A Labor Day Warning

Today is Labor Day, a public holiday honoring the American labor movement and the contributions that workers have made to the strength, prosperity, laws, and well-being of the country. Though this holiday dates back to the end of the nineteenth century, the concept of organized labor is under increasing attack. While many of the physician and nurse readers may think that “labor” does not apply to them, after all they are professionals, management would likely disagree.

In Arizona v. Maricopa County Medical Society in 1982, the Supreme Court ruled that when physicians negotiate collectively with insurers about fees, and as a consequence do not compete with one another, such negotiations represent a horizontal agreement among competitors to fix prices (1). This was based on the concept of physicians being independent from hospitals or healthcare systems. However, more physicians are now hospital employed which has been in no small part due to cuts in physician compensation by Medicare with the insurers rapidly following. This increase in physician employment has been associated with increased billings leading to increased profits and decreased physician compensation (2,3).

The Nation’s largest healthcare system is the Department of Veterans Affairs (VA). The pace of VA hiring has not kept pace with the growth of patients leading to prolonged wait times first reported in Phoenix (4). Two recent decisions will likely affect physician hiring and retention at the VA. First, President Trump announced cancellation of the the planned salary increase for civilian employees (5). Second, VA Secretary Robert Wilkie, cancelled collective bargaining rights when it comes to professional conduct and patient care by VA providers (6). In the private sector, hospital employed physicians seem to becoming increasingly discontented because of 1. Having to deal with a lot of rules; 2. Having to deal with a large bureaucracy. 3. Not having a staff under their control; and 4. Having little control over compensation models (7).

All in all, this does not bode well for physicians or patients. The data suggest that the Medicare has helped destroy independently employed physicians while over compensating hospital employed physicians whose fees are collected by the hospital (7). This trend will likely continue until Medicare realizes that the existence of the independent practitioner keeps healthcare costs down. By financially squeezing the independent practitioner Medicare’s actions lead to decreased competition and increased healthcare costs.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Halper HR. Arizona v. Maricopa County: a stern antitrust warning to healthcare providers. Healthc Financ Manage. 1982 Oct;36(10):38-42. [PubMed]
2. Lowes R. Hospital-employed physicians cost Medicare more, study says. Medscape. November 16, 2017. Available at: https://www.medscape.com/viewarticle/888772#vp_1 (accessed 9/3/18).
3. Kane L. Medscape physician compensation report 2018. Medscape. April 11, 2018. Available at: https://www.medscape.com/slideshow/2018-compensation-overview-6009667#12 (accessed 9/3/18).
4. Davidson J. VA doctor shortage fueled by management issues, poor pay The Washington Post. July 16, 2018. Available at: https://www.washingtonpost.com/news/powerpost/wp/2018/07/16/va-doctor-shortage-fueled-by-management-issues-poor-pay/?utm_term=.070275d06e2a  (accessed 9/3/18).
5. Liptak K. Trump cancels pay raises for federal employees. CNN. August 31, 2018. Available at: https://www.cnn.com/2018/08/30/politics/trump-cancels-federal-employee-pay-raises/index.html (accessed 9/3/18).
6. Department of Veterans Affairs. VA secretary clarifies collective bargaining authority for patient care. August 29, 2018. Available at: https://www.managedhealthcareconnect.com/content/va-secretary-clarifies-collective-bargaining-authority-patient-care?hmpid=cmlja3JvYmJpbnNAY294Lm5ldA== (accessed 9/3/18).
7. Mertz GJ. Physicians employed by hospitals. Medscape. January 01, 2018. Available at: https://www.medscape.com/viewarticle/891120#vp_1 (accessed 9/3/18).
8. Lowes R. Hospital-employed physicians cost medicare more, study says. Medscape. November 16, 2017. Available at: https://www.medscape.com/viewarticle/888772 (accessed 9/3/18).

Cite as: Robbins RA. A labor day warning. Southwest J Pulm Crit Care. 2018;17(3):95-6. doi: https://doi.org/10.13175/swjpcc106-18 PDF 

Competition or Cooperation?

