By Jeff Morris

December, 2008

Feature Article - e-Journal of Age Management Medicine - December 2008

The Financial Crisis and Age Management Medicine

The economic meltdown has dominated the headlines for months, was the most important issue in the U.S. Presidential election, and continues to spawn increasingly dire reports and predictions as we head into the New Year. Yet, while the financial crisis has proven disastrous for nearly every sector of the economy, its effect on the field of Age Management Medicine is not entirely clear. We have gathered a cross section of media reports and surveyed leaders in this medical field in an attempt to make some sense out of what is currently happening, and provide a glimpse into what direction practitioners may wish to take into the future.

Physicians in general are already noting a mixed bag of consequences. The range of effects was well expressed in this October post on KevinMD, the blog of Nashua, NH primary care physician Kevin Pho:

"The current economic turmoil is resulting in a flood of office visits in some cases."

Doctors say people's financial troubles can, in fact, spread to your body and cause everything from ulcers to heart attacks, often disrupting people's lives and relationships.

Cardiologist Ramin Oskoui says he's seen a 30 to 40 percent jump in the number of patients complaining of chest pains or tightness.

I personally haven't seen it - patient volume has been steady. The poor economy can cut the other way as well, leaving patients with less money for co-pays and keeping them away from the doctor's office.

That last point reflects an October 13th report from American Medical News, a publication of the AMA, which noted that the weak economy leads to a vicious cycle: States, which fund much of Medicaid, have fewer tax revenues coming in?while more people sign up for Medicaid as they lose jobs with health benefits. The Kaiser Commission on Medicaid and the Uninsured found Medicaid enrollment grew by 2.1% in fiscal 2008 after a 0.5% decline in 2007, while spending increased 5.3%, the fastest incline since 2005. States expect bigger increases in both enrollment and spending in 2009, according to Kaiser. Doctors? fees could be on the chopping block if states can't cover their costs, the AMNews report said, because cutting those fees creates savings faster than does cutting benefits.

The extreme result of the economic downturn, for some doctors, is that they are abandoning their practices altogether. That, at least, is what the Los Angeles Times focuses on in a December 24, 2008 story by Lisa Girion. Girion says that the one- or two-physician general practice is an endangered business model, with primary-care physicians unable to maintain such practices because of their "relatively slim and declining margins." This is because such physicians "have little or no clout to leverage better payments with insurers; they have no economy of scale, which makes overhead more burdensome." The story notes that such small practices were in trouble already; now, physician revenues nationwide are falling, as patients "who have lost jobs or homes stop paying their bills and skip appointments." The president of the California Association of Family Physicians is quoted as saying, "We see people putting off physicals and mammograms and blood tests because they just don't have the cash."

In the case of one Beverly Hills physician on whom the L.A. Times article focuses, the solution was to join 200 physicians in a multioffice practice affiliated with Johns Hopkins Medical Center in Prince George's County, MD, where benefits include vacations, health insurance, a pension plan and paid continuing medical education. That solution is one that is increasingly appealing to physicians, according to an American Hospital Association (AHA) study, "Report on the Economic Crisis: Initial Impact on Hospitals," conducted in October and released in late November. Based on responses from 736 hospital CEOs, the study found 69% heard physicians ask about hospital employment. It also found 83% reported physicians wanting more pay for on-call or other services, 31% got inquiries about whether they would buy physician practices, and 23% got queries to partner on physician equipment purchases. But the trend toward hospital employment is not new, says a December 15, 2008 AMNews story: "Past surveys have found physicians moving toward employed or hospital-based situations long before today's economic crisis. For example, a survey by the Center for Studying Health System Change found that there was a marked increase in the percentage of physicians joining large, single-specialty groups and employed situations. The survey, released in August 2006, covered 1996 to 2005."

Such stories seem to indicate that what we're seeing is not so much a sudden movement toward doctors leaving their practices due to the current state of the economy, as the continuation of a crisis in healthcare that has been apparent for some time. Indeed, most physicians now specializing in Age Management Medicine have indicated that at least part of their motivation for moving into the field was frustration with the paperwork-laden, rushed patient visit atmosphere forced upon them by insurance?not just Medicaid'reimbursement requirements. So how are practices already out from under the insurance system faring? It depends on who you ask.

