Six Degrees of Discrimination By Health Care Payment Design

Most family physicians face discrimination, but not as bad as the patients and communities that we serve. This is not so much about FM as it is about the distribution of family physicians - the broadest generalists remaining despite an aberrant payment design.

Family physicians are the only specialty remaining that has equitable population based distribution. The payment design has long chased other specialties away. They layer out with top concentrations of specialties clustered together and tapering down to few. Family medicine is quite different remaining at 30 per 100,000 even in the lower income, lesser educated, lowest resource, lowest workforce areas. 

Geographic categories are a way of examining this and are not too difficult to picture. There are just a few counties in each state with top concentrations. The rest are behind with lower to lowest concentrations. In the 2621 counties with lowest physician concentrations with 40% of the population, about 36% of family physicians are found for a ratio of 0.9. This compares to 25% of NP or PA and 21% of physicians. Only the NP and PA found employed in family practice positions share the population based distribution of FM docs, but these proportions have been steadily declining - also due to payment design. Family physicians are also slowly declining away from family medicine with 12% found in emergency rooms and 4% each for urgent care and for hospitalist workforce (Graham Center). The actual figures are probably closer to 25 - 30% not in family medicine positions after decades of 95% family medicine, but then again the designs do have consequences.

The discrimination in the nation known as health care payment must be addressed for any workforce to locate where care is most needed.

FM is impacted the most and still has the most to lose by new and innovative payment design. This is due to the consistent discrimination of Pay for Performance. Family medicine should therefore fight the most against discrimination by health care design - for the 50% in small and solo practice, for the 40% of the population impacted with lesser health spending, for their communities, and for the future of family medicine. 

Discrimination Arises Due to Lack of Awareness

Clearly the designers have chosen to ignore the consequences of their design. Even the basic Medicare versus Medicaid design contributed to the discrimination. Few realize how much this differential has grown and how much it impacts 80 - 100 million Americans.

Disparities are created by the distributions of revenue. Discrimination can be seen in designs for education, health, and other spending. Confirmation of discrimination is the long history of lawsuits that have been required to address education discrimination. Some have been addressed, but not all.

Lower property values shape lower school district revenues in the places that face the greatest challenges to education outcomes - challenges that were shaped long before kids begin school.

The designs of education spending clearly discriminate against the populations facing disparities.

Health care payment designs have long been separating America and Americans.

Payment Discrimination Number 1:
Geographic Concentrations of Federal Patients

Payment designs for health care also pay the least where disparities exist. Settings with lowest cost of living, lowest property values, and lowest cost of housing often due to environmental issues attract the highest concentrations of poor, fixed income, elderly, disabled, veteran, and other populations most left behind. Their health plans are least supportive for local care, especially Medicaid and Medicare. High deductible insurance is also poorly supportive for local care. Veteran and other populations often have to seek care outside of local providers.

Barriers to care are shaped where concentrations of lowest paying plan patients are found as in 2621 counties lowest in physician concentrations with 40% of the US population - over 120 million.

True reform was ignored. True reform would have increased the payments for federal patients to provide sufficient services, access, and workforce instead of

  1. Forcing other patients and plans to supplement local care by design.
  2. Forcing all in the community to seek care outside 

Payment Discrimination Number 2:
Least Paid Cognitive/Office/Basic/Oldest vs
Most Paid Procedural/Technical/Subspecialized/Newest

Where care is most needed, the least paid services are 80% of local services. Lowest payments for primary care, mental health, and basic services creates disparities.

True reform balances payments and shifts more dollars where disparities in access, care, and outcomes are most obvious.

Payment Discrimination Number 3:
Lower Payment in Certain States, Counties, and Practices

Services are consistently paid the least where disparties are more likely. This is seen in certain states, counties, regions, and cities. Medicare pays the lowest for the basic office code 99214 in counties without a hospital and pays the most in counties that have 10 or more hospitals.

Not being paid the same for the same service has long been and remains discrimination.

Studies indicate largest systems demand the most, leaving smaller to smallest behind.

