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49–824 PDF 2011

S. HRG. 111–972 

DELIVERY REFORM: THE ROLES OF PRIMARY 

AND SPECIALTY CARE IN INNOVATIVE NEW 

DELIVERY MODELS 

HEARING 

OF THE

COMMITTEE ON HEALTH, EDUCATION, 

LABOR, AND PENSIONS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

ON

EXAMINING DELIVERY REFORM, FOCUSING ON THE ROLES OF PRIMARY AND SPECIALTY CARE IN INNOVATIVE NEW DELIVERY MODELS 

MAY 14, 2009 

Printed for the use of the Committee on Health, Education, Labor, and Pensions 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys/ 

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS 

EDWARD M. KENNEDY, Massachusetts, Chairman 

CHRISTOPHER J. DODD, Connecticut 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

JEFF BINGAMAN, New Mexico 

PATTY MURRAY, Washington 

JACK REED, Rhode Island 

BERNARD SANDERS (I), Vermont 

SHERROD BROWN, Ohio 

ROBERT P. CASEY, JR., Pennsylvania 

KAY R. HAGAN, North Carolina 

JEFF MERKLEY, Oregon 

SHELDON WHITEHOUSE, Rhode Island 

MICHAEL B. ENZI, Wyoming 

JUDD GREGG, New Hampshire 

LAMAR ALEXANDER, Tennessee 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

JOHN MCCAIN, Arizona 

ORRIN G. HATCH, Utah 

LISA MURKOWSKI, Alaska 

TOM COBURN, M.D., Oklahoma 

PAT ROBERTS, Kansas 

J. MICHAEL MYERS, Staff Director and Chief Counsel 

FRANK MACCHIAROLA, Republican Staff Director and Chief Counsel 

(II) 

C O N T E N T S 

STATEMENTS 

THURSDAY, MAY 14, 2009 

Page 

Brown, Hon. Sherrod, a U.S. Senator from the State of Ohio, opening statement ...................................................................................................................... 1 

Thorpe, Kenneth E., Ph.D., Professor of Health Policy, Emory University, 

Atlanta, GA ........................................................................................................... 4 

Prepared statement .......................................................................................... 6 

Murray, Hon. Patty, a U.S. Senator from the State of Washington, statement 11 

Cooper, Richard A., M.D., Professor of Medicine and Senior Fellow, Leonard 

Davis Institute of Health Economics, University of Pennsylvania, Philadelphia, PA ................................................................................................................ 12 

Prepared statement .......................................................................................... 13 

Schlossberg, Steven, M.D., MBA, Vice President, Clinical Operations, Hospital-Based Surgical Specialities, Sentara Medical Group, Chair, Health 

Policy, American Urological Association, on behalf of the Alliance of Speciality Medicine, Norfolk, VA .............................................................................. 18 

Prepared statement .......................................................................................... 20 

Nochomovitz, Michael, M.D., President and Chief Medical Officer, University 

Hospitals Medical Practices and University Hospitals Management Services 

Organization, Cleveland, OH .............................................................................. 24 

Prepared statement .......................................................................................... 26 

Raulerson, Marsha, M.D., FAAP, Primary Care Pediatrician, on behalf of 

the American Academy of Pediatrics, Brewton, AL .......................................... 31 

Prepared statement .......................................................................................... 34 

Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode Island, 

statement .............................................................................................................. 42 

ADDITIONAL MATERIAL 

Statements, articles, publications, letters, etc.: 

American College of Surgeons (ACS), prepared statement ........................... 57 

(III) 

(1) 

DELIVERY REFORM: THE ROLES OF PRIMARY 

AND SPECIALTY CARE IN INNOVATIVE NEW 

DELIVERY MODELS 

THURSDAY, MAY 14, 2009 

U.S. SENATE, 

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS, 

Washington, DC. 

The committee met, pursuant to notice, at 10:04 a.m. in Room 

SD–430, Dirksen Senate Office Building, Hon. Sherrod Brown presiding. 

Present: Senators Brown, Murray, and Whitehouse. 

OPENING STATEMENT OF SENATOR BROWN

Senator BROWN. The Senate Health, Education, Labor, and Pensions Committee comes to order. 

Thank you for joining us today. Thank you to the witnesses especially and to others in the audience, and thank you for being here 

on time. 

For the first time in a long time, there is widespread consensus 

that to improve the health of our people and the strength of our 

Nation, we must act to reform a healthcare system that has failed 

far too many Americans. 

Nearly 50 million Americans, as we hear over and over, are uninsured. Tens of millions of others underinsured. With our Nation 

spending more than any other Nation on healthcare, a whole lot 

more, some $2 trillion overall annually. Yet we rank below most 

other developed nations across a broad range of health indicators. 

We must not settle. This year, as we move toward real 

healthcare reform, we must not settle for simply improvements at 

the margins. Instead, we must fight for substantial reforms that 

will improve care, that will combat unjustifiable spending, and will 

close the coverage gaps that leave Americans without the 

healthcare they need. 

That is why we are holding this hearing today to examine ways 

in which we can restructure our healthcare delivery system so that 

it better and more fully meets the needs of our citizens. 

As this committee has examined our Nation’s healthcare system 

over the past year in dozens of hearings, one thing has become 

glaringly obvious. Our healthcare system lacks cohesion. It lacks 

coordination. It lacks cost efficiency. It is a patchwork system 

grounded in good intentions, to be sure, but derailed by unjustifiable variations in healthcare utilization, unproductive barriers to 

2 

care coordination, and misaligned incentives that compromise effective and efficient healthcare delivery. 

For this reason, it becomes imperative that any discussion of 

healthcare reform focuses on how to build a healthcare delivery 

structure that capitalizes on existing strengths like our exceptional 

healthcare workforce, but dispenses with our existing weaknesses. 

Among those weaknesses, I put inefficiency at the top of the list 

because it captures a multitude of sins—lack of coordination, lack 

of information, lack of basic standards of care and standards of coverage to become the norm across the Nation. And the list goes on 

and on and on. 

That is why we are here today to discuss the roles of primary 

and specialty care in innovative new delivery models. In an effort 

to address the fragmentation of our healthcare system, one policy 

proposal under consideration is the medical home. The concept of 

the medical home has evolved over some 40 years since its introduction by the American Academy of Pediatrics. It has gone from 

a specific place to receive care for children, if you will, with chronic 

disease to an entire system providing care for all Americans. 

The basic premise of the medical home is that continual care 

managed and coordinated by a personal physician with the right 

tools will lead to better health outcomes. This concept shifts the 

paradigm from episodic acute care to a continuous, comprehensive 

model of care. 

Central to the medical home is the premise that patient-centered 

care requires a fundamental shift in the relationship between patients and their primary care physicians. The idea that there must 

be a higher degree of personalized care coordination, access beyond 

the acute care episode, and identifications, therefore, of key medical and community resources to meet the patient’s individual 

needs. 

While there is widespread agreement that the concept of medical 

home is a good one, there are concerns about how best to design 

and implement such a model. For instance, some have expressed 

concern that the medical home, by requiring physician referral for 

specialty services, can sometimes or more than sometimes add a 

costly and needless step to the process of linking patients to the 

right source of care. 

Additionally, some have argued that it might not make sense for 

a primary care physician to always serve as the medical home coordinator. For example, many women view their obstetrician/gynecologist as their primary care provider and would choose that their 

medical home be based out of their OB/GYN’s office. 

The financing of delivery changes is another issue that has 

drawn significant scrutiny and deserves our attention. Reforming 

our healthcare system is a tall order. The public deserves reforms 

that reduce unnecessary costs, improve the quality of care, and increase access so that all Americans have meaningful health coverage. 

We must be careful as we undertake this task to evaluate each 

change to ensure that the goals and the means of achieving them 

are, in fact, truly aligned. This is as true for health delivery reform 

as it is for health insurance reform. 

3 

I am confident today’s hearings will provide valuable insights 

that will help us reshape health delivery to squeeze out wasted 

spending and build in improved health outcomes. I look forward to 

hearing from our panel of five distinguished witnesses, who represent primary care providers, specialty care providers, and community-based providers on some of these complicated and pressing 

issues. 

And particularly, I would like to thank Michael Nochomovitz, 

president and chief medical officer, University Hospitals Medical 

Practice in Cleveland. Thank you for joining us, especially. I only 

pick him out because he is the only one from Ohio. So don’t take 

that personally, anybody else. 

[Laughter.] 

University Hospitals has worked closely—and it is the one I am 

certainly most familiar with, living in an area served by UH—has 

worked closely with primary physicians and specialists to introduce 

new technologies and quality measures which have helped with 

care coordination in northeast Ohio, the most populous part of the 

State. I look forward to hearing more about these successful models 

and how they can be adopted nationwide. 

I would like to thank the witnesses. I will look forward to discussing how the patient-centered medical home model can play an 

important role in delivering a reformed healthcare system. 

So I will introduce each of the panelists and then begin listening 

to their opening statements, and then we will do questions. 

I will start with Dr. Ken Thorpe, professor of health policy at 

Emory University—where my mother attended, I might add—in 

Atlanta, GA. Dr. Thorpe was Deputy Assistant Secretary for 

Health Policy in the U.S. Department of Health and Human Services from 1993 to 1995. In this capacity, he coordinated all financial 

estimates and program impacts of President Clinton’s healthcare 

reform proposals for the White House. 

Dr. Thorpe has authored and co-authored over 85 articles, book 

chapters, and books and is a frequent national presenter on issues 

of healthcare financing, insurance, and healthcare reform at 

healthcare conferences and in television and the media. 

Dr. Richard Cooper is a professor of medicine at the University 

of Pennsylvania. Dr. Cooper has been a physician for 50 years 

whose early career was an academic hematologist, first at Harvard 

and then at Penn. He helped to found a comprehensive cancer center and served as the dean of the Medical College of Wisconsin. 

Dr. Steven Schlossberg, welcome, is the chair of health policy for 

the American Urological Association, a member organization of the 

Alliance of Specialty Medicine. He is a practicing urologist from 

Norfolk, VA, and part of the management team of a 400-physician 

multi-specialty group practice. 

Dr. Michael Nochomovitz—that is pronounced correct? Dr. Michael Nochomovitz, right, is the president and chief medical officer 

of University Hospitals Medical Practices at University Hospitals 

Management Services Organization in Cleveland, a position he has 

held for a little more than a decade. 

He is a practicing physician, board certified in internal medicine 

and pulmonary medicine. He is the architect of University Hospitals regional multi-specialty physician network in northeast Ohio, 

4 

which is the single, largest portal of entry into the system. This 

network of some 450 medical providers includes the largest primary care group in the region, as well as 6 urgent care sites and 

5 hospitalist programs. 

And Dr. Marsha Raulerson is a graduate of the University of 

Florida College of Medicine, and a fellow at the American Academy 

of Pediatrics. She is a primary care physician who has practiced in 

Brewton, AL, for 28 years and has received many awards in recognition of her commitment to the health and the welfare of children. 

Thank you, Dr. Raulerson, for joining us. 

Dr. Thorpe, would you begin your opening statement? 

STATEMENT OF KENNETH E. THORPE, Ph.D., PROFESSOR OF 

HEALTH POLICY, EMORY UNIVERSITY, ATLANTA, GA 

Mr. THORPE. Well, thank you, Senator Brown. And thank you for 

holding this important hearing. 

I am going to make seven points very quickly. First point, I think 

a central challenge we face in healthcare reform is how to build 

primary prevention and care coordination into the fee-for-service 

Medicare program, with the intent that it would spill over into 

other payers. 

Today, if you think about it, about 30 percent of the growth in 

Medicare spending is linked directly to the doubling of obesity 

among Medicare beneficiaries. Ninety-five percent of what we 

spend in Medicare is directly linked to chronically ill patients. 

And I may add, in addition to my Emory position, I am also the 

executive director of the Partnership to Fight Chronic Disease. We 

just held a press event this morning with Senator Harkin where 

we had most of these facts in our almanac, and we will be sharing 

this with you and your colleagues. 

There are six conditions in Medicare driving most of the growth 

in spending—diabetes, hypertension, hyperlipidemia, asthma, back 

problems, and depression. Those are all conditions that are largely 

ambulatory based and require medication therapy. And in the traditional fee-for-service program, most of that is completely 

unmanaged. 

Second point, the performance in the program is suboptimal. We 

don’t coordinate care in it. So, as a result, admission rates are high. 

Re-admission rates within 30 days are 20 percent. We can do a lot 

better if we really build some type of a formal coordination program into Medicare. 

Third point, there is some good news here. We have a lot of data 

in randomized trials and examples of systems that work effectively 

in managing Medicare patients. Intermountain Healthcare, 

Geisinger—you have heard of these examples. They are largely 

large integrated group practices. 

And in those settings, they can reduce admissions by 25 percent 

and reduce re-admission rates to 6, 7, 8 percent within 30 days, not 

20 percent, which is the norm in fee-for-service Medicare. 

The problem is, those things are not easy to replicate and scale. 

While the large integrated group practices that work, we can’t 

build them everywhere in the country. 

5 

So one of the things that we have been talking about as a proposal is to let us look at what they do well. What is it about the 

functions of those systems that really make them effective? Let us 

see if we can’t find ways to build them into community settings to 

work with smaller physician practices so that we can scale it and 

replicate it nationally quickly. 

And if you think of the functions that work well, it is formal 

transition care, close integration of care coordination with the primary care physician’s practice, having community-based primary 

care prevention programs available, and having care coordinators 

working directly with patients at home to make sure that they are 

executing the care plan effectively. 

The dilemma we face, I think, in terms of building care coordination into the program is that 83 percent of physician practices are 

in groups of one or two. That is about 40 percent of primary care 

physicians. 

While the medical home vehicle is a great vehicle, and we should 

continue to encourage it, most Medicare beneficiaries don’t get 

their care through these large integrated systems. So I think the 

challenge is to figure out how can we find the good elements of 

those programs, replicate them, and scale them? 

The fourth point is, we can do this through what some States 

like Vermont, North Carolina, Rhode Island are already doing, 

using community health teams. A community health team is a collection of care coordinators, nurse practitioners, mental and social 

health workers, community outreach workers that work hand-inhand with primary care practices to help patients execute the care 

plan that is put together by the primary care physician. 

The community health teams have all the functions that are 

built into the successful programs like Geisinger and Intermountain Healthcare, including the transitional care models, close 

integration with that practice, and so on. We have seen in North 

Carolina in the Medicaid program, this has saved between 5 and 

15 percent relative to unmanaged care since 2003. 

Fifth point is that if we make a modest investment nationally to 

take this community health team concept and make it available everywhere to work with Medicare fee-for-service patients and spend 

0.6 percent of Medicare on it, I think, based on the data, that it 

is not unreasonable to expect not only better outcomes and better 

quality, but a return in terms of savings of anywhere from 3 to 7 

percent, based on published data that we have seen. 

So I think, in closing, we face a choice. We are either going to 

not do care coordination and traditional fee-for-service Medicare, or 

we have got to find a way to scale it and replicate it in a way, 

building on the best elements of the medical home model but recognize its limitations in terms of replication and scalability. But a 

community health team approach to doing this is one that I think 

holds much promise. 

I look forward to working with you and the committee and would 

be happy to answer any questions at the end of the remaining testimony. 

[The prepared statement of Mr. Thorpe follows:] 

6 

PREPARED STATEMENT OF KENNETH E. THORPE, PH.D. 

Good morning, Senators. Thank you for inviting me here today to discuss the urgent need to reform health care delivery in the United States and the pivotal role 

that primary care providers must play in a changed system. I am Ken Thorpe, 

chairman of the department of health policy and management at Emory University. 

I also lead the Partnership to Fight Chronic Disease, a national coalition of patients, 

providers, community organizations, business and labor groups, and health policy 

experts that are working with State partnerships to prevent chronic illness and reform how we deliver care to patients. 

I believe a central challenge we face in health reform is how to integrate effective 

primary prevention and care coordination into the traditional fee-for-service (FFS) 

Medicare program. Success in integrating these care delivery components into Medicare will surely have spillover effects in how Medicaid and the private sector work 

to prevent and manage chronic illness as well. The following six facts highlight the 

nature of the challenge we face and provide insights about the design of a successful 

solution to the problem. 

1. The majority of all U.S. medical practices (83 percent) are composed of just one 

or two physicians.1 More than a third of primary care physicians (36 percent) work 

in these small practices.2 Most Medicare patients are not treated through larger integrated group practices. 

2. Eighty-one percent of Medicare beneficiaries are enrolled in traditional FFS 

Medicare, and they account for about 79 percent of the program’s overall health care 

spending.3 Today, there is no care coordination in the program, leading to high rates 

of preventable hospital admissions, re-admissions, clinic and emergency room visits.4

3. In 2010, we will spend about $395 billion in the traditional FFS Medicare program. Over 95 percent of total spending in Medicare is linked to chronically ill patients. 

4. Multiple morbidities among these patients are common: More than half of 

Medicare beneficiaries are treated for five or more chronic conditions yearly.5 On average, the top spending 5 percent of Medicare beneficiaries account for roughly half 

the FFS program’s costs. 

5. Over 30 percent of the recent rise in Medicare spending in the last 10 years 

is associated with the persistent rise in obesity in the Medicare population. (Exhibit 

1, graphically depicts rising rates of overweight—obesity, and two associated chronic 

conditions, diabetes and hypertension—in the United States over the last 40 years.) 

6. The increase in obesity-related chronic diseases among all Medicare beneficiaries and particularly among the most expensive 5 percent is a key factor driving 

growth in traditional FFS Medicare.6 Six medical conditions—all related to obesity: 

diabetes, hypertension, hyperlipidemia, asthma, back problems and co-morbid depression—account for most of the recent rise in spending in the Medicare population. Treatment for these patients is largely uncoordinated, and relies largely on 

therapeutic interventions in ambulatory care.7

7 

Today, Medicare spends nothing to help coordinate health care in the traditional 

fee-for-service program. As a result, Medicare spending is higher than it would be 

if care were coordinated. For instance, 20 percent of Medicare patients are re-admitted within 30 days of leaving the hospitals. Well-managed and coordinated plans 

such as Geisinger, Puget Sound, and others have re-admissions rates of half this 

amount. Moreover, since they manage and coordinate care their hospital admission 

rates are about 25 percent lower than unmanaged Medicare. 

Nationally, the private sector and the Federal Government (through Medicaid) 

currently spend approximately 2.5 percent of total spending to invest in care management. Well-managed programs have been associated with savings of 5 to 7 percent—well over a 2 to 1 return on investment. To generate these savings, private 

plans, Geisinger, and others invested in new technology, transition care programs, 

and other care management tools. 

Medicare spends nothing on care management—and so generates no savings from 

it. If Medicare took the best practice approaches with proven results from the private sector (formal transition care model, integration of the care management function and the physicians’ office, financial and payment incentives) and made it available nationally in FFS Medicare, the program would save money. 

The challenge is most of the good care management models are large clinics such 

as Mayo, Geisinger, Cleveland, and Marshfield. Their approach to preventing and 

managing disease has proven effective. However, these models are not replicable or 

scalable nationally. 

As an alternative, the key design features of these successful integrated system 

prevention and care management programs could be identified and incorporated into 

community settings to work with smaller physician practices. These communitybased health teams would provide care coordination and prevention using the same 

tools and approaches used successfully in larger integrated practices like Geisinger. 

This approach would allow Medicare to quickly replicate these effective practices nationally. 

The community health team concept is an approach already used in Vermont, 

North Carolina, Rhode Island and soon West Virginia and Pennsylvania. According 

to several evaluations from Mercer Consulting, North Carolina has saved between 

5 to 15 percent annually in their Medicaid program with these models. 


49824-1.eps
8 

In Vermont and elsewhere, CHTs work with primary care practices, patients, and 

their families to prevent and manage chronic illnesses. These teams variably include 

care coordinators, nutritionists, behavioral and mental health specialists, nurses 

and nurse practitioners, and social, public health, and community health workers. 

These trained resources already exist in many communities, working for home 

health agencies, hospitals, health plans, and community-based health organizations. 

To better leverage their systemic impact, dedicated teams are needed to work 

seamlessly with small primary care practices in communities across every State. 

The CHT model is replicable and scalable nationally and quickly, unlike other approaches. Like other payers, Medicare must make a very modest investment to coordinate care if it ever hopes to generate savings, reducing admission and re-admissions in the program. A $2.5 billion per year investment—or 0.6 percent of total 

Medicare FFS spending, and about 50 percent less than other payers currently invest to generate savings in their programs—would allow CHTs to work nationally 

with Medicare FFS patients. 

Community health teams have the potential to reduce spending in the program 

and working in tandem with other health reform proposals (hospital bundled payments and penalties for high re-admission policies) should generate savings higher 

than already scored by CBO. The Medicare program’s fragmented benefit design and 

reimbursement policies discourage care coordination and disease management. At 

the same time, these very same conditions present opportunities for prevention, better care, and long-run cost savings.8 Health reform should seek to reduce the rate 

of rise in targeted chronic conditions (primary prevention) and implement evidencebased care management (secondary and tertiary prevention), starting with current 

FFS Medicare beneficiaries. 

The most recent evaluation of the Medicare Coordinated Care Demonstration 

(MCCD) and several other randomized controlled trials substantiate the importance 

of five care elements that CHTs should provide: (1) monthly (or more frequent) inperson contact with patients, (2) targeting the right patients (treatment-control differences were concentrated entirely in the highest severity enrollees), (3) patient 

education on medication adherence and other self-care, (4) transition care coordination to avoid preventable re-admissions, and (5) close collaboration between care coordinators and physician practices.9


49824-2.eps
9 

To realize fully both health gains and potential cost savings, each patient should 

have a care coordinator who works closely with primary care providers in executing 

the care plan developed by the primary care physician collaboratively with the patient. Depending on the patient’s constellation of illness, several members of a CHT 

may be involved in working with the patient to execute the individualized care plan. 

