A Blizzard, A French Restaurant, and the Future of Healthcare

Health Tips / A Blizzard, A French Restaurant, and the Future of Healthcare

Posted 03/11//2013

If you’d been one of the handful of pedestrians walking down Chicago’s Halsted Street during our snowstorm a couple weeks ago, you might have glanced into the window of an otherwise deserted French restaurant, your attention held for a moment by a pair of geezers engaged in extremely animated conversation in the warm amber light.

One of them (me) was clearly on the defensive, sliding down into his chair disconsolately, occasionally bringing his outspread hand before his face as if to ward off blows. The other, hunched forward with a devilish grin, was animatedly enjoying himself. If you looked carefully, you saw him extracting and unfolding newspaper clippings, internet printouts, and handwritten notes from various locations in his coat, wallet, and shirt pocket.

These two were discussing healthcare.

Or rather, I was learning about the future of healthcare from a longtime friend, an internist in his fifth decade of practice, as fiercely independent as any John Wayne or Clint Eastwood character (though the comparison stops there as he’s 5’1” and totally bald with thick Woody Allen glasses). My colleague enjoys regaling fellow physicians with bad news about the future of medicine even as his wine-stained evidence accumulates in a pile on the crisp linen before him.

It’s a good thing we had plenty of wine. And because we were the only customers all evening as the snow fell steadily outside, every once in a while our waiter joined the discussion. Everybody has a healthcare story to tell.

“It’s not that the Affordable Care Act is necessarily a bad thing,” my old friend began, “but rather the way all of American healthcare has, in one fell swoop, been capitulated to the health insurance industry. The near future will be a series of sweetheart deals between the major insurers and the mega-medical centers that wipe out the small fry like the neighborhood hospitals. The far future will be ‘Northwestern: a Division of Blue Cross’ and ‘Rush: A CIGNA Hospital.’”

Here’s what he predicted we’d be seeing during the next five years:

  • The small primary-care office with a family practitioner or internist will become extinct (“We’re both dinosaurs, David”). The insurance industry dislikes our undersized offices because we’re not cost effective. Even doctors themselves, with declining reimbursement rates and rising costs, can’t afford to keep their offices open anymore. “When was the last time you actually saw a freshly minted young doctor open a solo practice?” he asked. “Years ago,” I muttered. “Maybe decades. Chiropractors still open their own offices, but not MDs.”
  • With the president announcing he’ll reduce health care costs by cutting reimbursement rates to both doctors and hospitals, no medical school graduate will go into primary care unless somebody agrees to pay off his loan. Since this is unlikely, primary care will be handled by Certified Nurse Practitioners (CNPs) and Physician Assistants (PAs) in clinics that will be owned by insurance companies. Your “doctor” will be an employee of your health insurance company.
  • To turn out the army of CNPs and PAs needed for 40 million new patients, community colleges are offering two-year crash courses. Some of them will add a PhD if you write a term paper, a deliberate strategy so the CNP or PA can introduce himself as “Dr. Jones” and the patient will never know the difference.
  • With declining reimbursement to hospitals, we’ll see about 25% of hospitals in the US closing their doors. At this point, my friend pulled out a hospital bill from one of his patients. For a total hip replacement and four-day stay, the hospital and surgeon had billed the insurance company $37,000. And they had received, as a total noncontestable settlement, $2,500. “You can’t have a business survive when your fees are slashed by 92%. They’re toast.” Read more here.
  • So far, the new and mandatory electronic health record (EHR) system is turning out to be a disaster for everyone. There are now more than 400 (!) software companies trying to sell their products to every medical practice in the country, and guess what? They’re not compatible with each other. If you’re at Midwest Orthopedics and your x rays are needed across the street at Rush, you have to hand carry them because the two EHR systems are incompatible. More here.
  • The ultimate beneficiaries of EHRs are neither the doctor nor the patient but rather the insurance companies, who can use the data (which they have access to) to monitor medical practices and penalize doctors financially if they don’t tow the line. The new buzz phrase is “physician accountability,” but there’s nothing new about it. It’s the same “use cheap generics, don’t do too many lab tests, keep your patients out of hospitals” refrain we’ve been hearing from insurance companies for years.
  • The fee-for-service model will be done in five years. Group practices, populated mainly by CNPs, will be assigned a certain number of patients and reimbursed a fixed fee, learning to work fast and efficiently if they want to keep their bank accounts healthy. They’ll be penalized if they spent too much on patients and “bonused” if they don’t (a lot like the old HMO model).
  • We’ll ultimately settle into a three-tier system. For the well-to-do, the concierge practices are working well. An experienced primary care doctor limits herself to 300 patients, collecting an average of $2,000 annually from each. That’s $600,000 and with 50% expenses for running an office, she takes home half of it. Surgeons would be unhappy with an income of $300,000 a year, but a primary care doc with no more insurance headaches, ever, would likely think she was in heaven. The second tier is for the middle and upper-middle income patient. Fee-for-service can never completely vanish, but members of this group will have to contribute more out-of-pocket then they did in the past. Still, they’ll have a doctor who knows them. At the bottom will be huge clinics, owned by tax-exempt health care systems or insurance companies. Ten-minute visits. New doctor every time. Everybody in the US is covered, but your health care is like Charlie Chaplin on the assembly line in Modern Times.
  • The real winners in all this are the executives running these programs. First, many work for companies that boast being not-for-profit, but what that really means is they pay no taxes, so they have more money to pay their executives. “Here, look at this,” my friend said, thrusting a newspaper clipping from the Charlotte Observer in front of my crème brulee. “Ten executives from Carolinas HealthCare pay themselves based on profits, which mean cost cutting, staff reductions, and sweetheart contracts with suppliers. The lowest paid executive walks away with a million-plus a year. Her boss, the CEO makes multiples of that. No wonder they’re all smiling!” The CEO of Cigna Corp racked up a salary of $19.1 million in 2011. Even the oh-so-noble Blue Cross of Illinois pays its CEO $12.9 million a year.