Even the method of decreasing the gap has created consequences. The outpatient hospital services had a greater level of payment for the same service. These have been decreased. Unfortunately there are many areas where the additional revenue was needed.

Small hospitals and small practices have had significant problems due to payment discrimination.  Assertions that Small Practices Can Prosper Are Not Helpful

True reforms must not pay less where care is already compromised.

Payment Discrimination Number 4
The Most Lines of Revenue and the Highest Reimbursement in Each Line

Those most closely identified with shaping the payment designs are academic institutions and health professional associations. It is not surprising that the most lines of revenue and the highest reimbursements in each line shape the top concentrations of physicians and health workforce and health spending into 1100 zip codes involving 1% of the land area with 45% of physicians and well over half of health spending. Corporate deals, patents, fund raising organizations, foundations, graduate medical education, research funding, and other lines of revenue shape health care design.

True reforms must consider more equitable payment to relieve disparities.

Payment Discrimination Number 5:
Cherry Picking Creates Disparities

A major theme in health care for many decades has been the most success for those serving the fewest patients with disparities. Those most organized are paid the most and face the least complexity.

This leaves most Americans behind where disparities are most common. Lowest payments, lowest resources, and highest complexities are a bad combination.

ACOs doing best fit this pattern and for good reason. The chief models for ACOs such as Kaiser have long been shaping their patient panels. Not surprisingly Kaiser has been highest paid and may well face the lowest complexity. Oldest ACOs and those highest paid did best. The rest have faced challenges (Jha).

Cherry picking was one of the key learning issues involving managed care. Numerous marketing schemes helped to shape the plans who did best and those who fell behind or closed. Not surprisingly the newly created plans have done poorly as they have been forced into less profitable patient populations. Also not surprising is the lack of plans in rural and other counties with challenging patient populations. Kip Sullivan's works indicate the flawed managed care reasoning that led to the 2010 reforms, and also the consequences. 

True reforms must bust up cherry picking, not reward it.

Payment Discrimination Number 6:
Innovative Payment Designs 

The one consistent outcome arising from Pay for Performance schemes is discrimination. The providers caring for patients and populations with the most disparities are consistently rated lesser in outcomes - outcomes that are mostly about the people factors and populations and not about the care. Over a dozen studies document this discrimination across rural, underserved, and poor populations as well as rural, safety net, and other types of providers.

In my own study, readmission penalties at the highest levels were found in rural areas and areas short of health care. About 9% of rural hospitals had top penalties and the level reached 14% for hospitals in lowest physician concentration counties. This compares to the average of 5% with 3% for urban hospitals.

Overall Health Care Payment Creates Disparities

Clinical interventions receive the most attention at levels nearing 3 trillion dollars a year. These are dollars spent in zip codes and counties with top economics already. The cascade of lower payments shapes least economic impact where economics, health, education, and other outcomes are worst. Cuts in payments, compromises of small hospitals and small practices, failure to maintain higher Medicaid payments, and innovative payment designs make disparities worse. This shapes health and education and societal outcomes the wrong way.

Additionally these innovative designs force practices to send billions away from investment in local care delivery to send to software and other suppliers - the ones that most benefit by design. Mail order pharmacies also shaped concentrations of spending and defeated local pharmacies and the contributions made locally in economics and in helping to change patients to better health.

True Reforms must not divert spending away from places and populations with the most disparities. 

MedPAC Weighs In

This just in - MedPAC has long questioned CMS over the flaws of the payment design and repeated these concerns about MACRA. Now MedPAC has questioned the validity of the rating scale used for hospitals. As is usual, the CMS ratings penalize the facilities that take on the care of the complex and underserved. 

Designs that penalize providers in most need of support are further indication of failure by design.

Why Can't CMS Leave Health Access Alone

Zeal for innovation and cost cutting comes with a price. The price is lesser access where access is already compromised by design. Rural Health, Community Health Center, Small Practice, Small Hospital, and other care where needed suffers because CMS fails in the most important area of

Do No Harm.

It is actually hard to count the different ways that CMS compromises care where needed and the care of its own patients.

Which Discrimination to Address?

