By Chelsea Hadaway and Ashley Fletcher Frampton
chadaway@scbiznews.com
aframpton@scbiznews.com
Originally published Oct. 12, 2009

Broken. Over-regulated. Sheer chaos.

Those are some of the ways S.C. health care providers describe the nation’s health care system.

Most want Congress to change the structure of health care and the golden ticket required for accessing it: Insurance. But a common call for change doesn’t equate to a unified vision for improvement.

Local health care providers’ views on the ideal system are as varied as their work and specialties. For example, some see a health insurance system run entirely by the federal government as the only way to ensure everyone has coverage. Others say that idea, known as a single-payer system and generally seen as politically unworkable, would have disastrous financial and regulatory consequences for medical practices.

Several S.C. doctors, hospital executives and other medical professionals talked to the Charleston Regional Business Journal about the challenges they face now and the reform ideas that they think would best balance the business of medicine with the work of making people well.

Paul Jacques

Associate professor in the College of Health Professions at the Medical University of South Carolina; physician assistant for 32 years

Dr. Paul Jacques describes the current health insurance situation as “sheer chaos.”

Navigating the many layers has turned into an increasingly difficult task and an impediment to practicing medicine, he said. When he was working once a week at a private geriatric practice, there was one doctor, one part-time physician assistant (himself) and four people to deal with insurance paperwork.

What he would like to see come out of health care reform efforts is a single-payer system. He realizes the uphill challenge that faces politically, however, and sees more promise in a requirement that people have health insurance. Massachusetts has seen a significant increase in access to primary care since that state’s Legislature implemented such a requirement.

That could lead to lower costs and better access to primary care, he said.

Another large and interlocking piece of health care reform is in earlier access to health care, especially primary care, he said.

“Our health care system is based on crisis intervention,” Jacques said. “Health care is at the river’s edge, pulling people out when they’re drowning,” he said. “We need clinicians at the top of the river telling them not to jump in.”

With the focus back on primary care and an emphasis on health promotion and disease prevention, we won’t need as huge a system to resuscitate drowning patients, he said. Early intervention or treatment by primary care providers decreases the demands on the health care system.

Thomas Litton

General surgeon with Tri-County Surgical Associates; chairman of the board for Trident Health System

As a small-business owner and a surgeon, Dr. Thomas Litton sees how the many issues in health care reform are woven tightly together.

The provision of health insurance to employees in his eight-person practice is his top business expenditure. Malpractice insurance premiums are high on the list as well.

Although he wants better oversight and regulation of the private insurance market, he’s not in favor of the public option. He foresees it becoming like Medicare, a program that is running out of money, has lots of paperwork and doesn’t reimburse for the full cost of care.

Litton cites the increasing amount of regulatory paperwork and concerns about malpractice as the top reasons for physicians leaving medicine.

Tort reform would not only lower the overall cost of health care, it would help increase the declining supply of physicians, he said.

At his practice, Litton pays $58,000 a year in malpractice premiums. He has been sued only once, but, “after that happens to you, you know you’re always under the gun,” he said.

The result of such worry is a defensive environment with overtreatment, he said. The American Medical Association estimated that $200 billion a year is spent on defensive medicine.

Reform should incorporate caps on noneconomic damages and create special health panels and mandatory binding arbitration, Litton said.

Gary Delaney

Anesthesiologist in Orangeburg; president of the S.C. Medical Association

“Physicians have to order lots of tests to make sure they’re not missing anything,” Dr. Gary Delaney said. “With the lawyers breathing down everyone’s necks, we say, ‘Maybe you need that MRI.’ ”

The S.C. Medical Association advocates for tort reform policies that set limits, which the group hasn’t specified, on the damages plaintiffs can be awarded. The association also would like Congress to mandate a “loser pays” system, which would force unsuccessful plaintiffs to pay doctors’ legal costs.

Delaney said the tort reform that South Carolina enacted in 2005, including a cap of $350,000 on noneconomic damages for patients, has helped reduce premiums for doctors and lawsuits filed.

