Health Care

His research at Duke involved cardiovascular disease prevention. Dr. Lillis is a full time internal medicine physician, practicing primary care in Fredericksburg, Virginia. He is also a monthly columnist for the Free Lance Star newspaper and a member of the Board of Directors of Doctors for America as well as its director of the blog Progress Notes. In June, he was invited to the White House to participate in its Physician Conversation on Care Coordination which brought together some 200 medical leaders from large and small healthcare practices, specialty societies and other medical organizations. It was here that he, along with fellow Doctors for America physicians shared the results of their membership survey with the White House. Dr. Lillis and his wife and son live in Fredericksburg. As we are all aware, the issue of healthcare reform continues to be a contentious and complex ongoing discussion in our republic today. The June Supreme Court ruling by Justice Roberts has apparently done little to quell the debate. Everyone seems to agree that reform is necessary but what form that reform will take morphs in a thousand shapes. In the end, however, the simplest priority should perhaps be the one most closely connected to our humanity. We are all the face of healthcare for we all will require it at some…in some form throughout our lives. There is no immunization against that reality. Politics may be at the heart of the matter but surely people matter more. Our guest today is a committed and dedicated advocate for patients’ rights and speaks out frequently in service to the public on every aspect of healthcare and health concerns and we are very grateful to him for taking the time to come and speak with us on this vital subject of healthcare reform. Welcome again, doctor.

Christopher Lillis: Thanks so much.

Jan Paynter: Before we begin our discussion of healthcare and the Affordable Care Act, share with us if you would what led you to primary care medicine and fueled your passionate devotion to public advocacy.

Christopher Lillis: Sure. Choosing a specialty in medical school is not an easy task. There are certainly lots of different fields to choose from and I found that internal medicine or primary care led to the most broad application of medicine, sort of like the Marcus Welby ideal where you were the family physician. Forming a relationship with my patients, getting to know them, helping them through difficult times and helping protect their health has always been what’s most appealing about medicine for me and so primary care was a natural choice because I could personally be connected to my patients in a way that some specialties don’t get the time to enjoy. Shortly after getting out of residency and when I started to practice, I also started to volunteer in free clinics and those free clinics throughout Virginia service a population that does not have health insurance and often is poverty stricken. And to see folks both in a place like Duke University Hospital, the pinnacle of American medical care, and then also to see patients in a free clinic, you can see that really there’s always been a two tier system in America. There’s been highly specialized care for those who have health insurance or the cash to pay for it. And then there’s a real difficulty with access to care and the health and human suffering consequences that come along with that in our free clinics. And so it was the free clinic experience that motivated me to work as an advocate to find a way to get better access for all Americans.

Jan Paynter: Tell us about Doctors for America. How does it function and what does the organization seek to achieve for healthcare?

Christopher Lillis: Sure. Yeah, so Doctors for America is a nonprofit, nonpartisan organization. We rely heavily on volunteers, most of the physicians. There’s 15,000 members in all 50 states, medical students, physicians, some in academics, some in private practice like myself, but what we want is we want a fair and equitable health system for all Americans. We’d like to see that there is high quality individual care provided to patients, better population health for our country and we also seek to lower the cost of medical care because right now we acknowledge that our healthcare costs are soaring and it has a significant impact on the American economy.

Jan Paynter: In your view, doctor, what are the merits of the Affordable Care Act and in what areas do you see the greatest benefits and what does the law make possible now?

Christopher Lillis: The law makes possible several things. What we know is that since 2010 roughly five billion more young Americans under the age of 26 now have health insurance whereas they did not before and that was the provision stipulating that young Americans could stay on their parent’s insurance through the age of 26. We see that tens of millions of seniors are benefiting from lower drug costs. The so-called donut hole that occurs in Medicare Part D when patients are solely responsible for their prescription costs often led seniors to skip their medicines out of financial concerns. But already we’re seeing that those drug costs are lowered and it’s saving Americans tens of billions of dollars. Children no longer are subject to pre-existing condition limitations for getting health insurance and that’s already a provision that’s in effect. And we also see that there are new regulations on insurance companies and in August of 2012 many consumers are going to get rebate checks from their health insurance companies because their administrative costs ran too high and their premium dollars will be refunded to them. The future is bright because after 2014 when the health insurance exchanges are constructed in each of the 50 states, when the Medicaid expansion takes place, 30 million Americans who are currently without health insurance will now have access to care.

Jan Paynter: Tell us about small businesses because this is a big concern for a lot of people. What kind of tax breaks will they receive as a result of their employees being on healthcare?

