Tuesday, August 16, 2016

The cost of health care: insurance companies, high-profit and low value care

We know that health care in the US is incredibly expensive. Those who read about health policy from a variety of sources (perhaps including this blog) know this in terms of data – our per capita cost is 50% more than the second highest-cost nation (Norway), twice what most comparable (rich) countries spend, and almost 3 times that of the United Kingdom. But you don’t have to be a policy wonk to know that health care is expensive; you just have to be a consumer who is trying to buy health insurance and is seeing their premiums go up – and their out-of-pocket costs (deductibles, co-pays, co-insurance) go up as well. All those other countries cover everyone, equitably, despite spending so much less money (and those that spend more, like Norway, have especially good coverage). Not so here.

“My premiums are more than $600 a month, which is more than our mortgage payment,” a cancer survivor quoted by the New York Times in its August 14, 2016 article by Robert Pear “Health insurers use process intended to curb rate increases to justify them”, said. “I am grateful that the Affordable Care Act is here for my family, but I am disappointed by its limitations. All I want is a plan that makes our health care affordable, but it doesn’t exist.” She is likely to be disappointed, because this was not how the Affordable Care Act (ACA) was set up, and unless control of Congress changes dramatically, we probably will not see a fix. ACA passed because it guaranteed continued profit for insurance companies, and this has led to both the rate increases and out-of-pocket cost increases we have seen. Insurance companies can do this because the law allows them to ask for premium hikes when they are not making “enough” money. Essentially, ACA requires the American people (subsidized by the federal government if they are poor) to ensure private insurance companies are profitable. Because they believe that they have not been permitted to jack up rates “enough”, some companies (Humana, United, Ætna) are leaving the exchanges in many places.

While other counties make sure everyone is covered by some national health insurance (a national health service in the UK, a single-payer national health insurance system in Canada, and highly-regulated multi-payer systems in many other European countries such as France, Germany, and Switzerland), we have tried a patchwork that leaves many people out (e.g., the undocumented, poor people in the 19 states that haven’t expanded Medicaid), and encourages others to buy policies on the health insurance exchanges based solely on their cost. This is examined in a story by Reed Abelson in the Times from August 12, 2016, “Cost, not choice, is top concern of health insurance customers”. It notes that people who are healthy and young but don’t have employer-based health insurance are either buying the cheapest policies available on the exchanges or “particularly those not eligible for generous subsidies, are shunning plans altogether, finding all of the prices too high.” When they don't buy insurance, it messes with the insurance company model of offsetting costs for sick people with the premiums paid by healthy people, the reason for increasing premiums. And many other people, neither young nor healthy, are also buying the cheapest policy they can find because they can’t afford the cost (and maybe can’t understand the details); for these folks, it is not the insurance companies that pay the financial price, but themselves, when they get hospitalized or otherwise need costly care and discover that their “insurance” is inadequate (the technical term here is “crap”).

And this is just the health insurance contribution to high health care cost. Also very important is the cost of the care itself, particularly high-tech, high-cost care, provided to many Americans (at least those with good insurance coverage). This is driven, at least currently, by the fact that in most places, where insurance companies pay providers by piecework (“fee-for-service”), high-cost is also high-profit for providers, both individual physicians and the large institutional providers (hospitals and health systems) that often employ them. This blog, and a variety of exposés in many news articles including in the Times (particularly the work of Elisabeth Rosenthal) have given example after example of such incentives driving both the kind of care delivered and the cost of that care. In the worst instances, this is the result of rapacious greed that provides unnecessary care at very high cost. In many other settings, the opportunity for profit subtly (I hope) tips the scales toward providing high-cost, high-profit services rather than just as good, or almost as good, alternatives. But there are even more insidious drivers of cost; these are in the “everyday tests”, such as those done for screening, that in themselves, one by one, don’t seem to be excessive but multiplied by the number of people receiving them cost a lot (and make a lot of money for providers). The practice of ordering such tests is often driven by advocacy groups, providers in certain specialties and relatively small numbers of people with a specific condition who think everyone needs to be tested for it.

A good example is screening for lipid disorders (basically, high cholesterol) in children. Yes, some children have a genetic disorder which means that they should be tested and treated, but the vast majority do not and screening them (barring a history of familial hyperlipidemia or very early heart attacks) should not be done. It is not recommended by either the US Preventive Services Task Force or the American Academy of Family Physicians (AAFP), nor by the UK National Screening Committee. This example is discussed in an outstanding editorial in JAMA Internal Medicine by Thomas B. Newman, Alan R. Schroeder, and Mark J. Pletcher published on August 9, 2016, titled “Lipid screening in children: Low-value care”, preceded by the tagline “Less is more.” The authors contrast the USPSTF and AAFP recommendations to those of the National Heart, Lung and Blood Institute of the NIH, endorsed by the American Academy of Pediatrics, which recommends it. The authors of the editorial demonstrate the amazing lack of cost-effectiveness for this screening test, and note that is only because USPSTF does not consider cost-effectiveness that it gave the test an “I” (insufficient evidence to recommend for or against”) and not a “D” (recommend against testing).