Care plans should be developed for at-risk populations (pre-diabetic, overweight and 

obese, tobacco users) as well as patients with one or more diagnosed chronic conditions. 

A critical CHT focus must be transitional care. Potentially avoidable re-admissions have been identified as a major quality and spending problem in Medicare: 

About 18 percent of admissions result in re-admissions within 30 days of discharge, 

accounting for $15 billion in spending each year. Not all of these re-admissions are 

avoidable, but some are, potentially as much as $12 billion worth.10 The CHT care 

coordinator would track patients as they enter the hospital or skilled nursing facility, conduct an on-site visit, and, most importantly, work with the patient and admitting physician at discharge. The care coordinator would provide information and 

input to make sure the discharge plan and medication reconciliation for the patient 

are completed. 

CHTs are a vital link to community-based prevention programs that can deliver 

effective primary prevention to avert disease as well as programs to detect and mitigate existing conditions and avert complications (secondary and tertiary prevention). 

Each team should have a public health practitioner familiar with effective community-based lifestyle, exercise, diet/nutrition, smoking cessation, and other risk-reduction programs (e.g., substance abuse and mental health). An emerging example of 

the value of these community-based resources is the replication of the diabetes prevention program (DPP) and other protocols shown through randomized trials to reduce dramatically the incidence of diabetes among pre-diabetics and other at-risk 

populations. 

Absent an investment to prevent and manage disease, Medicare has no workable 

tools for slowing the growth in spending and will save less. Cutting provider payments may save money in the short term, but could drive spending up in the longer 

term, as fewer physicians accept Medicare patients and those with chronic illnesses 

are untreated and their diseases unmanaged. 

Chronic illnesses—mostly preventable—take an increasing toll on Americans’ 

health, productivity, and quality of life. Reversing or at least slowing the rise in incidence and prevalence is critical to better health and reduced health spending over 

the long term. The stimulus bill endows a national ‘‘Prevention and Wellness Fund’’ 

with $1 billion, including $650 million for ‘‘evidence-based clinical and community 

strategies that deliver specific, measureable health outcomes that address chronic 

disease’’ in title VII. 

Reforming the way in which the U.S. health system provides care to chronically 

ill patients is also essential. Episodic, uncoordinated care is ineffective and inefficient for patients like most Medicare beneficiaries who have multiple, chronic 

comorbidities. Reforming the traditional FFS Medicare program would go a long 

way in spurring needed transformation in health care delivery. The United States 

leads industrialized nations in per capita and total health spending, but is last in 

preventable mortality. Preventing disease, particularly chronic illness, and providing better care for those with life-long illness, along with how we finance and 

pay for care, must change. 

Thank you again for the opportunity to discuss these vital reforms. I’m happy to 

take your questions. 

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10 

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Hospitalization, Quality of Care, and Health Care Expenditures Among Medicare 

Beneficiaries: 15 Randomized Trials,’’ JAMA 301, no. 6 (2009): 603–618. 

9. D. Peikes, A. Chen, J. Schore, and R. Brown, 2009. 

B.W. Jack, et al., ‘‘A Re-engineered Hospital Discharge Program to Decrease Rehospitalization,’’ Annals of Internal Medicine 150, no. 3 (2009): 178–187. 

E.A. Coleman, et al., ‘‘Preparing Patients and Caregivers to Participate in Care 

Delivered Across Settings: The Care Transitions Intervention,’’ Journal of the American Geriatrics Society 52, no. 11 (2004): 1817–1825. 

M.D. Naylor, et al., ‘‘Comprehensive Discharge Planning and Home Follow-up of 

Hospitalized Elders: A Randomized Clinical Trial,’’ Journal of the American Medical 

Association 281, no. 7 (1999): 613–620. 

10. B. Starfield, L. Shi, and J. Macinko, ‘‘Contribution of Primary Care to Health 

Systems and Health,’’ Milbank Quarterly 83, no. 3 (2005):457–502. 

Medicare Payment Advisory Commission (MedPAC), Report to the Congress: Promoting Greater Efficiency in Medicare (Washington, DC: MedPAC, 2007). 

Medicare Payment Advisory Commission (MedPAC), Statement of Mark E. Miller, 

Executive Director (September 16, 2008), http://www.medpac.gov/documents/ 

20080916lSenlpercent20Finltestimonypercent20final.pdf (accessed April 1, 2009). 

Senator BROWN. Dr. Thorpe, thank you. 

Senator Murray, welcome. You don’t want an opening statement 

or are you—— 

Senator MURRAY. Mr. Chairman, I just really appreciate the opportunity to have this hearing, and I will submit my opening statement for the record. 

So thank you. 

[The prepared statement of Senator Murray follows:] 

11 

PREPARED STATEMENT OF SENATOR MURRAY

Thank you Senator Brown for holding this hearing. 

I am pleased that we are discussing ways that we can reform our 

health care delivery system. 

This is such an important issue—especially now as we work to 

reform the health care system to reduce costs, make care more affordable, and ensure that all Americans have access to high quality 

health care. 

I go home to Washington State almost every weekend and spend 

a lot of time talking to families and business owners about the 

challenges they face. 

And one thing I hear from them again and again is that they are 

deeply concerned about health care, and they desperately want 

meaningful reform. 

They tell me that especially now—as jobs are being lost across 

the State, and families are worried about their economic future— 

they want a health care system that they can count on—that they 

know will be there for their families when they need it. 

They tell me that they want a modernized health care system— 

and affordable, accessible health care for every single American. 

We all know our health care system is broken and it needs real 

reform. And we have an historic opportunity to finally tackle this 

challenge. These investments are not luxuries—they are essential 

to our future strength. 

I was very encouraged to see President Obama stand with representatives from across the medical community this week as they 

committed to bringing down health care costs by $2 trillion over 10 

years. 

This was a big step—but the work to reform the delivery system 

is going to be just as important. 

We need to alter the payment structure in health care to ensure 

that there is true coordination across medical disciplines. 

Models that encourage this coordination of care—like the medical 

home model—benefit the overall system by: 

• Encouraging disease management—particularly of chronic diseases; 

• Focusing on prevention and wellness; 

• And cutting down on duplicative and repetitive tests and treatments. 

And while we encourage these new and innovative ways to deliver health care, we also need to remember that not everything 

can be prevented and planned, and we still need to ensure that 

trauma centers continue to be there for anyone who needs lifesaving care. 

I believe that all Americans deserve high quality health care that 

reduces costs and makes care more affordable—and I know that delivery reform is going to be a big part of that. 

I thank our witnesses for coming in to speak with us. They are 

on the front lines of health care in America—and I look forward to 

hearing from them. 

Senator BROWN. Thank you, Senator Murray. 

Dr. Cooper, welcome. Thank you for joining us. 

12 

STATEMENT OF RICHARD A. COOPER, M.D., PROFESSOR OF 

MEDICINE AND SENIOR FELLOW, LEONARD DAVIS INSTITUTE OF HEALTH ECONOMICS, UNIVERSITY OF PENNSYLVANIA, PHILADELPHIA, PA 

Dr. COOPER. Thank you, Senator. Thank you so much for allowing me to be here today, and thank you for your introductory remarks, which certainly dramatically frame the problem. 

My message today is simple and direct. The problem that we are 

facing is that there are currently too few physicians, and we are 

training too few for the future. 

There is more to say about how this occurred and much more to 

say about how these shortages will affect physician practices and 

the models of practice. But the fundamental problem is too few 

physicians, too few generalists and too few specialists—too few 

physicians overall. 

These shortages actually began more than 5 years ago, but they 

were initially limited to certain specialties, including urology and 

some of the others represented here, and to certain locales. But because they were limited, they largely escaped public attention. Now 

that they have spread to engulf primary care, the secret is out. 

There are too few doctors. 

When concerns were raised in the past about too few primary 

care physicians, the strategy was to shift the balance of training 

from specialist to generalist. But this time, the problem is not one 

of balance. There aren’t enough physicians overall. 

This problem is further complicated by the fact that although we 

need more physicians today, we can’t get more for a decade or 

more. The math is easy. It will take several years to expand medical schools and residency programs, 4 years for students to complete medical school, 3 to 6 years of residency. And then it is 2025, 

and the Nation will be coping with shortages far more severe than 

today. 

These facts make it important to work doubly hard. Medical 

school expansion has begun, but it needs help. And it won’t yield 

more physicians unless residency programs are also expanded. And 

for that to happen, Medicare’s caps on graduate medical education 

will have to be lifted. That is one place Congress can help. 

But Congress must be aware that healthcare reform is occurring 

in a new era of physician shortages. No one alive today has carried 

out healthcare planning under such conditions. 

When we projected these shortages more than a decade ago, we 

cautioned that if steps were not taken to correct them, the medical 

profession would be forced to redefine itself in ever more narrow 

scientific and technological spheres while other disciplines evolve to 

fill important gaps. And that is what is happening now. 

Specialists are necessarily concentrating their efforts on technologically advanced care, on the care of patients with major acute 

disorders and complex chronic diseases and, of course, on advanced 

diagnostic services. 

Some specialists are trying to organize their practices to serve as 

the principal physicians for patients with chronic disease and, to do 

that, they are relying heavily on nurse practitioners and physician 

assistants to provide general care. 

13 

The specialties are narrowing, and the overlaps among them are 

decreasing. That presents challenges of the very sort you spoke of 

Senator Brown—challenges for the coordination and communication among physicians, which makes information systems even 

more critically important. 

There is a great deal of innovation, and we have heard a little 

bit about it already from Dr. Thorpe. Lots of ways to do it, and 

there will be more. No one model will fit every circumstance, and 

the circumstances will be more complex as the physician shortages 

deepen. 

Generalists, too, are gravitating to services with a higher average 

acuity and complexity. Some are now serving as hospitalists. Some 

concentrate—some continue to practice in rural communities, 

where a whole range of services are needed. Many are continuing 

to care for patients with uncomplicated chronic illness and for older 

patients with multiple infirmities. And like specialists, many are 

partnering with nurse practitioners, PAs, absolutely key to the success of such efforts. 

But the important point for consideration as one plans ahead is 

that fewer will be available for front-line primary care. Generalists 

instead will have to serve as consultants to nonphysician primary 

care providers. This is not a matter of taste. This is not a matter 

of desire. This is a matter of reality. 

It is a matter of choices. This is democracy. You represent the 

people. You can choose what physicians will do. Will they be neurosurgeons, or will they involve themselves in smoking cessation? 

These are very important choices. 

So these various transitions that are occurring naturally will 

allow physicians to do more than physicians normally do if there 

are enough physicians to do it. But there still won’t be enough. 

So my message to you is simple and direct. Open the gates for 

residency training so that physician supply can be increased and 

free physicians to develop innovative approaches to clinical practice 

of a great variety of ways. 

Ultimately, high-quality care depends on the autonomous exercise of clinical judgment by competent and empathic physicians. We 

need to be sure that there will be enough for everyone in the future. 

Thank you. 

[The prepared statement of Dr. Cooper follows:] 

PREPARED STATEMENT OF RICHARD A. COOPER, M.D. 

Mr. Chairman and members of the committee, I very much appreciate the opportunity to provide testimony to the committee as it undertakes this important inquiry 

into the critical role that physicians will play in a reformed health care system. It 

is a topic that I feel deeply about. 

OVERVIEW

The problem that we are facing is that there are worsening shortages of physicians. I will say more about these shortages and about how physician practices are 

likely to evolve because of them, but it is important not to lose sight of the fundamental problem: too few physicians to serve the needs of the Nation. Too few generalists and too few specialists. Too few physicians. 

This problem will have to be addressed in two ways. The first is by expanding 

the capacity to train more physicians. Although difficult to accomplish, the ways to 

accomplish it are generally known. The second is more elusive. It is through innovative practice arrangements among physicians and between physicians, hospitals and 

14 

nonphysician clinician (NPC) providers. There are infinite numbers of such arrangements, and infinite regional and local circumstances in which they will be carried 

out. Innovation is key. While some believe that the ‘‘true’’ way can be known and 

applied generally through practice incentives or otherwise, that approach is fraught 

with danger. Experiences can be shared, but practices cannot be shaped by widelyapplied incentives or regulations. In health care, as in politics, everything is local. 

These two lines of thinking come together when it is appreciated that no one has 

carried out health care planning in the context of physician shortages of the magnitude that are now developing. At times like this, it is best to work toward minimizing long-term shortages, make efforts to assure that disadvantaged populations 

do not bear the brunt of the problem, and sustain an atmosphere that is conducive 

to practice innovation. 

BACKGROUND

I come to this after almost 50 years as a physician. My early career was as an 

academic hematologist, first at Harvard and then at Penn. While at Penn, I also 

helped to found a Comprehensive Cancer Center, which I later directed. After almost 15 years there, I was drawn back to Milwaukee, the city of my birth, to serve 

as dean of the Medical College of Wisconsin. It was toward the end of that tour of 

duty that the Clinton Health Plan was in the making. I was attracted to these deliberations by the notion that there would be a vast surplus of physicians by Century’s 

end. 

In examining the way that the Bureau of Health Professions projected these surpluses, it quickly became apparent that outmoded census data had been used. When 

correct data from the Census Bureau’s were substituted, a very different picture 

emerged. It was not one of mounting surpluses but of a ‘‘turn of the century bulge’’ 

in physician supply followed by increasing shortages as the new Century unfolded— 

which is what is happening now. 

The view that shortages would develop was very unpopular at the time, but it has 

proven to be correct. Sadly, rather than beginning then to prepare for an expansion 

of medical education now, the consensus was to stop any further expansion of physician training by freezing the number of residency positions. That was accomplished 

in the Balanced Budget Act of 1997, which capped Medicare funding for graduate 

medical education (GME) at its 1996 level. And that is why we are here today. 

DEFINITION OF THE PROBLEM

As I stated at the outset, the Nation is producing too few doctors for its current 

and future needs. As my colleagues and I forecasted a decade ago, economic and demographic trends, combined with insufficient training capacity, are leading to deepening shortages of physicians. But now there is a second part to the forecast. Because so much time has passed, a further deepening of physician shortages cannot 

be avoided. Regardless of how much effort is made to add training capacity now, 

it will not be possible to correct the problem soon enough or fully enough to avert 

still worse shortages over the next decade. And that makes your deliberations doubly important, for they concern not only the need for adequate numbers of physicians but the need for innovative models of practice in this coming era of physician 

shortages. This is uncharted territory. There is no time in the past when the United 

States has had shortages of physicians of the magnitude that are now developing. 

Innovation is the operative word, both for expanding training capacity and structuring the practice of medicine. 

The shortages that are now being experienced are not new. They began to appear 

7–8 years ago, even earlier than we had anticipated. But they were limited to certain specialties, such as cardiology and urology, and because they were limited, they 

largely escaped public attention. However, they were noticed by national organizations. Following our initial projections a decade ago, the Council on Graduate Medical Education adopted a similar planning model and made similar projections, and 

these were confirmed by a series of follow-up reports from the Association of American Medical Colleges. With these projections and early evidence of shortages in 

many specialties and many communities, most major medical organizations called 

for expanding physician supply. They included the American Medical Association, 

the American Osteopathic Association, the Association of American Medical Colleges, the American Association of Colleges of Osteopathic Medicine and the Association of Academic Health Centers. More than 20 specialty societies and an equal 

number of State medical and hospital associations joined this chorus. Yet, it was 

largely ignored. However, now that the shortages have spread to engulf primary 

care physicians, whose care is sought by most patients, even when they are healthy, 

the secret is out. Everyone knows. We don’t have enough physicians. 

15 

On past occasions when there was concern about too few primary care physicians, 

the strategy was to shift the balance of training from specialists to primary care. 

But this time the problem is not simply one of balance—it is global—there are too 

few physicians across specialties. Unlike the past, there’s no ‘‘robbing Peter to pay 

Paul.’’ The only solution is to train more physicians and allow them to distribute 

among the various specialties where they are needed. 

The problem is further complicated by the fact that, although we need more physicians now, we really can’t get any more for a decade or more. This is because, even 

with sufficient financial support, it will take several years to increase medical school 

output and expand residency training capacity, and then it will take 4 years to educate medical students and another 3 to 6 years for these graduates to undergo residency and fellowship training. And by then it will be 2020, and the Nation will be 

coping with shortages far more severe than today. 

EXPANDING MEDICAL EDUCATION

The fact that future shortages are unavoidable is not a reason to do nothing. It 

is a reason to work doubly hard to minimize them. In response to that need, many 

medical schools have already begun to increase class size, and a small number of 

new schools are in various stages of development. The pace of both is commendable, 

but it is too slow and not enough, and without national support, it is unlikely to 

be sufficient. Medical schools need financial help in this endeavor. 

But most of all, residency programs must be expanded. Medicare’s caps on residency positions must be lifted, and support must be made available to assist existing training programs to expand and to help hospitals that are capable of starting 

new programs. And that is where Congress can help. 

Why is expanding graduate medical education so important? It is because, regardless of where physicians are schooled (U.S.-M.D. schools, U.S.-Osteopathic schools, 

U.S. citizens trained abroad or foreign nationals trained abroad), physicians must 

receive residency training in the United States in order to be licensed for practice 

in the United States. This limitation does not hold for most other countries, which 

allow the entry of practicing physicians, albeit with some restrictions. However, in 

the United States, GME is the portal to practice. It’s a good portal, one that enhances the quality of care. 

HOW MANY MORE PHYSICIANS ARE NEEDED?

Estimating the future demand for physicians requires a consensus about the future dimensions of health care. Over the past several decades, health care spending 

has grown at an annual rate approximately 2 percent higher than the rate of GDP 

growth (which averaged 3 percent). The 2 percent differential was not because no 

more health care was desired, but because desire encountered downward pressure, 

and 2 percent became the equilibrium point. Even if downward pressure is greater 

in the future, it seems unlikely that health care spending would grow more slowly 

than the economy overall. It also is unlikely that its growth could exceed GDP 

growth by as much as 4 percent, double the historic level. So the range of predicted 

spending is rather narrow. 

President Obama’s announcement earlier this week concerning proposals by major 

health care providers to rein in the annual growth of health care spending is in line 

with projections of growth within 1–2 percent of GDP growth, a level that would 

cause health care’s portion of GDP to reach 20 percent by 2020 or shortly thereafter. 

Long-term trends also indicate that spending will not be the same everywhere— 

more prosperous States spend more, not only on health care but on other social 

services. And they have better outcomes when their diverse sub-populations are 

taken into consideration. While it is difficult to predict the future, and there are extreme views in both directions, it seems prudent to make long-term plans for facilities and personnel based on these estimates. 

Historically, as health care spending has grown, the supply of physicians has 

grown much slower, while other health care workers undertook important tasks. 

During the 1920s, physicians accounted for 25 percent of health care workers, but 

now account for fewer than 7 percent. This trend has been associated with new technical disciplines, a vast expansion of nursing and a progressive increase in the number of nonphysician clinicians (NPCs), principally nurse practitioners (NPs) and 

physician assistants (PAs), reflecting the greater complexity of the tasks that physicians now delegate or defer to others. 

WHAT IS POSSIBLE?

The illustration below depicts the trends in physician supply and demand over the 

past several decades, expressed in per capita terms. It also shows how demand will 

16 

change over the coming years, assuming a slowing of spending growth, as indicated 

above. And it shows that, if the rate of training is not increased appreciably, there 

will be as many as 200,000 too few by 2020, 20 percent of the projected demand, 

and larger shortages thereafter. 

The illustration also shows what could happen if the number of entry-level residency positions were increased by 10,000 over the next decade, from approximately 

25,000 to 35,000, a 40 percent increase. While such an increase is seemingly large, 

it is equal to the expansion of residencies that occurred in the 1960s and 1970s, the 

last major effort to expand supply. Such an expansion would clearly lead to meaningful increases in physicians long-term. But, because of the long lead-times, little 

will occur until after 2020, and a gap between supply and projected demand equivalent to 100,000 physicians will continue well into the future. 

Thus, there are two problems. A near-term shortage, about which we can do very 

little, and a long-term shortage, which we can work to ameliorate, recognizing that 

it will be impossible to correct completely. But it is essential that Congress act 

quickly to aid in that process. Helping medical schools is important, but increasing 

the number of residents trained annually is the key. 

While there is a tendency to want to use the funding for residency training as 

a lever to influence specialty mix, it is difficult to anticipate the precise roles that 

physicians will serve 20 and 30 years hence, which is the timeframe during which 

current efforts to increase the supply will come to fruition. Therefore, it is hazardous to attempt detailed adjustments to the specialty mix of trainees. Physicians 

will have to be trained to deal with the changing knowledge base of medicine, and 

they will have to distribute in a manner that is consistent with medical care in that 

somewhat distant future. 

REDEFINING PHYSICIANS’ ROLES

In 2002, we prophesized that: 

‘‘shortages of physicians will force the medical profession to redefine itself in 

ever more narrow scientific and technological spheres while other disciplines 

evolve to fill important gaps.’’ 

That transition is now occurring, as physicians gravitate to higher complexity 

services that only they can provide. Faced with deepening shortages, this trend 

seems certain to continue. The following scenarios describe ways that physicians are 


49824-3.eps
17 

likely to distribute responsibility. Implicit in all of them is an interdependence 

among physicians and between physicians and NPC. But most important is innovation. The processes of restructuring physician practices will be very fluid and will 

undoubtedly include characteristics that are not evident today. It would be a mistake to favor any particular form of organization. 