One of our local institutions, the Mayo Clinic Arizona, was mentioned in a recent op-ed in the New York Times. The editorial entitled, “It Costs More, but Is It Worth More?” by Ezekiel J. Emanuel and Steven D. Pearson (1), criticizes the Mayo Clinic in Rochester and Arizona for building two new proton beam treatment facilities at a cost of more than $180 million dollars each.  It accuses the Mayo Clinic of participating in “…a medical arms race for proton beam machines, which could cost taxpayers billions of dollars for a treatment that, in many cases, appears to be no better than cheaper alternatives”. The editorial states that except for a handful of rare pediatric cancers, the evidence is lacking for treatment of other types of cancer such as lung, esophageal, breast, head and neck, and prostate cancers.

John Noseworthy MD, President and Chief Executive of the Mayo Clinic, replied that the Mayo Clinic “will carefully study proton therapy and other new therapies, compare clinical outcomes and offer high-quality, cost-effective, proven and safer treatments for patients”. In another letter to the Minneapolis StarTribune, Nosewothy goes on to say, “Mayo Clinic takes serious issue with the authors' use of Mayo Clinic and its programs in this manner. As a not-for-profit institution, we are motivated by the best interests of our patients, not ‘profit’ or competitiveness. With the facility costs, start-up expenses and the extensive training required to offer this therapy, we do not expect to break even, much less earn a ‘profit,’ on our proton therapy program for years”.

I am not an expert in either cancer treatment or proton beam therapy, but a weekend search of the medical literature largely confirms that the therapy is unproven for most cancers, although there was no evidence that proton beam is inferior to more traditional means of delivering radiation therapy. Second, the cost of proton beam therapy is high. Costs are about $55,000 plus $15,000 in physician fees per patient for the therapy alone, twice as much as a linear accelerator. This sounds like a lot of money but you still need an estimated volume of about 2,000-3,500 patients per year to cover an investment of over $180 million investment.

So why are the Mayo Clinic and others constructing these centers since they are expensive; mostly of unproven superiority over existing therapies; and reimbursement, although generous, may not cover the cost of the facility? The answer is likely competition. Competition for patients largely drives tertiary referral centers. Locally, there is a small war going on between the Mayo Clinic Arizona and the new Banner MD Anderson Cancer Center. Mayo Clinic is concerned about MD Anderson having greater name recognition and losing its patients to the new center. Banner in partnership with MD Anderson sees an opportunity to compete in a large metropolitan center without a strong university medical center. Mayo Clinic Arizona undoubtedly feels that new technologies such as proton beam are necessary to compete with MD Anderson, especially since MD Anderson has a proton beam therapy unit in Houston.  

All this is probably not good for patients and illustrates that competition in medicine does not necessarily lead to cheaper, more effective care. Patients will be easily persuaded to receive the latest and greatest therapy when their life is on the line, especially when the bulk of the cost is covered by a third party. Whether proton beam therapy is the latest and greatest is fairly difficult to determine at this time, given the absence of well designed, randomized studies. The Center for Medicare and Medicaid Services (CMS) process of determining reimbursement costs is largely a mystery but needs to show some restraint. Large reimbursements for unproven therapies such as proton beam while underfunding areas with well demonstrated benefits is not in the best public interest. Furthermore, instead of directly or indirectly encouraging competition, CMS needs to foster cooperation. Perhaps requiring hospitals to work together to study the effectiveness of proton beam to get reimbursed would be a good first step. As Franklin D. Roosevelt said, “Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off” (5).

Richard A. Robbins, MD

Editor, Southwest Journal of Pulmonary and Critical Care

References

1. Emanuel EJ, Pearson SD. It costs more, but is it worth it? New York Times. http://opinionator.blogs.nytimes.com/tag/proton-beam-therapy/ (accessed 1-23-12).
2. Noseworthy J. Mayo clinic’s investment. New York Times. http://www.nytimes.com/2012/01/06/opinion/mayo-clinics-investment.html (accessed 1-23-12).
3. Nosewothy J.  Mayo CEO defends use of proton beam therapy. Minneapolis StarTribune http://www.startribune.com/opinion/otherviews/136758278.html (accessed 1-23-12).
4. Clark C. What would super committee say about $430m proton beam center war? http://www.healthleadersmedia.com/page-1/QUA-272912/What-Would-Super-Committee-Say-About-430M-Proton-Beam-Center-War (accessed 1-23-12).
5. http://www.brainyquote.com/quotes/authors/f/franklin_d_roosevelt.html (accessed 1-23-12).

Reference as: Robbins RA. Competition or cooperation? Southwest J Pulm Crit Care 2012;4:30-1. (Click here for a PDF version of the editorial)