Gregory W. Petersburg, D.O., whose Renascence clinical practice is in Oro Valley, AZ, says he has not seen an impact from the economy's severe downturn. "Behind every dark cloud is a silver lining," says Dr. Petersburg. "There has never been a better or more important time for preventive-aging medicine. In uncertain economic times, there is one thing that everyone needs?good health." According to Dr. Petersburg, "My own patients realize that the money they spend on wellness and prevention is a solid investment, impervious to the ups and downs of the economy. I currently have a full-time clinical practice focused exclusively on preventive-aging (wellness and prevention). My practice is full, with a 90% patient retention rate, which has not dropped with the economy. In fact, I receive more calls from prospective patients from around the country than at any other time in my eight years of specializing in preventive-aging medicine."

While not expressing quite so unabashedly enthusiastic a view, John Adams, CEO and President of Cenegenics Medical Institute in Las Vegas, NV, remains positive. "Naturally, our organization faces some challenges with the current economic downturn," he says. "However, Cenegenics continues to set new benchmarks for medical excellence, growing and maintaining our patient base while remaining financially strong." Such is not the case everywhere, however. Chalmers Daniel, M.D., who practices in Memphis, TN, says, "Potential clients are putting off the decision to enroll in our Age Management program and are taking a wait-and-see [approach] until after the first of the year." And Dick Parvus, M.D., says of his Vero Beach, FL practice, "I became an affiliate of a large Age Management Medicine group which offers top of the line programs which are also costly. Advertising has generated interest but I was unable to grow my practice as the expense was prohibitive even to business owners, and this is directly attributed to the economy. I have tried to design hormone replacement therapy programs for Menopausal/Perimenopausal women and even though very affordable, very slow growth is being realized." Paradoxically, Dr. Parvus is now moving in exactly the opposite direction to which so many were headed?at least, temporarily: "I do not accept insurance and may have to resort to an insurance model to survive until the economy turns around. I find it very difficult to understand how people are prepared to forego well-being and health during hard times and this may be a problem with our priorities, as my area is extremely affluent. I am only able to practice Age Management Medicine on a part-time basis and will have to continue to do so until the financial crisis is over."

Despite the current slowdown, Dr. Daniel sees a positive side for the specialty, looking ahead: "I believe the poor economy will ultimately benefit Age Management indirectly, because people are reminded how important health is in a crisis, they have to stay healthy to work longer and to be more productive. Also retirement for many of us will now be put off for several more years and we will have to push our aging bodies to keep working at a pace we did not plan on doing." Cenegenics? Adams also foresees a turnaround. "Providing clinical excellence in Age Management Medicine while maintaining the doctor/patient relationship should be our industry's focal point," he advises. "Despite national and global economic slowdowns, if we succeed in our focus?we will be poised for great strides in 2009."

An in-depth analysis comes from our Arizona respondent. "Here is how I see it," explains Dr. Petersburg. "Our sick care system is based on the concept of gambling: when you purchase health insurance you are betting (with your premium payments) that the managed care company (i.e., the casino) will eventually have to pay out (in benefit payments), for the poor choices you continue to make regarding your health. The sad irony in all this is that the current sick care system financial model ultimately encourages people to 'win' by losing their health." In Dr. Petersburg's view, during this economic downturn, the last thing people need are more medical expenses, or even worse, poor health preventing them from earning an income. "Furthermore," he continues, "with business downsizing and predicted layoffs, it is a given that we will see in the near future a rise in the number of medically uninsured. And if your medical practice is dependent on insurance, things must look quite dismal. Instead of gambling away dwindling dollars on health with sick-care insurance (although I do believe we all need some coverage, even if just for catastrophic events), wouldn't it make more sense to invest in good health and potentially prevent the 75-80% of chronic aging-related diseases that consume nearly 90% of our nation's sick care dollars? The idea is to shift from gambling with health to investing in health by moving from 'downstream' sick care medicine to 'upstream' health care medicine. This is where preventive-aging medicine comes in; it helps people take charge of their health."

The strategy being followed at Cenegenics to weather the slowdown is straightforward, says Adams: "We've kept our focus clear; the entire Cenegenics team continues its vigilance in providing clinical excellence and five-star service while underscoring the importance of the doctor/patient relationship. And, across the board we are making responsible changes to reduce or eliminate expenses where possible, so we can continue to support our patient base, partners and affiliates." Dr. Petersburg shares a comprehensive look at his own model: "First, I remain laser-focused just on what I do best?providing in-depth and comprehensive preventive-aging consultative services. My professional fees will remain the same, but offering multiple tiers of retainer service agreements allows patients to choose levels of service that fit their needs and their pocketbooks. I do not provide aesthetic services or sell products to patients?which require out-of-pocket expenditures, additional staff, equipment, space, upkeep and additional liability insurance?as they are potentially far more likely to suffer during a significant economic downturn. In my simple philosophy optimal health is indispensible; everything else is optional."