Christopher Lillis: Sure. And I think the stipulation is, what constitutes a small business in the eyes of the Affordable Care Act and from the Affordable Care Act standpoint it’s businesses that have 50 or fewer employees, so the true small businesses. And what these small businesses have accessible to them actually right now are 35% tax credits that constitute 35% of the healthcare premiums for their employees. So there’s an incentive now for employers to purchase health insurance for their employees and they get a tax break for it.

Jan Paynter: And in the area of women’s care, women get typically charged higher premiums, they’re subjected to more issues with pre-existing conditions.

Christopher Lillis: Right. So one of the most onerous things that Americans don’t realize is that even pregnancy is considered a pre-existing condition and so a very natural part of life can actually exclude a woman from purchasing health insurance later in life. Those pre-existing conditions will be banned come 2014. That’s one of the provisions of the Affordable Care Act. And in 2014 also there will no longer be allowed price discrimination based on gender and that’s always been the case. I think right now less than 10 states in the country prohibit those gender discrimination price gaps but come 2014 it’ll be a national law as opposed to state by state.

Jan Paynter: A frequent complaint about healthcare coverage paid out are the percentages that go, doctor, to administrative costs. What does this law do to address that issue?

Christopher Lillis: Sure. So it’s going to limit significantly what health insurance companies can spend on administrative cost and profit. This is the so-called medical loss ratio. It’s a term that was coined on Wall Street, a term that refers to the amount of money a health insurance company spends on healthcare that come from their revenue. Their revenue is our premium dollars. So the medical loss ratio used to be all over the map. Some health insurance companies would spend as little as 60% of our premium dollars on direct healthcare whereas 40% would go to administration, salaries, profits and the like. The Affordable Care Act stipulates that 85% of your premium dollars will need to be directly spent on care from now on, thus limiting what a health insurance company can spend of your premium dollars on administration, profits and salaries. What’s interesting is the medical loss ratio for Medicare is 97%. So our Medicare taxes that go to the government, 97% of those end up going to direct care, 3% goes to the administration of the program.

Jan Paynter: Unnecessary testing is another area that people are concerned about. Speak to that if you would.

Christopher Lillis: Sure. So there’s been an interesting campaign that’s come up after the passage of the Affordable Care Act and it’s physician led. I’m very proud of that. It’s so-called Choosing Wisely Campaign. It was helped to be organized by the American Board of Internal Medicine Foundation and different specialty societies. Cardiologists, gastroenterologists, primary care doctors like myself have tried to cite the most common wasted tests. So an example for primary care might be an EKG for a young asymptomatic patient. We really don’t need to get an EKG for a young healthy person. It’s not going to give us any information but it does squander precious medical resources. For others it might be certain blood tests that we too easily order when we don’t really need them to help our patients. But it’s estimated that a third of all healthcare costs are to unnecessary care in our country. And in a $2.3 trillion health economy, we’re actually talking about some real money. We’re talking about almost a trillion dollars a year is wasted on unnecessary care.

Jan Paynter: Doctor, for a family of four, what kind of reduction in their insurance premiums might be possible under this new law and approximately how much would you say?

Christopher Lillis: Right. Well, that’s actually a very hard question to answer, Jan. I think if you look at the Massachusetts experience that passed a very similar law in 2006, we see that premiums have not dropped significantly but they’ve also not reason as fast as the rest of the country. So it depends on everyone’s individual circumstance. If they’re already getting insurance through their employer, their plan’s not likely going to change one iota. But for an individual who’s been unable to purchase insurance and now will have a health insurance exchange from which to purchase from, they’re going to see significantly lower premium costs because purchasing on the individual market nowadays is actually cost prohibitive. But once these exchanges encourage competition among private health insurers, a family of four should see significant savings if they’re not able to get their health insurance through their employer.

Jan Paynter: That’s interesting. I’m wondering where they, Kathleen Sebelius for instance, came up with this $1,200 average saving but I can see where it would vary according to…state to state and circumstances.

Christopher Lillis: And different for every American depending on how they’re getting their insurance now.

Jan Paynter: Sure.

Christopher Lillis: For people who are currently purchasing an individual policy on their own outside of their employer, they should be saving incredible amounts of money on their premiums. I think for those that get their premiums from their, I’m sorry, their policy from their employer, they’re not likely going to experience much change which again is interesting because if you look at the people this is going to effect, it’s a narrow slice of our population who’s going to be purchasing from the exchanges but it is going to create significant opportunity where they have a group purchasing power because of the competition encouraged by these exchanges, free market competition and it’s going to allow for a better pooling of risk and lower costs for Americans who don’t get their insurance from either Medicare or their employer.

