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Interview with Dr. Thomas Bodenheimer

Hedrick Smith: You are a primary care physician and medical researcher?

BodenheimerDr. Thomas Bodenheimer: I'm a primary care physician. I'm also a clinical professor of family and community medicine at University of California at San Francisco.

Hedrick Smith: Let me just ask you as a primary care physician, what's been the impact of managed care on your life and your role?

Dr. Thomas Bodenheimer: It's been pretty major. Number one, throughout the first 10 years of managed care, I would say that we had to ask permission to do a lot of things that we used to just decide to do ourselves. Now there's a lot less permission-asking because I think managed care executives have realized that most of the permissions are granted. So it wastes a lot of money to have to have us ask permission, have them give permission, and then we go ahead and do it anyway. So it's lightened up somewhat. Another impact has certainly been on our budget. So it just makes things a little bit more difficult. It's more work for less money, but that's life.

Hedrick Smith: You’ve said something to the effect that managed care hijacked the primary care physician and converted him into a cost-control tool. That's rather dramatic. I'd like to get an explanation of what you mean by that.

Dr. Thomas Bodenheimer: Back in the '50s and '60s, most medicine in this country was practiced by patients choosing the specialist to go to, if they have another problem, going to a different specialist, not having their care coordinated.

In the '60s and '70s, there was a movement for primary care, especially for family practice, which was very, very important in terms of improving the coordination of care for people. So people really had a family doctor, and that family doctor coordinated their care with specialists and other health care facilities. This was a very good move.

When managed care came around, especially in the '80s, it said, ‘Hey, we like this idea of primary care physicians, but we don't want the primary care physicians to simply coordinate people's care throughout the health care system. We want them to be able to say no, you can't go somewhere else in the health care system,’ because most of the specialty care is a lot more expensive than primary care. So the managed care organizations, mostly HMOs, basically conferred upon primary care physicians the power to authorize or not authorize specialty care.

After a while, the public began to realize that primary care physicians weren't this wonderful kind of family doctor coordinator of care that they were supposed to be, but they were kind of Dr. No saying you can't go to the cardiologist, you can't get an MRI, you can't go to physical therapy. This did convert the primary care physician from a really positive influence in the health care system to a potentially negative one. Now, luckily, studies show that people still like the idea of having a primary care physician. So, hopefully, managed care has not tainted primary care such that the public has turned away from it and wants to go back to only an uncoordinated bunch of specialists to take care of them. We're not sure of what the future will hold.

Hedrick Smith: What is it like for you as a primary care physician to deal with a variety of health plans? If you are dealing with one health plan and you had one set of standards being told, one list of approved drugs, one set of instructions, one set of guidelines all the way through it, it would be one thing. But if I understand correctly, as a primary care physician, you're dealing with a half a dozen plans or maybe more. How many plans are you dealing with, and what does that do for you as a physician trying to deliver care?

Dr. Thomas Bodenheimer: In our primary care office here in San Francisco, we deal with something like 20 or 30 health plans. Now, only about five of them are HMOs. Others are PPOs and other insurance, but let's just take the HMOs. An HMO will basically give you a list of physicians, laboratories, X-ray facilities, physical therapists, and medications that you are allowed to give the patient. If you give the wrong one or if you send the patient to the wrong specialist, the patient is going to end up getting a bill for that because the HMO only will pay for that approved list of specialist drugs, whatever it may be. If we have five different HMOs, then we might have five different lists of specialists, of drugs that people can use, and a lot of times, these things change from time to time because the HMOs will contract with different groups, different X-ray facilities, have different drugs on their lists from year to year.

Hedrick Smith: Let's talk about something that's even more fundamental to the delivery of care, and that is patients with chronic diseases: diabetes, asthma, all kinds of chronic diseases. What happens to that kind of care in the vulcanized medical system that you're just describing?

Dr. Thomas Bodenheimer: Well, chronic disease care is so, so important because tens of millions of Americans have some kind of chronic disease, whether it be diabetes, hypertension, cholesterol problems, heart failure, depression, osteoporosis, whatever it may be. As a primary care physician, especially taking care of mostly elderly people, I deal with chronic disease probably 80 percent of my time. Good studies have been done that show that primary care physicians do a lousy job taking care of chronic disease, and it's not that we don't know how to do it because we do. The problem is we don't have time to do it because the patient volume is too great and we don't have enough time in each visit to really deal with the chronic disease-established guidelines that we may know how to do [but] don't have time to implement.

Hedrick Smith: But managed care companies will tell you, companies like Humana will tell you, ‘We can do a better job dealing with chronic disease because we can do a lot of preventive care, a lot of follow-up care, for example, congestive heart failure. Somebody who has a heart problem, gone into the hospital, we can set up a regularized telephone contact from a nurse at an end of an 800 number to remind people to take their medication, to get their exercise, to watch their diet, and what we see is a reduced return of people back into the hospital for repeat occurrence. So this is a great gain of managed care. We can do this either through the primary care physician or through a nurse or another health professional.’ What's your response? Is this right?

