Doctors Orders

2009 Legislative Agenda

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TMA’s Prescription for a Healthy Texas

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Doctor’s Orders: TMA Prescription for a Healthy Texas 2009 Legislative Agenda In emergency medical situations, seconds count. For health care and health insurance reform challenges facing the 81st Texas Legislature, our time also is short.

Josie R. Williams, MD

Our patients no longer understand nor can they navigate today’s complicated health care system. Our patients are afraid they can’t get or even afford the care they need. Our patients believe our health care system is broken.

Texas state leaders and legislators have the power to fix our broken health care system. As you arrive in Austin for the 2009 Texas Legislature, we ask that you review our diagnosis and follow the treatment prescribed by the Texas Medical Association in our Healthy Vision 2010: Diagnosis and Prevention. Texas physicians and our patients strongly support steps that: • Add accountability and performance standards to health insurance, • Expand access to care for all Texans, • Enhance patient safety, and • Improve quality of care. Texas needs a health care system that allows all patients to receive the care they need when they need it. Removing barriers to affordable, medically needed care is our No. 1 priority. We know that’s a big task, but we’re Texans. Respectfully, and on behalf of our 43,000 physician and medical student members and more than 20 million Texas patients, here is the Texas Medical Association’s Prescription for a Healthy Texas.

Josie R. Williams, MD President, Texas Medical Association

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Health Insurance Company Accountability Skyrocketing health insurance premiums are making it more difficult for employers to offer their employees coverage. No one feels the challenge more acutely than Texas’ small businesses. Over the past decade, health insurers have decreased their costs by increasing premiums and offering products with much higher out-of-pocket cost for our patients. Texans end up paying more each year for their health insurance but receive less coverage in return. Meanwhile, neither physicians nor our patients can easily access accurate informaPage 2

tion from health insurers to make informed decisions. It has become impossible for us to counsel patients on affordable and efficient treatment plans. To avoid higher costs, patients need current and honest information on copays, deductibles, and health plan networks. To bring accountability to this multibilliondollar industry, TMA is asking legislators to support the Health Insurance Code of Conduct 2009 and other legislation. We must hold health insurance companies accountable to the promises they make for the premium dollars Texans pay.

Health Insurance Code of Conduct 2009 These measures would ensure transparency and accountability in the way health insurance companies conduct business: ✓ Health Coverage Cancellations: Require an independent review of all decisions to cancel an individual health insurance policy prior to the actual cancellation. ✓ Calculation of Premium Quotes: Subject health insurers to “file and use” requirements at the Texas Department of Insurance (TDI), like other kinds of insurers. ✓ Calculation of Medical Loss Ratio: Require health insurers to disclose how they spend the patient’s premium dollar. ✓ Unregulated Secondary Networks (Silent PPOs): Regulate how a physician’s contract information is sold, leased, or shared among health insurance companies. ✓ Physician Rankings: Require health insurance companies to use scientifically valid criteria to evaluate physicians’ performance, disclosing them in advance. ✓ Claims Processing: Prevent health insurance companies from reverting to their old, unethical ways of processing claims. Timely Health Insurance Information Buying health insurance coverage today is increasingly complex. Insurance companies offer a wide range of plans with different benefits, exclusions, and costs. It is nearly impossible to decipher the sales literature for a direct, product-to-product comparison. Standardized and reliable nutritional labeling has made it much easier for consumers to make better food choices. Consumers can examine 20 different boxes of cereal and easily compare product benefits such as

Insurance Facts PLAN IV (PPO) Monthly Premium

$407

Percent of Expense Paid by Plan In-Network 60% Percent of Expense Paid by Plan Out-of-Network xx% Annual Out-of-Pocket Expense (est.) $1,669 Your Total Annual Cost (est.) Justified Complaints Premium to Direct Patient Care Expected Profit Benefit Levels Annual Deductible

Annual Family Deductible Annual In-Network Deductible Annual Out-of-Network Deductible Out-of-Pocket Maximum Office Visit Copay Rx Copayments Rx Brand Name Deductible Lifetime Maximum Emergency Room Visit Copayment

$6,553

$500

$5,000 30% $10/$30 $250 $5 million $100 copay + 30%*

Number of Electric Wheelchairs per Lifetime Outpatient Surgery Copay 30% after deductible** Inpatient Cost Sharing 30% after deductible** *Your share of the negotiated rate (deductible waived). **Your share of negotiated rate afer deductible is met.