Jan Paynter: What would you say are some of the law’s drawbacks?

Christopher Lillis: Well, honestly, this is a very carefully constructed law that’s been incubating for about 50 years. The blueprint from…for this law comes from the Heritage Foundation and it was ideas originally launched in the 1990s. What we saw is the Heritage Foundation put forward these principles of having an individual mandate, having health insurance exchanges where health insurers could compete with one another and thereby decouple a little bit the need that we have for employment to have health insurance in our country. Right now, if you’re unemployed, it’s very hard to have health insurance. And what we saw is that as these laws were implemented in 2006 in Massachusetts, that you now have 98%, 99% of Massachusetts residents who have health insurance. Prices are starting to rise more slowly in Massachusetts comparatively to the rest of the country and there’s not been a significant drawback. There aren’t long waits that were feared, people are able to find primary care physicians and there’s even been a reduction in ER visits by about 4% in Massachusetts over the last six years. So I don’t think there are too many downsides to the law and that’s why I advocate for it so passionately.

Jan Paynter: When I was looking on Huffington Post, Dr. Marcia Angell of Harvard Medical School was noting that she felt that the President didn’t do enough to reign in the profit-oriented delivery system that rewards providers on a piecemeal basis. Is…does the law also begin to address reorienting the delivery system itself?

Christopher Lillis: Yes. Very good question. I do think that what Massachusetts is going through now is what they’re affectionately referring to as Healthcare 2.0 because what they achieved in their 2006 law was near universal coverage. What they did not achieve was a so-called bending of the cost curve, bringing costs down significantly. And so Massachusetts is preparing to pass a whole new set of laws to try to work on bending the cost curve. So what was not present in Massachusetts but what was…what is present in the Affordable Care Act is the Center for Medicare and Medicaid Innovation. So this is a new division of Medicare that has funding to help study new delivery models that bend the cost curve. You might have heard of accountable care organizations or patient centered medical homes. These are models that are working at places like the Mayo Clinic in Minnesota, Geisinger Health in Pennsylvania, where they are taking care of their patients in a much more comprehensive way with better outcomes at lower costs than our piecemeal fee-for-service system across the country. And what the Centers for Medicare and Medicaid Innovation are doing is they’re trying to help fund studies to see which of these models works best, whether we talk about the comprehensive primary care initiative being piloted in seven states right now, pioneer accountable care organizations like Kaiser Health, Intermountain Health in Colorado or patient centered medical homes. There’s just an amazing family practice up in Seaport, Maine, Seaport Family Practice that’s operating a patient centered medical home model and they’re having amazing patient outcomes, very healthy patients at very low health care costs. And so there’s no skimping of care, it’s actually a better quality care but it’s allocating medical resources the way we always should have been.

Jan Paynter: One of the criticisms that the people have had of the law and that states have felt is that a distrust of Congress which we all concede might have some legitimacy in terms of funding being cut off suddenly. So if one or two percent is the rate at which states are responsible and the government picks up the rest under this law, their fear of course is that after two or three years Congress will decide, depending on how the makeup changes, to cut back on funding and that the states will be left carrying the water for this and governors are obviously very concerned about this. What do you think about that?

Christopher Lillis: Sure. I think there’s a downside and an upside to looking at the future any which way you cut it. Ever since 1965 when Medicare was passed into law, there have been small changes to that law every single year and what’s happened traditionally over time is services have been expanded. So there are new benefits for Medicare beneficiaries, whether it’s something small like in 2010 when preventive physicals were now free to patients and that’s actually something that happened prior to the Affordable Care Act to ever more expansive free preventive care as a result of the Affordable Care Act or even something major like the Medicare Part D program that George W. Bush passed to expand drug coverage to seniors back in the early 2000s. We see that when a program benefits Americans, there’s significant political pressure to protect that program and what we’ve seen in the Affordable Care Act are a number of changes to try to strengthen the Medicare program. I think when we’re talking about people’s lives and people’s health, there’s intense political pressure on politicians to make sure that they’re looking after their constituents.

Jan Paynter: One of the things that I know you feel strongly about, and I do too, is focusing more on prevention, preventative care in this country. How does the law begin to put the emphasis there?