At the recent AAFP meeting as is the usual, there was a great deal of attention paid to delegates and resolutions that deal with discrimination and disparity. Unfortunately none of these deal with discrimination by design - the designs that hurt family physicians, their team members, their practices, and their community.

The AAFP positions in support of the payment schemes are puzzling. Why support payment schemes that
  1. Compromise Family Medicine team member efforts by sending hundreds of thousands of dollars outside of the practice for practice consultants, certifications, software, hardware, IT maintenance, and other innovations
  2. Distract team members from care delivery such as with EHR focus for 2 hours for each hour of care
  3. Increase burnout and turnover, costly for staff or physician losses
  4. Increase access barriers, and 
  5. Represent discrimination versus most of us and our patients and communities?
An association, its leaders, and its delegates should support its members - especially the 50% of family physicians in small and solo practices facing the most obstacles, the 21% of family physicians in rural areas, the 36% of family physicians in lowest physician concentration counties with the least resources.

These family physicians need an efficient and effective financial design, not an incredibly costly Primary Care Medical Home design talking 20% of their revenue. The do not need to do marketing or sell their brand where half of family physicians are found as they are located where fewest others exist. They often do not need quality improvement efforts as they have demonstrated greater ability to prevent admissions (small practices, private ownership, Casalino), and they do not need outside consultants that often fail to understand who they are or what they do.

Like many of the self-sustaining populations that they care for, they simply need an end to discrimination by design.

Family medicine leaders are not shaping value by what they do. In fact their support is demonstrated to be higher cost without improvement in quality - the opposite of value. Value is consistently demonstrated by practicing family physicians who do the most despite the least support.

Imagine what family medicine teams could do 
with a little more support from government and from their association
with a major reduction in obstacles to care.

Have We Come a Long Way, or Not?

As a new physician starting solo rural practice in Oklahoma in 1983 I was paid less for
  1. Being a young, new physician (20% cut)
  2. Being a physician in Oklahoma
  3. Being in Area 99 as with most rural physicians in the state
  4. Having the most Medicaid and Medicare patients
The young physician discrimination was terminated due to court action. Some of the above gaps have narrowed (some). But I could do assistant surgery, deliver babies, and do various procedures - something largely lost. I was also able to boost the function of Nowata Kiwanis, the Chamber of Commerce, increase access to primary care and hospital, organize two health fairs, and help address disparities via the Ministerial Alliance and working with county resources (public health, extension, obesity, teen issues) until all were trimmed away including my practice. 
What worked 1965 to 1980 was largely about lesser discrimination. 
What has not worked since 1983 is about greater discrimination.

Questions and Comments

The recent themes in my posts have resulted in some questions:
  • What discrimination?
  • What do you mean by discrimination by design?
Most are familiar with the lawsuits applied to gerrymandering or discriminatory school funding schemes. Discrimination may be hard to prove or reverse, but this does not mean that it does not exist. 

Clearly in health care, the designs of payment are easily seen as favoring a few associated with highest concentrations of physicians, subspecialty services, and most technologically advanced services. It is not surprising that the lowest payments go to the places, people, patients, populations, and providers that are most behind in other areas as well. 

It is hard for many to grasp the magnitude of the impact. For example, the 2621 counties shaped lowest in physician concentrations by payment design include all but a few counties in each state. Rural counties join counties with concentrations of minority populations as most left behind.

These 2621 lowest physician concentration counties have 40% of the population but the design for payment only allows 21% of physicians to practice in these locations and health spending is an even lower proportion (shaping access barriers, economic discrimination). Lowest payments via Medicaid impact the locations with greatest concentrations of poor, fixed income, disabled, and elderly patients. Medicare and veteran populations are commonly concentrated in these locations. Families caught in the middle without supplementation tend to buy high deductible insurance - also unsupportive of local care, primary care, mental health, and basic services. 

These are places with little or no competition across health care providers or health care insurance. Patient and plan choices matter little to these areas - a concept difficult for designers, foundations, and associations to grasp.

