The Squeeze Play That Fails

Medicare is supposed to be a design that facilitates health care for the elderly. But the overall US design for health care insures that most of the elderly fail in access to basic health services.
Medicare pays out 30% of spending for the final year of life. The 70% not dying soon are left behind. Medicare pays out more than 70% to zip codes where only 30% of the elderly are found. About 68% of the elderly do not benefit from the direct or indirect impacts of health spending. The elderly are less likely to be found in the 3400 zip codes where over 80% of stroke centers, heart attack centers, and emergency rooms are found.
The elderly need two to three times more primary care, but are also least likely to reside in zip codes with concentrations of primary care. Internal medicine primary care levels drop by about 2000 each year. Do any of these seem to work out well for the elderly or for most Americans left behind by design? Is there any specific plan that would actually result in the primary care workforce needed by the elderly and guaranteed to remain in primary care and guaranteed to be available to the elderly  when and where they need primary care? Absolutely not!
The United States pays attention to non-primary care, hospital, academic, and subspecialty care. Cost overruns for declines in those left outside. Even though Medicare does not really work for the major needs of the elderly, Medicare spending appears immune to changes. It does not take much to stir up the elderly to oppose change, even when their coverage program does not work well.
Primary care is even lower in priority squeezed by the last year of life, squeezed by Medicare cuts, squeezed by Medicaid cuts, abused by insurance companies, and squeezed by priorities placed on academic, hospital, and subspecialty care. Each new technology advance results in higher costs and cuts in lower priority areas. The Squeeze Play results directly in less primary care spending, less primary care workforce, and even less primary care delivery as the cost of delivering primary care continues to increase.
Reality Check in Primary Care
Numerous political and health care leaders have touted primary care as important in health access, in reducing overall health care costs, and in improving health care quality. But no political or health or academic or journal leader has come close to explaining how the United States will prevent steady 5 – 10% annual declines in primary care delivery each year for the next decade or more. Those who truly support primary care as a vehicle of cost, quality, and access would not allow it the past 15 years of steady decline with more years to come.
The reasons for declines in primary care delivery are quite simple.
  • PC Workforce shortages - Shortages of primary care workforce are the major limitation. Primary care cost increases simply do not allow the United States to pay for as much primary care workforce – especially RN, MD, DO, NP, and PA. Without more workforce it is not possible to deliver more primary care – plain and simple. This is the folly of various promotions involving technology, case management, or reorganization of care.
  • PC Spending Freezes or Cuts – First the Medicare Physician Advisory Committee recommended cuts in all Medicare fees, then it changed its recommendation to Congress to a freeze in primary care for 7 years – sparing some of the cuts that will be seen in non-primary care areas. Without the action of Congress or some change by the Obama Administration, on January 1, 2012 a 27.4% cut is scheduled for all physician Medicare fees, including primary care. The final rule is already in place.
  • PC Cost of Delivery Increases - Primary care delivery costs at least 10% more each year. The usual costs of personnel, health insurance, office space, equipment, and insurance keep rising.
  • New Types of Costs Added - In addition those attempting to deliver primary care in areas short of primary care (most of the nation) are having to pay increasing amounts to recruit primary care, to retain primary care, and to pay for temporary primary care help (locums). Many have been enticed to invest in costly electronic software, more and newer electronic hardware, consultants, various certifications, and advertising. None of these improve the ability to deliver more volume at lower cost.
  • Inefficient Designs Reducing Primary Care Delivery - The most numerous primary care workforce, 270,000 primary care registered nurses, remains hostage to the cost cutting designs of government and insurance companies. Instead of being able to deliver care, primary care nurses are often on the phone or online attempting to get approval for needed care when they are not defragmenting our fragmented health information sources. Because our nation has a cost cutting design rather than a design to deliver health care, health care delivery is inefficient and ineffective by design.
Front line primary care workforce that remains permanently in primary care is in trouble. Family medicine is specifically impacted with 90% remaining in primary care for a career and because family physicians are 3 times more likely to be seen by the elderly (Ferrer). Other sources can move away from primary care and have been doing so steadily for decades and across the years after graduation.
In many ways internal medicine has already responded with declines of primary care workforce at 1500 to 2000 per year – the result of only 1400 IM graduates per year entering primary care combined with steady departures from primary care each year after graduation. Internal medicine should be down below 60,000 in primary care by 2021 and between 2025 and 2030 it will be no more than 42,000. This is all that 1400 annual graduates for 30 years can produce, not counting departures in the years after entry which could take IM primary care even lower and faster.
Complicating primary care is overall health spending. The increases in overall spending will force overall cuts that will not spare primary care – resulting in worsening of health access.
So What Do We Spend and On Who?  From NY Times