We finished our wine and desserts, grateful for the numbing effects of alcohol and sugar. “And you?” I asked. “What are you going to do?

“Same as always. Go to work. I like growing old with my patients. I like my office. No electronic records for me–it’s a 2% penalty and I’ll just pay it to save the headache.”

We put on our coats and headed out onto Halsted. The snow had stopped and the street was deserted. As we said our goodbyes and started trudging in opposite directions, I heard my friend’s voice once more. “Hey, David,” he called back over his shoulder, smiling, “We’ve got to do this more often. You have to admit its always fun talking about healthcare.”

Be well,
David Edelberg, MD

13 thoughts on “A Blizzard, A French Restaurant, and the Future of Healthcare


    Carrie A
    Posted March 23, 2013 at 12:20 am

    Terrifying! But your imagery is wonderful. I can see the flinches… Thank you for this as it gives a more realistic picture of what to expect. I am sending it on to my son who is going into nursing. It is those insurance companies, AGAIN, getting the best of the situation. What is the solution, really.
    So I am going to host a brain talk at my house on April 3rd just to see if there is any interest in a session on supplements and current info , putting a toe in the water. Picked “Brain Longevity” by Khalsa off the shelf where it has been for 16 years and for the first time read it. Loved it! so I thought for Lincoln Park Villagers it might be fun and informative to have a conversation a bout this book and others that might be helpful with memory and Alzheimers prevention. Do you have a book to suggest? (I love the old Ultraprevention by Hyman as well as his newer Ultramind Solution.) You have such a stockpile of supplements at Whole Health but which to take when is daunting.

    Thank you again for the wonderful newsletter! Reven Fellars

    Reven Fellars
    Posted March 18, 2013 at 4:21 pm

    Dear Dr. Edelberg,
    Thank you for posting this article. It is exactly what we need to get more and more people to wake up and pay attention. But, I’d like to suggest that it isn’t all doom and gloom. Perhaps you are correct that the health care system as we once knew it is changed forever. But, I believe the demise that you describe is only in the short run.

    Institutions throughout the entire fabric of our global society are all going through major transformation–governments, economies, educational and religious institutions. (I recently said to my husband, “I wonder what it would be like if the cardinals in Rome chose a nun to become the next pope…”). Health care is no exception.

