Wednesday, April 16, 2014

Fwd: qotd: Maldistribution of the physician supply

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-------- Original Message --------
Subject: qotd: Maldistribution of the physician supply
Date: Wed, 16 Apr 2014 04:10:49 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

OECD Health Working Papers No. 69
April 3, 2014
Geographic Imbalances in Doctor Supply and Policy Responses
By Tomoko Ono, Michael Schoenstein, James Buchan

Doctors are distributed unequally across different regions in virtually
all OECD countries, and this causes concern about how to continue to
ensure access to health services everywhere. In particular access to
services in rural regions is the focus of attention of policymakers,
although in some countries, poor urban and sub-urban regions pose a
challenge as well. Despite numerous efforts this maldistribution of
physician supply persists. This working paper first examines the drivers
of the location choice of physicians, and second, it examines policy
responses in a number of OECD countries.

The choice of practice location is complex, but across the examined OECD
countries, several key factors have emerged in studies of doctors and
medical students in recent years. First, the relative unattractiveness
as places to live and work is the root of an unequal distribution of
physicians across regions and areas. Second, the mode of employment and
payment for physicians set the frame for their options for location
choices. Third, while incomes for general practitioners in rural regions
are higher than those in urban regions in some counties, it may not be
sufficient compensation as they work for longer hours and in generally
more difficult working conditions. Furthermore, professional prestige
plays a role as more prestigious specialties tend to be concentrated in
urban areas and by default making rural practice less attractive.
Finally rural origins and experience in rural settings are influential
factors as doctors who are from rural regions are much more likely to go
and practice in rural setting compared to those with an urban upbringing.

While a truly comprehensive regional development policy is helpful to
tackle the maldistribution of physicians across regions, policymakers in
the health sector have three broad strategies to respond to imbalances
in physician distribution.

* The first strategy is to target future physicians to maximize the pool
of physicians available for practice in relatively underserved regions.
This means increasing the number of qualified physicians who are
interested in practice in underserved regions, and/or the number of
working hours they are willing to provide. The crucial focal point of
action for this strategy is the selection and education of medical students.

* The second strategy is to target current physicians to maximise the
share of physicians in the health system who practice in underserved
regions. This requires a suitable incentive system, which may include
both "carrots and sticks", i.e. not only financial incentives, but also
suitable regulatory measures to influence physicians' location choices.

* The third strategy is to do with less, i.e. accept that staffing
levels will be lower in some regions and focus on service re-design or
configuration solutions. This can be done through expansion of
involvement in health service delivery by non-physician providers.
Service delivery innovations can also make a difference, by the use of
technology (e.g. through better use of telemedicine), better management
of human resources and their workload, or a combination thereof.

Policymakers in most countries will have to blend a range of elements of
these three strategies, and review this mix over time. The best mix of
such strategies will depend on various factors: patient needs,
demography of the population and the physician workforce, health system
characteristics, the budgetary situation, and the overall health reform
context. While broad characteristics of interventions can be identified,
more robust evaluations are required to improve the evidence basis for
these policies and strategies in order to support policymakers to make
better informed choices.


Comment by Don McCanne

All OECD countries experience maldistribution of the physician supply.
Of particular concern is the distribution of primary care physicians,
especially the lack of their presence in underserved regions. This OECD
working paper describes the problem and suggests some approaches to
improve distribution.

Currently I am in San Francisco, participating in the National
Conference on Primary Health Care Access presented by the Coastal
Research Group. The chief of adult medicine of a highly respected
California family medicine residency that is noted for training
physicians who would more likely practice in community health centers in
underserved communities told me that though their program is initially
very successful, their graduates experience burn-out, typically after
about three years of practice. This is a very serious problem that
obviously requires the attention of public policymakers. This OECD
report suggests some strategies that could help.