Specialists will increasingly concentrate their efforts on technologically advanced 

care and on the care of patients with major acute disorders and complex chronic illnesses, and, of course, on advanced diagnostic services. The degree of overlap among 

specialties has decreased over time, as each has evolved to encompass a special body 

of knowledge, and this seems certain to continue, which brings interdependence 

more sharply into focus. Many specialists who care for patients with chronic disease 

will organize their practices to serve as ‘‘principal physicians’’ for these patients, 

sharing the responsibility for general care and care coordination with NPCs within 

their own practices and with generalist physician colleagues. Relationships like 

these will also facilitate the ability of some specialty practices to retain the continuing responsibility for patients whose chronic illnesses are quiescent or ‘‘cured.’’ 

Innovation and experimentation will be important. No one model will fit every circumstance. 

Generalists, too, will serve a variety of roles, but the hall marks will be greater 

acuity and complexity. One is their comparatively new role as hospitalists, an example of generalist physicians gravitating to higher complexity care. A second is the 

collaborative care of patients with complex chronic illness, as mentioned. Third, is 

the traditional role of generalists in caring for patients with uncomplicated chronic 

disease and multiple co-morbidities, responsibilities that they will increasingly discharge in partnership with NPCs. And fourth are areas with special needs, such as 

rural communities, prisons and the military. 

Generalist physicians have traditionally been major providers of front-line primary care, including wellness care, patient education, prevention and the care of 

acute self-limited disease. However, the lack of sufficient numbers of physicians, 

combined with the decreased interest of young physicians in such tasks and the 

doubtful wisdom of committing such highly-trained professionals to this purpose, 

predicts that more such care will be provided by NPCs and, through the use of the 

Internet and other resources, by patients themselves. While some have argued that 

this spectrum of responsibilities should be retained by physicians and provided 

through physician-directed ‘‘medical homes,’’ it seems improbable that there would 

be sufficient numbers of such physicians, even if the model were ideal everywhere 

and for everyone. Rather, the provision of primary care services will have to be responsive to particular regions and subpopulations in each and to the spectrum of 

providers who are available to participate. Retail clinics, some in cooperation with 

hospitals or health plans, are only the most recent innovation. As generalists relinquish their roles in front-line primary care, they will be called upon to serve as consultants for these various primary care systems. And they must be appropriately 

compensated for the higher average acuity and complexity of the patients they 

serve. 

DOES IT MATTER?

This analysis of the need to expand physician supply and encourage innovation 

in physician practices stands against a set of beliefs that more physicians and more 

health care may not be good for the Nation and that primary care should supplant 

specialty care for patients with chronic illness. In fact, the preponderance of data 

do not support these conclusions. Moreover, when the studies underlying them are 

exposed to scrutiny, it becomes evident that some were confounded by the anomalous distribution of family physicians in the upper Midwest; some suffered from the 

error of aggregation and averaging; some relied on statistical permutations rather 

than measures of actual physicians; and many relied exclusively on analyses of 

Medicare spending, which is not a proxy for health care spending overall. As an example, Mississippi and Nevada, where quality is low, do not have high health care 

spending, nor do they have an abundance of specialists, as portrayed. They devote 

the least resources to health care, and have corresponding outcomes. 

Most important in understanding regional comparisons is an understanding of the 

interplay between communal wealth and individual income in determining health 

care utilization and outcomes. Viewed in that light, more physicians, both specialists 

and generalists, and more health care spending are associated with better outcomes. 

Simply stated, ‘‘more is more.’’ The Nation may not be able to afford all of the 

health care that would be beneficial, but it would be a mistake to assume that 

spending less, or limiting physician supply in order to spend less, would be beneficial. Rather, it seems prudent to base the future demand for physicians on realistic 

18 

projections of health care spending, to respond to that demand by training as many 

physicians as is practical, and to foster innovations in practice structures that can 

aid in meeting needs as they evolve. Ultimately, high quality care depends on the 

autonomous exercise of clinical judgment by competent and empathic physicians 

who are accountable to their patients and society. 

SELECTED REFERENCES

1. Cooper RA. Forecasting the physician workforce. In Papers and Proceedings of 

the 11th Federal Forecasters Conference. (Washington: U.S. Dept of Education), 

2000, PP. 87–96. 

2. Cooper RA, Getzen TE, McKee HJ, Laud P. Economic and demographic trends 

signal an impending physician shortage. Health Affairs 2002; 21(1): 140–54. 

3. Cooper RA. There’s a shortage of specialists. Is anyone listening? Academic 

Medicine 2002; 77: 761–66, 2002. 

4. Cooper RA. Weighing the evidence for expanding physician supply. Annals of 

Internal Medicine 2004; 141: 705–14. 

5. Cooper RA. It’s time to address the problem of physician shortages: Graduate 

medical education is the key. Annals of Surgery 2007; 246: 527–34. 

6. Cooper RA. States with more physicians have better-quality health care. Health 

Affairs. 2009; 28(1): w91–102 (published online 4 December 2008) http://content 

.healthaffairs.org/cgi/content/full/hlthaff.28.1.w91/DC1. 7. Cooper RA. States with more health care spending have better quality health 

care—Lessons for Medicare. Health Affairs. 2009;28(1):w103–15 (published online 4 

December 2008) http://content.healthaffairs.org/cgi/content/full/hlthaff.28.1.w103 

/DC1. 8. Physician shortages in the U.S.: Commentaries and controversies. http:// 

buzcooper.com/. 

Senator BROWN. Thank you, Dr. Cooper. 

Dr. Schlossberg, welcome. 

STATEMENT OF STEVEN SCHLOSSBERG, M.D., MBA, VICE 

PRESIDENT, CLINICAL OPERATIONS, HOSPITAL-BASED SURGICAL SPECIALTIES, SENTARA MEDICAL GROUP, CHAIR, 

HEALTH POLICY, AMERICAN UROLOGICAL ASSOCIATION, ON 

BEHALF OF THE ALLIANCE OF SPECIALTY MEDICINE, NORFOLK, VA 

Dr. SCHLOSSBERG. Mr. Chairman and members of the committee, 

I am the chair of health policy for the American Urological Association, a member of the Alliance of Specialty Medicine, which I am 

here to represent. 

As a practicing urologist and part of the management team of a 

400-physician multispecialty group, I am keenly aware of the necessity of collaboration between primary care and specialists. Currently, I am responsible for hospital-based and surgical specialists 

within our medical group, which includes hospitalists, pulmonary 

critical care, general surgery, neurology, vascular surgery, and 

urology. 

Therefore, effective partnerships between specialty care and primary care are absolutely essential to the delivery of high-quality, 

cost-effective patient care. Through the dissemination of clinical 

guidelines, offering of continuing medical education courses, and innovative collaborations among primary care and specialty practices, 

specialties educate primary care providers and ensure timely and 

appropriate referrals and resource use. 

Not everything can be prevented. People get sick. They need specialists. They need surgeons, and they need hospitalists and emergency rooms. Primary care will not always be the most efficient 

and effective provider for every condition and disease. In fact, evidence indicates that specialists achieve better outcomes in the 

19 

treatment of their specialty area compared to primary care providers and other specialists. 

An article in the American Journal of Medicine looked at the 

treatment of arthritis, rheumatic, and musculoskeletal conditions 

and found that primary care providers often lack adequate 

rheumatologic training. They are less skilled in the diagnosis and 

management of these diseases and may order more diagnostic studies, drugs, and consultations. Rheumatologic care for these conditions provides better patient outcomes and is less costly. 

To foster collaboration, Congress should not divide medicine and 

strive to strengthen primary care at the expense of specialty care, 

whether through budget neutral changes to reimbursement or by 

limiting access to specialists. 

Congress must address the underlying physician payment problem. Without a long-term solution to the flawed Medicare payment 

formula, our healthcare delivery system cannot truly be reformed. 

When the Government programs do not provide stable and fair reimbursement, it equally impacts the private insurance programs 

and leads to discrepancies in the true cost of care. 

One of the innovative delivery models being discussed is the 

medical home. A key feature of this concept, as you have said, is 

a personal physician responsible for overseeing all of a patient’s 

healthcare and coordinating care. Unfortunately, the current medical home models do not include all qualified physicians able to provide medical homes and may, in fact, result in limiting access to 

some specialists. 

The design of the CMS-proposed medical home excludes many 

specialties, including surgery. Urology is a surgical specialty, and 

a urologist may be the most appropriate medical home for patients 

with certain chronic urologic conditions, such as prostate cancer 

and bladder problems. 

These patients often have long established relationships with 

their urologist and have trust and confidence in their care. Arbitrary severance of this relationship through the exclusion of surgical specialties does not serve the goals of this program. We 

should think in terms of having a principal provider and not assume it is always the primary care provider. 

Rather than having the Government decide which providers are 

most appropriate, let individual physicians in consultation with 

their patients together decide if they want to participate. Many 

may not. 

Finally, Congress should not move forward with innovative delivery system models that have not been fully tested. Implementation 

of the medical home is scheduled to begin next year. Before the 

program is made permanent, Congress should fully analyze the 

data from the demonstration project. 

Finally, a couple of thoughts on information technology. Certainly, HIT, or health information technology, has the potential to 

increase collaboration, efficiency, and quality of care and to lower 

healthcare costs. The alliance strongly supports the development of 

an electronic health information network that is both reliable, 

interoperable, secure, and protects patient privacy. 

The specialty community is appreciative for the opportunities 

available for physicians to receive enhanced Medicare payments to 

20 

support the adoption and effective utilization of HIT. I currently 

am doing e-prescribing, PQRI, and using electronic medical record. 

However, the alliance is concerned that many surgical physicians 

will not be able to take advantage of the enhanced payments. 

Therefore, the alliance urges you to consider amending the current 

HIT bonus and penalty timelines. 

Finally, a thought on quality. Each of the alliance’s specialty association members has been actively engaged in the process of developing evidence-based and clinically relevant quality measures 

and establishing data registries. While much progress has been 

made, it takes time to develop the extensive quality infrastructure 

needed for quality improvement and simply is not yet established 

for the majority of physicians. That makes participation in quality 

measurement and improvement efforts very different from other 

providers. 

Finally, just to amplify Dr. Cooper’s comments about the workforce, specialists are an integral part of American medicine, and we 

cannot take for granted that specialists will always be there. The 

Council on Graduate Medical Education reported that in rural 

areas, there is a clear need for specialty care and although primary 

care would be an essential area of medical service and training, 

subspecialty and surgical disciplines are also sorely needed in underserved areas. 

It is important to consider workforce issues as you consider 

healthcare reform because it takes 12 years to produce a specialist. 

Like many specialists, urology requires training, extensive training—4 years of college, 4 years of medical school, and 5 years of 

residency. 

As a professor of urology at Eastern Virginia Medical School, I 

caution you against going too far in discouraging young physicians 

from entering specialty medicine. By the time a true crisis is visible, we will be unable to correct it. 

Thank you, Mr. Chairman. 

[The prepared statement of Dr. Schlossberg follows:] 

PREPARED STATEMENT OF STEVEN SCHLOSSBERG, M.D., MBA 

Mr. Chairman and members of the committee, thank you for inviting me to testify 

regarding the role of specialty care. 

My name is Steven Schlossberg from Norfolk, VA. I am the chair of Health Policy 

for the American Urological Association, a member organization of the Alliance of 

Specialty Medicine, which I am here to represent. The Alliance was founded in 2001 

and its mission is to develop sound Federal health care policy that fosters patient 

access to the highest quality specialty care and improves timely access to high quality medical care for all Americans. As patient and physician advocates, the Alliance 

welcomes the opportunity to be here today and participate in the national health 

care reform debate. 

I am a practicing urologist and part of the management team of a 400 physician 

multi-specialty group practice. This makes me keenly aware of the necessary collaboration between primary care and specialists. 

Effective partnerships between specialty care and primary care are absolutely essential to the delivery of high quality, cost-effective, patient-centered care. Through 

the dissemination of clinical guidelines, offering of continuing medical education 

(CME) courses, and innovative collaborations among primary care and specialty 

practices; specialties educate primary care providers and ensure timely and appropriate referrals and resource use. Not everything can be prevented. People get sick. 

They need specialists. They need surgeons. They need hospitals and emergency 

rooms. 

Primary care will not always be the most cost efficient and effective provider for 

every condition and disease. In fact, evidence indicates that specialists achieve betVerDate Nov 24 2008 16:04 May 16, 2011 Jkt 035165 PO 00000 Frm 00024 Fmt 6633 Sfmt 6621 S:\DOCS\49824.TXT DENISE
21 

1Katz JN, Solomon DH, Schaffer JL, Horsky J, Burdick E, Bates DW. ‘‘Outcomes of care and 

resource utilization among patients with knee or shoulder disorders treated by general internists, rheumatologists, or orthopedic surgeons.’’ American Journal of Medicine Jan 2000: 108 (1) 

PP. 28–35. 2 Curtis JP, Luebbert JJ, Wang Y, Rathore SS, Chen J, Heidenreich PA, Hammill SC, 

Lampert RI, Krumholz HM. ‘‘Association of Physician Certification and Outcomes Among Patients Receiving an Implantable Cardioverter-Defibrillator.’’ Journal of the American Medical 

Association Apr 22/29 2009—Vol. 301, No. 16, PP. 1661–1670. 

ter outcomes in the treatment of the diseases they focus on than primary care providers and other specialists. For example, an article in the American Journal of 

Medicine looked at treatment of arthritis, rheumatic and musculoskeletal conditions 

and found that primary care providers often lack adequate rheumatologic training. 

They are less skilled in the diagnosis and management of these diseases and may 

order more diagnostic studies, drugs, consultations and follow-up visits than 

rheumatologists, making the care they provide lower quality and more costly. 

Rheumatologic care for these conditions provides better patient outcomes and is less 

costly to the health care system.1

A recent article in the Journal of the American Medical Association (JAMA),2 directly relates subspecialty training to improved patient outcomes. This particular 

case looked at outcomes for implantable cardioverter-defibrillators (ICD) and used 

cases submitted to the ICD Registry. The study confirms that specialized training 

enables physicians to lower risk of complication and select the most appropriate 

treatment for the patient’s unique needs. 

To foster collaboration, Congress should not divide medicine and strive to 

strengthen primary care at the expense of specialty care—whether through budget 

neutral changes to reimbursement or by limiting access to specialty care. 

REIMBURSEMENT

Congress must address the underlying physician payment problem. Without a 

long-term solution to the flawed Medicare payment formula, our health care delivery 

system cannot truly be reformed. When the government programs do not provide 

stable and fair reimbursement, it equally impacts the private insurance programs 

and leads to discrepancies in the true cost of care. Nor should Congress rob Peter 

to pay Paul. The Alliance recognizes the importance of improving access to primary 

care and strengthening the role of primary care providers. The Alliance can not support proposals that would provide additional payments to primary care physicians 

at the expense of specialists, e.g., through budget neutral adjustments in payments 

made to specialists. 

INNOVATIVE DELIVERY MODELS

One of the innovative delivery models being discussed is the Patient-Centered 

Medical Home—a healthcare delivery model intended to promote patient-centered, 

longitudinal, integrated care. A key feature of Medical Home is a personal physician 

responsible for overseeing all of a patient’s health care and appropriately coordinating care with other qualified professionals to enhance access, improve integration, and increase safety and quality. 

Unfortunately, the current Medical Home models do not include all qualified physicians able to provide Medical Homes and may, in fact, result in limiting access 

to some specialists. Through the Tax Relief and Health Care Act of 2006, the Center 

for Medicare and Medicaid Services (CMS) was directed to launch a Medical Home 

demonstration. However, the design of the CMS-proposed Medical Home excludes 

many specialties such as surgery. Urology is a surgical specialty and may be the 

most appropriate Medical Home for patients with certain chronic urologic conditions, such as prostate cancer or bladder control problems. These patients often have 

long-established relationships with their urologists and have trust and confidence in 

their care. Arbitrary severance of this relationship through exclusion of surgical specialties does not serve the goals of this program. We should think in terms of having 

a ‘‘principal’’ provider and not assume it always will be a primary care provider. 

Rather than having government decide which providers are most appropriate, let individual physicians, in consultation with their patients, together decide if they want 

to participate; many may not. I believe that will foster the patient-centeredness care 

around which this program is built. 

Finally, the Alliance requests that Congress, before enacting Medical Home as a 

permanent model, fully analyze the data after the completion of the demonstration 

to determine if Medical Home significantly improved care coordination, was patientcentered, delivered improved patient outcomes and saved money. Currently, implementation of the demonstration project is slated to begin January 2010. 

22 

If Medical Home or other innovative delivery systems are to succeed, there must 

be collaboration between primary care and specialty medicine. Specialists are working with primary care physicians to ensure appropriate referral and promote continuity of care. For example, the American Urological Association has spearheaded 

a free continuing medical education (CME) update tailored exclusively to primary 

care practitioners on major urologic conditions, reaching out to the American Academy of Family Physicians (AAFP) and the American College of Physicians (ACP). 

The North American Spine Society/National Association of Spine Specialists 

(NASS) is unique in that it encompasses multi-specialty care including non-operative and surgical care from entry into the healthcare system through all phases and 

types of care, thus demanding routine coordination among a range of practitioners, 

including primary care providers. NASS provides specific evidence-based guidance 

to spine care providers in the form of clinical guidelines to benefit patient care, helping them diagnose, treat, and properly manage, among other conditions, back pain. 

The American Gastroenterological Association (AGA) provides educational materials for primary care providers on such highly prevalent GI conditions as appropriate management/evaluation of diarrhea, Gastroesophageal reflux Disease 

(GERD), colorectal cancer screening and polyp/cancer surveillance. Additionally, 

some larger gastroenterological practices are working closely with primary care 

practices to develop clinical care protocols for four areas: pediatric chronic diarrhea, 

adult chronic diarrhea, acute abdominal pain and chronic abdominal pain. These 

protocols include, for example, what diagnostic steps should occur at the primary 

care level and then what should be included in the information transfer. Having 

electronic medical record (EMR) interface will help with the proper information flow 

and the development of future protocols. 

These are just a few examples of the kinds of essential exchange of clinical knowledge and practice expertise that specialists are proactively providing to primary care 

professionals to promote cost-effective, timely, efficient and clinically appropriate patient care. Other Alliance member organizations also have developed similar tools 

for primary care physicians. We ask that such fruitful and functional partnerships 

be explicitly recognized and actively fostered by supportive government policies that 

unite diverse segments of medicine around the patient as the center of attention, 

rather than artificially, through divisive payment policies and arbitrary definitions, 

perpetuate dysfunctional silos of care that both patient and physician must struggle 

to navigate. Specialty care is and can continue to be an effective, knowledgeable contributor to a reformed healthcare system and is able and willing to do so. 

HEALTH INFORMATION TECHNOLOGY (HIT)

Health information technology (HIT) provides a building block for innovation and 

the delivery systems of the future. It has the potential to increase collaboration, efficiency and quality of care, and to lower health care costs significantly. The Alliance 

strongly supports the development of an electronic health information network that 

is reliable, interoperable, secure, and protects patient privacy. Congress made significant strides towards the implementation of HIT with the passage of the ‘‘American Recovery and Reinvestment Act of 2009’’ (ARRA)(PL11–5), and the specialty 

community is appreciative for the opportunities available for physicians to receive 

enhanced Medicare payments to support the adoption and effective utilization of 

HIT. 

My practice has moved forward in this area. We viewed this as a shared responsibility. The only reason my practice was successful is because we had the resources 

to do this. If I was in a small or solo practice, I could not have done it. Smaller 

physician practices, which include the majority of the physicians practicing medicine 

in this country, continue to face barriers to purchasing HIT systems. In addition, 

for those practices that manage to adopt HIT, it takes a further investment of significant time and resources to use their systems to the fullest capacity. 

However, the Alliance is concerned that many specialty physicians will not be able 

to take advantage of the enhanced payments to purchase HIT because of the ambitious bonus and penalty timelines and the fact that current specialty systems lack 

certification and interoperability standards. Further, the current certified HIT systems have been developed for primary care settings and have not yet been fully 

adapted for specialty or surgical care. The financial incentives and penalties are 

based on the adoption and ‘‘meaningful use’’ of certified HIT systems and will have 

a profound impact on our members and their ability to adopt and become meaningful users. Physicians are hesitant to make the considerable investment until certified systems are available that meet their unique needs. 

I call your attention to the fact that there are surgical specialties that have made 

significant accomplishments toward achieving interoperable HIT solutions for their 

23 

3 COGME 18th Report: ‘‘New Paradigms for Physician Training for Improving Access to 

Health Care,’’ Sept 2007, page 5. 4 Ibid, page 13. 

members and have been placed on the Certification Commission for Health Information Technology (CCHIT); the only recognized certification body, roadmap for HIT 

Certification. However, due to the obstacles that must be overcome to be identified 

by CCHIT as one of the planned expansion areas, and the lack of CCHIT financing 

and staff, most specialties are not even in the pipeline. In addition, even those who 

are on the roadmap are facing challenges in the timelines that have been outlined 

by the Commission. 

As a result, and under the current timelines, it will be virtually impossible for 

the majority of surgical specialty physicians to purchase certified systems that are 

designed for their specialty, become meaningful users, and qualify for the majority 

of the vitally necessary financial incentives. Specialty medicine continually strives 

to provide quality care, and the Alliance recognizes that HIT can play an important 

role in achieving and maintaining high performance. Therefore, the Alliance urges 

you to consider amending the current HIT bonus and penalty timelines. 