Dr. Thomas Bodenheimer: In theory, doing very simple things to help take care of chronic diseases will, number one, improve the quality of care and help patients and, number two, will save money. In practice, it doesn't quite work out that way. Let's take congestive heart failure as an example. Congestive heart failure is a situation [in] which people's [hearts don’t] pump very well. So they get fluid in their lungs, and they get very, very sick and often [sick] enough to go to the emergency room or go to the hospital. If you have a nurse come to someone's home and take all the salt off of their food shelves because salt is very bad for people with this problem and weigh them every day, and if their weight goes up, that means they're getting too much fluid on board and that means they need more medications to help them vary their medication doses, depending on their weight.

Those simple things can keep people out of the hospital and out of the emergency room, and probably could ultimately save money for managed care organizations and for the health care system as a whole. The problem is that the front-end costs of doing that -- a lot of organizations don't want to pay for a lot of these programs because you have to hire the nurses. You have to have them go into people's houses. You have to get people enrolled in the program. You have to have information systems to get it up and running. A lot of managed care organizations try to do it and then they find that it costs more than they actually save and they drop it. For example, Brown and Tolen, which is our main medical group through which we get much of our managed care, had a congestive heart disease program for about a year. I got a letter last week saying that Brown and Tolen no longer has a congestive heart disease program. Now, the program is good. It didn't save them money. They dropped it.

If you're on an HMO in the United States, most HMOs, because employers and patients will switch from one HMO to another, don't expect that they're going to keep their enrollees for more than 2 or 3 years. So, if they invest money in improving someone's chronic disease and say they improve it and that maybe 2 or 3 years down the line that patient is better and doesn't cost as much, that patient may be in a different HMO at that point. So the HMO that invested the money may not be the organization that reaps the financial benefits. So a lot of HMOs are saying, hey, if we can't get the benefits in 6 months, it's not worth doing it.

Hedrick Smith: Is that their normal time frame, six months? They want [it] to pay back that fast?

Dr. Thomas Bodenheimer: I think they want [it] to pay back pretty quickly, and especially these days when managed care organizations are under a lot of fire and are not in such good financial shape as they were 2 or 3 years ago. They're very worried about the bottom line. They're worried about the stock market. They're worried about how they look to their investors, and programs that are up-front, costly, and save money down the road may not be that attractive, because programs that cut care right now save money right now.

Hedrick Smith: As a doctor, you deal with five HMOs or maybe 20 or 30 health plans in your office here. What kind of follow-through can they count on from doctors? Can the ordinary market health plan get compliance from the doctors that it contracts with?

Dr. Thomas Bodenheimer: Let me give you an example. Say I have patients who have a 12-minute appointment all day long, and most of my patients are elderly and they have several illnesses. I have to make sure that their diabetes, everything is done right about their diabetes, that they get their ophthalmologic exam every year, that they get their hemoglobin A1c twice a year, that they know how to check their blood sugars [at] home, that they get their feet checked, that their cholesterols and their blood pressures are okay.

All that takes time, but the person who comes in and says, "Doc, I've got a headache, I'm dizzy, and my left knee hurts," and that's what I want to deal with in my 12 minutes, well, I don't have time to additionally do what I need to do to take care of their diabetes correctly. We have to do it in 12 minutes because we have a lot of people signed up for our office under managed care that have my name or my partner's name on their card, and we have to take care of them. And if they call up, we've got to see them. So 12 minutes is all the time there is.

Hedrick Smith: From the doctor's standpoint, you're being told that you've got to pump a whole lot of people through in 12 minutes in order to meet the targets of the HMO, but at the same time, the HMO is telling you that you've got to do all of these other things. The HMO is putting on you contrary pressures. You can't meet them both. Is that right?

Dr. Thomas Bodenheimer: The HMO is basically saying the primary care physician should see 2,000 to 2,500 HMO patients in their sort of list of patients that they take care of. That's a lot of patients, especially if they're elderly. So there's tremendous pressure to see a lot of patients. Yet, we have tremendous pressure to do all of the right things for the patients, but we just don't have time to do both of those things.

Hedrick Smith: You had to see a lot of patients before. How is that different?

BodenheimerDr. Thomas Bodenheimer: It feels as though we're seeing more patients now. Now, whether that's true or not, I can't say, but it feels as though we're seeing more patients per hour now than we used to. So that's one thing. The second thing is that the quality expectations for how we take care of people with chronic disease are higher than they used to be, and that's very excellent. If people want both quality and quantity, we need help about the quality part, and we could get that help very easily because, for example, taking care of someone with diabetes that's stable is not that difficult. I could probably teach you how to do it in a couple of hours. A lot of the basic things, you need a reminder system, how often in the year do people need different things done and so forth, that could be done by a well-trained medical assistant, nutritionist, a nurse, a chronic disease person who just is here to help me do it, but there's no one here to help me do it and we don't have the money to pay for it.