number of calories, percentage of fat, sodium, sugar, and protein. The same standardized system could aid employers and patients when shopping for health insurance. TMA’s “Health Insurance Product Labeling Plan” would require health insurers and their brokers to use standardized reporting measures to help employers and individuals make direct, side-by-side product comparisons. Once a plan has been selected, patients should have convenient access to benefit information when they are making their health care decisions. Health insurers should Page 3

Accountability for Out-of-Network Services Employers and patients pay steadily rising health insurance premiums. In exchange, health plans promise a comprehensive network of physicians, and payment for outof-network medical expenses. When health plans break one or both promises, which happens often, it dramatically increases the out-of-pocket expenses for patients. Texas must hold health plans accountable for providing comprehensive networks of physicians. We should give TDI authority to ensure health plans develop adequate networks.

make this information easily available. Almost every card in your wallet has some ability to provide data — except your health insurance card. There is absolutely no reason why health insurers cannot provide accurate, realtime information regarding patient benefits and exclusions. Routine Medical Care for Clinical Trials Texans participating in a clinical trial should be able to use their health insurance to pay for routine medical costs — especially when they are suffering from a life-threatening disease or condition. Twenty-three states require health plans to pay routine medical care costs for clinical trial participants. Medicare does, too. In Texas, however, patients in clinical trials still must pay these expenses out of pocket unnecessarily. This must change. Page 4

TMA opposes health plans’ attempts to prohibit balance billing or to establish wholly inadequate payment rates for non-network physicians and hospitals. TDI needs authority to require health plans to disclose the methods and data they use to set “maximum allowable” amounts. Regulation of Preferred Provider Organizations (PPOs) Currently the discounted rates physicians negotiate with health plans are being hijacked by unregulated PPOs. These entities, called “silent” and “rental” PPOs, shop around to find the lowest rate a physician has agreed to with any health plan. Then the PPO sells, resells, or leases that discounted rate to insurance companies, discount brokers, and other unregulated health care businesses without the physician’s knowledge or permission. Fourteen states outlaw these arrangements. Texas should, too.

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Texans Need Affordable and Timely Health Care Finding affordable care is the most urgent health care problem facing the state. More than 26 percent of Texans, 5.6 million people, are uninsured. In addition to being the uninsured capital of the United States, Texas also ranks last for employer-sponsored insurance. Only 52 percent of Texans have coverage through their employer. For small businesses — the bulk of Texas employers — the number is even worse: 34 percent. Cost is the primary culprit. Premiums for employer-based insurance have more than doubled since 2000. The average cost for

family health insurance coverage is more than $12,600 annually. Uninsured patients create higher health care costs for everyone. Without continuous care by a primary care physician or “medical home,” these patients must seek care in an emergency room — the most expensive place to receive care. To compound problems, Texas continues to face a physician shortage, especially for primary care physicians. TMA is asking legislators to take these bold steps to make health care more affordable and available to all Texans. Page 5

Adequately Fund Texas’ Physician Loan Repayment Program The Physician Education Loan Repayment Program has been one of the most successful models to address the state’s physician shortage. However, current funding for the program covers only about a third of the average debt a physician accumulates during his or her 11-plus years of education. Additional funding is needed to restore the program so it can be a valuable tool in recruiting physicians to underserved areas of the state. Fund Graduate Medical Education (GME) Texas needs more GME slots to train the number of physicians required to care for our rapidly growing population and reverse our overdependence on other states and countries. It is not good fiscal policy for the state to invest $200,000 in each Texas medical student over four years, then force graduates Page 6

to leave the state for residency training. Those new physicians likely will never return to Texas. TMA calls on legislators to fund medical school expansions and GME slots. We also must restore state appropriations for Medicaid GME, which will allow Texas to obtain additional federal matching dollars. Establish an Appropriate Payment System for Medicaid Medicaid and the Children’s Health Insurance Program (CHIP) are good buys for Texas, given their generous federal matching dollars. Both programs offer low-income working parents an affordable way to insure their children. Medicaid and CHIP payments to physicians still lag far behind other payment rates, even after the 2007 increases. Physicians want to participate in these programs but in many cases cannot afford to open their practices to Medicaid and CHIP patients. To ensure access to a medical home for these

It is critical that we protect the 2003 health care liability reforms, especially the caps on noneconomic damages and emergency care provisions. The emergency care protections have saved lives by helping ensure Texas patients have access to critical and timely care. The threat of lawsuit frenzy could harm Texas’ trauma care.

patients, legislators must continue to improve continuity of care and payments through Medicaid for adults’ and children’s services. Protect Texas’ Medical Liability Reforms The 2003 liability reforms have worked. They’ve lived up to their promise. Sick and injured Texans now have more physicians who are more willing and able to give them the medical care they need. In fact, Texas has gained more than 14,000 new physicians representing many high-risk specialties such as emergency medicine, neurosurgery, pediatric intensive care, and pediatric infectious disease.