QUALITY

Likewise, quality improvement programs cannot be one-size-fits-all. Each of the 

Alliance’s specialty association members has been actively engaged in the process 

of developing evidence-based and clinically relevant quality measures and establishing data registries through initiatives within their own specialty and/or through 

the AMA’s Physician Consortium for Performance Improvement. While much 

progress has been made, it takes time to develop the extensive quality infrastructure needed for quality improvement which simply is not yet established for the majority of specialty physicians. That makes participation in quality measurement and 

improvement efforts very different from other providers to whom most physicians 

are readily compared. Since many times the private market follows Medicare’s lead, 

I would like to share the Alliance’s concerns with implementation of the Physician 

Quality Reporting Initiative (PQRI). 

Process of care measures may be more relevant for primary care, but we need to 

move to a quality system that focuses also on clinical outcomes. For the program 

to succeed, it first needs to extend the timeline for full implementation so that physicians can catch up to other providers, some of whom have had decades to create, 

test, and report on measures; it must provide physicians with access to their data 

in a timely manner and it must have a reasonable appeals process. Also, the information should be verified before it is made public and quality reporting should be 

voluntary, not punitive. Congress should consider establishing a public private partnership to provide long-term support for clinical data registries and measure development currently undertaken solely through the limited resources of medical specialty societies. Additionally, the PQRI program could reward physicians who report 

clinical data to such registries. Finally, Congress must recognize the increased cost 

to report quality measures and should provide physicians with adequate funding to 

implement reporting requirements. 

PHYSICIAN WORKFORCE

Specialists are an integral part of American medicine. As a Nation, we pride ourselves on having the best medical care has to offer. Regardless of what insurance 

product people have, Americans want to know they may see their doctor of choice 

when needed. However, we can not take for granted that those specialists will be 

there. 

The Council on Graduate Medical Education (COGME), reported that: ‘‘In rural 

areas, there is a clear need for specialty care.’’ 3 The report goes on to say that: 

‘‘Though primary care would be an essential area of medical service and training, 

subspecialty and surgical disciplines are also sorely needed in underserved areas.’’ 4

The Bureau of Health Professions (BHP) has cited significant workforce challenges across the surgical specialties. Between 2005 and 2020, BHP projects an increase of only 3 percent among practicing surgeons—with projected significant declines in a number of surgical specialties. Over the same time period, BHP projects 

that the number of practicing primary care physicians will increase by 19 percent. 

The Association of American Medical Colleges (AAMC) published an updated physician workforce study demonstrating essentially equivalent shortages between primary care and surgery. Specifically, the study projects physician supply and demand 

through 2025 and finds that: ‘‘in terms of the general projected shortage of 124,000 

FTE physicians, while 37 percent of the shortage will be in primary care [46,000], 

24 

5The Complexities of Physician Supply and Demand: Projections through 2025, Michael J. Dill 

and Edward S. Salsberg, Center for Workforce Studies, Nov. 2008. 

33 percent will be in surgery [41,000] . . .’’ In addition, the study projects a shortage 

of 8,000 medical specialty physicians.5

It is important to consider workforce issues as you consider health reform because 

it takes more than 12 years to produce a specialist. Like many specialists, urology 

requires years of training. In my case, 4 years of undergraduate education, 4 years 

of medical school, 5 years of urology residency; some then also do an additional 2 

or 3 years of Fellowship training. As a professor of urology at Eastern Virginia Medical School, I caution you against going too far and discouraging young physicians 

from entering specialty medicine. By the time a true crisis is visible, we will be unable to quickly correct it. Already, there are shortages in many specialty areas and 

as I mentioned earlier, the projections are that the problem gets worse. 

Mr. Chairman, thank you again for including the Alliance of Specialty Medicine. 

I’m happy to answer any questions. 

Senator BROWN. Thank you, Dr. Schlossberg. 

Dr. Nochomovitz, welcome again. 

STATEMENT OF MICHAEL NOCHOMOVITZ, M.D., PRESIDENT 

AND CHIEF MEDICAL OFFICER, UNIVERSITY HOSPITALS 

MEDICAL PRACTICES AND UNIVERSITY HOSPITALS MANAGEMENT SERVICES ORGANIZATION, CLEVELAND, OH 

Dr. NOCHOMOVITZ. Senator Brown and distinguished members of 

the committee, it is an honor to speak to you today about the role 

of primary and specialty care physicians in current and proposed 

healthcare delivery models. 

Senator Brown, I am particularly pleased to be here as a physician from Ohio. Thank you for inviting me to testify. 

I am a practicing physician and lead a 450-member physician 

provider organization, which is the community arm of University 

Hospitals System in Cleveland. 

Our organization includes the largest primary care network in 

northeast Ohio composed of specialists, seven urgent care centers, 

and five hospitalist programs. 2008 saw 1.2 million office visits at 

more than 100 locations in 42 communities, serving 650,000 patients, and producing more than 1 million electronic prescriptions. 

I am acutely aware of the challenges daily faced by our primary 

care physicians. Our model is structured with local physician authority and responsibility, similar to private practice, but with the 

leverage of our organization’s technologies, economies of scale, 

funded quality programs, and self-funded malpractice insurance. 

We are a microcosm of healthcare delivery in the heartland of our 

country. 

Our overall success, however, masks the daily struggles by primary care physicians to navigate the complexity of the healthcare 

system despite our enhanced resources. Suburban, rural, and 

urban populations have a myriad of healthcare coverages with 

varying access to services, causing physicians to spend significant 

time in unreimbursed activity. 

We deal daily with issues of complex healthcare plan structures 

interfering with medical decisionmaking, overly complex regulatory 

requirements, inadequate reimbursement for cognitive work and 

disease management, pressures to practice defensive medicine, and 

provision of care to the uninsured or working poor. These factors 

discourage medical trainees from specifically considering primary 

care careers, and that trend is compounded by the magnitude of 

25 

educational loans and the stresses on earning opportunities in primary care. 

Our ideal future State must have seamless access to coordinated 

care, utilizing primary and specialty care providers as well as allied health professionals. This is not a unidimensional concept. 

Major public and private wellness initiatives should become the 

norm, and this will take years. 

Cost reductions will be driven by quality, and outcome-based 

bonus payments to providers based on evidence-based quality and 

outcome measures. Simpler Federal rules governing safe harbors 

are required to encourage the development of real or virtual delivery networks, such as accountable care organizations, which would 

include independent and employed physician constituencies, hospitals, and other providers, all incentivized to participate. 

There are a number of significant risks to consider as we restructure. We must not damage what works well, and we must not disrupt existing doctor-patient relationships. Cutting costs to pay for 

reform must not result in the creation of new shortages in essential 

services. The concepts will fail without appropriate technological 

infrastructure for timely quality and performance reporting. 

The exclusion of physicians and organized medicine from any 

component of the planning and implementation process will severely limit the chance of success. The selection of appropriate 

quality measures are always key in making the most significant 

impact on cost and outcome. We can’t do everything. 

In our organization, we were early adopters of e-prescribing and 

one of the five national sites selected by CMS for its demonstration 

project. We funded an American Diabetes Association self-management program at six regional sites, in addition to pursuing recognition for all our primary care physicians by the National Committee 

for Quality Assurance, NCQA, in diabetes. And we recruited six 

full-time endocrinologists for the community. 

We have opened seven urgent care centers for patients to access 

care in a low-cost environment after hours or as an extension of 

their physician’s office rather than present at an emergency room, 

and more complex diagnoses can be done in those facilities because 

of the capabilities we have. 

Irrespective of the initiatives, primary care disciplines clearly 

need help. Multi-year increases in reimbursement with immediate 

change in the sustainable growth rate methodology will avoid reductions in reimbursement and worsening of the situation. Reimbursement for care management will result in reduction of admissions to hospital. 

Reimbursement methods which recognize realistic practice costs 

for physicians and health professionals will avoid the current situation in reimbursement. The lifting of the Medicare resident cap and 

enhancement of Government-sponsored loan options and loan repayment programs that target primary care and selected specialists 

in underserved areas are needed. 

Finally, the fundamental issue of healthcare coverage and its 

components with methodologies to include all Americans must be 

addressed through a combination of existing payers, employmentbased coverage, and expansion of safety net Government programs. 

26 

Thank you again for the opportunity to address you today. I welcome any questions you may have. 

[The prepared statement of Dr. Nochomovitz follows:] 

PREPARED STATEMENT OF MICHAEL NOCHOMOVITZ, M.D. 

Senator Brown, Ranking Member Enzi and distinguished members of the committee, it is an honor to speak to you today about the role of primary and specialty 

care physicians in current and proposed health care delivery models. Thank you for 

inviting me to submit this testimony. 

I am Michael Nochomovitz, the President and Chief Medical Officer of University 

Hospitals Medical Practices (UHMP) and its associated Management Services Organization (UHMSO) in Cleveland, OH. 

I am a practicing physician and lead a 450-member multi-specialty physician network in northeast Ohio. This includes the largest primary care network in the region, complemented by a diverse group of specialty practices, seven urgent care centers and five hospitalist programs. 

I have led the development of these organizations through the last decade. The 

enterprise has evolved into a regional force that in 2008 provided 1.2 million office 

visits at more than 100 locations in 42 communities. The network cared for 600,000 

patients requiring more than 1 million electronic prescriptions. 

I am acutely aware of the challenges primary care physicians face in attempting 

to coordinate care and also am cognizant that the optimal and most cost-effective 

health care cannot rely on one single specialty or service. 

UHMP is the largest portal of patient entry into the University Hospitals system 

and accounts for more than 50 percent of the patients utilizing system services. 

PRIMARY CARE FOCUS

From the outset, primary care has been the foundation of the organization. There 

always has been a clear vision of the critical nature of primary care physicians in 

the delivery and coordination of care. This view was unrelated to considerations of 

health care reform but rather to the practice of medicine and the vision of University Hospitals. 

The organization has grown largely by merger of key established primary care 

practices into the organization in many diverse communities. Within UHMP, we are 

fortunate to count numerous examples of the finest-trained and seasoned physicians 

in all primary and many specialty care disciplines. The care provided by our primary care physicians associated with regional multi-service ambulatory facilities 

translates into an exceptionally high level of continuity of care. This is, indeed, the 

type of care any of us in this room would want. 

LIMITATIONS

Our success does not tell the entire story. Despite the enhanced infrastructure 

and resources available to the physicians in our University Hospitals (UH) system, 

the challenges of coordinating care on a daily basis remain formidable. We all are 

familiar with the patchwork of components that make up our current health care 

system and the potential obstacles to patient and physician satisfaction. Our organization spans northeast Ohio and includes suburban, rural and urban locations each 

with varying levels of access to the full scope of physician and allied health services. 

In the best situations, there are still significant limitations on physicians who seek 

to provide comprehensive services and continuity of care. The limitations include 

our overly complex administrative and payer system, inadequate payer recognition 

for cognitive work of primary care physicians, pressures to practice defensive medicine, a shortage of new primary care providers to replace the mature workforce, and 

the challenge of providing necessary care to the uninsured and the working poor. 

The lessons learned from our specific experience are cogent, as our model, despite 

physician employment, has unique features to meet physician and local community 

needs. Our model gives the local community primary care physicians unique authority and responsibility for managing their practices and staff in a manner akin to 

private practice. We utilize our resources to grow these practices, provide the leverage of the integrated delivery system and ensure replacement for any attrition. The 

model is characterized by unusual physician empowerment and autonomy and has 

promoted significant physician engagement and physician satisfaction. Their alignment with University Hospitals has allowed us to introduce new technology and 

quality measures, which would have been impossible in the current private practice 

environment. The pressures in recent years on human and financial capital and lack 

27 

1 Ross DeVol and Armen Bedroussian, et al., An Unhealthy America: The Economic Burden 

of Chronic Disease, The Milken Institute, 2007: 4–5. 2 Ibid, 184. 

of leverage with payers have impeded progress in many ways in traditional models 

for the majority of physicians in the United States. 

We have a real life experience in diverse communities that represent a microcosm 

of regional health care delivery in the heartland of the country. 

THE SCOPE OF AN INTEGRATED DELIVERY SYSTEM

The University Hospitals system was founded upon its academic hub, University 

Hospitals Case Medical Center and Rainbow Babies & Children’s Hospital. Its physician network has become the backbone of this system. These institutions were created more than a century ago to serve the community and to serve as the teaching 

and research hospitals affiliated with the Case Western Reserve University School 

of Medicine. 

Today, UH has expanded to include seven hospitals, which consist of critical access hospitals, suburban hospitals, a long-term care hospital and skilled nursing facility, a children’s hospital, and a 900-bed adult academic medical center. Currently, 

UH has two new hospitals under construction: a free-standing Cancer Hospital and 

a community hospital. In addition to the community-based physician practices, UH 

also employs its full-time academic physicians, the Case Western Reserve University 

School of Medicine faculty, in an integrated practice plan. These physicians, who include national and international leaders in their fields, serve the tertiary and quaternary needs of our regional system at UH Case Medical Center. This tertiary and 

quaternary component is a critical part of the ultimate continuity of care to which 

we all aspire. 

THE MEDICAL HOME CONCEPT

Many hearings have addressed the glaring gaps and weaknesses in health care 

coverage in our country, as well as the dislocation and fractionation of care that 

many citizens experience, whether insured or uninsured. The idea of continuity of 

care provided through a Medical Home with access and comprehensive services is 

under substantial discussion. These concepts cannot be grounded in jargon, but need 

to address the substance of patient care delivered appropriately in an evidencebased fashion in the appropriate setting for an affordable cost. The Medical Home 

is likely to be a methodology within a more global approach to continuity of care. 

HEALTH CARE REFORM: QUALITY OF CARE, COORDINATION OF CARE AND COST CONTROL

There will be critical success factors to change the direction of health care in the 

decades to come. Some of the critical success factors include: 

Wellness 

It is a truism that our health care must be grounded in the lifelong pursuit of 

wellness and prevention.1 The latter realistically is a more difficult long-term challenge as it involves population behavioral change. Major impacts on population behavior will require both public and private programs to promote wellness as an integral part of our society. Incentives for employers to promote wellness in the workplace will need to be instituted. 

The Role of Primary Care 

It is on this background that primary care providers evaluate symptoms and abnormal findings for evaluation and diagnosis. Subsequently, the best treatment will 

result in either cure or the transition into chronic disease management. The latter 

accounts for a significant percentage of our health care costs and offers the most 

opportunity for the care coordination provided access to the necessary resources are 

made available and reimbursement for care management is provided in an unequivocal manner.2

It should be apparent that this ideal State will not be unidimensional and will 

require a multi-disciplinary approach that involves access to coordinated, convenient, affordable and humanistic care for an array of medical providers. These will 

include primary care physicians, specialists, and a wide variety of allied health professionals who cover the entire spectrum of care from cradle to grave. 

Structures of Care Delivery 

There will not be one solution that meets the needs of every community and all 

constituencies of patients and providers. 

28 

3 Elliott Fisher, M.D., MPH, ‘‘Building a Medical Neighborhood for the Medical Home,’’ New 

England Journal of Medicine 359 : (2008) 1202–5. 

We will need to create vehicles for integrated care that could affect the necessary 

changes in all our communities. These would provide opportunities for participating 

providers to be eligible for quality and outcome-based bonus payments as well as 

benefit from more global savings. Accountable Care Organizations (ACO) and existing structures such as integrated delivery systems could be empowered to manage 

the continuum of care. 

The consolidation of health care in recent years could turn out to be a distinct 

advantage in many communities in terms of building on existing infrastructures to 

deliver coordinated care. Further modeling will no doubt result in a variety of 

unique public and private vehicles which would be evaluated in demonstration 

projects. In some areas we should anticipate a growth in community health centers, 

and an expansion of the National Health Service Corps locations, as well as the optimal use of the Veterans Administration Health System and the Indian Health 

Service. 

There are a number of significant risks that must be called out: 

• We must not damage what already is working well. 

• We must not remove patient choice or disrupt existing doctor patient relationships. 

• All physicians should have an opportunity to participate on the basis of standards to be determined. 

• The imperative of cutting costs to pay for reform could result in creating new 

shortages.3

• The infrastructure for quality and performance reporting will likely be more expensive and challenging in implementation than predicted. 

• The reporting methodology for quality measures must be timely and accurate. 

• Health care is a local phenomenon and there will be unique regional and community specific challenges, which may or may not be associated with cost-differentials. 

• The cost to expand coverage may exceed the projected savings in the early 

years. 

• The exclusion of physicians from any component of the planning implementation process is likely to limit the effectiveness of implementation. 

LESSONS LEARNED FROM THE UHMP EXPERIENCE: MAKING CHOICES

In our own experience, we have created a large, regional network built mostly on 

aligning the best physicians in local communities who were previously in traditional 

private practice. We have taken these physician practices empowered them to succeed by investing in an enhanced infrastructure and the ability to introduce new 

technologies, quality measures and outcome evaluation which would not have been 

possible in their former States. 

Over the last few years despite the presence of incentives we have chosen to make 

significant expenditures to position the physicians in their local communities for 

quality measurement and outcome evaluation. In a growing organization which was 

merging physicians from the private practice environment we were required to 

make choices to achieve in our mind the maximum impact on patient care. 

The following were areas of focus: 

a. Electronic Prescribing 

We targeted electronic prescribing 5 years ago, as the most useful technology for 

a primary care physician office. We were early adopters long before health information technology incentives were a reality. Indeed, we created our own incentives by 

affording those physicians who utilized e-prescribing a discount on their malpractice 

insurance. The cost was borne by UH because we felt that it was a critical technology to enhance quality of patient care. We subsequently were one of the five national sites selected by CMS for the e-prescribing demonstration project to develop 

foundation standards for the current program. In the past year our physicians submitted more than 1 million electronic prescriptions and the number continues to 

grow. This has greatly increased patient satisfaction and assured increased awareness of drug interaction and oversight on dosage and compliance. 

b. Chronic Disease Management: Diabetes 

We also embarked on an ambitious program targeting diabetic care as a prototype 

for chronic disease management. We funded the necessary initiatives for the following components: 

29 

• Adopted the American Diabetes Association Diabetes Self Management Programs.—We obtained ADA certification for six regional locations to deliver educational/instructional programs with diabetic nurse educators working closely with 

primary care physicians and endocrinologists. Particularly in the management of diabetes, there is a need for collaboration among primary care providers, specialists 

and allied health professionals. We have recruited six full-time endocrinologists to 

our network to provide the specialty services needed by the primary care physicians 

and their patients, and to complement the work of diabetic nurse educators, podiatrists, nutritionists and other professionals. This is an excellent example of what 

some might call a ‘‘Medical Home’’ for diabetic patients and it relates to the establishment of an appropriate continuity of care for diabetic patients in any setting or 

structure. 

• National Committee for Quality Assurance (NCQA).—We have systematically 

worked with our adult primary care physicians to obtain recognition from NCQA for 

diabetic care. This was achieved through an extended and ongoing educational program for physicians and their staffs. We hired additional staff to audit medical 

records through our document imaging system which has been an outstanding transitional modality for establishing a paperless workflow and preparing physicians 

and practices for our new University Hospitals electronic medical records. 

c. Alternative Sites of Care 

• Urgent Care Centers.—UH has established a total of seven regionally based Urgent Care centers to provide care for patients who need urgent but not emergent 

care in convenient locations, as well as care after regular hours. We have instituted 

a national model for an urgent care Fellowship program. This is done in collaboration with the Department of Family Medicine at Case Western Reserve University 

at University Hospitals Case Medical Center. 

These regionally based centers serve as an extension of the primary care physicians’ office as well as a site where non-emergent presentations are evaluated in a 

more sophisticated fashion and at lower cost than an emergency department. 

We have introduced a variety of system-wide protocols that can be delivered in 

this low-cost environment. These include management of dehydration, asthma, fracture care, minor trauma as well as a protocol for chest pain which includes measuring serum troponins, a diagnostic indicator for heart attacks, which may be positive in the presence of a normal EKG. We also are able to rule out other serious 

conditions like pulmonary embolism with the appropriate care paths established. 

RETAIL CLINICS

We also are investigating and evaluating the prospects for retail clinics staffed by 

nurse practitioners linked directly to our urgent care centers for both incidental care 

and work-related health care. As more payers recognize this environment as a site 

of care, there should be ongoing reporting of the outcomes of this model and its costeffectiveness as part of a broader continuum. 

PRIMARY AND SPECIALTY CARE NEEDS

The primary care disciplines do need help. They will be the backbone of any costeffective health system provided they have the resources to provide necessary care 

for their patients. There are also specific specialty shortages that significantly impact the provision of cost-effective care in our communities. 

Support for these deficiencies could come in a variety of methods including: 

a. Increase reimbursement for primary care physicians, with appropriate change 

to the Medicare SGR methodology. Increases in reimbursement must be guaranteed 

as increments to the current base over the next number of years and not be subject 

to SGR-related cuts. The methodology must recognize realistic practice costs for physicians and other health professionals. These increases should not be at the expense 

of other physicians’ reimbursement. 

b. Reimbursement for care coordination and management for selected chronic disease beyond the confines of the office encounter and the acute hospitalization. 

c. Lift and expand the Medicare resident cap, established in 1998. Achieving an 

increase in the physician supply requires lifting residency training caps as well as 

increasing medical school enrollment. 

d. Enhance government-sponsored loan options and loan repayment programs to 

increase the supply and retention of primary care physicians, nurses, mid-level providers and practitioners who will be critical in ensuring better coordination of patient care. Loan forgiveness should be offered in exchange for true long-term commitment to primary care practice in any location. 

30 

e. Early identification of medical students interested in primary and selected specialty care that could make long-term commitments to a clinical career. Increase 

funding for the National Health Service Corps (NHSC). The number of NHSC 

awards should be increased by at least 1,500 per year to help more physicians practice in underserved areas while enabling more new physicians to practice primary 

care. 