The fact that all OECD nations experience these problems indicates that
the health care financing system alone cannot be expected to correct
these deficiencies. However, a public financing system, such as single
payer, should improve the flexibility to work with the health care
delivery system to drive improvement in the distribution of health care
professionals. Our current fragmented financing system provides little
opportunity to incentivize strategies that might help.

We do need a single payer national health system, but also we need to
elect public officials who believe in better health care for all.
Although correcting maldistribution will always remain a challenge,
there is much that can be done, but we need people in charge who will
want do it.

Tuesday, April 15, 2014

Fwd: qotd: ACO incentives exceed efficiency gains

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: ACO incentives exceed efficiency gains
Date: Tue, 15 Apr 2014 05:46:01 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

April 2014
Structuring Incentives Within Organizations: The Case of Accountable
Care Organizations
By Brigham Frandsen, James B. Rebitzer

Accountable Care Organizations (ACOs) are new organizations created by
the Affordable Care Act to encourage more efficient, integrated care
delivery. To promote efficiency, ACOs sign contracts under which they
keep a fraction of the savings from keeping costs below target provided
they also maintain quality levels. To promote integration and facilitate
measurement, ACOs are required to have at least 5,000 enrollees and so
must coordinate across many providers. We calibrate a model of optimal
ACO incentives using proprietary performance measures from a large
insurer. Our key finding is that free-riding is a severe problem and
causes optimal incentive payments to exceed cost savings unless ACOs
simultaneously achieve extremely large efficiency gains. This implies
that successful ACOs will likely rely on motivational strategies that
amplify the effects of under-powered incentives. These motivational
strategies raise important questions about the limits of ACOs as a
policy for promoting more efficient, integrated care.


Comment by Don McCanne

The growth in the number of accountable care organizations (ACOs) has
been phenomenal considering that they are primarily only a wish on the
part of the policy community and bureaucrats that such organizations
would increase efficiencies to reduce health care spending, especially
when earlier results have been very disappointing. This study has added
to the doubts about ACOs by showing that incentive payments that they
receive will exceed cost savings unless the ACOs "achieve extremely
large efficiency gains" - an extremely unlikely outcome.

The policy literature is saturated with these "wish they would work"
reports and recommendations to further expand the use of ACOs. The
experiment has already failed, and we are meandering back into the
disdained managed care organization model disguised as ACOs. The tragedy
is that this has distracted our politicians and bureaucrats from moving
forward with a model that actually would increase efficiencies, not to
mention meeting other goals such as universality and removing financial
barriers to care - a single payer national health program.

Monday, April 14, 2014

Fwd: qotd: Lessons from British Columbia

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Lessons from British Columbia
Date: Mon, 14 Apr 2014 04:27:05 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Surrey Now
April 8, 2014
Health-care changes seem to be paying off in B.C.
By Keith Baldrey

Have we finally wrestled that voracious gobbler of tax dollars - the
public health-care system - to a standoff, if not to the ground? By that
I mean the days of the system automatically devouring increasingly large
amounts of money every year to feed itself may be drawing to a close, at
least in British Columbia.

Of course, I don't mean the health-care system will stop being the
biggest area of government spending by far (the health-care budget this
year is pegged at $16.9 billion, out of a budget of $44.4 billion).

But the rate of growth in spending is slowing down significantly. The
annual hike is down to 2.6 per cent this year, compared to just several
years ago when it was above five per cent.

Now, there are those who think this is bad news. After all, shouldn't we
be plowing even more money into the system rather than less? If we
don't, won't health-care standards suffer? The answers are: a) not
necessarily and b) no.

The ideological defenders of the public health-care system (who think
the answer to everything is to blindly spend gargantuan amounts of more
money) think the only measuring stick worth anything is per capita
spending. In other words, B.C. should spend more dollars per person than
anywhere else, and things will take care of themselves.

But those with experience in the system, who study it and come up with
good ideas for change, point to another and far better measurement:
health outcomes.