Improve Mental Health Funding Mental illness costs the state and local governments more than $1.5 billion per year. Each person repeatedly jailed, hospitalized, or admitted to detoxification centers can cost the state $55,000 per year. We must expand the availability of community-based mental health care for adults and children, including prevention and early intervention.

Physicians enjoy lower premiums and a more competitive liability insurance market.

Newly Licensed Texas Physicians Jump by 26 Percent Since 2003 Reforms 4,000

Pre-Reform, Texas Averaged 2,298 Newly Licensed Physicians Per Year

3,000

Since Reform, Texas Has Averaged 2,899 Newly Licensed Physicians Per Year

2,000

1,000

0

1998

1999

2000

2001

2002

2003

Before Tort Reform

2004

2005

2006

2007

2009

After Tort Reform

Total number of licensees was adjusted to include an estimated 720 new licensees that were processed during Fiscal Year 2001 but not issued until September 2001, the start of FY 2002 due to lack of funding for an August 2001 board meeting. Sources: Texas Medical Board, and Texas Medical Association

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The Physicians’ Foundation Survey Reveals Looming Decrease in Practicing Doctors The bottom line is that the person you’ve known as your family doctor could be getting ready to disappear — and there might not be a replacement. Combined with the significant lack of primary care physicians nationwide, these findings portend health care disaster for Texas, where the shortage is even more dire. We currently rank 43rd out of 50 states and the District of Columbia in number of physicians per capita. The reported reasons for the widespread frustration among physicians include increased time dealing with nonclinical paperwork, difficulty receiving payment, and burdensome government regulations. In fact:

A late 2008 survey by The Physicians’ Foundation depicts widespread frustration and concern among primary care physicians nationwide, which could lead to a dramatic decrease in practicing doctors in the near future. Nearly half of those surveyed — more than 150,000 practicing doctors — say that over the next three years they plan to reduce the number of patients they see or stop practicing entirely.

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✓ 63 percent said nonclinical paperwork has caused them to spend less time with their patients, ✓ 76 percent of physicians said they are either at “full capacity” or “overextended and overworked,” ✓ 60 percent would not recommend medicine as a career to young people, and ✓ Only 17 percent of physicians rated the financial position of their practices as “healthy and profitable.” Physicians say all these challenges combine to keep them from the most satisfying aspect of their job: patient relationships.

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The physicians of the Texas Medical Association are committed to working with business leaders and lawmakers to restructure our health care delivery systems and reverse this unhealthy trend. As outlined in TMA’s groundbreaking Healthy Vision 2010: Diagnosis and Prevention document, TMA’s long-term plan would increase the availability, affordability, and quality of Texas health care. We also stress wellness and prevention to stem the growing demand and cost of medical services in Texas.

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Effective health care system reform requires strong leadership, careful planning, and extensive collaboration among those who pay for, deliver, and receive health care. It must begin by taking short-term, immediate steps that establish positive momentum. Our 2009 legislative agenda, Prescription for a Healthy Texas, prescribes numerous first steps that can move Texas down the road toward significant health care reform.

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Ensure High-Quality Health Care for All Texans Texas has a shortage of physicians, both primary care physicians and specialists. We currently rank 43rd out of 50 states and the District of Columbia. The passage of the 2003 landmark medical liability reforms has helped Texas bring more than 14,000 new physicians to take care of Texas patients. However, we still don’t have enough physicians to keep up with our robust population growth.

Unfortunately, many seek to fill this void with nonphysician practitioners, corporations, and retail health clinics. Some would prevent physicians from owning a health care facility and/or lifesaving equipment. This only further restricts our patients’ ability to receive cost-effective and timely care. TMA argues that lowering the standard of care is neither a good solution nor good public policy for improving Texans’ access to quality health care.

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a physician. We must protect the safety of Texas patients and ensure they receive the best medical care by the best person trained to deliver that care. Only physicians have the broad clinical expertise and training to exercise independent medical judgment and serve as the trusted leader of the health care team. Nonphysician practitioners are valuable members of the health care team but are limited by their education, training, and skills as to the level of care they can safely provide. The legislature must prevent nonphysician practitioners from expanding their scope of practice beyond that safely permitted by their education, training, and skills. Protect the Patient-Physician Relationship Texas prohibits the corporate practice of medicine. The principle is simple. Only physicians, not corporate entities, are licensed by Texas to provide medical services. The fundamental purpose of this law is to ensure physicians’ independent medical judgment.