INTEGRATED CARE DELIVERY

It is necessary to reiterate the paradox that for those in a stable health care delivery environment in the United States, we have arguably the most advanced and refined health care in the world. The lack of uniformity, the exclusion of many and 

the spiraling costs are mandating change for what is not sustainable. 

Medicine does not have simple metrics and most complex conditions are multifactorial. The current luxury and advantage derived by those who have access to 

strong stable and supported primary care would be an important component of our 

health care reform but not a sole solution. We must target the development of a 

new ‘‘Continuum of Care for America’’ which would achieve the goals of necessary 

care for all our citizens and optimal utilization of resources while maintaining international leadership in specialty innovation and advancements. 

This approach could include concepts such as value-based purchasing, bundling of 

hospital and physician payments, and Accountable Care Organizations (ACO). Each 

of these efforts would need to be substantiated with voluntary demonstration 

projects for validation before any system-wide expansion. The substantive background for many relates to the commonsense components of access, prevention, 

acute care management, chronic disease coordination and prudent use of the full 

spectrum of specialty services needed to practice evidence-based medicine and meet 

the needs of our patients. 

Remove legal and regulatory impediments to delivering coordinated care: 

a. Make targeted changes to laws and regulations to allow physicians, hospitals 

and others to work together as teams, and to be able to use financial incentives to 

reduce cost and improve care. 

b. Establish a simpler, consistent set of Federal rules for how hospitals, physicians and others may structure their financial and contractual relationships. 

c. Provide clearer guidelines under Federal antitrust law to enable clinical integration and joint hospital-physician contracting with payers to ensure aligned performance incentives and to facilitate continuity of care, particularly in light of electronic health record technology. 

d. Provide a simple and meaningful ‘‘safe harbor’’ under Federal laws and regulations to encourage the development of real or virtual delivery ‘‘networks’’ (such as 

Accountable Care Organizations). 

e. Ensure HIPAA continues to enable providers to share information to enable patients to receive higher quality, safer care. Misunderstanding HIPAA requirements 

has led to reluctance among providers to share information, even though doing so 

is in the best interest of patient care. 

There are numerous critical success factors for the massive undertaking of health 

care reform. In recent days, numerous major provider organizations and associations 

have petitioned our congressional leaders with their concepts and concerns relating 

to health care reform implementation. 

As these ideas relate to primary and specialty physicians, there are a number of 

key recommendations that I will highlight. 

1. Ensure health care coverage for all Americans through a combination of existing payers, employment-based coverage, and expansion of safety-net government 

programs. 

2. Drive the introduction of physician and patient-friendly technologies to facilitate care and the physician practice environment. 

3. Drive cost-reduction through evidence-based quality and outcome measures, 

which are established through federally sanctioned quality organizations, national 

specialty societies and organized medicine. 

4. Eliminate unnecessary administrative complexity and cost through the establishment of uniform, interoperable technologies that promote both clinical and administrative data-sharing. 

5. Reduce the impact of malpractice claims on defensive medicine through Federal 

tort reform. 

Thank you again for the opportunity to address you today. I welcome any questions you may have. 

Senator BROWN. Thank you very much, Dr. Nochomovitz. 

31 

Dr. Raulerson, your testimony? Thank you. 

STATEMENT OF MARSHA RAULERSON, M.D., FAAP, PRIMARY 

CARE PEDIATRICIAN, ON BEHALF OF THE AMERICAN ACADEMY OF PEDIATRICS, BREWTON, AL 

Dr. RAULERSON. Yes, thank you, Senator Brown. And I thank 

you so much for the opportunity to testify before this committee. 

I am Marsha Raulerson. I am a pediatrician, and I am representing the American Academy of Pediatrics, an organization of 

over 60,000 primary care pediatricians, pediatric medical subspecialists, and pediatric surgical specialists. We are all dedicated 

to the health, safety, and well-being of infants, children, adolescents, and young adults. 

I am a pediatrician. I have been in private practice in the same 

town for my entire career—Brewton, AL. It is a town of approximately 10,000 people in the pine forests in beautiful lower AL. 

The closest large city is Pensacola, FL, which is over 60 miles 

away and not in my State. The closest children’s hospital is in Mobile, AL, which is over 90 miles away, and our large children’s hospital for the State of Alabama is in Birmingham, 200 miles from 

my home where I practice. 

So I want to talk to you a little bit about what it is like to be 

a primary care doctor in a rural area with no subspecialists close 

by. Seventy percent of my practice is Medicaid, about 25 percent 

private insurance, and about 5 percent Children’s Health Insurance 

Program. 

In 2006, my practice did not break even for the first time. At 

that time, I lost my office manager, who went back to school to become a nurse because I could not pay her an adequate salary. I lost 

my head nurse because I could no longer pay her. And my own salary was less than the physician’s assistant who has worked with 

me for the last 6 years, and I knew that I had to make some 

changes. 

I had been able to change to a rural health clinic, but it took 11⁄2

years to do the paperwork and work through the Government regulations to become a certified rural health clinic, which I finally was 

able to do in July 2007 and, once again, have a viable practice that 

could pay for the services that we needed to run an office seeing 

approximately 2,000 children a year from a large rural area in 

lower Alabama. 

I want to tell you a little bit about what it is like to have a medical home. I was very fortunate when I started my training as a 

pediatrician. The medical home concept was just starting. It started with an idea of providing comprehensive, coordinated care to 

children with special healthcare needs, and that is what I learned 

at the University of Florida. 

But as the concept has developed, the medical home, as aspired 

to by the American Academy of Pediatrics, is not just a place, but 

it is a coordinated effort led by a physician to provide the best care 

for all children, adolescents, and young adults. So that they get not 

only care for illnesses when they are acute or chronic illnesses, but 

they also get the preventive care that they need to be healthy 

adults. 

32 

You know, most adult diseases start in childhood, and we feel 

that it is our responsibility to try to prevent many diseases that 

adults have. 

I want to tell you about a few of my patients. I work very closely 

with specialists in pediatric care in Mobile and in Birmingham. 

Several years ago, a cardiologist from Mobile called to tell me 

about a young girl who lived in a small rural area north of me 

about 30 miles who was dying of congenital heart disease. He said 

she was a beautiful child. He had done everything that he could 

for her. She needed some special surgery that could only be done 

in one place in the United States, and he got a door slammed in 

his face when he tried to refer her there. 

The problem was she had Medicaid. She had no other private insurance. She needed to go to San Francisco to have a very special 

procedure done by a cardiac surgeon who specialized in children. 

I was president of my State pediatric chapter at that time, and 

I called the chapter president in California, discussed this child 

with her. She got very excited about it and said she knew the surgeon and she knew that he would want to do the surgery. 

Her cardiologist in Oakland Children’s Hospital called me, and 

he got the records from Dr. Mayer in Mobile. Soon the community 

raised the money to send the child and her parents to California, 

where she had the surgery, and the surgery was performed at Oakland Children’s Hospital. She was there for 3 weeks, came home, 

and has not been hospitalized since. That was 4 years ago. 

She still has a lot of chronic problems, but she is pink. She is 

no longer blue, suffering from severe congenital heart disease. 

Also, as my practice has aged, I have taken on more and more 

children with chronic health problems who live in rural Alabama. 

I have two children in my practice with heart transplants. One of 

them born with congenital heart disease, and the second one had 

a virus that destroyed his heart when he was a year old. 

I manage these patients with the help of pediatric surgeons and 

cardiologists in Birmingham, 200 miles away. My feeling is that 

the medical home should be able to coordinate the care of all the 

children in our area, that we should have access to specialists. 

There are some specialists that I can’t reach. 

Pediatric psychiatry is one of those areas. So 5 years ago, Dr. 

Vaughan, a full professor of children’s psychiatry at UAB in Birmingham, and I began to work on a telemedicine project where he 

sees approximately 15 children a month with serious psychiatric 

illness from rural Alabama through telemedicine. 

He e-mails me immediately his workup. I write the prescriptions. 

I coordinate the counseling services through our local mental 

health. Also, most of the children in my practice have to receive 

part of their healthcare at school because that is where they are. 

They spend their day at school. 

Just yesterday, I wrote three care plans for school nurses who 

live in two different cities in my area—medications and what to do 

if the child has a problem or has a seizure at school. Two of the 

children have asthma, and one of them has insulin-dependent diabetes. So I work on those care plans, and at least once or twice a 

week, I talk with school nurses. 

33 

Another thing that I do in coordinating the care of patients, 

which I think is important, is I conference not only with school 

nurses, mental health workers, and other people like this, I also 

have to have time spent with the parents when the child is not 

there. And are you aware that we are not paid for that time? 

This week, already I have had conferences with three sets of parents. One of the mothers came in because we had discovered as her 

child was going through puberty that she was developing a significant chest wall deformity. I referred her to a pediatric surgeon in 

Birmingham. He saw the child and said that she was going to need 

a number of things, and he sent paperwork to the mother. 

The mother came to my office, and we sat down and went 

through the child’s chart and wrote down every illness that she had 

had since birth. And then the mother began to talk about the problems she was having with her teenage rebellion and the fact that 

her chest wall deformity was causing a lot of social problems and 

things that she was even more concerned about, that the child had 

no friends at school. She came home at night and went in her room 

and shut the door. 

Mom and I spent a long time talking about that child’s emotional 

well-being and some services that we could find in the local community to help her right away. When the mother left, she told my 

receptionist, ‘‘This is the best office visit I have ever had. I need 

to come by myself more often.’’ 

The problem is pediatricians are not paid to see parents and conference with them, and I have had three of those conferences this 

week. With the medical home, there needs to be a different way of 

paying for services. There needs to be a way for us to coordinate 

the care of our patients and work with our subspecialists that are 

available to us to provide for the child the best care that that child 

can receive. 

I have to also speak about the problems with workforce, which 

has already been raised here. There are not enough primary care 

pediatricians for every rural community like mine in the Nation. 

And perhaps there never will be. 

But I have difficulty, when a child has a seizure disorder, finding 

a pediatric neurologist who can see that child now and not 6 

months from now. When I have a child who has some form of arthritis, and I have several of those in my practice, there is only one 

pediatric rheumatologist in my State, and getting an appointment 

there is very difficult. 

Also, one of the other problems that we have, we do not have 

mass transportation in Alabama. I have to also work the transportation system to see that my child who has an illness and his family can get 200 miles one way to Birmingham. 

I also have to take care of children when they come home from 

those tertiary care centers and they get in trouble. Last year, we 

had a newborn who came to our office, who was seen by my physician’s assistant. 

She came and grabbed me and said, ‘‘Come, see this baby. Something is terribly wrong. Mom says her stomach doesn’t look right.’’ 

I went in and palpated the little baby’s belly and felt a huge mass 

in her stomach. We immediately got an ultrasound that showed she 

had a liver tumor. 

34 

I called the surgeon in Birmingham. He said, ‘‘Send her now.’’ 

And I said, ‘‘Well, it is Friday afternoon. Do you really want her 

on Friday afternoon?’’ ‘‘Well, not really on a Friday afternoon.’’ 

So mother made arrangements to take a leave of absence from 

her teaching assistant’s job and on Monday morning traveled to 

Birmingham, where the diagnosis was made of a hepatoblastoma, 

which is a type of liver cancer. This beautiful little baby underwent 

treatment for the next year. She had radiation therapy. She had 

chemotherapy, and then she had surgery and removal of the tumor. 

I saw her 2 weeks ago, and she has hair for the first time in her 

life. And we are so proud that she is doing well. 

Well, why did I mention this child? She got the most significant 

care that I could not give her at a wonderful children’s hospital 200 

miles away. But when she came home and her central line got infected, I was the first person to see her, to diagnose this, to stabilize her, and send her away. 

When my heart transplant patient last summer came in trying 

to die from hemolytic uremic syndrome that we thought how could 

somebody with a heart transplant have this other horrible disease? 

It turned out to be a reaction to one of the rejection drugs that he 

was receiving for his transplant. 

I had to type and cross him in my rural hospital and get blood 

hanging to save that child’s life and then send him by helicopter 

to Birmingham. 

That is what it is like to be a rural physician. But I could not 

do it if I did not have my specialists—that they were not available 

to me by e-mail or by telephone—in an emergency situation. 

I thank you very much for letting me testify, and I would be glad 

to answer any questions about what the medical home means to 

me as a primary care physician. 

Thank you. 

[The prepared statement of Dr. Raulerson follows:] 

PREPARED STATEMENT OF MARSHA RAULERSON, M.D., FAAP 

Good morning. I appreciate this opportunity to testify today before the Committee 

on Health, Education, Labor, and Pensions on Primary and Specialty Care. My 

name is Marsha Raulerson, M.D., FAAP, and I am proud to represent the American 

Academy of Pediatrics (AAP), a non-profit professional organization of 60,000 primary care pediatricians, pediatric medical sub-specialists, and pediatric surgical 

specialists dedicated to the health, safety, and well-being of infants, children, adolescents, and young adults. 

I am a pediatrician in private practice in Brewton, AL; I serve as a member of 

the AAP’s Committee on Federal Government Affairs. I have been taking care of 

children and adolescents in Brewton since 1981. In the 2000 census, Brewton had 

a population of 5,498. The largest close city is Pensacola, FL and the closest Alabama hospital specializing in children is 90 miles away in Mobile. Brewton is located in the piney woods of Alabama and its major industry is pulp wood. My practice, Lower Alabama Pediatrics, is 70 percent Medicaid and we do our best to provide a medical home to all of the children we can reach. 

In 2006, I did not break even in my practice because Medicaid patients require 

so many services and payments are so low. I had to dip into my own savings to keep 

my practice afloat. Nevertheless, I believe that I have a calling to provide these 

services to this population, many of whom are children who have severe and long 

lasting health needs. I have since converted my practice to a rural health clinic. 

WHAT IS A MEDICAL HOME?

AAP believes that every child, regardless of health status, should have a medical 

home. A medical home is a place, a process and people who partner to improve 

health outcomes and the quality of life for children and families. In a medical home, 

35 

1The U.S. Department of Health and Human Services’ Healthy People 2010 goals and objectives state that ‘‘all children with special health care needs will receive regular ongoing comprehensive care within a medical home,’’ and multiple Federal programs require that all children have access to an ongoing source of health care. 

care is delivered or directed by competent, well-trained physicians who provide primary care, managing and facilitating all aspects of pediatric care: preventive, acute 

and chronic. The Academy has led the development of a body of literature surrounding the medical home, including dozens of studies that examine the impact of 

care coordination on patient outcomes.1

Children and adolescents deserve a high performance health care system that includes medical homes to promote system-wide quality with optimal health outcomes, 

family satisfaction, and value. A medical home offers families full service high quality health care and provides comprehensive, coordinated, compassionate, culturally 

competent care for children. 

HISTORY OF MEDICAL HOME

The Academy first pioneered the concept of the medical home in the 1960’s as a 

way to describe the ‘‘gold standard’’ of primary care for children—particularly children with special health care needs. 

In March 2007, the AAP joined with the American Academy of Family Physicians, 

American College of Physicians and the American Osteopathic Association to publish a set of joint principles for the patient-centered medical home. This consensus 

statement describes the principles of a patient-centered medical home: personal physician, physician-directed medical practice, whole person orientation, coordinated 

care, quality and safety, enhanced access, and appropriate payment. In addition to 

these important concepts, the specific needs of pediatric populations also include: 

• Family-centered partnership: A medical home provides family-centered care 

through a trusting, collaborative, working partnership with families, respecting 

their diversity and recognizing that they are the constant in a child’s life. 

• Community-based system: The medical home is an integral part of the community-based system. As such, the medical home works with a coordinated team, provides ongoing primary care, and facilitates access to and coordinates with, a broad 

range of specialty and related community services. 

• Transitions: The goal of transitions is to optimize life-long health and well-being 

and potential through the provision of high-quality, developmentally appropriate, 

health care services that continue uninterrupted as the individual moves along and 

within systems of services from adolescence to adulthood. 

• Value and Payment: To assure optimal quality of care for all children, the 

health system must provide appropriate payment for medical home services. A highperformance health care system requires appropriate financing to support and sustain medical homes that promote system-wide quality care with optimal health outcomes, family satisfaction, and cost efficiency. 

MAKING A MEDICAL HOME AVAILABLE TO ALL CHILDREN: FINANCING THE

MEDICAL HOME

Medical homes do not just happen. Transforming a medical practice into a medical 

home has been described as trying to rebuild a bicycle while riding it. But change 

cannot just be limited to the willingness of the doctor—everyone in the health care 

system has a role to play. Thus, AAP calls for partnerships among private and public payers, employers, clinicians, and families and patients to ensure that medical 

home payment reforms are implemented in ways that assure quality, financial sustainability, and equity among payers and providers that assure children and youth 

receive all recommended and needed services. 

These reforms should be based on the medical home joint principles and the payment structure should encompass recognition of relevant payment codes, expanded 

care coordination responsibility, new quality improvement activities, and up-front 

investments and support for infrastructure. AAP recommends the following: 

• All private and public payers should adopt a comprehensive set of medical home 

payment reforms that include three components: 

• A contact or visit-based fee component that recognizes and values evaluative/ 

cognitive services and also preventive counseling based upon Bright Futures. 

• A care coordination fee to cover physician and non-physician clinical and administrative staff work (telephone care, on-line communication, conferences 

with the ‘‘care team’’) linked to the delivery of medical home services. 

36 

• A performance or pay-for-performance fee for evidence-based process, structure, or outcome measures and paid as a bonus. This bonus should take into 

consideration the complexity of the patients who are in the panel of the practice. In return for this bonus, physicians should assist payers in addressing 

such cost centers as emergency department utilization and unnecessary hospitalization. 

• Vaccines and their administration costs must be adequately paid for to exceed 

total direct and indirect expenses and updated when new vaccines are adopted into 

recommended schedules or when vaccine prices increase. 

• Payments should be closely tied to evidence-informed medicine, and methods 

used for payment should consider the child’s age, chronicity, and severity of underlying problems, and geographic adjustment. 

• Payment policies should recognize and reward systems of care that promote 

continuous and coordinated care ‘‘24/7’’, including care coordinated between generalists and specialists, population-based prevention, and should discourage the use of 

clinics that provide episodic care only for minor conditions. 

• Competition should be structured so that practices are rewarded for providing 

access, service, and quality; cheaper care is probably not better care. 

• The Centers for Medicare and Medicaid Services should update the ResourceBased Relative Value Scale to take into account the value of the complex and comprehensive nature of cognitive care and practice expenses associated with the medical home model of care, provide health information technology support, and create 

incentives for continuous quality improvement. 

• Congress should sponsor ongoing, large-scale Medicaid medical home pilot 

projects for children and youth. It should also support an all-payer pilot project of 

the medical home model for children and youth. Congress should evaluate current 

State Medicaid and CHIP programs and share information among the States about 

State programs that are providing good medical homes for children. 

MAKING A MEDICAL HOME AVAILABLE TO ALL CHILDREN: ENSURING SUFFICIENT

WORKFORCE TO MEET CHILDREN’S NEEDS

Meeting the health needs of America’s 80 million infants, children, adolescents, 

and young adults and providing them with a medical home will require a strong and 

stable pediatrician workforce comprised of appropriate numbers of well-trained pediatricians, pediatric medical subspecialists, pediatric surgical specialists, and other 

child health professionals and specialist physicians. Moreover these professionals 

will be needed where children are—in all rural, suburban and urban communities. 

Workforce shortages exist in pediatric medical subspecialties and pediatric surgical specialties. I previously stated that the nearest locus of comprehensive specialty care is 90 miles away. This specialty shortage has real impacts in my community and in urban areas as well. Initiatives are needed to recruit medical students 

and residents into specific pediatric disciplines and to underserved geographic regions. These initiatives must address the comprehensive needs of children and adolescents. 

Federal policies should address and improve the uneven geographic distribution 

of the physician workforce, including pediatrics, enhance the delivery of culturally 

effective health care and include mechanisms to educate and train an appropriate 

supply of pediatric medical subspecialists and pediatric surgical specialists. 

Congress should consider the extension of student-loan deferment until the completion of residency education, and make educational loans tax deductible. In addition, federally sponsored student loan deferment and forgiveness programs and 

other incentives for residents and pediatricians should be expanded to ensure a 

health care workforce that is adequate to meet patients’ needs. These incentives also 

should support pediatricians pursuing academic research careers or practicing in 

designated underserved communities. 

CONCLUSION

In conclusion, on behalf of the American Academy of Pediatrics and the children 

and adolescents I take care of in Alabama, I would like to urge the committee to 

keep children foremost in mind while you consider reforms to our health care system. This is a unique moment on our country’s history and an opportunity for us 

to finally place children first. 

Providing all children with health care designed for them—a medical home—that 

emphasizes their healthy development and prevents illness when possible is an investment in our country’s future. This investment coupled with needed improvements in health care financing and a strong primary and specialty workforce will 

37 

provide all children and adolescents the greatest chance to lead long and healthy 

lives. 

Thank you again for the opportunity to testify. I look forward to your questions. 

Senator BROWN. Thank you, Dr. Raulerson. 

My guess is you know the names of most of the 10,000 people 

in Brewton, AL. So thank you. 

I want to ask one question that all of you take a shot at, and 

then I will turn it to Senator Murray for her questions. Then I will 

come back and ask each of you some specific questions. 

The one question generally is, as we discuss—and I will just 

start with you, Dr. Thorpe, and work your way down, and each 

take a couple of minutes to answer it, if you would. As we work 

on healthcare reform and we look at the inefficiencies that you all 

pointed out very well, I thought, the inefficiencies of having some 

Americans insured and others uninsured, talk through, if you 

would, how or if ensuring that every American has meaningful 

health coverage will have an impact on the efficiency of this system. 