And in that regard, B.C. ranks the highest in the country. While we sit
second-to-last in per-capita spending, (only Quebec ranks lower) we beat
most other provinces in all kinds of areas: best cancer survival rates,
lowest heart attack rate, longest life expectancy, lowest smoking rate,
lowest infant mortality rate, etc.

When it comes to wait times for certain surgeries (an admittedly
frustrating situation for many people on those wait-lists), they've been
mostly going down and not up. The median wait time for a hip joint
replacement has declined to 13 weeks from 19 weeks over the last 10
years, while a knee joint replacement has gone from 25 weeks to 18 weeks
over the same time period.

None of this is to suggest the health-care system does not need constant
up-keeping and reform (crowded emergency rooms, for example, seem to be
a chronic problem, and we could always use more nurses). But it is
encouraging that blind yearly spending hikes are being replaced by
newer, innovative ways of spending that are both efficient and lead to
healthier outcomes for the users of the system.

Not being able to count on big increases in funding every year has
brought some much-needed discipline to the system, and employing some
different models has also helped.

One of the most significant changes that is paying off is the
government's relationship with doctors.

In the past, physicians were viewed as costly, self-interested cogs in
the system.

Now, however, they are viewed as equal partners who have real
responsibilities when it comes to running the health-care system.

For example, several joint committees have been established with the
Doctors of B.C. (formerly called the B.C. Medical Association) where
doctors and the government shape policies that are aimed at improving
patient health, rather than protecting the financial interest of either

One committee is for general practitioner services (overseeing
improvements to the primary care system), another is for specialist
services (aimed at improving access for specialist care) and a third is
for shared care (focused on better integration of all levels of care).

As well, something called the Divisions of Family Practice has been
created. It links family doctor practices and is designed to improve
common healthcare goals in a particular region (improved maternity
coverage, for example).

Committees such as these were unheard of a decade ago. They appear to be
improving patient care by focusing on smart, evidence-based decisions
rather than on simply demanding more money, either for doctors' pay
packets or a health authority's budget.

The Canada Health Accord between the provinces and the federal
government died last week. It means Ottawa will be cutting in half its
annual transfer of money to pay for health care.

The fact the B.C. government hardly said a peep about the accord's
demise is evidence of how much the system has changed in the past few years.


Comment by Don McCanne

Evidence based health care. Why should that be controversial? Yet it is.
It provokes accusations of "cook book medicine," or "bureaucrats
interfering with your health care." Current efforts in British Columbia
can provide us with a more rational perspective than is being provided
by these negative memes.

Physicians from the B.C. medical association (Doctors of B.C.) and the
government are cooperating on efforts to improve patient health in
manners other than by simply increasing spending (though that should not
be neglected when there is an obvious imperative). Such efforts to spend
better rather than simply spending more will be particularly important
now that the federal government is being run by individuals who promised
to protect Canada's medicare but instead cut federal spending on the
program in half.

Although single payer systems are often criticized for being bogged down
by government inflexibility and laggardly progress, the activities in
B.C. demonstrate that such processes need not be an inevitability. In
fact, B.C. is showing us that their single payer system does have the
flexibility to make needed improvements.

In the United States we are currently using models, such as accountable
care organizations, supposedly to achieve higher quality at a lower
cost. Unfortunately, the model seems to have been misdirected away from
efforts to improve health care based on evidence to efforts granting
nominal awards based on penny pinching and a few negligible
teach-to-the-test measures. Under our fragmented, multipayer system it
is difficult achieve widespread adaptation of systemic improvements,
simply because it is our unique, dysfunctional financing system that is
so inflexible.

This is not to belittle the efforts of AHRQ toward expanding the use of
evidence based medicine. Rather it is to make the point that government
efforts such as those of AHRQ can be more effective if we get the
dysfunctional financing system out of the way, especially the intrusive
private insurers, and allow AHRQ and other public entities to cooperate
more effectively with the people actually delivering health care.