2011
2021
% Change
Medicare Per Person
$9,735
$13,500
39%
Non-Medicare Per Person
$8,060
$8,989
12%
US Health Spending Per Person
$8,333
$9,864
18%
Medicare population
49,000,000
64,000,000
31%
Non-Medicare population
251,000,000
266,000,000
6%
Total Population
300,000,000
330,000,000
10%
Medicare spending
$477,000,000,000
$864,000,000,000
81%
Non-Medicare spending
$2,023,000,000,000
$2,391,000,000,000*
18%
Total Health Care Spending
$2,500,000,000,000
$3,255,000,000,000*
30%
Health % of GDP
17%
21%
Gross Domestic Product
$14,000,000,000,000
$15,500,000,000,000*
11%


Data from Census and NY Times except for *my estimates
Medicare costs will go up substantially to 864 billion dollars by government estimates. This 81% increase does include more elderly 39% increase per Medicare person from 2011 to 2021.
This will exert down pressure on other health spending (and non-health spending as well). The total health spending will increase 30% at least and might be even more since we have Three Dimensions of Non-Primary Care Workforce Expansion – a major driver of overall health care costs. Non-primary care just does not respond well to any interventions to save cost other than less non-primary care workforce.
The non-Medicare parts of the nation will increase in population by 6 percentage points but will not come close to the Medicare spending increases. The overall US health care bill is set to increase by 30% by 2021. Increases in spending upon the elderly and the last year of life will impact the lives of all of those not in the last year of life or elderly.
There is not much room to consider any types of increases, something that primary care must have to stay even with primary care delivery. The failure to understand this and separate primary care out for increases is a disaster for primary care.
Non-primary care has no where to go but up with a 32% increase. This will result in primary care staying flat at 5% of health spending or 125 billion a year.
Each year with costs of delivering primary care going up, the end result will be a 5% to 10% decrease each year in primary care delivery. This will result in a 40% - 65% decline in primary care delivery from 2011 to 2021. Also matters are worse with the elderly set to double from now until 2030, demanding 2 to 3 times more primary care compared to the remaining age groups. Using the Standard Primary Care Year, the US has already had steady declines class year to class year in primary care production predicting the future that is already  upon us and will remain for at least 20 years.
The elderly will be squeezed just as much and perhaps even more. They will be facing at least three major problems – fewer physicians accepting Medicare, declining primary care workforce, and primary care workforce declining fastest in the 30,000 zip codes with 65% of the US population and 68% of the Medicare population. There are also more complications because the elderly as they age steadily lose mobility and the ability to transport – and they will have to transport as US workforce concentrates even more into zip codes where the elderly are less likely to be found.
The US design really works out well only for a few that are concentrated in 1% of the land area where US health care spending is concentrated in 1000 zip codes. These are locations with the least proportions of primary care, the fewest elderly, the most lines of revenue, the highest reimbursement level in each line, and the highest concentrations of all types of health care. These 1000 zip codes put a squeeze play on the rest of the nation.
Thanks to all 12,000 who have visited Basic Health Access in 2011.

Robert C. Bowman, M.D.        Basic Health Access Web    Basic Health Access Blog

Dr. Bowman is the North American Co-Editor of Rural and Remote Health and a Professor in Family Medicine at A T Still University School of Osteopathic Medicine. He was the founding chair of the Rural Medical Educators Group of the National Rural Health Association, he was the long term chair of the STFM Group on Rural Health, he is the founding director of Priority Infrastructure at http://www.infrastructureamerica.org/ and he is the author of the World of Rural Medical Education, and Physician Workforce Studies

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