How covering everybody will increase the efficiency. How do we 

make that happen? And Dr. Thorpe, if you would start? 

Mr. THORPE. Covering everybody is certainly a necessary condition to make the system work efficiently, both in terms of the premium base. So if we can change the whole nature of how health 

plans set premiums and how competition in the health insurance 

market works and move it away from competing on risk selection 

to have it compete on better metrics like outcomes and cost, that 

is a step in the right direction. 

So I think there is no question that we need to move to universal 

coverage in order to increase and improve the functioning of the 

health insurance system. 

On the care delivery system, one of the problems that we face 

with uninsured folks is that they come to the system too late and 

at the wrong time, at the wrong place. And so, to the extent that 

we have a system in place that is more geared toward early diagnosis, early detection, and then appropriate treatment in the right 

setting, that is also a plus. 

So we know from all kinds of data internationally that early detection and primary care, getting to patients earlier to prevent disease, and if they are sick, getting treatment to them earlier makes 

a big difference in terms of their healthcare outcomes. 

Senator BROWN. Dr. Cooper. Oh, I am sorry. 

Mr. THORPE. Just in closing, again, as I started out, I think our 

challenge here is that we have a system that works in thousands 

of unconnected silos. And I use Medicare as sort of an opening to 

try to make a change here, but the type of model I am talking 

about really applies to everybody. It is not just a Medicare model. 

It is a model that we should have for all Americans, and it is one 

that really is building integration in the system between care coordination, primary care physicians, specialists, hospitals, and community-based resources. I think healthcare reform can play a major 

role in building those integrated links that you have heard that are 

not as functional today as they could be. 

Senator BROWN. Thank you. 

Dr. Cooper. 

38 

Dr. COOPER. Well, I won’t repeat what Dr. Thorpe said. I think 

it is well appreciated that insuring everyone is a matter of fairness, 

and it will have its major effect on efficiency at sort of the—picture 

a pyramid, a pyramid where there is a lot of very inefficient early 

care, and patients who aren’t insured don’t have access easily to 

that care. 

But as the pyramid goes up, utilization goes down because there 

are a lot of relatively healthy people or people who aren’t very sick 

who need care. But they don’t use a lot of resources. 

There are very few people at the top, but then it is an inverted 

pyramid. The people at the top who are the sickest use the most 

resources. 

There is an overlap because the people at the top who use the 

most resources of all are poor. Many poor people are uninsured. 

And so, one has to sort of differentiate in this notion of adding efficiency or what causes inefficiency, uninsurance and poverty. 

The major source of inefficiency—and I hate to apply that particular word to this circumstance, but the major source of inefficiency is poverty. Poor people, as low as 15 percent on the economic 

scale, use double the healthcare resources that more affluent people do. 

They are the people who are re-admitted. That is inefficiency. 

And they are the people who have recurrence of disease, and that 

is inefficient. The real inefficiency is the disorganized life and 

health and care among the poor. 

So, yes, have expectations that insurance will add fairness to the 

system and will spread the responsibility for costs more fairly. All 

of that is very important for efficiency. But the real inefficiency, if 

it all was perfect in every other way, if we had an absolute singlepayer system and everybody was the same, the poverty problem 

won’t disappear. And that is the major inefficiency in healthcare 

today. 

That has to be addressed in some of the ways that we heard in 

rural areas and others, systems that cope specifically with the poor. 

It is not going to be through physicians alone. But poverty is the 

major source of inefficiency. 

Senator BROWN. Thank you, Dr. Cooper. 

Dr. Schlossberg. 

Dr. SCHLOSSBERG. Yes, thank you, Senator Brown. 

I think the inefficiency—as you call it, and certainly if we fix the 

financing mechanism—I don’t think we will necessarily fix the inefficiency through the system because I think, just as Dr. Raulerson 

said, all of us experience the hassle factor. It took her 2 years to 

bring up the rural health clinic. 

We all suffer from a system where you walk into the office, you 

buy the service, and somebody tells you 60 days later how much 

you are going to get paid, if you are going to get paid, and what 

is going on. As we think about fixing the system and doing the financing, there are probably some other things we should do as 

well, which is maybe real-time adjudication for insurance reform 

when a patient walks in the door. 

Certainly, as specialists, we don’t want to see end-stage disease. 

It is a lot more work for all of us. It is terrible for the patient. And 

so, I think getting people in earlier is also helpful. 

39 

I think the other thing—as I see it, and I experienced it this 

weekend when I was on call—is I don’t see much conversation 

about personal responsibility for all of us. 

I think of it as healthcare being a right, but we should treat it 

as a privilege. And when people have a privilege, they protect it. 

I don’t hear that conversation in Washington. Maybe that is a difficult political conversation? 

This weekend, I was on call, and there was an older gentleman. 

He was a Medicare patient who, unfortunately, has bad bladder 

cancer. One of my partners operated on him, and his right kidney 

is blocked. So he has got a tube in his back. And as it just so happens, he can’t urinate. So he is going to have a tube in his bladder 

with two bags. 

And the daughter was in the room, and somebody said, ‘‘Well, 

home health will not take him with two bags. That is their rules.’’ 

So, therefore, he has to stay in the hospital. 

So I turned to the daughter, and I said, ‘‘What do you think? ’’ 

I looked at both of them, and I said, ‘‘What do you think? ’’ They 

said, ‘‘No, we can take care of this. We are going to go home.’’ 

Well, they were responsible. They didn’t feel the entitlement, and 

they were willing to participate in their care. And I think whether 

it is through public service or other things, we need to fix the financing mechanism. We need to decrease the hassle factor. But ultimately, I think we need to change the personal responsibility 

quotient in this country. 

Thank you. 

Senator BROWN. Thank you, Dr. Schlossberg. 

Dr. Nochomovitz. 

Dr. NOCHOMOVITZ. Thank you, Senator Brown. 

I think I would make five points as it relates to inefficiency. As 

far as the universal coverage is concerned, I think that that is a 

matter of public policy, and I agree with everybody else in terms 

of its necessity and the fact that we have reached a point where 

we just must do that. 

One of the major areas of inefficiency can be improved by administrative simplification. On the payer’s side, there could be uniform 

documentation and uniform approaches to credentialing of doctors, 

to payment procedures, to the method that payments are made. 

And technology can really assist from the doctor’s office or from the 

clinic’s office in introducing that degree of administrative simplification, which is now a Byzantine collection of potpourri that is 

very difficult to get one’s arms around. 

The third point would be related to information technology, 

where true interoperability, which is not easy to achieve, would 

prevent duplication of tests. We have a lot of duplication of tests 

because people don’t know what the patient has had. And when a 

doctor sees a patient in the emergency room, the patient may have 

had all sorts of diagnostic tests a week earlier, but they are just 

not available to the physician. 

The fourth point relates to coordination of care, and that would 

be different in different communities. This is not a one-shoe-fits-all 

issue. Concepts like the medical home certainly have a place, but 

it is not a one-shoe-fits-all issue. You have different issues in coordination of care in rural communities, as so eloquently described. 

40 

You have got different issues of coordination in suburban communities or in urban communities. 

I think we need to create the necessary structures and build on 

existing structures, whether they be large or small, incorporating 

all constituencies to provide this coordination to create the efficiencies. 

And last, one must reiterate that there has to be a focus on practice guidelines, evidence-based medicine, that we can stop doing redundant tests. And we need to call upon the physicians of this 

country, whether they be in organized medicine, specialty societies, 

academic centers, to step forward and assist us in creating these 

guidelines that are not necessarily all available and not necessarily 

self-evident. 

But whatever we do will go a long way toward reducing waste 

and improving efficiency and cutting costs. 

Senator BROWN. Thank you, Dr. Nochomovitz. 

Dr. Raulerson. 

Dr. RAULERSON. I have three points I would like to make. First, 

having insurance coverage is not the only thing that you need. As 

I mentioned, Alabama has done an excellent job of covering children through Medicaid, the Children’s Health Insurance Program, 

and Blue Cross Blue Shield’s Caring Foundation. 

But with children in my practice, even with insurance, I still 

went in a hole. A lot of it had to do with the way Medicaid pays 

and the fact that they would be on again, off again. And sometimes 

I would see them for 3 months, and I wouldn’t get paid for those 

3 months. And then they would be back on, and trying to get paid 

was really a hassle. So that was a problem. 

The second thing, when my patients turn 19, in Alabama, they 

lose their Medicaid, and they have no hope of insurance. A 19-yearold who is in school or who has a job at Wal-Mart cannot afford 

insurance. And so, I have a lot of 19- and 20-year-olds in my practice with asthma, with diabetes, with other kinds of problems, who 

have no health insurance when they turn 19. 

And finally, it is not just the people in poverty because sometimes an illness makes you in poverty. I have a family in my practice whose child was born with a problem that she has outgrown. 

She is 5. She is starting to kindergarten this year, and she is a 

healthy little girl. 

But she had a severe, life-threatening disease the first few 

months of her life. Her mom, who is a college graduate, had to quit 

her job and stay home and take care of her. Her dad, who is also 

a college graduate and has a pretty good job, was trying to pay the 

health insurance, trying to pay for their travel to go to Mobile and 

to go to Boston, where she got some of her care. And they actually 

ended up on Medicaid because they went broke. 

And now that she is 5 and doing so well and over her illness and 

is going to be a beautiful, healthy child, they are still paying on 

medical bills and will be for a very long time. 

Senator BROWN. Thank you, Dr. Raulerson. 

Senator Murray. 

Senator MURRAY. Thank you very much, Mr. Chairman. 

41 

An excellent hearing, and I really appreciate all of you coming 

and giving us your very important time to help us understand 

these issues. 

Dr. Cooper, I wanted to ask you, you talk in your testimony a 

lot about innovation and how we should deal with both the longterm and short-term healthcare workforce shortage. I agree it is 

really important to make some investments so that we can have 

people in the pipeline, but it is going to be a while before they get 

there. 

So I have a question about the short term. What do we do in the 

short term? You talked in your written testimony about innovative 

practice arrangements. Can you talk to me about how you think 

perhaps other primary care workforce providers, nurse practitioners, or physician assistants could be helpful? 

Dr. COOPER. Well, they are going to be absolutely helpful and absolutely necessary. And you will hear a lot of discussion, of course, 

of whether a physician can do it better or a nurse practitioner can 

do it better. And they are interesting conversations to have, but 

they become irrelevant because there aren’t enough people. 

We don’t have that choice. We don’t have the opportunity to 

choose from column A or column B. We either get column A or column B. 

Not only in primary care, but in specialty care offices, nurse 

practitioners and physician assistants (PA) are very effective in 

giving and providing the general care of specialty patients and the 

vast majority of care that we consider primary care. 

Most acute self-limited disease, wellness, patient education, prevention, all of those skills are commonplace among nurse practitioners, and many of them are commonplace among physician assistants. And increasingly, physicians, whether they are in generalist or specialist practices, are seeking to work in consort with a 

nurse practitioner or a PA to even urologists or general internists, 

either one, to do those tasks that a physician doesn’t have to do. 

If you put this in a historic context, in the 1920s, 25 percent of 

healthcare providers were physicians. Now it is about 7 percent. 

When I was an intern, the nurses all had pink stethoscopes, and 

I couldn’t exactly figure out why that was. They worked just as 

well as my stethoscope. In fact, I had to use theirs because mine 

broke, and I couldn’t afford to get a new one. 

Only later did I find out that they were pink because in the years 

before I was an intern, the AMA insisted that nurses couldn’t take 

blood pressures. It was too technical a task. And therefore, nurses 

didn’t have stethoscopes. 

[Laughter.] 

You laugh today, but they will laugh 20 years from now about 

things we are arguing about today. And so, nurses, of course, take 

blood pressures today. 

But they couldn’t have—it was unacceptable professionally, politically unacceptable like what we are dealing with. To be objective 

about primary care is politically unacceptable. To be objective 

today, just as being objective about nurse practitioners doing blood 

pressures was politically unacceptable then. 

It has been a moving process, but with the process, the educational level of those to whom work has been delegated has risen 

42 

from nurses to nurse practitioners, now to doctoral-level programs. 

From brief training for a physician assistant, to longer training, to 

specialty certificates. 

We need that workforce. It is not large enough. I didn’t have 

time in my comments to comment on it. But the number of nurse 

practitioners graduated annually has plateaued at about 8,000, up 

a little bit last year. Unclear where it is going. It has been that 

way for more than 5 years. That whole population of practitioners 

is aging, and the supply will plateau. The same for PAs. 

The answer is, they play an integral partnership role—that is 

No. 1—with a practitioner, generalist or specialist. And in primary 

care, in that spectrum of primary care services, they are quite capable of practicing independently with a collegial relationship, distant supervision, and accomplishing the vast quantity of services 

that otherwise would have to be given by a physician. 

I would view that as a real step in the direction of efficiency, and 

we see it, on the one hand, happening and, on the other hand, 

being fought back by those just the same ones who tried to fight 

back in the 1950s about nurses taking blood pressure. 

But the world is moving, and that is where it is moving, and that 

is what they have to do. 

Senator MURRAY. OK. Very helpful. 

My time is up, but I just want to mention, Mr. Chairman, that 

we do have to look at the short term, and I hope we look not just 

at healthcare reform in dealing with these issues, but in some of 

the things we already have in place, like graduate medical education. 

We also have the National Health Service Corps that provides 

scholarships and loan repayments for doctors and nurses and 

healthcare professionals. Dr. Nochomovitz, I think I saw it in your 

testimony, talking about the National Health Service Corps and 

the importance of that. 

I have been working very hard on the Budget Committee to try 

and increase those numbers for access to those programs. In fact, 

this Administration increased the National Health Service Corps, 

too. But those are some of the things I hope we don’t say we will 

have to wait until healthcare reform passes. We have got to focus 

on a lot of this in our current budget and appropriations process. 

But my time is out, and I really appreciate all of your testimony 

today. 

Thank you. 

Senator BROWN. Thank you, Senator Murray. 

Dr. Cooper, thank you for your answer. I want to pursue that 

after Senator Whitehouse. 

Senator Whitehouse. 

STATEMENT OF SENATOR WHITEHOUSE

Senator WHITEHOUSE. Thank you, Chairman. 

This is a happy occasion for me, not just because such a distinguished panel is here and not just because a fellow member of my 

class of 2006 is chairing a significant hearing in the Senate, but 

because this is my first opportunity to speak as a new member of 

the HELP Committee. 

43 

Perhaps a temporary member, I have been warned. But nevertheless—— 

[Laughter.] 

Nonetheless, happy to be here for that. 

Senator BROWN. My guess is after Senator Whitehouse’s performance today, we will want him on permanently. 

Senator WHITEHOUSE. My timing certainly could not be better. If 

you are going to be a temporary member, this is the time to be a 

temporary member. And it is a great honor for me to serve on this 

committee while Senator Kennedy chairs it, given his long and distinguished career of interest and struggle on these issues. 

It is a great lesson for a new Senator to see Ranking Member 

Enzi and Chairman Kennedy work together on issues. The HELP 

Committee has a wonderful model of bipartisan cooperation that I 

think is a testament to both of their characters. 

Of course, the work ahead of us is daunting. I hope, Dr. Cooper, 

that when people look back at the struggles we are having 20 years 

from now, they actually laugh and not weep. If they laugh, we will 

have succeeded. 

This hearing is important. In Rhode Island, we have a story 

board that I have put up on my Web site. I do community dinners, 

and I go around the State. Rhode Island is a small enough State 

I can actually invite pretty much everybody to dinner. 

[Laughter.] 

That is a bit of an exaggeration, but we have regular community 

dinners. And people come, and they talk about different issues. 

Healthcare is the one that most captivates people because you 

have stories like your young lady in Alabama who, through no fault 

of her own, became ill as a child. And the result of that was the 

bankruptcy of her family. Her family was financially ruined because of that through no fault of their own because our system is 

so poorly managed. 

We have hundreds of people who have come in across that story 

board and told their stories. And while many of them are stories 

that come out of the finance, access, and coverage failures of our 

healthcare system, equally as many and, indeed, I would say probably more come out of the delivery system failures. And we are 

really not as experienced yet in getting our hands around those. 

That finance, access, and coverage fight is a mature political 

fight here. It goes back to the Clinton struggles of 1993 and 1994. 

We know less about the delivery system issues. 

My question to all of you—just picking out some of the things 

that have been said—there has been a reference to the Byzantine 

billing and approval systems that be-devil practices across the 

country, the need to move from just having equipment on doctors’ 

desks to true interoperability of HIT and the establishment of 

health information exchanges to do that. 

About how you establish meaningful guidelines for practitioners 

with consequences so they don’t just go gather dust on the shelf 

someplace, but without getting to the point where you have Government dictating what medicine should be practiced or not. 

How you cure the interruption of the risk and reward feedback 

loop that is the fundamental premise of capitalism and entrepreneurship, which is broken in the healthcare system, particularly for 

44 

quality investments and prevention investments, where the party 

who has to take the trouble and take the risk and put out the 

funds and retrain their folks and actually assume the risk of getting it done gets a very small sliver of whatever the reward is from 

that. 

So we are built in to drastic underinvestment in quality and prevention unless we fix that. And then there are all the organizational questions about accountable care organizations and medical 

homes and what the different models should be. 

Given that array of issues, and I have just touched on a few that 

have come up during the course of this hearing, a question I would 

like your thoughts on is whether you think that in our structure 

of Government right now we have the authorities and the power 

in place, the accountability in place to manage a delivery system 

reform that has to take all of those questions on in an interlocking 

way, because they affect each other. There are virtuous cycles that 

emerge, and there are problems that emerge if it is not done in a 

consistent way across many issues. 

And if not, and we have had CBO testify that that authority does 

not exist in Government, I would like to get you thinking a little 

bit about what steps we need to take to make sure we can manage 

this transition before the healthcare system finally falls in around 

our ears. 

Mr. THORPE. Well, that is quite a macro—— 

[Laughter.] 

Mr. THORPE [continuing]. But it is a good question. I will just 

sort of try to highlight a couple of things. I do think the good news 

is that there are good models out there in our healthcare system 

today that we should study closely, try to replicate and scale them. 

And the lessons from those models, one is in North Carolina’s Medicaid program. One is in the State of Vermont. One is starting to 

evolve in your own State—what Chris Kohler and others are doing 

in Rhode Island. 

The lessons from those models are that if you look at the successful approaches—the Geisingers, the Mayos, the Intermountain 

Healthcares—those are great case studies. Our challenge is we 

can’t replicate and scale those. We can learn from why they work 

and how they work and see if we can’t pull those functions out and 

start building more integration into the system. 

You build more integration and coordination into the system by 

doing two or three things. One is through payment reform. So you 

have got to align the financial incentives with the delivery system 

incentives. And so, much of what is being talked about in terms of 

hospital bundled payments, focusing on high re-admission rate hospitals really starts to move us down the path of getting to think 

about the relationships and the transitions as patients move from 

hospitals back into the home and community and so on. 

So I think we have got to change the payment environment. 

Senator WHITEHOUSE. I guess my question that I tried to ask is 

can you do something like that—can we do it, something like that 

just once in a piece of legislation and walk away? 

Or is it too dynamic a forward-going environment not to have to 

establish some continuing authority that can look at where the 

payment is going and moderate it as new things are learned? That 

45 

can look at how HIEs are developing and moderate that as new 

things are learned that can go through these issues and not just 

sit here like a mortar and launch a trajectory that you know is 

going to land someplace but understand that it is a more dynamic 

environment, and you have to fly it like an aircraft. And somewhere, somebody has to be doing some piloting. 

Mr. THORPE. No, I think that is right. I think you have to focus 

on the payment side. I think you have got to build, as I have been 

talking about, a chronic care infrastructure that deals with the fact 

that most of healthcare is balkanized smaller physician practices. 

We don’t have the types of care coordination built into our system. 

We can do that, and then we can align them with financial incentives to make a difference. So I think we can go in the right trajectory, but you need feedback and study and improvement as you go 

along the way. So it is not going to be a one-shot deal, where you 

just sort of do the legislation and then walk away and think we 

have got it done. 

One of the—— 

Senator WHITEHOUSE. Mr. Chairman, I know I am over the time 

at this point, and I apologize. And maybe what I should do is invite 

anybody who wishes to add to the doctor’s remarks to do so for the 

record—— 

Senator BROWN. Well, you have as much time as you need. So 

if you want everyone to answer, unless you keep interrupting each 

one and asking three additional questions of each one. 

[Laughter.] 

I don’t know if he acts like this in his other committees, but take 

what you need, Senator Whitehouse. 

Senator WHITEHOUSE. I am taking liberties. I am taking liberties 

because of my friendship and affection for the distinguished Senator who is chairing this hearing. 

Dr. COOPER. I think you raise a very important issue. And as I 

heard you describing it, I couldn’t help but think of the NIH. What 

the NIH does, it enables. What is very clear is we don’t have the 

answer. There isn’t one answer. And in fact, the medical home, 

which barely exists, if we were using medical effectiveness techniques to evaluate the medical home—I mean, the medical home is 

like a new drug that has been tried on four people. 

It is an anecdote that we are now going to have the FDA approve 

a drug that was used on four people. So it makes no sense whatsoever. But it happened to appear, and whatever. 

As I commented in my opening remarks, nobody has ever organized medicine, organized the practice of medicine under the circumstances that we are entering. That is why there is all this talk 

about Marcus Welby primary care because people know about that 

from the 1960s. I mean, the students don’t even know about 

Marcus Welby. It was too long ago. 

So the NIH is the example. I would say don’t build, but enable. 