We don't have the money to pay for it because we have, again, contradictory pressures, getting paid less per patient under managed care, having more administrative work assigned to us by managed care, therefore having to hire more people to do that administrative work, cost of medications going up, cost of personnel going up. So costs going up, reimbursement going down, it puts a lot of pressure on us. Primary care doctors that work in low-income neighborhoods as we do are not doing very well, and we just kind of do the best we can, but we cannot hire these extra people.

Hedrick Smith: When you read customer satisfaction ratings, report cards, you don't see the dramatic difference in customer satisfaction ratings for these different kinds of HMOs that you might expect to see. What's the hidden message here? Why is that the case?

Dr. Thomas Bodenheimer: Patient satisfaction is something that has become very important because Newsweek and U.S. News and World Report and The Washington Post and whoever are printing these report cards saying such and such an HMO, 80 percent of the patients are satisfied and such and such an HMO, only 70 percent are satisfied, but there is a big flaw in that system. Most people in HMOs are healthy. Just a small percentage are really sick. The ones that are healthy like the HMO because it's cheaper than the health plans they used to have, but they don't need any health care because they're healthy. So they're satisfied.

If you take patient satisfaction with people who are sick, then you begin to see some real differences, but HMOs don't really want to do that because they're afraid that they might not do so well. So the patient satisfaction data on the report cards is quite flawed. If an HMO can say 90 percent of our patients are satisfied, that's a great marketing tool, even though about 90 percent of the patients may come in for a Pap smear or, you know, a cholesterol check once a year and that's all they need. So they're probably going to be satisfied.

Hedrick Smith: Now let's take a look at CalPERS [California Retirement System]. Last fall, CalPERS is saying to its members go to Pacific Care. Pacific Care is a better value, and they say specifically in their recommendation that it hasn't raised its rates as much as Kaiser has. There's another huge employer representative, a mass employee representative which is trying to guide its members towards a health plan, and it looks as though cost is the primary consideration.

Dr. Thomas Bodenheimer: There are obviously very major employer organizations in California, CalPERS and Pacific Business Group on Health. People in the staffs of those organizations, or the executives of those organizations, or the thought leaders in those organizations do believe in quality. They really do. There are some very good people in those organizations, but when it comes down to the key decisions, it's the actual employer, that's the Bank of America or Chevron or Fireman's Fund Insurance, some of the big people in the Pacific Business Group on Health--they are the people who are going to decide which HMOs they like or not. Those companies are going to decide based on cost because, for them, cost on health care is a huge, huge issue, and quality is way down on the totem pole.

Hedrick Smith: "Adverse risk selection" is a term that gets thrown around a lot. What are HMOs trying to do in terms of their selection of the people they cover and what are they trying to avoid?

Dr. Thomas Bodenheimer: HMOs generally get paid from either the Government for Medicare, the Government for Medicaid, or employers, get paid a set amount of money for patients they enroll. If that patient is healthy and doesn't cost the HMO anything, the HMO is going to make a lot of money on that patient. If that patient is sick, needs a lot of doctor visits, hospitalizations, emergency room visits, et cetera, the HMO is going to lose money on that patient. HMOs, by and large, don't want sick people, and there are some very good studies about HMOs with regard to Medicare patients, the elderly, in which they have managed to skim off the healthy Medicare population and are not taking care of the sick Medicare population.

Hedrick Smith: People talk about the revolving door in Medicare patients. What do they mean?

Dr. Thomas Bodenheimer: There is a concept that Medicare HMOs will bring in people who are healthy, and if they happen to bring in someone who becomes sick, they will figure out a way to have that person go out the door and go back into the general Medicare system, so that they end up with the healthiest Medicare patients. So the revolving door really is that sick patients go out the door and healthy patients go in the door.

Hedrick Smith: How do they do that? How do they get rid of people when they're sick, or do the people themselves understand that they're going to have a hard time getting to see specialists and getting tests and that kind of stuff, and people themselves just simply know that it's easier to get the care if you're in traditional Medicare rather than HMO Medicare?

Dr. Thomas Bodenheimer: Well, if someone who is chronically ill goes into a Medicare HMO and finds they're not getting the care they want--because, for instance, they say they can't see the specialist that they used to see because that specialist is not in that HMO. Sometimes the patient will just disenroll so that the incentives right in the HMO just sort of cause the patient to leave.

The other thing that can happen is that the physicians who don't get paid much by the HMO to see sick people might say, "Hey, maybe you'd be better off outside the HMO. I can still take care of you," but then the physician will get paid directly by the Federal Government, not by the HMO, and might get paid more. So the physicians [have incentives] to sort of help the HMO escort the sick person out of the HMO.