Data from the S.C. Medical Malpractice Liability Insurance Joint Underwriting Association, which writes many of the state’s medical malpractice insurance policies, back up that claim.

Claims to the S.C. Patients’ Compensation Fund, a fund that pays amounts that top $200,000, dropped an average of 17% per doctor in the first full year after the state law took effect.

Tim Ward, senior vice president with Marsh USA, which administers the liability insurance underwriting program, warned that those are early figures based on only one year of data after tort reform, compared with multiple years before reform. One year of data can contain spikes or dips not necessarily related to reform, he said.

Data for fiscal 2006 are the latest available because claims often take several years to be filed and are tracked by the year of the incident, not the filing, Ward said.

Premiums for the compensation fund dropped by 3.6%-8.6% this year, the first decrease since the 1990s, Ward said.

Delaney said that, as an anesthesiologist, he doesn’t typically see malpractice suits. But he has felt another type of financial pain that many doctors describe: the low reimbursement rates that government health insurance pays doctors for the work they do.

“When you are getting paid 17 or 18 cents on the dollar by Medicaid and 18 or 19 cents on the dollar by Medicare, and 60 to 70% of your practice is Medicare and Medicaid, you cannot afford to keep your doors open,” Delaney said.

Two years ago, those economics prompted Delaney to end his 28 years of private practice and join the Regional Medical Center of Orangeburg and Calhoun Counties.

Delaney said the S.C. Medical Association wants everyone to have health insurance. But he and some other board members don’t like the idea of mandates for individuals to buy insurance and mandates for insurance companies to cover everyone.

One strategy Delaney said his group prefers for reaching universal coverage is the encouragement of more interstate competition among insurance companies to lower rates.

Gregory Tarasidis

Ear, nose and throat specialist in Greenwood; president-elect of the S.C. Medical Association

Dr. Gregory Tarasidis said the S.C. Medical Association also supports tax credits for individuals to buy insurance. Those credits would be for individuals, not businesses, because insurance plans should not be tied to jobs, he said.

Tarasidis also mentioned the challenge of operating a medical practice when private and public insurance reimbursement rates don’t cover costs. Typically, the costs of running a business go up every year, but rates insurance companies — especially government insurance programs — pay for medical procedures do not, he said. Some go
down.

One result is that doctors who work for themselves take home less money. Tarasidis said his salary has fallen by a quarter to a third in the past decade.

But there’s an impact on patients, too. Doctors increasingly are forced to turn away patients covered by Medicare and Medicaid because they can’t afford to treat them, Tarasidis said.

“Medicine obviously has a business component,” he said. But the system is forcing doctors to make business decisions instead of health care decisions, he said.

Tarasidis said one solution would be giving doctors the ability to charge patients for an amount beyond what their insurance pays. Patients wouldn’t be cut out of the system, and doctors could cover their costs.

“The free market isn’t in medicine,” he said. “There’s so much regulation that tells us what we cannot do.”

Ellen Brown

Vice president of managed care and business relations for Roper St. Francis Healthcare

Roper St. Francis sees the fallout from the continued fraying of the health care system coming through its doors every day.

About one-third of the patients in Roper’s emergency room are uninsured, and the rates keep climbing. She estimates that Roper will spend about $150 million by the end of this year on care for which it will not get paid, either through charity care or because of patients’ bad
debt.

To them, the key issues in health care reform are health care coverage for everyone, insurance reform and access to primary care in order to focus on wellness instead of illness.

Roper would support a co-op, but it would not favor a public plan. Existing government plans don’t cover all the costs, and they create lots of administrative and regulatory paperwork, Brown said.

Roper employs nearly 150 people in billing and payment to figure out all the insurance regulations, both governmental and private. Roper would rather see the money being spent on the hiring of more nurses, pharmacists and doctors.

As part of insurance reform, Brown said coverage should include behavioral health and preventive care and wellness services.