These counties have concentrations of Medicare, Medicaid, least supportive insurance, diabetics, obese persons, sedentaries, fair to poor health status, lowest local resources, and lowest social determinants.  This shapes lowest education and health outcomes to go with lowest concentrations of workforce as well as lowest ratings and most penalties via "quality" measurement.
Shortages force local populations to travel for care (higher cost, access barriers) and they take their dollars with them and spend them where health care is concentrated (magnified economic disparity). The lessons learned from decades of rural research presentations (Dr. Gerald Doeksen especially) apply to many if not most populations left behind by design. Rural Health Works except to the designers of health care.

Others, not federal patients in these locations, are impacted because of this design that shorts local workforce, access, services, economics, and social organization. 

The same designers trivialize the losses of rural and small hospitals as well as economic and social determinant impacts. Researchers unaware of the full range of influence as well as those trying to prove a point cause problems. Their research attributes error and lower outcomes to rural, underserved, or lower volume providers when it is their research that is flawed. Attempting to compare different locations with different patients, providers, resources, and payment designs should be identified as flawed from the start.

Journals fail to see the flaws and publish these "quality" studies. The zeal of CMS to do "quality" has resulted in distorted penalties and distorted quality ratings. MedPAC has now for the third time questioned CMS. The latest concerns have been raised about the validity of CMS methods used for rating hospitals. The lowest rating go to the facilities caring for low resource patients. CMS and MedPAC also differ about overall payment balance and about MACRA as well. Others in Congress and posting in The Health Care Blog have concerns regarding CMS exceeding the will of Congress and CMS standards for validity. 

Those who train health professionals claim that they can fix the problem, but make disparities worse as seen in GME as only 6.5% of residents are found in 2621 lowest physician concentration counties with 40% of the population - the worst disparity in payment and the major shaping force in physician practice location.

Additional Payments for Special Training Programs 

Of course there is no training intervention that can work - because the payment design does not support workforce where workforce is needed! This was seen in 30 years of working on rural physician distribution to watch no progress across the states and locations where I was working. We could claim great outcomes for the training programs and great fun for us, but no change other than the names serving in a particular county.

Additional Consequences

The one thing that can be counted on is worsening disparities although confusion, low morale, low productivity, higher turnover, and other adverse behaviors and attitudes can be seen arising by the design. And of course these are worst in the states, counties, and zip codes most impacted by the design. Note that Texas gained the rating of lowest physician morale in the nation as reported in the Austin Business Journal.

Discrimination in health care was institutionalized in Independence, Missouri on July 30, 1965 when President Johnson signed the Social Security Amendments of 1965 into law, creating “two moral frameworks for public financing of healthcare”. Medicare was supposedly an “earned” right for the elderly, while Medicaid was framed as a “welfare” program for the poor. It was a necessary political compromise. It was just a first step and bigger and better things would certainly be accomplished in due course. It was better than nothing. But fifty years later, and after taking yet another “first step” with Obamacare, the wasteful, divisive, discriminatory, and ultimately self-defeating direction we chose back in 1965, and again in 2010, has not changed one bit.

Recent Posts and References 

Primary Care Must Rise from the Ashes of the Last 20 Years

Patients Should Be Changed, Not Physicians - Physician Behavior has been changed  -  the wrong way

Revisiting Basic Health Access in a Land of Smoke and Mirrors

Time Talent and Treasure to Measure Is Not Quality

The Mess that is MACRA - Kip Sullivan at The Health Care Blog

Value Failure By Those Who Promote Value

Bundling or Bungling, Once Again Into the Fray

Solving Mental Health Takes More than Race and Place

No Positive Spin for the Innovator Tailspin - more claims for innovation successes are apparently attempts to hide failure
Stop the Promotion To Restore Mental Health Access - claims of mental health care reforms or improvements are a stark contrast from the reality of lowest payment, highest complexity of care, unreliable payment, and poor support other than lots of rhetoric

Primary care can be recovered and should be recovered, 
but cannot be recovered when moving the wrong directions

Robert C. Bowman, M.D.

The blogs represent the opinion of the blogger alone.
Copyright 2016


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