Christopher Lillis: Sure. In several ways. First and foremost, after 2014 and already in Medicare, preventive services like breast cancer screenings, mammograms, pap screenings for cervical cancer, colonoscopies for colon cancer are all free. In other words, your health insurer foots the bill. No longer will you have a deductible or a co-pay or out-of-pocket expenses. There’ve been some good studies in heart failure that look at the higher out-of-pocket costs are the lower there is compliance with care. So by removing the barrier of high deductibles, it’s going to encourage Americans to seek preventive care. Another significant way that the Affordable Care Act addresses this is an establishment of a national prevention strategy and so our founder of Doctors for America is one of the members of that prevention council and it brings together all the different cabinet officials, whether it’s the Department of Transportation, Education, Agriculture, to figure out where are our laws in this country stacking the deck against American’s health. So a simple example might be subsidizing corn farming and how inexpensive it’s become to have high fructose corn syrup an ingredient in most of our foods. Well, how can the Prevention Council address this negative incentive…this incentive that actually puts more calories on our plates? How can the Department of Transportation look to see where bike lanes or walking lanes are a natural part of how we develop our infrastructure? How can the Department of Education understand how better school…better nutrition school meals will affect the downstream health of all Americans. And so this national prevention strategy is really, it’s a groundbreaking opportunity to find out how we can lay the groundwork for better health.

Jan Paynter: That’s fascinating because it’s a very synthetic approach bringing in every different facet of our lives and who organizes it so I think that’s really a very exciting part of it.

Christopher Lillis: Yeah, it’s all led by the Surgeon General Dr. Regina Benjamin. She’s the chair of that prevention council.

Jan Paynter: Okay, now, understanding that your sphere is medicine and not politics I nevertheless am going to ask you, where in your view, given the current economic climate with budgetary concerns and joblessness in the rest of the world we’re familiar with, how can we look…where can we find funds to pay for this bill?

Christopher Lillis: Right. So there’s been a variety of funding mechanisms that are accounted for in the Affordable Care Act that many Americans aren’t aware of. So for high earning Americans, Americans individually who earn over $200,000 a year or as a couple more than $250,000 a year, there’s a 0.9% increase in your Medicare taxes and that’s going to help fund the program. For pharmaceutical companies, they’re going to pay essentially excise taxes each year to help fund the healthcare system that they profit so richly from, same for device manufacturers. There are changes in the tax code to make sure that individuals who receive incredibly generous health insurance packages from their employer are treated differently in terms of their tax exemption. This way it’s…the idea from health economists is that we’re going to dis-incentivize massive spending on healthcare but rather get back to what is appropriate spending on healthcare. And so the variety of funding mechanisms is meant to allow for everyone to have some skin in the game, I know that’s a term that many politicians throw around, but not have any significant impact on any one industry or one population. And of course the individual mandate looks to get people who have not previously been insured who might be using healthcare services that never get reimbursed and have them invoke some personal responsibility to make sure that they’re helping fund our healthcare system.

Jan Paynter: Cycling back to the issue of preventative care, I know you mentioned earlier the two tiered social system in our country. How…what kind of safeguards are there to make sure that people, perhaps the most indigent people can actually get good, quality preventative care?

Christopher Lillis: Sure. And so the Affordable Care Act calls for an expansion of Medicaid. Previously all 50 states administered Medicaid slightly differently but one constant was true. Indigent seniors had their nursing home bills paid by Medicaid and that’s actually 40% of the Medicaid budget is actually for seniors. Pregnant women had access to Medicaid and children had access to Medicaid. But adults who were either not pregnant or not female had no access to Medicaid but now this will be a means-based test. If your income is below 133% of the federal poverty limit, which is actually a salary in about the $25,000 range, a very meager salary, then you will be eligible for Medicaid and of course the Supreme Court ruled that states don’t have to accept this expansion but there’s significant funding from the federal government that’s going to help states make this possible. So I think the poor are going to have immense new access to the Medicaid program whereas before the only access was if you were truly an indigent senior in a nursing home, a pregnant woman or a child. Now, what’s interesting is a common criticism is that very few physicians accept Medicaid patients and it’s a very legitimate criticism and the reason for that is Medicaid reimburses even less for physician services than Medicare does and of course Medicare reimburses less than most private health insurers. And so the Medicaid program had trouble finding physicians to participate because of the low reimbursement but the Affordable Care Act brings payment parody. So it’s going to bring Medicaid reimbursement up to Medicare levels. This way…taking it away as almost a third tier system if we think of private health insurers reimbursing doctors the best, Medicare next and Medicaid last.

Jan Paynter: Okay, one of the…another issue that people have raised is, and now with this decision states can opt out, what happens to individuals, what happens to hospitals that have a high proportion of people that they see using Medicaid, being paid in that way. What happens in that area?