I would say I don’t know how to say this politely. I am too old to 

be polite. Get out of the way and let it happen. Let the hundreds 

of Geisingers and hundreds of rural communities and many specialties figure out what to do and learn from themselves. 

46 

You know, medical effectiveness wasn’t invented yesterday. I 

mean, we have actually, as physicians—you may not believe this. 

We have actually been concerned about doing the right thing. 

I mean, there have been textbooks. Osler wrote about how to do 

things well. It wasn’t called the ‘‘Osler book of medical effectiveness,’’ but that was the authority. We look to those authorities, 

Conn’s Current Therapy, clinical trials. 

I mean, Congress didn’t invent medical effectiveness. We actually—I know this will surprise everyone. We actually have been 

concerned about this as long as I have been in medicine, which is 

half a century. 

So let us do it. Enable us. Fund medical effectiveness. Fund ways 

that people can actually do the sorts of things you heard about in 

a rural community. Here, I want to do an experiment in my rural 

community, but where can I go for the money for infrastructure, 

the very thing you refer to in your comment. 

Where can I get some money to see if maybe this would work? 

I would have to do it out of my practice funds. No, but if I could 

go someplace. And then there would be a clearinghouse, as there 

is for the NIH. 

I say look to the NIH. If the NIH had done in the 1950s what 

is being talked about for healthcare reform today, we would be a 

Third World country in medical research. 

I think we all have a lesson to learn, and that is, really, I know 

it is popular not to trust physicians. They are bad. You can succeed 

in life by saying physicians churn the system and so forth. Honestly, we are not all that bad. We are actually rather good, and 

most of us are really quite wonderful. Trust us a little bit. 

[Laughter.] 

Trust us a little bit, and I think you will find that without all 

of the machinations and all of the strangleholds that we have to 

get ourselves out of, to do the very job we want to do, we’ll probably do it better. 

Dr. RAULERSON. Could I speak a little bit about the medical 

home? Because in pediatrics, medical home is more than just for 

patients. I actually have been working in the medical home concept 

for over 30 years now, and I feel that my practice is a medical 

home and has been for a very long time. 

But I think all of us are in a continuum. We are somewhere 

along the pathway of doing the best thing we can for our patients. 

I look to the experiments that have been done in North Carolina, 

and I wish that Alabama could model our medical home system 

after North Carolina. 

What they have done, with the guidance of the American Academy of Pediatrics and what we call Bright Futures, which is what 

healthcare should be for children, they have used this model in 

North Carolina. And they are providing excellent care for children 

there, and they have shown that it is financially very sound. And 

they are saving that State’s Medicaid program a great deal of 

money by providing a medical home using pediatricians, along with 

their nurse practitioners and their physician assistants, to take 

care of children from the get-go and to prevent things before they 

get to be big problems. 

47 

Senator BROWN. Dr. Schlossberg, would you like to continue on 

Senator Whitehouse’s question? 

Dr. SCHLOSSBERG. Sure. It is always hard to follow Dr. Cooper, 

but I am not sure it will be quite—— 

Senator BROWN. Dr. Raulerson actually just did it pretty well. 

[Laughter.] 

Dr. SCHLOSSBERG. Yes, I will do it poorly, I will tell you that. I 

would offer two threads. 

One is related to health information technology and how you 

change that because I think you talked about change. And so, a 

month ago, we brought up at our health system, which is seven 

hospitals, our tertiary care hospital, 600 beds, 1 day, big bang. So 

all the systems went live with physician order entry documentation. 

It was a 4-year journey that started 31⁄2 years ago because we 

created a vision. We created a culture of shared responsibility, and 

it was going to be event-driven. And we said to the medical staff, 

‘‘If you do this, we will do that.’’ 

We brought people along slowly. We communicated. We participated with the medical staff in doing it. So, what I think maybe 

the Congress could do is develop that vision that says we are not 

going to tolerate this, this, and this. Whatever the 80 percent is 

that people can agree on up here, and pick the vision of what people want to do. 

Then the specific thing you brought up, I guess, was around 

guidelines? The American Urological Association is very active in 

guidelines. We have been doing them for 10 years. The problem 

with guidelines at the point of care is they are not absolute. 

They are not absolute for two reasons. They are not absolute because at times the medical evidence doesn’t allow us to be. And 

again, sorry for an unpopular comment, but they are not absolute 

because we don’t have any malpractice protection if we don’t do 

something. 

So if we sit across from a patient, and we said the guidelines— 

you don’t need the CT scan, or you don’t need the ultrasound. Or 

you are 82-year-old, you don’t need the PSA. And they say, ‘‘Sorry, 

I want it. Order it, and Medicare will pay for it.’’ What do we do? 

We order the PSA. We order the CT scan. We order the ultrasound. 

I had that ultrasound conversation yesterday with a lady about 

a renal mass that probably didn’t need another ultrasound. So 

somehow at the point of care, we don’t have that protection to try 

to do the right thing, even though a lot of us want to do it. 

So I think the answer is I think Congress could strategically help 

us with some of those things. And as Dr. Cooper said, then maybe 

let us solve some of the problems. 

Senator BROWN. Thank you. 

Did you want to add something, Dr. Nochomovitz? 

Dr. NOCHOMOVITZ. Yes. I think that the Federal Government 

clearly can and is going to do something, and it does have substantial power, which will influence a lot of things. Because historically, 

whatever gets done in Medicare tends to trickle down into the commercial markets, and that is a very serious responsibility that our 

leaders and legislators have. 

48 

Because even if it is a mortar shell that is going, landing somewhere, it does have an enormous trickle-down effect, and we all 

have to live with it. And I think whatever is done will immediately 

snowball throughout this country because of that impact. 

Now what the ongoing stewardship of that is what I think you 

were asking, I think that is where we do need to look at the different provider constituencies for help, and it is not exclusively— 

with respect to Dr. Cooper—it is not exclusively academic. It may 

be rural. It may be inner city. It may be urban. 

There are a lot of people who should participate in this, organized medicine, the trade associations, because basically what you 

are trying to look at is you are trying to look at three things. You 

are looking at access, continuity, and coordination. 

So to the extent that what we do can impact in different communities and different settings access, continuity, and coordination, 

we are winning. And the guideline issue will just be a work in 

progress forever. 

Senator BROWN. Thank you, Senator Whitehouse, for your good 

insight and your incisive questioning. 

I am going to ask each member one or two questions or each panelist one or two questions to conclude the hearing. And if Senator 

Whitehouse wants a second round, I suppose we can do that. 

I will start with Dr. Thorpe. I will just work my way. Dr. Thorpe, 

you had some part of your testimony about the issue of community 

health workers. And in my hometown of Mansfield, OH, I had my 

first exposure to what community health workers can do. 

I did a roundtable, which Senator Whitehouse takes his constituents to dinner. I serve them water. 

[Laughter.] 

In a roundtable of 15 or 20 people, and I had one in—— 

Senator WHITEHOUSE. Not bread and water? 

Senator BROWN. Not bread and water. Just water. 

In one of the poorest areas of Mansfield, and it is an area that 

is mostly African-American, bordering on an Appalachian white 

community. And they had the highest rate, by far the highest rate 

of low-birth weight babies of anywhere in the area, about four 

times the national average. 

They use community health workers, young white and AfricanAmerican women, high school graduates or G—I was going to say 

GME—GED. Sorry, there is a difference, I understand, Dr. Cooper. 

Dr. COOPER. Not as big a difference as you think, but there is 

a difference. 

[Laughter.] 

But nonetheless, they were dispatched to their neighborhoods 

where they lived, and they talked about nutrition. They brought 

them in to OB/GYNs, pregnant women, and they dropped the lowbirth weight baby rate almost to the national average over about 

a 3-year period. 

I met with some of these women, and they had great accomplishments in their lives at the age of 22 or 23. I would also add, partly, 

Dr. Cooper, your comments about getting people into the business 

of medicine and other ancillary healthcare services that some of 

these women will be so empowered from this experience, I would 

49 

bet they will be nurses and doctors, even though they have had little opportunity in their lives to this point. 

Without belaboring this too much, the community health worker 

designation has only been in Ohio for 5 or 6 years. I believe they 

are licensed by the State nursing board. So talk to me about how 

we scale this up. And we are working on the healthcare bill, particularly with Senator Harkin because this is all about prevention, 

and he is, at least on this committee, working that piece of it, if 

you will. 

But how we scale this up in terms of training, in terms of bringing them, these kinds of workers into the medical home model, how 

we can do this nationally in a way better than the pockets that we 

have seen it in places that you acknowledged earlier? 

Mr. THORPE. Well, I think you look at the good case studies of 

places that are doing this right now. North Carolina has been mentioned. Vermont does this statewide for all patients. And the challenge is building a primary care infrastructure. We don’t have a 

primary care infrastructure that really does primary prevention 

such as, when somebody has five, six, seven different chronic conditions, particularly in Medicare, and working with patients outside 

the physician’s office to manage and execute the care plan. 

So the vision here is to have a team of care coordinators—nurse 

practitioners, nurses, social workers, mental health workers, community outreach workers—many of the types of community health 

team workers you were talking about collaborate and, in fact, really fully integrate themselves with smaller physician practices to 

build a primary care infrastructure that does both primary prevention and care coordination. 

North Carolina does this statewide. They have been doing it 

since 2003. Again, Vermont does this for all their patients in three 

sites, and it does it very successfully. You build the primary care 

infrastructure. You build referral patterns appropriately to specialists. You are really building integration in the system in a way to 

make it more functional. 

I just go back to my basic statistics on it. You know, if you have 

got 30 percent of the growth in spending in Medicare nationally 

linked to a doubling of obesity, and if 75 percent of spending is 

linked to chronically ill patients, these same type of diabetic hypertensive patients, we have got to find a way to build a primary care 

infrastructure and a better way of managing them. 

I think the way you do it is pretty simple. You look at the functions that make the multispecialty clinics, that we have seen work 

well, effective. It is having a formal transition care model. We have 

seen it at Penn this model, a nursing-led model for years. It has 

been very effective. 

Geisinger does this very effectively. So you build transition care 

into it. That is just simply a care coordinator working with a patient as they go into a nursing home or a hospital, doing an in-site 

visit, and working with the admitting physician at discharge to do 

medication reconciliation and make sure that the care plan is followed. 

They have got to be closely integrated with the smaller physician 

practice, whether it is a specialty practice or primary care practice, 

50 

but that collaboration is critical. And having that close interaction 

with patients, working with them at home. 

So you build the functions in. We know the types of people that 

we are looking for. It is nurses, nurse practitioners, who do a great 

job of delivering primary health care. And if Medicare wants to get 

into the game, just like Medicaid does today in the private sector, 

we have to make a modest investment to build that infrastructure 

to work with Medicare fee-for-service patients. But it will spill over 

to work with other patients as well. 

So as I mentioned in the testimony, we are looking at something about $2.5 billion a year when it is up and running fully. It would 

provide nationally the capacity to have community health teams 

everywhere in every hospital referral area in the country. That if 

physicians wanted to work with them or collaborate with them, 

they could be community health centers, small physician practices, 

bigger physician practices. You are building that infrastructure out 

there so that we can do a better job of prevention and managing 

chronic disease. 

And as I have said, if you look at the data on this in terms of 

how well-functioning systems work, whether it is Intermountain 

Health, Geisinger, Marshfield—you can go down the list of them— 

if you can’t save 2 percent in terms of the cost structure, then we 

have got it set up wrong. 

So I think that is the way you do it. I think it is easy to scale 

it. You are focusing on the effective functions, but we have got to 

make a modest investment to make it available nationally. 

Senator BROWN. Thank you. 

Dr. Cooper, taking a bit, connecting with that, you talked about 

the shortage of physicians. And with your conversation with Senator Murray, I thought that shed some light on some of the next 

steps. 

And while you talked about the training of physicians over a 

10-, 12-, 15-year period, you are precisely right on that, of course. 

There are functions that are—or I guess the question is are there 

functions that physicians now perform that other healthcare workers can do? 

Because without causing fights between the nurse anesthetists 

and the anesthesiologists, I don’t want to weigh into that, or between a specialist and a general practitioner. I am looking more for 

do we, along Dr. Thorpe’s ideas and models, is there a way—because in large part, we can train. We can train community health 

workers and nurse’s aides and the physician’s assistants and PTs 

and OTs and a whole lot of other people. We can train them more 

quickly. There are different educational levels, different training 

levels. 

Is there a way to integrate using the, I guess you would say the 

much deservedly maligned medical home model—but is there a 

way of doing this, to answer your both criticisms and prescience 

perhaps down the line by finding ways to bring that together better 

perhaps than we have, if that is clear? 

Dr. COOPER. Well, you know, you have to differentiate the rhetoric of what should happen, like a medical home, for example, and 

what is actually happening. What are primary care or generalist 

physicians or specialists actually doing? And what they are actually 

51 

doing is along the lines of your question, so that they are jettisoning things that they don’t have to do. 

I couldn’t help but remember being in Washington about a decade ago. And as I was about to give a talk to the ophthalmology 

association, the president said to me, as he was putting the microphone on my tie, ‘‘You know, 70 percent of what we do is optometry.’’ And in fact, that has been jettisoned to optometrists. 

The dentists jettison things to hygienists, dental hygienists. So 

the physicians are always in the process of offloading or delegating 

things that people can otherwise do. And yes, I think one thing 

that is necessary for where this rocket lands is to be sure there are 

enough physicians out there. If we don’t increase physician supply, 

they will, Senator Whitehouse, cry rather than laugh. 

It will be a disaster. It is almost a disaster already. We can have 

this conversation about how to fill in for a little while, but after 

all—after a little while, we will have exhausted that ability. We 

will not have community health workers. We will not have nurse 

practitioners and PAs, and now physicians are backed into the corner doing what only neurologists or neurosurgeons, urologists and 

oncologists can do, and there aren’t enough of them. 

So your question really is, as we back them in the corner, who 

can pick up what is left? And yes, encourage the nurse practitioner 

programs. They need help. They are not being developed fast 

enough. Be supportive of all the other kinds of workers that Dr. 

Thorpe talks about within these community networks. 

Build the infrastructure. But don’t look to physicians to run that 

infrastructure. Look for them to participate in the infrastructure as 

physicians. 

Senator BROWN. Fair enough. Yes, I, first of all, don’t want to 

back you into a corner. It might be a very dangerous thing to do. 

[Laughter.] 

But I do—I wonder, and this is maybe idealizing a little too 

much. If we did the community health workers right and we did 

the nurse practitioners right and we did the optometrists, ophthalmology/optometrist construct right, would the shortage of physicians you cite or you predict be so acute? 

Dr. COOPER. The answer is yes. The answer is the way we trend 

this is back to the 1920s, and we assume that this offloading process is continuous. And we don’t build into our projections that physicians will be the primary taker of blood pressures, for example. 

So as we project forward, it is the changing role of physicians as 

they delegate. When we project the physician workforce forward, it 

is a much slower rate than the healthcare labor force overall. The 

assumption is that tasks will continue to be delegated to others 

and that physicians will be able to do what physicians do. 

Our problem is that those trends can’t continue with the number 

of physicians we have. We don’t have enough physicians even if 

they delegate to community health workers and nurse practitioners 

and so forth. And so, now we have to figure out how to make it 

possible for even more, and that means having other people enter 

into areas of care that they might otherwise not have done. 

Senator BROWN. But I—— 

Dr. COOPER. Therefore, there are the doctoral-level nurse practitioner programs, as an example. I am sorry. 

52 

Senator BROWN. No, no, that is all right. I interrupted you. 

I would also argue if we do the community health workers right 

and we do the nurse practitioners right, there will be, in fact, fewer 

cases of diabetes and low-birth weight babies. 

Dr. COOPER. Oh, yes. 

Senator BROWN. And fewer need for the specialists to take care 

of those low-birth weight babies. I mean, that goes without saying. 

Dr. COOPER. I would agree with you entirely. And I would say 

if it turns out, then let us start planning to expand the physician 

workforce. Let us start building, and we will build toward a target. 

We can always turn off the spigot if you see this great success. 

I am too old to share your great optimism that we are going to 

prevent diabetes. 

Senator BROWN. But you are also wise enough to share my optimism. 

Dr. COOPER. But I do think we can cut those low-birth weight babies down. 

Senator BROWN. I am going to have to cut you off and go to Dr. 

Schlossberg next. Sorry. Because I could talk to you a long time, 

Dr. Cooper. And I know Senator Whitehouse is probably waiting 

even more, too. 

So a bit of a more pedestrian question perhaps for Dr. 

Schlossberg. You talked about rural providers and how difficult it 

is to attract specialists to rural America, and almost every one of 

our States, almost every one has some shortage of rural providers. 

Give me prescriptively, if you will, some thoughts about attracting 

specialty providers in underserved areas. And not just rural, but 

also inner-city areas that also suffer from shortages. 

Dr. SCHLOSSBERG. Yes, I mean, that is a tall order that people 

have been trying to solve. I think if you look at why we got there, 

I think we are there because of the complexity of specialty medicine. 

So if you look at urology, for example, a functional urology group 

is probably, at a minimum, three or four people because of the 

medical science that goes with it. When you have this shortage, 

people seek a job that they think is in their best interest. And so, 

why should I go work in a rural area if I can work with three or 

four other physicians? 

I think the other thing that drives the lack of specialists in the 

rural hospitals is the business of medicine, the complexity of medicine, and something we haven’t talked about, which is ER call. And 

I am dealing with today in my job trying to fill emergency room 

call for specialists because we are trying to recruit pulmonary critical care physicians to a smaller hospital, and none of them want 

to come because that means, ‘‘How much call do I have to do? And 

how is that? ’’ 

As you look at the rural communities, one of the things that they 

struggle with is staffing the emergency rooms and staffing the 

acute nature of what happens. I think we do personally need to 

have a lot more innovative solutions, like Dr. Raulerson talked 

about, whether it is telemedicine or other things. 

I think we may need to reset the expectations of some of these 

rural hospitals that says we need every specialty. We need every 

53 

procedure. In my specialty, it is robots and robotic prostatectomies 

and laparoscopic stuff. It is complicated stuff. 

Should that happen at all these places? What kind of specialty 

care do you need at all these places? I think we need to look at 

those creative mechanisms. 

Senator BROWN. Thank you. 

Dr. Nochomovitz, talk to us in some detail, if you will, about the 

structure of the UH model in terms of primary care, working into 

your answer preventive medicine, preventive care. If there are 

ways that you could suggest nationally for us, for a national model 

of how to use less-educated, less-trained people like community 

health workers and others for preventive care, and especially in 

light of dealing with the disaster that diabetes will bring people individually and society collectively in the next generation. 

Dr. NOCHOMOVITZ. I think that is a good segue for me to begin 

with a comment about some of Dr. Cooper’s testimony. I think that 

one of the questions we should all ask ourselves here for the sake 

of transparency is who are our doctors? The people in this room 

and people sitting at this table. 

We probably all do have a fine internist or fine primary care doctor who coordinates care for us. This doesn’t detract from the need 

for allied health professionals. But I think, as a specialist, I think 

there has been somewhat of an understatement here of the value 

of a well-trained, efficient, primary care physician who can coordinate care, advise, counsel, engage, navigate. And we shouldn’t forget that, and this needs to be reiterated. 

That goes into—that is a good segue for me into the model that 

we have used. And what we have done is we have taken, first of 

all, what we have perceived to be the best physicians in local communities and brought them into a structure that gives them significant independence, authority, and autonomy but allows them to leverage the resources of a larger organization. 

Had they not become aligned with our organization, the quality 

guidelines, the technology, the e-prescribing, the electronic office 

wouldn’t have been possible for these physicians. So therein is a 

story that is both positive and has a negative side to it. 

The positive side is that larger organizations, many of whom 

have been cited, have the ability to bring in the necessary technology, support to look at guidelines, to look at coordinated care, 

to provide comprehensive diabetes programs across a region with 

diabetic nurse educators and endocrinologists and primary care 

doctors. 

But we do need to look to the 60 percent of physicians practicing 

in small practices, and again, how Dr. Thorpe is—how do you scale 

that? And it might be that those parameters need to be provided 

in alternate structures, some of them that have been alluded to. 

And perhaps the accountable care organizations, perhaps spin-offs 

or extensions of integrated delivery systems, spin-offs or extensions 

of new, even from the private sector of integration of independent 

doctors, hospitals that have incented in the payer mechanism to 

provide these services with some guidelines that are associated 

with reward. 

Now there will have to be wholesale changes to some of our regulatory laws as far as Stark, anti-kickback, and other things if you 

54 

are going to have these kinds of structures. But I think the idea 

of—healthcare is a local phenomenon. So one, first of all, needs to 

build on what one has. The easiest way to build is to build on existing structures that can implement these quality programs, technology, etc. 

What we have done is we have gone even to smaller communities, some rural communities associated with critical access hospitals. We have organized physicians in clusters and given them 

the infrastructure to do the diabetic care, the urgent care, the after 

hours care in a low-cost—and we did the urgent care to create the 

low- cost environment, even though we were not essentially 100 

percent fee-for-service environment. 

But we anticipate the need for this, and we think it is the right 

thing to do. 

Senator BROWN. Thank you. 

Dr. Raulerson, what can we do in this healthcare legislation, or 

what can the Federal Government do generally to help you and 

other pediatricians at your medical homes provide better preventive care? Again, especially about diabetes, but preventive care generally for the children whom you serve. 

Dr. RAULERSON. One of the things that comes to mind immediately is our entire vaccine program for children. The vaccine program, I would say, is the A-plus of preventive diseases. It certainly 

changed my practice. 

When I started out in the wintertime, I would see one or two 

children a week who needed a spinal tap because they might have 

meningitis, and I don’t see that anymore because of vaccines. 