She likens the creation of an insurance exchange to a “Travelocity” approach to health care, referring to the popular travel booking Web site that compiles and lists offers from many companies. She says such an approach would bring transparency to the insurance industry and would make it easier for consumers to shop and understand what they’re getting.

“It would ensure that people can compare apples to apples and make educated decisions about their health care,” Brown said.

Todd Gallati

President/CEO of Trident Health System

Like many health care insiders, Todd Gallati wants to see more people covered by health insurance.

But he thinks the best way to do that is by expanding what he considers an already existing public option — Medicare and Medicaid.

“The recent expansions seem to make more sense instead of setting up another public option,” he said. If those people who fall through the cracks of coverage could be included in Medicare and Medicaid, their overall health would improve.

Doing so also would help alleviate the pressure on emergency rooms. About 70% of the patients who come into Trident ERs have an illness that could be treated in a primary care office setting.

To encourage the purchase of insurance, Gallati thinks the government should offer financial incentives to individuals and small businesses.

He realizes the costs that these expansions and tax incentives would add on the back end, though.

“My fear with the health care reform is ‘Can we afford it?” he said, adding that one way is to reduce long-term costs. He, too, suggests tort reform, citing a recent study estimating that 10% of the cost of a patient’s care is from defensive medicine.

John ‘Jeb’ Hallett

Medical director of Roper St. Francis Heart and Vascular Center

Dr. John “Jeb” Hallett said he worries about patients who lack insurance because of its cost, their medical conditions, or both. But those aren’t the only patients Hallett sees who are dissatisfied with the system.

Patients with private insurance often are frustrated that they cannot choose a doctor outside of their proscribed network. Or they get stuck with costly bills their insurance company won’t pay if they do receive care outside their network.

“Until we have a system where patients can pick their doctor and their hospital and insurance will accept payment, we still have a broken health care system,” Hallett said.

In the current debate over health care reform, Hallett said it looks like the big money interests — the insurance and pharmaceutical companies — are winning, and patients are not.

“Unless there is a public option, the insurance companies will have protected their turf,” Hallett said.

A public option could give patients coverage that is more affordable than private policies, he said. But it appears a public option is unlikely to be part of national reform.

Other countries around the world have figured out how to provide health care for less money than the United States has, and often with better outcomes, Hallett said. Our leaders struggle to improve the system, he said, “because the profitability of medicine in this country has been so great, and those who get the greatest profit have such strong l
obbies.”

Hallett would like to see insurance that is portable, that isn’t tied to employment.

Robert ‘Casey’ Fitts

General surgeon; founder and medical director of Tri-County Project Care

No matter how ambitious Congress is in passing health care reform, unless it’s a single-payer system, some people will remain uninsured, according to Dr. Casey Fitts.

That’s because Fitts expects that a mandate for everyone to buy health insurance would make exceptions for certain low-income individuals and for small businesses. The result would be at least 20% — and as many as 50% — of South Carolina’s uninsured would remain uninsured under a mandate.

Fitts is no stranger to the economics of health insurance or the demographics of the uninsured. Since 2002, Fitts has run Tri-County Project Care, a nonprofit organization he founded to help working people who don’t earn enough money to buy private health insurance.

“I got so frustrated with not being able to take care of my patients,” Fitts said.

Tri-County Project Care doesn’t cover people who are eligible for Medicaid or Medicare. It is meant for those who can afford to pay some, but not all, of the costs. Fitts said the program has reduced overall health care costs for participants because they transitioned from expensive emergency care to primary care “homes.”

Tri-County Project Care initially covered more than 2,300 people when it began. Fitts started with $10 million in community support, which he raised during a year off from his surgery practice. But now, money is running low and only about 90 participants remain.

Fitts is hoping to create a new finance model for the program, including patient payments, community contributions and dedicated funding from an increased cigarette tax in South Carolina. A bill that would create that funding stream passed the state House of Representatives last year but stalled in the Senate, he
said.

Revenue from the tax would provide money for other community programs like his throughout the state, he said.

Reach Ashley Fletcher Frampton at 843-849-3129 and Chelsea Hadaway at 843-849-3142.