Christopher Lillis: All right. Well, it’s going to be interesting because the states do have a couple of years to decide if they’re going to opt into the Medicaid expansion or opt out. There’ve been a least a half a dozen governors who have said that they’re not going to accept the Medicaid expansion so far but what I’ve read in the public health and health policy journals that I read is that there’s going to be significant pressure on these politicians to accept the Medicaid expansion. Hospitals depend on this revenue stream, hospitals provide tens of billions of dollars in uncompensated care primarily because of the Emergency Medical Treatment Act, the EMTALA law that was passed by Ronald Reagan back in the 80s dictating that if a patient in an…presents to an emergency room, then they cannot be refused care under any circumstance. That’s a federal law. And so hospitals have seen an increasing population of the uninsured getting life saving emergency medical care and then being unable to pay for it. And that’s led to the so-called hidden tax on the middle class. We all pay about $1,000 more per year than the actuarial tables would dictate, mostly to compensate for uncompensated care. So there’s going to be a lot of pressure from hospitals on politicians to accept the Medicaid expansion.

Jan Paynter: That’s interesting. I was very excited in reading the Robert Wood Johnson Foundation newsletter that under the Affordable Care Act $28 million will be given to expand the National Health Services Core for Primary Care offering the tuition and the monthly stipends. That’s a fantastic idea and it really is a kind of domestic Peace Corps for physicians. Are we also looking at systems around the world that work? When we were talking earlier, you discussed the Swiss system which I’d like to hear about. We know that…everyone knows that in the British system it’s problematic because the taxes are higher, it’s very difficult to get seen. In France they have a better system, the government picks up a lot of the cost and encourages individuals to have small amounts of their own insurance which then allows them to be more focused on preventative care. Are we as a country really looking at models that can help us to achieve this goal of care?

Christopher Lillis: Yeah. It’s a great question. I think the healthcare economists who really want to see a positive change for our system are looking to other models and finding out what works. But there are a lot of different models. There’s the single payer system in Canada, there’s a nationalized health system in Britain and then there are systems that are employed by France, Germany, Switzerland, other western European countries, that use a hybrid system that actually doesn’t differ much from the Affordable Care Act. It’s a system that allows for private health insurers, private physicians, private hospitals to administer basic health services to patients but the question is, how are those patients going to be insured. And in Britain it’s a decision that there is no insurance. It’s just healthcare is provided by the country. In Canada, your health insurance comes from the government but in France, Germany, Switzerland, health insurance comes from private health insurance companies but it’s subsidized by taxpayer’s contributions, in other words the government. And so you have universal access without a federalized health system. And there have been a number of commentators, both from the right and the left in the political spectrum who admire systems like Germany, France and Switzerland. And there’s a brilliant book by T.R. Reid. He’s an author who wrote about comparative health systems around the world. He actually did something really interesting. He went to these different countries to seek medical care for shoulder pain and just reported back in his book how he was treated, what his costs were like, was he on a long waiting list or was he treated promptly and I think the results will surprise your listeners. They’ll be interested to see The Healing of America by T.R. Reid.

Jan Paynter: In closing, doctor, what do you see…how do you see the future going as it’s progressing now for this healthcare bill and for the future for healthcare…better healthcare in our country? What’s your view?

Christopher Lillis: Well, one thing I’m very encouraged is that we’re going to see expanded access to health insurance which should provide expanded access to preventative healthcare services. I think we’re going to need to look very carefully at new delivery models to make sure that we don’t bankrupt our system. We need to deliver high quality care but also have to be mindful that we’re not squandering precious resources. But from what I can see, everything that’s been happening in this country for the last four years, is that we’re moving in that direction deliberately and carefully and in a very positive way.

Jan Paynter: Well, it will be interesting to see if there’s a new surgical technique developed that will allow us to extract politics from the equation.

Christopher Lillis: Oh, that would be wonderful, yeah.

Jan Paynter: Thank you very much, Dr. Lillis for joining us and contributing so much to our understanding of this issue today.

Christopher Lillis: Thank you.

Jan Paynter: Our thanks to you at home for listening to our discussion. If you would like more information concerning the topic under discussion today, we invite you to take a look at our website at politicsmatters.org. We will be posting a number of books, articles and relevant links on healthcare there for you. You will also find a comprehensive archive of all prior Politics Matters programs there which you may watch in their entirety at any time. We are always interested in hearing from you with any questions and concerns as well as with ideas for future programs. We encourage you to email us at info@politicsmatters.org. Thank you again and until our next broadcast I’m Jan Paynter and this is Politics Matters.