or Intermountain Healthcare. The article continues: “But many of the new salaried arrangements have evolved from hospitals looking for new revenues, and could have the opposite effect. For example, when doctors’ practices are bought by a hospital, a colonoscopy or stress test performed in the office can suddenly cost far more because a hospital ‘facility fee’ is tacked on.”

Rosenthal has written about facility fees before, as has Alan Bavley of the Kansas City Star in his “Doctors, Inc.” series (“’Facility fees’ add billions to medical bills”, Dec 29, 2013), and I have commented on it in Changing the structure of health care delivery systems: to benefit the patient, the providers, or the insurers?, January 14, 2014. The new arrangements promise more money, or at least stable incomes, to physicians, and continue to pay the currently-most-highly-paid specialists the most money, with primary care doctors getting less. This is not because hospital systems have anything against primary care, but rather that they are following the money, and these acquisitions have occurred precisely while we are still under fee-for-service reimbursement in most locations. If cardiology or orthopedic or radiologic or neurosurgical procedures bring in great amounts of money to the hospital (“technical fees”) the hospitals like this, and are willing to share some of that money with the doctors to ensure that they keep their patients in their hospital or health system. Primary care does not generate such largesse. Relatively intelligent systems recognize that they need a locked-in “primary care base” to create referrals to their subspecialists, but will pay as little as they can, and demand “high productivity” (which could be seen as “patient churning”), and it is not just primary care: “many doctors on salary are offered bonuses tied to how much billing they generate, which could encourage physicians to order more X-rays and tests.”

Bloomberg News has a more direct take on this phenomenon, stating firmly in an article by Shannon Brownlee and Vikas Saini that “Bigger hospitals mean higher prices, not better care”, February 18, 2014. They cite data from sources such as the Dartmouth Atlas of Health Care, a recent article in Health Affairs[1] which demonstrated that “On average, higher-priced hospitals are bigger, but offer no better quality of care,” and a variety of lawsuits by public agencies (such as the Massachusetts Attorney General) to demonstrate that hospital acquisitions are about market share and control of practices and, ultimately, about money, not quality. “If you think of value as some combination of needed services delivered for the right price, large hospitals are no better than small hospitals on both counts.” As I have written about before, doctors control a lot of costs in the health system, by choosing the tests that they order, deciding whether to admit to the hospital or not, and where they refer. By employing the physicians, hospitals can not only control the latter, but can set criteria requiring physicians to abide by hospital policies on the others. The doctors then become, in the words of this article,  “…another cog in the corporate machine, and many physicians have told us they feel they must skew their medical judgment to keep their jobs.”

This is the nonsense that occurs when things are done piecemeal. Intermountain Health Care and Kaiser are not perfect, but they have used their status as integrated health systems to control costs and increase efficiencies. To the extent that they are also the insurer, it is in their interest to do so. Efforts by the federal government to have others emulate these models through the creation of Accountable Care Organizations (ACOs), without changing the manner of reimbursement, are bound to fail. As Paul Baladian is credited with saying “every system is perfectly designed to get the results that it gets.” If we are getting a system in which hospitals are buying up physician practices so that they can charge insurers, from Medicare to Blue Cross, more; if we are getting a system in which medical decisions are being made in the best financial interests of hospitals rather than the best health interests of patients; if we are getting a system in which we continue to favor some patient over others based upon their income, insurance status, or their type of disease (middle-aged well-insured person who needs a single joint replacement = “good”, older person with multiple chronic medical conditions and “just” Medicare or worse yet uninsured because they are under 65 or undocumented = “bad”), it is because we have perfectly designed it to be so.

Brownlee and Saini offer some suggestions for solutions. They suggest that Medicare expand its “Advance Payment Model,” a program that provides capital to small or rural physician groups, and also particularly about forming multispecialty Accountable Care Organizations driven by primary care.

“Until we give primary-care groups control over what happens to patients, large hospital systems and specialist-dominated groups -- those with greatest access to capital -- will be able to keep raising prices, even as they issue press releases about their plans to control costs and improve care.”

Sounds like a good idea to me. Combine that with a single-payer system that covers everyone, “everybody in, nobody out!” and we may be able to reverse the trend toward higher profit at the expense of lower quality.

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[1]White C, Rechovsky JD, Bond AM, “Understanding Differences Between High- And Low-Price Hospitals: Implications For Efforts To Rein In Costs”, Health Affairs, January 2014 10.1377/hlthaff.2013.0747.