But the most important point made in the editorial is that our recommendations for testing – and how to spend our healthcare dollars – are individually focused, and virtually ignore (and thus dramatically underfund) those interventions in public health and the social determinants of health that would truly make a major difference in the health of millions of Americans. The authors say it extremely well:

Tackling major public health concerns such as climate change, poverty, obesity, and gun violence is likely to yield high-value solutions, and many advocate policy and community-level interventions that might achieve such solutions. Meanwhile, other segments of our health care establishment continue to try to solve health problems by doubling down on individual-level health care solutions that tend to be low in value...The need for clinicians and leaders to focus on sustainability and health care value has never been greater, and it is likely that policy and community-based interventions will get us there much more quickly than adding more clinic-based interventions that have low value and are wasteful of resources and clinicians’ time.


We need to take this advice to heart. It goes way beyond lipid screening in children. It means supporting interventions that actually  improve the health of the public on a large scale. And, as always, “support” is spelled M-O-N-E-Y.

Sunday, August 7, 2016

Health system woes, or whose benefit should we be focusing on anyway?

It’s not easy to be a big healthcare system these days, what with all the new rules and incentives for spending less money and providing less unnecessary care. Medicare is leading this charge, with a variety of efforts, mostly recently contained in the 2015 Medicare Access and CHIP Reauthorization Act, fondly known as MACRA. This law extends previous efforts by Medicare to encourage consolidation and “shared savings” (spend less and you get to keep some) through the creation of “alternative payment models” (APMs), most of which emphasize increasing prospective payment (paying in advance for a basket of services to be delivered to a population) rather than fee-for-service (paying for each service provided).

In some ways, and particularly in some places, such large health systems are well-positioned for these changes; because they are big and provide the whole range of healthcare services (or most of it), and because many of them employ physicians, they should be able to take advantage of the efficiencies of scale, as well as understand their comprehensive costs. Many of them are; Kaiser, especially on the West Coast, and other early-adopters of this comprehensive model. Other payers are following Medicare’s lead, such as Blue Cross/Blue Shield of Massachusetts.

Still, it’s hard to change your business model. When your health system has been designed for decades to maximize income from fee-for-service by hiring lots of specialists who provide services (often procedures) that bring in a lot of money and supplying them with the expensive facilities and equipment to do them, it is scary to think that this entire investment could move from being a profit center to a cost center, where each of these procedures just chips off money already received in capitation rather than generating new revenue. Plus APMs create incentives to spend less overall, and you have spent decades gearing up to spend more – with the expectation and assumption that reimbursement would more than cover this investment.

And if you are not on a coast, but in the part of the country where such changes are happening more slowly, and in fact are mostly still in the future and you’re still making money the old way, it is a very scary and risky proposition to change your business model completely. The analogy of when it is time to put your second foot in a canoe is an apt one. The dock is a stable place to be, comfortable and familiar, but the canoe can take you off to new, and maybe wonderful, places. But there is only a limited amount of time that you can keep one foot on the dock and one in the canoe before the canoe moves off and you end up falling in the lake.

One of the big concerns confronting such health systems is the degree to which they should invest in expanding primary care capacity. The argument for doing so, put forward by most consultants and experts, is that it ensures a patient base loyal to their system and referring in to their hospital(s) and specialists and providing a more comprehensive ability to manage the spectrum of care. The other option is to “double down” and be providers of only high-end, high-cost (and hopefully high-profit) care, with the assumption that the community’s primary and secondary care providers will see you as a beacon for their complex problems and refer their patients to you. This latter position is especially popular among academic medical centers, hospitals tied to a medical school and a faculty practice group, and is much closer to the advice given by the University Health Consortium, the organization of such hospitals.

Along with this is the question of how income might be distributed. Most of the incentives in MACRA and prospective payment are for primary care; in addition to direct reimbursements for primary care providers, the shared savings come from a higher percent of conditions being managed by primary care and not subspecialists, fewer hospitalizations resulting from greater continuity of care, and fewer referrals for imaging (x-rays and the like) of questionable necessity but easy availability (because the capacity for doing them has been overbuilt). Kocher and Chigurupati discuss these issues in their July 14 piece in the New England Journal of Medicine, “The Coming Battle over Shared Savings — Primary Care: Physicians versus Specialists”.[1] The main point of the piece is how specialty physicians will respond to their incomes decreasing – they suggest the options are defensive (fight it and keep doing what they are doing) or offensive (sell themselves as more able to contain costs especially for certain disease conditions). Of course, what works for some specialists may harm others; if, say, a pulmonologist caring for chronic obstructive lung disease is very efficient and their patients need less imaging and fewer admissions, it can hurt others.

The average American is not going to have great sympathy for loss of income for such specialists. The authors cite the mean income for primary care doctors as $195,000, about 4 times the average US household income, and average for specialists $284,000, significantly more but deceptive in that many specialist make 2, 3, or more times that. Thus a $35,000 reduction in income, which is what the authors use in their example, is likely to mostly concern these doctors. The authors also note that primary care physicians “…account directly for a small percentage of health care costs. Yet they substantially influence the total cost of care through referrals and directing of their patients’ subsequent care.” They are, or could be, cost effective, provided that there is not pressure from the system to increase referrals – something that has usually been the norm, and even touted by primary care physician groups who talk about “downstream revenue” generated.

