The Clare Spark Blog

James Pagano, M.D.

[See two earlier blogs: https://clarespark.com/2012/03/29/james-pagano-m-d-on-affordable-care-act/,  https://clarespark.com/2012/07/09/james-pagano-m-d-on-effects-of-obamacare/, including the comment section where Pagano lays out his suggestions for improved care. For Pagano’s website see http://jamesvpagano.com/.]

I asked Dr. Pagano what his plans were for the future, given the current flap over the Affordable Care Act. Here is his update, September 29, 2013:

Since the evening of Obama’s re-election I’ve been considering the future, ours in general, but mine in particular, and what part the practice of medicine will play in it.  I’m still not certain, mainly due to the fact that the situation is still fluid, but I can best answer your question by making a few assumptions.

So, lets first assume that Obamacare will roll out as written and on schedule.  This is almost laughable considering the amendments and exemptions that have already taken place, most notably the one-year reprieve for some businesses and the exclusion of Obama, his family, the House and Senate, their families, their staff, and their families from this law.  (The big labor unions, once so vocal in their support of Obama and his health care law will be the next large group seeking relief from it now they’ve had time to figure out what it entails.)  But we need to start somewhere.  If all goes as initially planned, there will be a massive enrollment of previously uninsured individuals, as well as previously well-insured but now no longer insured individuals due to their employers opting to drop their coverage, in the new exchanges.  Whether they enroll in the Silver, Gold, or Platinum plans makes little difference.  It is all basically Medicaid which means choices of physicians, hospitals, medications and ancillary health services will be limited.

These patients will increasingly access hospital-based emergency departments for their primary care, or less-than-emergency-care, needs.  It is happening already in LA county.  Thousands of patients previously covered by MediCal have been herded into new MediCal managed care products, like Healthy Way LA.  They are assigned to a ‘medical home’, with a primary care physician to oversee their care and arrange for any specialty consultations they might require.  The problem is that most of these people either can’t get in to see their primary care physician in a timely manner, or prefer to be treated on an episodic basis with no appointments needed.  They go to the ER because they know they must be seen, no financial questions asked, and they must be proven not to have an emergency medical condition prior to being discharged, regardless of how much testing is required to do so.  Viva EMTALA.

As this practice becomes more pervasive ER’s will become increasing crowded.  Despite heroic efforts by the CMS, hospitals, and ER physician groups to legislate, regulate and mandate that wait times and lengths of stay not only remain as they are but actually go down, such is not likely to be the case.  Speaking as an ER physician this is good and bad.  The pressure to see more patients in less time while maintaining diagnostic and treatment accuracy at 100% and high patient satisfaction scores is more than a little annoying.  But, the fact that a higher percentage of these patients will have some means of paying for the care they receive could result in some small net positive, income-wise.  At least for the first year or two, until other aspects of the law kick in–like the one demanding parity between Medicare and Medicaid reimbursement.  At that point the ER doctor will be seeing more patients, more regulations, with fewer consultants and specialists on call, for less money.  It seems clear that a number of them, particularly those in the latter parts of their careers, will be heading for the exits and an early retirement.

Now let’s assume the House is successful at either defunding the law or getting it postponed in its entirety for another year.  As noble a goal as this is, it seems at best unlikely and at worst suicidal considering the stakes–a government shut-down–involved.  Still, we should consider the possibility.  The thinking here seems to be that putting it off past the next election cycle could allow the Republicans to gain more seats in the Senate while maintaining control of the House and a chance thereby to scuttle the entire ugly mess.  That would be wonderful, provided that at the same time some serious work got done to actually reform healthcare, and not, as Obama and the Democrats have done, merely expand the role of the federal government and redistribute wealth at the SAKE of good medicine.  For the next year things would limp along essentially as they are: ER’s would be crowded but manageable, physician reimbursements would go down, but probably not precipitously, and insurance companies will continue to be good investments, because they will do well with or without Obamacare.

Despite passionate remonstrations from the Left, capitalism actually does work.  Free markets have a way of anticipating the future and finding ways to profit from changes.  The healthcare market is no different.  In the past few years a new version of an older healthcare delivery model has arisen and will, I think, become an important piece of the system.  Urgent Care Centers, owned and operated by residency-trained, Board-certified emergency medicine specialists are becoming prevalent in places like LA and New York City.  Once staffed by general or family practitioners with an emphasis on occupational medicine, the modern urgent care center is now attracting the well-insured and well-healed with problems that would have required ER care a few years ago, but which can now be handled on an episodic, no-appointment basis by a trained emergency medicine specialist.  Point of care lab testing, imaging studies, and transfer arrangements to a near-by hospital for those who need a higher level of care are making this type of urgent care center the ideal venue for those with non-life or limb threatening medical conditions.  No crowded ER, no inflated ER bills.

So to answer your original question, I’m not completely sure what I’ll be doing a year from now, but if I had to guess I’d say I’ll be working part-time in one of the new urgent care centers and spending the rest working on my next novel, next guitar CD, and perfecting the gnocchi.  Unless, of course, healthcare actually does get reformed, in which case I might be in the ‘Pit’ a while longer. [End, Pagano update 9-29-13]

[The original blog starts here:] The fuse has been lit, the bomb is ticking, the ship has hit the iceberg—whatever silly metaphor you might want to use, the fact is Obamacare is off and running. Unfortunately it seems to be running amok.  This might be a good time to give you some insight into where, exactly, it seems to be going and how it will affect the delivery of healthcare to you, the hapless patient, and to other Americans.

