The Treatment for Nevada’s Ailing Health Care System

Paradigm-shifting, anxiety-provoking change is coming soon. Here’s what that means—and how you can play your part.

untitled-1.jpgI would rather take a DMV test than figure out a medical bill. I can’t think of anyone other than tax auditors and medieval history scholars who is sufficiently determined and detail-oriented to get to the bottom of those lines of Latin and figure out who paid what to whom, who still owes what, what was covered, what was not, why the things that weren’t covered were refused, and whether any of it corresponds to the treatment actually received.

This story is supposed to be about health care, not billing. But health care these days seems to be all about billing. “We don’t have a health care problem,” pundits will tell you, “we have a health care coverage problem.” In other words, it all comes back to that vexing question: Who’s going to pay for it?

That’s the question legislators and medical industry leaders are asking themselves in Nevada, which needs help on the health front. Last year, our state ranked 38th in the nation in the United Health Foundation’s ranking. The report considers behaviors, environment, policy and clinical care. We didn’t do well in any category. And—here’s where the money comes in—22 percent of our population is uninsured, the second-highest rate in the nation.

Big problems like these require a good, hard look at the big picture. So, let’s get past the Latin and examine the nature of the state’s health care crisis, the big changes ahead, and how—maybe, just maybe—things can get better.

Expanding care

Let’s start in Carson City. Before Nevada’s 2013 Legislature opened on February 4, Governor Brian Sandoval had already made the state’s most important decision about health care. On December 11, he said he would expand the state’s Medicaid program as outlined in the Affordable Care Act (a.k.a. “Obamacare”). This means some 78,000 Nevadans will be newly eligible for the federally subsidized insurance program. And, here’s what that means:

The expansion loosens eligibility. Whereas Nevada used to go by the strictest guidelines for qualification possible, starting in 2014 it will go by the same as other states: 133 percent of the poverty level. So, using the 2012 poverty level as an example, a single person age 19 to 64 with no children making less than $14,856 per year or a family of four making less than $30,656 would qualify for the government-subsidized plan.

The states, which administer their own Medicaid programs, will be on the hook for part of the bill. The federal government will cover 100 percent of the medical costs of the expanded Medicaid program for the first couple of years, and then decrease its contribution little by little over time. In 2020, the share of the burden sticks at 90 percent federal, 10 percent state. But that’s just for the medical costs. States will be responsible for all the administrative costs from the very start. In Nevada, projections of these administrative costs vary widely, from $10 million to $50 million per year.

Making the exchange

Another part of Obamacare where Nevada is in front of the curve is in setting up health insurance exchanges. Ours, called the Silver State Health Insurance Exchange, was approved by U.S. Health and Human Services Secretary Kathleen Sebelius in January, which means it could start taking enrollments by October.

But what’s a health insurance exchange anyway, and why do we need one?

The coverage mandate means a whole bunch of formerly uninsured folks will be looking for inexpensive plans. Some reforms included in the new health care law, such as the elimination of insurers’ ability to deny coverage for pre-existing conditions, are popular. But there’s a tradeoff: All legal U.S. residents will be required to carry health insurance beginning in 2014. Not everyone can afford private insurance, though, so the expansion of Medicaid is intended to help make low-priced coverage available to all. But what about Nevadans who are neither eligible for Medicaid nor covered by an employer plan? That’s where the exchange comes in …

If you’re covered by your employer, you’re all set. But for others, the federal government recommends that states set up health insurance exchanges. Such exchanges give consumers access to multiple options and allow them to compare the options all in one place. Exchanges function like travel aggregation websites such as Expedia, which are able to offer discounted rates because they buy rooms and airline seats in bulk.

Nevada got started early, and some state leaders believe our Silver State Exchange is so good, it will serve as a national model. The entities that offer the coverage—the federal government, plus private companies such as Anthem, Sierra and United Health Care—won’t change, but now individuals can get group rates previously reserved for large companies. People can log onto the insurance exchange to compare rates and benefits, and sign up for plans.