Hedrick Smith: Are you saying that HMOs are setting up benefit structures for patients and fee structures for physicians to encourage sick people to leave the HMOs?

Dr. Thomas Bodenheimer: There's no doubt that HMOs set up difficulties for sick people in their HMOs that would sort of encourage them to leave, and that they also set up fee structures with physicians that would encourage the physicians to kind of help the patient out the door of the HMO and back into the regular Medicare system.

Hedrick Smith: There's a Kaiser program I wonder if you'd comment on, and that's the colon cancer screening program. I presume you're familiar with that, this extensive effort to cover an entire population of people, hundreds of thousands of people over a period of 10 years with Sigmoidoscopies. And it costs a lot. It may have a payoff over time, but it doesn't have a quick payoff. What's your reading of Kaiser and its motivation for undertaking a program like that? What's your assessment of that program?

Dr. Thomas Bodenheimer: An organization like Kaiser could say, okay, we did some great research on this, but we're not going to implement it, but it looks like they are implementing it and really trying to do colon cancer screening to prevent their patients from getting colon cancer. Now, it's not going to pay off for Kaiser for probably 5 or 10 years to have a lower rate of patients with colon cancer, but Kaiser [is] a 50-year-old organization. It thinks about its patients over a longer time span than a lot of other HMOs, and clearly, it's got some kind of ethic that's leading it to move that program forward even though it may be costly.

Now, if Kaiser gets into financial trouble--and it's been in financial trouble--that program could go by the wayside. So I don't think anyone should think that good things are going to stay forever, but at least it's a positive development and it's encouraging that some organizations are trying to do the right thing in terms of taking care of chronic disease.

Hedrick Smith: What do we do about uninsured Americans as a country?

Dr. Thomas Bodenheimer: Well, one thing is it's here we have people complaining about managed care and all the bad things it does to them, and a lot of those complaints are correct, but if you compare someone having an HMO that may deny a few things to them compared to someone who has no insurance at all, I'd take the HMO any day. So compared to the problems that the American public sees with HMOs, they're tiny compared to the problem of having 40 million people, just more people that live in most countries in the world--40 million people with no insurance whatsoever. To me, this is a national scandal, and it should be like front page, every day in the newspapers, and if Congress and whoever is going to be the President doesn't do something about this soon, if the economy goes down, we're going to have 60 million people without any insurance.

Hedrick Smith: Are we paying for those people, one way or another? Are a lot of those people showing up either in practices like yours or in emergency rooms where their diseases are advanced and the cost is much greater and somehow the system, the health care system, is underwriting it?

Dr. Thomas Bodenheimer: If someone who is uninsured becomes very sick, usually what they do is they wait as long as possible. Sometimes they wait too long. They go to the hospital emergency room. They get admitted. The hospital tries to bill them. Most of them don't have the money to pay. So the hospital tries to cost-shift, to say okay, we're going to take what it costs to take care of that uninsured patient, and we're going to put it into our costs for people who do have insurance. So people not having insurance raises the cost of health care for people who do have insurance. Many of the uninsured don't get the care they need. When they finally do need care, often someone else, you and I through our insurance premiums, indirectly pay for that.

Hedrick Smith: Are we in effect rationing care by economics?

Dr. Thomas Bodenheimer: Sure, we're rationing care. Rationing care means that people don't get all the care that they should be getting that's appropriate for the particular condition they have, and a lot of people don't get the care that's appropriate for the condition they have because they can't afford it. They don't get it, and that's the main way that care is rationed in this country is by whether someone has insurance or not.

Hedrick Smith: Are there studies that show direct health outcomes, that is, that the uninsured have higher incidence of certain diseases or they're likely to die earlier? Are there studies that show there is a direct care of impact of being uninsured?

Dr. Thomas Bodenheimer: Absolutely. There are very good studies that show that people who don't have insurance have higher mortality rates, higher rates of complications from chronic diseases. Some people think that the uninsured are just kind of college kids who are between jobs and don't have insurance. That's not the case. Many of the uninsured are low-income people, minority people mainly, and people with a lot of serious disease.

Hedrick Smith: So you're talking about the working poor, people working at above the level of poverty which would qualify them for Medicaid. Who are we talking about here?

BodenheimerDr. Thomas Bodenheimer: Most of the uninsured are people who have a job, but they usually have a job in a small business like a cleaning establishment, who doesn't give health insurance to their four or five or six employees, and those people are working, but they don't have insurance. So you could call them the working poor. There's another group. I have a tragic case of a couple that lost their jobs, both of them. They both have diabetes. They're both about 58 or 59 years old. They won't qualify for Medicare for another 6 or 7 years. They just lost their insurance. They're terrified. They have a serious disease, and they don't know what to do.





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