Dr. Petersburg continues, "Second, my business and clinical practice model is carefully designed to offer the greatest scope of clinical value while absolutely minimizing overhead, costly equipment, and operating expenses. Having the right business and clinical models is the key for me to run a full and very profitable practice, offering exceptional comprehensive clinical evaluations and ongoing preventive services?with NO employees or expensive equipment! Imagine if your overhead was essentially rent and utilities! Third, I believe 'defining experiences' are what truly change us. Based on this, my work includes creating unique, very powerful, and memorable experiences for my patients, which not only distinguishes my practice from the competition, but helps my patients successfully transform their life and ultimately converts them into my best marketing secret. This helps explain why 40% of my patients come from coast-to-coast and why my practice maintains a 90% patient retention rate."

Whether optimism is, in itself, a strategy for dealing with the economic downturn, or whether there truly are positive aspects to the situation, is difficult to say with any certainty?though it has been acknowledged that people's attitudes make up a sizable variable in economic reality. That being the case, there are other positive signs out there. A December 22nd press release from Boca Raton, FL-based BodyLogicMD, "Economic Crisis? Not In Bioidentical Hormone Therapy" states, "the nation's fastest growing network of bioidentical hormone therapy physicians is continuing to expand their growth with more office openings and many more patients, despite the current economic crisis." It continues,

"Health care, especially Hormone Therapy, really is a recession proof industry," said BodyLogicMD President Patrick Savage. "While no industry goes unscathed, with the increasingly aging population, with a woman entering menopause every 20 seconds in the United States and with an increasing demand to want to live better, this market continues to expand. Industry growth estimates are 9.5% per year and are growing even more rapidly. Even with the economic crisis this year, we increased the number of physician offices by 70% and doubled the number of active patients."

Another press release, from Dallas, TX-based Executive Medicine of Texas, claimed on December 8th, "Executives are experiencing tremendous pressure from workforce reduction and mergers to delivering shareholder results and stock market volatility.

They are taking a greater ownership in their health, putting pride and self-esteem aside. Our goal is to educate executives and prevent the inevitable heart attack or stroke that often comes with the job. Executives often got to the point of exhaustion and developed significant health issues by simply ignoring the signs. Now they want more personalized attention, relief and medical direction from us. Executives are responding quickly to managing stress now more than ever. Although no two executives are alike, they are placing an even greater emphasis on their health as one united front."

Though six months is now an eternity, a survey back in June found, "People are relying more on Botox, fillers and laser skin treatments, despite the economic slowdown, according to a new survey of skin surgeons." The poll of 562 members of the American Society for Dermatologic Surgery found "increased or stable demand for cosmetic procedures compared to six months ago"?which would now be a year ago. "Local dermatologists told the [Orange County] Register that they remain as busy as before, or busier." The story continued:

"Patients investing in the health and beauty of their skin are still a priority during unsteady economic times," said Dr. Darrell Rigel, president of the ASDS. "Looking good helps people feel confident." Out-of-work Baby Boomers may be seeking to improve their appearance for job interviews, he said.

Of particular interest to Age Management practitioners is the fact that the minimally invasive procedures many have taken on are actually seeing increased popularity?or at least were back in June.

Dr. Richard Ehrlichman, a plastic surgeon in Wellesley, Mass., said patients cut costs by shifting away from plastic surgery to minimally invasive work. He told the Boston Globe:

"In difficult economic times, people look for something to make them feel better about themselves," he said. "They feel like splurging a little bit without breaking the bank."

Not going under the knife can cost much less. Unlike reconstructive surgery, which insurance pays for, cosmetic work is an out-of-pocket expense. A facelift can come to almost $10,000. But a few Botox injections around the eyes and forehead? That'll be $500 to $800 for up to six months of rejuvenation.

"No one's saying these are substitutes," Ehrlichman said. "It's like eating pasta instead of beef."

Ultimately, none of us can predict what the future will hold, but Dr. Petersburg offers a hopeful coda even as he acknowledges as much. "I cannot foresee the future, but this is what I think each one of us must do: ?You must become the change you wish to see in the world? (Mahatma Gandhi). When I speak to other physicians, I advise them ?You must become the change you wish to see in your patients.? " Or, at least offer the opportunities for those changes.