While the Affordable Care Act should help improve people’s access to care, it’s by no means a cure-all. It fails to solve some problems and inadvertently creates others. Because of the Medicaid expansion, UMC will lose less money on uninsured patients, COO Brian Brannman says, but it will also lose the federal funds that offset those losses. It’s like digging yourself out of one hole by digging yourself into another one. And as the state’s only public hospital, UMC has no money to spare.

Calling all doctors

Let’s imagine that, because of the reform, most people will have some type of health care coverage by 2015. Crisis averted. Next problem: There may not be enough physicians to see all those newly insured patients in Nevada anyway.

The state has a serious shortage—only 195 active physicians per 100,000 residents, compared with the national average of 255, according to Nevada School of Medicine’s Center for Education and Health Services Outreach. We rank 45th in the nation in this regard. So, how do we solve the problem?

Start with primary care. Rather than taking care of themselves, getting regular check-ups and seeing their primary-care provider when they get sick, too many people are going without coverage, waiting until they get very sick and then heading to the emergency room for treatment. This is an expensive and wasteful use of our precious resources. More primary-care providers will help stanch the flow of the critically ill.

Use existing providers. Between doctors, physician assistants, nurse practitioners, nurses and physical therapists, we already have a wide spectrum of primary-care providers. Some patients don’t trust non-M.D.s, and some clinics and hospitals use providers for tasks beyond their training. But clear industry standards detailing who should do what, and some public awareness about it, would fix that.

Make primary care more attractive to budding professionals. Medical students are opting less frequently for primary-care fields, such as family medicine, general medicine, internal medicine, obstetrics/gynecology and pediatrics, and more frequently for specialties, such as cardiology and oncology, which tend to offer better pay and less grueling schedules. Debt relief for students who go into primary care helps offset this imbalance, and the federal government does offer student-debt waivers to medical students who do their residencies in zones of acute primary-care shortage. The National Health Service Corps gave two Nevada students such an award this year, out of 87 nationwide.

Keep up with our region in medical education. The University of Nevada School of Medicine graduates about 60 M.D.s per class; by comparison, the University of New Mexico’s Health Sciences Center in Albuquerque (population: 500,000) graduated 92 students last year.

Nevada’s School of Medicine is small, fractured and underfunded. Dean Thomas Schwenk has a plan to bring it into the 21st century that includes building a $220 million academic building in Las Vegas and beefing up clinical programs in Reno. But the state, hospitals and donors will have to kick in their share to make it happen.

Create more residencies. Residencies encourage talented medical students to stay in the state and start their careers here after finishing medical school. Schwenk says a student who graduates from med school and does his residency in the same city is twice as likely to stick around for work as one who graduates in one city but does his residency somewhere else. Between the school of medicine and its private, nonprofit counterpart, Touro University, Southern Nevada has only 280 residencies (that’s 10.5 per 100,000 population, 46th nationally), compared with 1,450 in Arizona.

The residency shortage is another money problem. Schwenk estimates one resident costs $100,000 to train. Funding for them, which comes mainly through Medicare, covers only as many residents as a hospital has in place three years after starting its residency program. So hospitals that have grown a great deal since they started their programs are locked in at old funding caps—and not enough residencies to serve a growing community.

Both Schwenk and Touro executive director Michael Harter are working with local hospitals to create more residencies, but it’s a tough sell. To help them, Dr. Andy Eisen, a Nevada Assemblyman, wants to commission a state-sponsored study of Nevada’s graduate medical education. The Southern Nevada Medical Industry Coalition is holding a conference in June to tackle the issue.

Better graduate medical education helps more than just students, schools and hospitals—it helps patients, too. Large academic health sciences centers, like those at UCLA or UCSD, tend to improve the quality of health care in a community overall. They attract reputable physicians who want to work in places where exciting discoveries and clinical trials are happening.

The fee-for-service dilemma

Even cities with world-class medical centers are confronting another problem, though: the prevailing system for giving—and getting paid for—health care.