Let’s start with millions of newly ‘insured’ individuals on the Medicaid rolls with nowhere to go, millions more on MediCare living the dream that they have managed to save their entitlement by voting Democrat, and doctors heading for the exits.  What?  Nothing seems different to you?  Why am I being so ‘negative’?

I’m not.  I’m being honest.  I know this must be difficult for many of you who’ve been feasting on lies for the last two years.  But try it.  Just a little.  If you don’t like it you can stop reading and go back to whatever version of reality makes you feel comfortable and validated.

The reason everything seems fine for now is because nothing much has happened. Yet.  It’s like the guy who, having jumped off the top of the Empire State building, is asked ‘How’s it going?’ as he sails past the fiftieth floor and replies, ‘So far, so good’.  But just as the pavement is waiting to greet the jumper the beast that is Obamacare is right behind the door, waiting for you to walk inside.

The very best parts of the health care law have already been put into place.  Coverage for pre-existing conditions is now the law.  Good.  Dependent children can stay on their parents’ policies until the age of 26.  Fine.  Those reforms would have taken about three sentences to legislate.  So what about all the stuff in the extra twenty-seven hundred pages?  It’s coming.

First will be the exchanges.  It is unclear to just about everyone what they are going to look like and how they are supposed to function.  From what little I’ve been able to see so far it would seem that ‘ugly’ and ‘not very well’ are fair descriptors.  The exchanges will be entities that sell subsidized health insurance to those who qualify.  Those who do not qualify will be picking up the tab through taxation.   The product they sell will be, essentially, Medicaid.

Medicaid does not reimburse physicians well enough for them to meet their costs.  To entice physicians to accept these newly ‘insured’ patients the federal government has offered to pay at MediCare rates for the first two years.  What happens after that time is anyone’s guess.  My guess is that by then Medicare rates will have been reduced dramatically, and the government will be paying for both classes of patients at deeply discounted rates.  Letters will be sent to patients explaining that their doctor no longer accepts their ‘insurance’ plan and they will need to find another who will.

If this seems overly harsh consider this: California’s MediCal program has one of the lowest reimbursement rates for doctors and hospitals in the entire country.  It is also a state with one of the highest costs of living.  Just yesterday the 9^th Circuit Court of Appeals issued an opinion that will allow California to cut its MediCal rates by 10%.  MediCal is California’s version of Medicaid.

So as I was saying, two years from now things are going to get difficult for the seniors.  Unless they get difficult a lot sooner.  There is a thirty percent cut in MediCare reimbursement set to go into effect January 1, 2013.  It is part of the fiscal cliff problem.  This has been an issue over and over in the past.  There has always been a last minute ‘fix’.  This time is different.  The sense is the cut may be allowed to finally stand.

If it does, and MedCare reimbursement drops by 30%, you can expect a number of physicians to drop out of the program.  Seniors on MediCare will look too much like Medicaid patients from a financial standpoint.  Seniors, who were lied to and frightened into voting Democrat to ‘save MediCare’ will learn that they actually killed it.  Whether it dies in 2013 or two years later is not significant.  The point is that Obamacare had the demise of MediCare built into it from the start.  Obama lied by accusing Paul Ryan of throwing Granny off the cliff.  Truth is, Granny was already in free fall, thanks to his healthcare plan.

Where, then, will all these patients go for their care needs?  The answer can be seen in what is already happening here in Los Angeles.  In anticipation of Obamacare the County has been furiously assigning existing MediCal patients and patients new to the system to MediCal managed care plans.  Things like Healthy Way LA, Healthy Families, LA Care, and other euphemistically titled HMO’s place these patients in ‘medical homes’—multi-specialty provider groups contracting with the government either directly or through a third party intermediary to provide care for this patient class.  The problem is that these practices are already overwhelmed and underfunded.  Patients are being referred to the emergency room in ever-increasing numbers.

For instance, a woman with abdominal pain is somehow able to see her primary care doctor.  He suspects a gall bladder problem.  He tells her to ‘go to the emergency room’ where the ER physician will be obligated to run expensive tests, like lab work, ultrasounds, and CT scans to rule out an emergency medical condition.  The cost for this will be borne by the hospital and the reimbursement it receives will be the Medicaid managed care rate, something like 85% of the Medicaid rate.  The ER doctor will likewise be paid a nominal sum for his efforts.

The more patients there are enrolled in these types of ‘insurance’ plans the more often this scenario will play out.

But let’s look at the bright side.  Let’s assume that the Medicare rates don’t drop next year and seniors actually will be able to keep their doctor.  Problem solved.  Obama saved MediCare.  No.  Ask yourself, when was the last time the federal government took control of anything, paid less for it, and got more for its money?  Right.  Never.  Remember the 750 billion dollars we are going to save by not spending it on MediCare so we can pay for Obamacare?  Where do you think that’s going to come from?  It comes from providing fewer services to seniors.  It’s called health care rationing.

This won’t be evident immediately, either.  The health care law will not be fully implemented until 2014.  It will then take some time for a MediCare patient to develop a problem, seek care for it, and be told that his or her options are limited.  Too old for a new knee, too sick for an expensive chemotherapy drug, not sufficient quality years of life left, according to their calculations, to warrant much of anything.  It will take more time for this to occur often enough to reach the general consciousness.  The media will not be running stories about it, just like they refused to run stories that might have harmed Obama’s chances of re-election.  So it might not be until 2015 or later that the seniors realize they’ve been had.  By then it will be too late.  It’s too late now.