    However, it is big pharma and the insurance companies are the dinosaurs, sure to become extinct. The reason is because another major transformation is taking place, but it is not quite as visible yet. It is a change that is going on within the consciousness of human beings everywhere. As Anodea Judith puts it in “Waking the Global Heart,” an inspirational vision for humanity’s maturation to social justice and sustainability, we are “moving through a rite of passage from the love of power (3rd chakra) to the power of love (4th chakra).”

    Funny, as I was driving to work today, mulling over in my mind what to write to you, I drove past Facets and noticed the marquee: “Coming Soon: The End of Love.” What??? I just finished reading a phenomenal book entitled “Love Without End!” So, I guess a lot of this depend on how we choose to look at things. Bruce Lipton, PhD explains in “The Biology of Belief” that research in the fields of quantum physics and epigenetics provides evidence that our thoughts impact everything from protein synthesis to healing to creating our reality.

    It may not happen in our current lifetime, but 50 years from now (which is a blink of the eye from a historical perspective), our children and grandchildren will be living in a new world. I’d like to suggest that you and your friend are not dinosaurs. Rather, you are pioneers paving the way to the new paradigm. What you and Dr. Rubin have created at WholeHealth Chicago is a model for healthcare of the future. So, rather than lament the current state of health care, let’s focus on what we know in our hearts: THERE IS A BETTER WAY. Envision it. Believe it. And so it is.

    Katie Oberlin
    Healing Touch Certified Practitioner

    Katie Oberlin
    Posted March 13, 2013 at 11:52 am

    To Dr. E.
    In your friend’s scenario, most people won’t be able to afford large hospital medical centers. That with his vision of vanishing clinics and small hospitals conveyed apocalyptic doom. I did understand his wanting to keep his small office. But his vision seemed limited –to traditional ways of seeing patients and to allopathy. I hear about new kinds of practice groups in smaller offices like yours all the time, although I can’t prove anything statistically. In New York City, there’s Doctors on Call, an organization providing physician home visits at reasonable, sliding scale rates (what’s old is new again). As you’ve pointed out, our health care system is a hot mess. But that doesn’t mean good changes can’t come from reaction to it. Your friend seemed resistant to change itself.

    Posted March 13, 2013 at 9:55 am

    Dr Edelberg,
    I write “The Physician Invesor Newsletter”. I have written on this topic. If you send me your email, I’ll send you some articles. I get to Chicago frequently as I’m Pres. of the Alumni Assoc at Pritzker. RMD

    Dr Robert Doroghazi
    Posted March 13, 2013 at 6:40 am

    would like to see your comments on the recent Time magazine article on health care.

    Colleen Jersild
    Posted March 12, 2013 at 6:35 pm

    To Addie: You’re missing his point. Small hospitals will disappear because most care will be outpatient. Large medical center will thrive. Small medical offices will coalesce into larger and larger offices (as has been the case in recent years). For better or worse, it’s just a shift of manpower. Basically my friend liked his small office and his small neighborhood hospital

    Dr E
    Posted March 12, 2013 at 12:20 pm

    love it, I felt like I was in the restaurant with you both eating at another table.

    How sad, the insurance companies have finally won.

    Thank you for the insight Dr. E

    Posted March 12, 2013 at 12:13 pm

    I don’t get it. . . he’s decrying increased centralization, and then he’s complaining things aren’t centralized enough. He’s saying both hospitals and small clinics are on the way out? Does he mean that we’ll see dead bodies in the streets? Really?

    Posted March 12, 2013 at 11:08 am

    But doesn’t Kaiser Permanente do it right?

    Posted March 12, 2013 at 9:57 am

    What Don said above, tragically. The assembly line system worked so well for manufacturing, which America no longer cares for, that we’ve set up healthcare that way. Ugh.

    Posted March 12, 2013 at 9:20 am

    This scenario is depressing but likely. It will happen because of poorly informed and ignorant citizens who elect far too many ignorant, ideologically twisted and self serving politicians.

    Don Schoenbeck
    Posted March 12, 2013 at 7:13 am

    Really hope none of this happens, too scary….

    Posted March 12, 2013 at 7:05 am

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