Ensure a Single Standard of Care for All Texans TMA is committed to a single high standard of care for all Texans. This means that care is centered on each patient’s need and each patient receives high-quality care by a welltrained team of professionals supervised by

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This independence is critical. It ensures that our patients’ medical needs come before a hospital or governmental entity’s business needs. TMA opposes efforts to broaden the corporate practice of medicine beyond the current exceptions for medical schools, 501a corporations, and federally qualified health centers (FQHCs). We also believe the Texas Medical Board should be required to maintain current information on the sponsorship, governance, and membership of 501a corporations.

Preserve Retail Health Clinic Oversight Retail health clinics were designed to give patients access to fast, convenient, and affordable health care. But because the clinics are staffed by advanced practice nurses (APNs) or physician assistants (PAs), they do not provide the same level of care as physicians’ offices, urgent care clinics, or minor emergency centers. TMA supports an integrated care model where the APNs and PAs staffing the clinics are appropriately supervised by a physician, refer patients back to the patients’ regular physician to ensure continuity of care, refer patients appropriately for additional or followup care, and practice within their scope of practice.

Ownership of Health Care Facilities and Equipment Physician-owned hospitals are not new. Physicians founded many of the nation’s first hospitals to ensure appropriate care for their patients. There have, however, been considerable changes in health care financing and coverage over the past decade. These changes drive the debate over who can invest in a facility. TMA believes that responsible ownership, whether by a physician or hospital, should be patient-centered and include a commitment to appropriate peer review of utilization, quality, and safety to ensure the highest quality care for our patients.

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Improve Texas’ Fiscal and Physical Health Heart disease, cancer, and stroke may be the most common causes listed on death certificates. However, the real killers are tobacco, poor diet, stress, and lack of exercise. Studies indicate that at least 50 percent of health care spending is lifestyle-related and could be preventable. The obesity epidemic threatens Texas’ physical and fiscal health. Texans young and old are growing fatter. Nearly 66 percent of Texas adults and 32 percent of Texas teens are overweight or obese. Obesity-related diseases such as diabetes, arteriosclerosis, and hypertension are increasing at the same rate as obesity. Page 14

Tobacco also exacts a high price from business and taxpayers. In Texas, more than $12.2 billion can be attributed to the costs associated with smoking. The cost per smoker is about $3,561, which includes direct medical and indirect costs. To improve the physical and fiscal health of Texas, all of us — individual Texans, their families, physicians, health care professionals, government, and health plans — need to focus on wellness and prevention.

Stop the Obesity Epidemic Obesity and related diseases like diabetes are major factors behind rising health care costs and health insurance premiums. Texas spends $5.3 billion on medical costs related to overweight and obesity. To stop the obesity epidemic, we must focus on preventing obesity rather than treating the diseases that it causes. TMA is asking legislators to pass legislation and funding for a coordinated school health program for all grade levels. We also must fund education on the importance of proper nutrition and physical activity.

Projected Increase in Number of Obese* Adults in Texas, 2006-2040 (in millions) 16 14 12 10

Anglo

8

Black Latino/a

6

Total

4 2 0 2006

2010

2020

2030

Source: Office of State Demographer, Moderate Projection

2040 *BMI<=30

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Make Texas Smoke-Free Banning smoking in public places is one of the easiest, simplest, and fastest public health interventions Texas could undertake. Twentyeight states have adopted smoking bans in restaurants; 22 of these states also prohibit smoking in workplaces. TMA believes it is time that Texas joins these ranks. We are asking lawmakers to pass a statewide ban on smoking in public places. Employers also should receive tax incentives to reward nonsmokers and encourage smokers to participate in tobacco cessation programs. Cancer Prevention and Detection for Frontline Physicians Primary care physicians are the front line of cancer prevention and detection. In 2007, the voters passed a constitutional amendment authorizing the state to issue up to $3 billion in bonds to fight cancer. It is important that we use Proposition 15 funding to help enhance care for Texas patients and reduce the incidence of cancer in the state by educating physicians about the latest cancer treatments and technological advances.

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Improve Texas’ Immunization Immunizations are important, effective, and safe. Each year more than 42,000 adults and 300 children die in the United States from vaccine-preventable diseases and their complications. Physician efforts are essential. Unfortunately, physicians’ payments for purchasing, storing, and administering vaccinations do not cover their cost. Physicians also must pay a new state tax on vaccines, a further disincentive for some physicians to provide immunizations. Improving payments to physicians for administering vaccines is important. It ensures children have a regular physician in charge of their care — a medical home — and protects our communities from preventable diseases.

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Texas Medical Association 401 West 15th Street Austin, Texas 78701-1680 www.texmed.org