When I was young, I was critically ill with the measles, and I 

will never forget that illness when I was bedridden for many 

weeks. We don’t see measles anymore. 

Vaccines are very complicated. In the first year of a child’s life, 

I give vaccines that add up to 30 different vaccines in that first 

year of life. It is an extremely expensive program, and payment for 

vaccine always lags the cost for vaccines. 

Right now, I am paid $8 for every shot that I give a Medicaid 

patient in my office. It costs me somewhere between $17 and $27 

to give that vaccine, but I am paid $8. So I think immediately 

something needs to be done about our vaccine program for children. 

That is the No. 1 thing. 

The second thing is, help us with technology. Don’t expect every 

small doctor in a rural area to come up with his own electronic 

medical record and e-prescribing. 

I have to laugh when I hear about technology. My very closest 

best friend is a retired math professor and a computer guru. She 

came and spent a month with me while we tried to get my eprescribing system working. At the end of the day, we would just 

fall apart laughing because of all of the problems. 

Send it, it goes. My computer, my PalmPilot says it went. Then 

the Indian reservation calls and says we don’t have the technology 

here to get what you sent so you will have to write it. Well, OK. 

I can’t call it in if it is a drug for ADHD. You have to have a written copy. So now I have to mail it to you. 

OK. So I send one to the pharmacy that is 200 yards from my 

office. They got it 4 hours later. 

55 

So if my small rural practice or the practice of doctors where 

there is two or three physicians together, if we are going to have 

IT and it is going to be effective, someone else has to help us do 

it. 

There has to be a systematic way. And I am so afraid that all 

of this money is going to go into a system where I get an electronic 

medical record that is 14 pages long, and I just want to know if 

the kid got his blood transfusion or not. And I don’t have time to 

read 14 pages to find out if this child got his blood transfusion before he left Birmingham. 

Senator BROWN. Thank you very much, Dr. Raulerson. Well said. 

Senator Whitehouse has one brief question that we are going to 

close with. 

Senator WHITEHOUSE. One brief question. I would like to mention first that President Obama’s Economic Recovery Act has in it 

a, I call it ‘‘geek squad’’, for HIT. We modeled it on the Agricultural 

Extension Service because people in rural areas are very familiar 

with that and even very conservative Members of the U.S. Senate 

are also very familiar with that. And they know that the program 

works. So it is hard to devil it as unwelcome Government intervention. 

And so, people, doctors and hospitals who are installing HIT will 

have access to the HIT extension help, and that is already in the 

bill. It is passed. It is just a question of standing it up. 

So to your specific concern, it is very real. But I hope help is on 

the way. Certainly, the infrastructure is in place to begin to deliver 

it. 

I would love to go back, while I have got you, to one piece of 

what I asked, which is the—let me ask it this way. If you are a 

doctor and you invest in electronic health records for your patients, 

if you are a hospital and you invest in a quality improvement plan 

for your intensive care units to minimize infections and complications, if you are a community health center and you invest in a prevention program for the clients that you service, in all of those 

cases, there is a common problem, which is that you have to put 

all the money out. You have to take all the risk. You have to adapt 

your practice to whatever the new regime is. And yet you get very 

little, possibly even none of the reward of that investment. 

We often hear in the Senate that if Government would just get 

its hands out of the healthcare system, then the market would 

work, and it would solve all these problems gloriously. I am delighted to see every head just shook no in response to that question 

because I couldn’t agree with you more. 

I think we have an infrastructure problem of some kind that we 

have to solve, and then the market can take off. But right now, 

when the fundamental risk-reward loop is broken, you are just 

never going to get that investment. 

If you have thoughts on how we solve that problem, because 

there is an enormous amount of initiative and entrepreneurship 

and innovation that can be brought to bear on this problem. Once 

that is solved, a halfway measure is to say, OK, Government is just 

going to pay for it in the meantime. 

A better way would be to figure out how to close that risk-reward 

loop so that people could actually win the benefits of their savings, 

56 

and then they are incented to keep looking and keep digging and 

the machinery begins to work in the right direction. 

Dr. COOPER. If I could respond, I think you answered the question, for me at least, in asking the question. And it reminds me to 

go back to my comment about the NIH model. 

Empower the community health workers in a little town in Ohio 

to create a system and a demonstration project and a grant structure. Give them access to the resources to do it, and you will have 

thousands of minds creating thousands of ways to do it. 

But they won’t bear the financial risk, and the reward will be 

their system is better, and they will be rewarded in nontangible 

ways as well. That is the NIH model—Enable. 

Pre-suppose that we have geniuses in America, because we do, 

who are much smarter than anyone in this room, and they will 

come up with the really good ideas. But just empower them. Don’t 

think that we here can collectively figure out what to do and then 

say, OK, here is some money. Now you go do it. 

The NIH doesn’t do that, and I would really encourage the kind 

of a mild shift in thinking that says, ‘‘Look, we don’t think the market can do it in the usual market way.’’ But the market, also the 

pharmaceutical market wouldn’t have invented all of the pharmaceuticals if the NIH hadn’t supported all this fundamental research 

that underpins it. 

So the analogy obviously breaks down very quickly, but there is 

a certain superficial analogy that comes across to me, at least, in 

your question, Senator. 

Senator BROWN. Anyone else, or that is it? 

Thank you, Senator Whitehouse. And thank you, Dr. Cooper, for 

that answer. 

As in all hearings, the record will stay open for 7 days. If anyone 

wants to add any comments or thoughts or any other kind of additional information to any of the comments or questions made by 

each other or by Senator Murray or Senator Whitehouse or me, feel 

free to submit that to the committee. We appreciate that. 

Special thanks to Keith Flanagan for his help, and to Jessica 

McNease for her very good work on this hearing and on my staff, 

and Eleanor Dehoney and David Mitchell, and also David Bowen 

on the committee majority staff. 

So the committee will adjourn. Thank you very much. 

[Additional material follows.] 

57 

ADDITIONAL MATERIAL 

PREPARED STATEMENT OF THE AMERICAN COLLEGE OF SURGEONS (ACS) 

The American College of Surgeons (ACS) commends the Senate Committee on 

Health, Education, Labor, and Pensions for holding this important hearing on ‘‘Delivery Reform: The Roles of Primary and Specialty Care in Innovative New Delivery 

Models.’’ On behalf of its more than 74,000 members, the ACS is grateful for this 

opportunity to present a statement describing the surgical specialty perspective on 

delivery system reform. 

Reform of our Nation’s health care system includes a range of important issues, 

from covering the uninsured, to ensuring patient access to trauma and emergency 

care, to improving the quality of care to containing the growth of our Nation’s rising 

health care costs. A myriad of problems and challenges calls for not one but many 

steps and solutions to put us on the path to extending the possibility and promise 

of quality health care to all Americans. 

INNOVATIVE DELIVERY SYSTEM MODELS

ACS Trauma Care Delivery System 

An important area of health care delivery that is often times overlooked comes 

through the emergency and trauma care delivered in our Nation’s hospitals and 

trauma centers. Sadly, the emergency health care system in America is in crisis. 

Traumatic injury is the leading cause of death for Americans aged 1 through 44. 

Medical evidence has shown that the care and treatments delivered within the first 

hour of a severe injury, known as the ‘‘golden hour,’’ are likely to mean the difference between temporary and permanent disabilities, as well as between life and 

death. Studies of conventional trauma care show that as many as 25 percent of 

trauma patient deaths could have been prevented if optimal acute care had been 

available. In addition to saving lives, restoring function, and preventing disabilities, 

ensuring appropriate trauma care also can serve an important role in the larger 

goal to contain the growth of health care costs. According to a report published by 

the Agency for Healthcare Research & Quality (AHRQ), trauma injuries were the 

second most expensive health care condition in 2005, costing approximately $72 billion. This includes money spent for doctor visits, clinics, emergency room visits, hospital room stays, home health care, and prescription drugs. The cost of trauma-related emergency room visits alone was $7.8 billion. The National Safety Council’s 

2005–2006 edition of Injury Facts found that the total cost of unintentional injuries 

for 2004 was $574.8 billion, with $298.4 billion in wage and productivity losses and 

$98.9 billion in medical expenses alone. 

Trauma systems provide for effective and efficient use of scarce and costly community resources. Yet, only one in four Americans lives in an area served by a trauma 

care system. Both the Institute of Medicine (IOM) and the Emergency Medical 

Treatment and Labor Act (EMTALA) Technical Advisory Group have documented 

significant gaps in our trauma and emergency health care delivery systems, showing 

that hospital emergency departments and trauma centers across the country are severely overcrowded, emergency care is highly fractured, and critical surgical specialties are often unavailable to provide emergency and trauma care. The IOM found 

that a coordinated, regionalized, accountable system based on the current trauma 

care system model must be created. Unfortunately, the most consistent element 

among the States is the lack of uniformity regarding system development. As a result, the quality of care a trauma patient receives largely depends on the quality 

of the regional and local system in place to respond to emergency and trauma situations. 

Since 1976, the ACS Committee on Trauma (COT) has developed criteria to categorize hospitals based on the level of trauma care available. These guidelines are 

now used by States to certify some hospitals as trauma centers and many hospitals 

seek certification to become a trauma center from the ACS COT. In addition, in 

1989, the ACS COT collaborated with emergency medical organizations, governmental agencies, trauma registry vendors, and other interested parties to develop 

the National Trauma Data Bank (NTDB), which contains over 2 million cases from 

over 600 U.S. trauma centers and is the largest aggregation of trauma registry data 

ever assembled. The goal of the NTDB is to inform the medical community, the public, and decisionmakers about a wide variety of issues that characterize the current 

state of care for injured persons in our country. The information contained in the 

data bank has implications in many areas including epidemiology, injury control, research, education, acute care, and resource allocation. Finally, the ACS COT plans 

to develop a trauma quality improvement program. 

58 

To ensure patient access to emergency and trauma care, we recommend that Congress support: 

• Regionalization of Emergency Care by including legislation like the Improving Emergency Medical Care and Response Act, legislation introduced in the 110th 

Congress by then-Senator, now President Barack Obama (D–IL) and Representative 

Henry Waxman (D–CA), in health care reform to ensure a regionalized emergency 

and trauma care system that provides patient access to prompt definitive care when 

they need it. The Improving Emergency Care and Response Act would authorize 

multi-year grants to support demonstration programs aimed at designing, implementing, and evaluating a regionalized, accountable emergency care system. In fact, 

President Obama’s fiscal year 2010 budget request includes $10 million for the 

Emergency Care Systems program that would support the development of the Emergency Care Coordination Center (ECCC) and two of its main programs: (1) the regionalization of emergency care services; and (2) national standards on emergency 

care performance measurement. • Improved Reimbursement for Emergency Services by: (1) providing physicians a tax deduction equal to the amount of the Medicare fee schedule payment; 

(2) providing a 10 percent added bonus payment through Medicare to all physicians, 

including on-call specialists, who provide EMTALA-related care to Medicare beneficiaries; (3) allowing all Medicare participating hospitals to include stipends paid 

to physicians providing emergency on-call services on their cost reports; (4) providing necessary funding to trauma centers that are at serious risk of closing due 

to the continual increase of uncompensated and charity care costs; and (5) establishing a dedicated Federal funding source for payments to providers for uncompensated emergency health care services. 

• Medical Liability Protections by: (1) requiring any lawsuits against physicians who provide EMTALA-mandated care be brought under the Federal Tort 

Claims Act; and (2) providing immunity or limited liability for certain medical personnel involved in the evacuation or treatment of patients during a declared state 

of emergency. 

ACS National Surgical Quality Improvement Program (NSQIP) 

Health system reform starts from an important and appropriate premise that patients receive their care in a large system of care rather than from one physician 

or health care provider. It is this same premise that has been the foundation for 

the ACS’s successful surgical quality improvement efforts. For example, the ACS 

National Surgical Quality Improvement Program (NSQIP) started with a successful 

effort within the Department of Veterans Affairs, which decreased VA post-surgical 

mortality by 27 percent and post-operative complications by 45 percent over 10 

years. ACS NSQIP is a prospective peer-controlled, validated database that quantifies 30-day risk-adjusted surgical outcomes and allows for comparisons among all 

participating hospitals. ACS NSQIP does not merely examine care the surgeon provides in the operating room, but rather it captures data regarding the range of preoperative, intra-operative, and post-operative care that the surgical patient receives 

over the 30 days following the surgery. After a pilot to test NSQIP in three nonFederal hospitals in 1999, the ACS applied for a grant from the Agency for 

Healthcare Research Quality in 2001 to expand the program to 14 hospitals. Based 

on its successful application in these hospitals, the ACS has spearheaded the effort 

to implement ACS NSQIP in private hospitals across the country, with ACS NSQIP 

currently in place in 220 hospitals nationwide. The program has received wide recognition as a successful model for surgical quality improvement and the Joint Commission acknowledges the value of participation in ACS NSQIP and includes a Merit 

Badge next to the profile of all ACS NSQIP hospitals. 

ACS National Cancer Data Base 

In the field of cancer care, the American College of Surgeons Commission on Cancer (CoC) is a pioneer in measuring performance. The more than 1,400 hospitals and 

free-standing cancer treatment facilities approved by the CoC report clinical data 

to the National Cancer Data Base (NCDB) and receive evidence-based benchmark 

comparison reports based on accepted standards of care for breast and colorectal 

cancers. These measures are endorsed by the National Quality Forum. Since 1995, 

it has captured over 21 million cancer cases and includes data on about 70 percent 

of all newly diagnosed malignant cases of cancer nationwide annually. To provide 

better ‘‘real-time’’ feedback, the CoC has also developed a new reporting system that 

could link into an interoperable, nationwide health information technology (HIT) 

system, which received significant support in the recently enacted American Recovery and Reinvestment Act of 2009 (H.R. 1). This prospective electronic reporting system, which is called the Rapid Quality Reporting System (RQRS), monitors eviVerDate Nov 24 2008 16:04 May 16, 2011 Jkt 035165 PO 00000 Frm 00062 Fmt 6633 Sfmt 6621 S:\DOCS\49824.TXT DENISE
59 

dence-based performance measures in real-time, alerting providers when standards 

of care for select cancers are not being met. The ACS believes RQRS could ultimately play an important part in any new, outcomes-based payment models. 

Through these efforts, the ACS has demonstrated a commitment to delivery reform that both includes and extends beyond the care that the surgeon provides to 

his or her patients. In addition, these efforts are based not simply on doing more 

for the patient but on doing what is most clinically appropriate for the patient. The 

ACS recognizes that surgical care is provided through a surgical team in the operating room and through a team of health care professionals, including the surgeon, 

who treat and monitor a patient’s progress before and after an operation. 

ENSURING PATIENT ACCESS TO SURGICAL CARE

Addressing Workforce Shortages 

The number of surgeons trained in the Nation’s graduate medical education system has remained static for the past 20 years. Today, U.S. population growth has 

far outpaced the supply of surgeons and as a result, the United States is beginning 

to see signs of an emerging national crisis in patient access to surgical care. 

Patients need access to safe, high-quality and affordable surgical care, whether 

the surgery is planned or unplanned. However, many aspects of the current health 

care system contribute to workforce shortages that threaten patient access to surgical care. Unlike many other medical specialties, there are no good substitutes or 

physician extenders for a well-trained general surgeon or surgical specialist. Surgical training is vastly different from other physician training programs. Mastery 

in surgery requires extensive and immersive experiences that extend over a substantial period of time. Whereas non-surgical residencies can be completed in as few 

as 3 years, surgical residencies require a minimum of 5 years and often several 

more for specialties such as cardiothoracic surgery. As a result, ensuring patient access to surgical care will take many years to address. 

Workforce shortages affect nearly all surgical specialties and occur in both rural 

and urban areas. According to 1996 and 2006 data on workforce numbers produced 

by the Dartmouth Atlas, general surgery, urology, ophthalmology, and orthopaedic 

surgery declined 16.3 percent, 12 percent, 11.4 percent, and 7.1 percent, respectively. In addition, the Archives of Surgery published an analysis last April that 

showed a decline of more than 25 percent of general surgeons between 1981 and 

2005 in proportion to the U.S. population. Looking to the future, between 2005 and 

2020, the Bureau of Health Professions projects an increase of only 3 percent among 

practicing surgeons, with declines projected in thoracic surgery (¥15 percent), urology (¥9 percent), general surgery (¥7 percent), plastic surgery (¥6 percent), and 

ophthalmology (¥1 percent). 

There are many reasons for the surgical workforce shortage including prospects 

of reduced payment combined with higher practice costs, bigger liability premiums, 

and the heightened threat of being sued; a crippled workforce leading to demands 

for more time on call; heavier caseloads with less time for patient care; and a U.S. 

health care delivery system that is in flux. Given the rigors of a surgical residency, 

these challenges can deter would-be surgeons from making the extra sacrifices necessary to enter the surgical workforce and create a dim long-term outlook for the 

profession. 

Compounding the crisis, large numbers of aging, established surgeons are either 

decreasing their workloads or retiring. According to the American Medical Association’s Physician Characteristics and Distribution in the U.S. (2007 edition), approximately one-third of the surgical specialists who are key to ensuring adequate emergency call coverage are age 55 or older (general surgeons, 32 percent; neurosurgeons, 34 percent; and orthopaedic surgeons, 34 percent). Hence, it is critical 

that our Nation’s medical schools and training institutions start producing more 

surgeons in these specialties. 

POSSIBLE SOLUTIONS

• Preserve Medicare funding for graduate medical education and eliminate the 

residency funding caps established in the 1997 Balanced Budget Act; 

• Fully fund residency programs through at least the initial board eligibility; 

• Include surgeons under the title VII health professions programs, including the 

National Health Service Corps program, and make them eligible for loan assistance; 

• Promote rural/underserved care through loan forgiveness programs that stipulate work in those areas; 

• Extend medical school loan deferment to the full length of residency training 

for surgeons; 

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• Allow young surgeons who qualify for the economic hardship deferment to utilize this option beyond the current limit of 3 years into residency; 

• Increase the aggregate combined Stafford loan limit for health professions students; 

• Create a new health professional shortage area (HPSA), separate from the traditional primary care HPSA, with bonus payment structures for surgeons who provide services in designated areas; 

• Provide tax relief and liability protections to surgeons who perform EMTALArelated care, especially when that care is uncompensated; 

• When hospitals pay stipends to surgeons who take emergency calls, have Medicare recognize these costs, as is currently done for critical access hospitals; and 

• Expand the Federal Tort Claims Act to include surgeons who provide services 

to patients who are referred through their primary care physician at a community 

health center. 

Payment Reform 

As the committee studies the important issue of delivery reform, it is critical not 

to lose sight of the fact that no delivery system, no matter how ingenious, can survive if those who are caring for patients are not being appropriately reimbursed, 

and the most immediate challenge for patient access to surgical care is the precarious reimbursement situation confronting surgeons and surgical practices. As the 

committee is well aware, Medicare payments to physicians will be cut 21.5 percent 

on January 1, 2010 if Congress does not act. The ACS calls on Congress to take 

action to stop this cut, to provide an increase in Medicare payments for all physicians in 2010, and to initiate reform for Medicare’s physician payment system this 

year. The ACS greatly appreciated the leadership of Chairman Kennedy and others 

on the committee to enact the Medicare Improvements for Patients and Providers 

Act of 2008 (MIPPA) last July that reversed the 10.6 percent cut in Medicare physician payments. In addition, MIPPA included the largest Medicare payment increase 

for physicians since 2005 by replacing a scheduled 5.4 percent cut in 2009 with a 

1.1 percent increase this past January. MIPPA also made changes to how work was 

valued under the Relative Value Scale, increasing payments for some surgical services. In spite of these important measures, Medicare payments for many surgical 

procedures have been reduced significantly over the past 20 years and, in some 

cases, have been cut by more than half from reimbursement levels in the late 

1980’s. 

In discussing delivery system reform, many often highlight the importance of 

measures to promote primary care to both prevent illness and disease as well as 

to manage the conditions that a patient may already have. To this end, some, most 

notably the Medicare Payment Advisory Commission (MedPAC), have proposed financing increased reimbursement for primary care by simply cutting reimbursement 

for care provided by other physician specialties. Such proposals, while seeking to 

promote efforts to help Americans better manage their care, would only exacerbate 

the workforce challenges described earlier and establish a reimbursement structure 

that would ultimately undermine patients’ ability to access the life-saving acute care 

services that only surgeons are qualified to provide. The ACS supports efforts to prevent disease and to manage patient care not only because it is in the best interests 

of the patient and health care system but also because, when these patients need 

surgery, they are much less likely to encounter complications and much more likely 

to recover quickly from the operation. However, regardless of how well patients’ care 

is managed, acute situations requiring prompt and definitive access to surgical care 

will continue to occur. A better alternative would be reforms that recognize the important roles that different specialties play in caring for the whole patient. 

Much attention has been paid to the need to provide more Americans with access 

to health care coverage, to increase Americans’ access to care, and to improve the 

value of care delivered in our health care system. Expanding coverage to more 

Americans and improving the quality of care will mean little if Americans are not 

able to access the care they need—particularly in potentially life-threatening situations due to the lack of qualified surgical practitioners. Before adopting any proposed steps or solutions, we must carefully consider what unintended consequences 

may result. So while our present situation calls for change and health system reform, we must proceed deliberately and thoughtfully to ensure that the policy 

changes we make today do not lead to unintended consequences that could undermine Americans’ access to quality care. 

The ACS looks forward to working with this committee to reform our Nation’s 

health care system and to preserve and improve Americans’ ability to access high 

quality surgical care and health care services. 

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[Whereupon, at 11:50 a.m., the hearing was adjourned.] 

Æ