Imagine that you did the job you do now as a freelancer or contractor. Now, imagine that you got paid according to every task involved in your job—not by your clients, but by a third party who guarantees your work. And that third party will only pay you after you’ve provided a detailed accounting of how you did each task, including a code that, if not entered correctly, would annul your compensation.

In the medical field, this is called fee-for-service, and it’s how the majority of physicians get paid. After seeing patients, they submit Byzantine paperwork to insurance companies, which dispense payment only after thorough review. Any “i”s not dotted or “t”s not crossed means no money for your doctor—and a headache for you, the patient.

And here’s the other thing: The rates insurance companies use are based on those set by the federal government for Medicare, and many of these rates are completely out of whack with reality. Speaking to Vegas Seven last year, Dr. Kevin Petersen gave the example of being reimbursed $1,800 for performing hernia surgery in 1986, and $350 for the same procedure 20 years later. He stopped taking insurance altogether and went to a cash-only business model.

So, what’s the answer? Nobody really knows, but many new approaches are in the works:

Some clinics and private practices are experimenting with methods other than fee-for-service. The cash-only model is one example. But making such a leap presents a conundrum: If physicians stop taking insurance, they stand to lose many of their patients; but if they keep taking insurance, they may barely make enough money to pay off student loans and cover staff salaries—particularly if they have a high percentage of patients on Medicaid and Medicare. Some doctors are taking the concierge route, charging a premium, out-of-pocket rate to be the primary-care coordinator at their patients’ beck and call. In these cases, patients still need insurance for catastrophic and specialty care.

Some physicians join networks. A good example is the local HealthCare Partners with its so-called “total care model,” a collection of primary-, specialty- and urgent-care providers. Although these networks still operate on the fee-for-service model, they can streamline the process, for instance by negotiating rates with insurers on behalf of all network members. Some doctors see this as the corporatization of private practice, offering access to a large patient pool and fancy marketing while reducing physicians’ independence.

Obamacare’s solution is the accountable care organization. ACOs are like provider networks, but taken a step further to include accountability and performance measurement. Volunteer participants agree to standards of care, and the organization negotiates contracts with Medicare to get compensated based on outcomes related to those standards. The underlying idea is to encourage both efficiency (fewer unnecessary procedures, for instance) and quality (fewer re-admissions based on avoidable errors). Good performance relative to standards yields bonuses; bad performance can mean penalties.

The private-sector version of accountable care organizations are clinical integration networks. Like ACOs, clinical integration networks come together to set standards of care and negotiate reimbursement terms, including incentives for good performance, but they do so with private insurance companies instead of the federal government. In October, St. Rose Hospitals launched its clinical integration network, the St. Rose Quality Care Network. It expected a couple hundred physicians to join; it got 600.

Not everybody, though, is thrilled by this idea. Although the intent is to drive down costs for both providers and patients, too much emphasis on performance measurement could backfire. Critics point out that even the most skilled doctor doing his best work under perfect circumstances can have a bad outcome. The human body is a complex, unpredictable thing.

Where do you come in?

It’s apparent how consumers can play a part in what happens with federal or state health care reform: By voting for public officials who support the approaches they prefer.

When it comes to medical education, the patient’s role is subtler, but just as important. If you want a UCLA-style hospital in your community, think about the contribution you’d have to make as a taxpayer, donor or patient.

You’re even involved in the development of alternatives to fee-for-service health care delivery, which seems the most industry-driven of all the changes taking place. Local health care leaders argue that consumers can exert great influence on how their care is delivered if they understand the different models and vote with their feet (or wallets). You can also voice your opinion on care in public forums.

Of course, the most basic thing you can do is to start taking care of yourself. Your ounce of prevention may help cure a sick system.

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Donald Carson Hartlieb * Degree: Foreign Medical School-Grenada, 1981. 
Office: 4275 S. Burnham Ave., Suite 130, 733-8871. Upinder Singh Degree: Foreign Medical School-India, 1992.
 Office: 874 American Pacific Dr., Henderson, 777-4809.
 Board certification: Internal medicine.