Of course, nowhere in these discussions is the question of what is best for the health of the American people. Implicitly, MACRA and the ACA before it (with its creation of accountable care organizations or ACOs), are intended to increase both access to care and its quality (two legs of the “triple aim”), but arguably have been put forward by both the federal government (Medicare) and adopted by other insurers to achieve the third leg – lower cost. And for insurers, including Medicare, the concern is lower cost to them. The issues addressed heretofore in this piece and by Kocher and Chigurupati and by consultants such as the Advisory Board and organizations like UHS, are how healthcare providers (healthcare systems, academic and otherwise, physicians and other individual providers) can most effectively respond to keep from losing money, from having the cost savings for insurers come at a big cost to them.

The health of the people should be the measure. And it needs to be the health of all the people, the poorest and sickest and most vulnerable and most easily left off, not just the high-yield, high-profit generally healthy, well-insured person who needs a single procedure and has no complicating conditions. Indirect incentives that seek to modify behavior by not demanding that all necessary health needs be provided to all people and no unnecessary care be provided to anyone are all bound to fail. Societies are, or should be judged, not by how they care for their most privileged but by how they care for their most needy (see the FDR epigram at the top right of this page).

And nowhere is this more true than when it comes to the people’s health.






[1] Kocher R, Chigurupati A, The Coming Battle over Shared Savings — Primary Care Physicians versus Specialists, NEJM 375(2):104-106, July 14, 2016

Sunday, July 24, 2016

President Obama on the ACA and next steps: what do we really need to improve our health?

On July 16, 2016, the JAMA took the unusual step of publishing an article by the President of the United States. “United States Health Care Reform: Progress to date and next steps”, by Barack Obama, JD, is by definition “political” and a defense of his administration’s health care policy and achievements, but it is also a well-documented piece of policy research. In it, the President details the improvements in both health care access and actual health status achieved by Americans since the passage (in 2010) and largely-full implementation (in 2014) of the Affordable Care Act (“Obamacare”), and provides evidence to support the central role of the ACA in creating those positive changes. He particularly notes that this improvement is not simply a result of improvement in the economy recovering from the Great Recession of 2008; this is supported by the fact that many indicators of breadth of coverage (what percent of people had health insurance), quality of coverage (how good was it), cost of coverage, and quality of care were getting worse for a long time before 2008.

The President provides data to demonstrate the increase in the number of insured people, especially in the 31 states that have expanded Medicaid. But coverage has expanded even in the others, due mainly to the availability of coverage on the Health Insurance Exchanges, the decrease in cost despite dire predictions for rate increases by insurers, the move (seen variably across the country) away from fee-for-service and towards comprehensive care reimbursement for health care providers, the decrease in the Medicare drug coverage (Part D) “donut hole”, the improvement in health status and quality outcomes from greater tobacco control, and many other positive results of ACA.

President Obama also bemoans the changes that the ACA was unable to achieve because of Republican opposition (while this could be perceived as partisan, it is fact, and fact strongly acknowledged by the Republican Party which has voted to repeal ACA dozens of times). He ends with a lengthy plan for the future, a future in which he will not be President, and what yet needs to happen to improve health and health care in the US. This includes the expansion of Medicaid to all 50 states, increasing competition in the marketplace so all Americans have access to a choice of plans, and limiting the control of special interests, especially drug companies:
The second lesson is that special interests pose a continued obstacle to change. We worked successfully with some health care organizations and groups, such as major hospital associations, to redirect excessive Medicare payments to federal subsidies for the uninsured. Yet others, like the pharmaceutical industry, oppose any change to drug pricing, no matter how justifiable and modest, because they believe it threatens their profits.

While the President does not call out the insurance industry as he does the pharmaceutical industry, he renews the call for a “public option” to compete with private insurance companies. He stops short of supporting a single-payer system, invoking “pragmatism” (defined as “we have to find something palatable to those who oppose change because they are doing so well now") “Simpler  approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all.”

When I am confronted by this pragmatism argument, I am somewhat sympathetic. Given the opposition both from Republicans in Congress and entrenched, wealthy and powerful industries (not only pharmaceutical and insurance, but also providers), the passage and implementation of the ACA was a formidable victory. All of the data cited by the President is true, and almost all of it is good. More people ARE covered, the quality of their coverage has improved, the cost to the system (and in most cases to individuals) has gone down, and there have been positive developments in the areas of quality improvement, fraud, and value, and moves away from fee-for-service to comprehensive care. The President led this effort and has the right to be proud, but the holes in the health system that remain are still very large.

For many people, good health insurance coverage is unaffordable; they buy policies on the exchanges that do not cover their needs when they get sick. For many others, there is still no coverage – most of those below 137% of poverty in states that have not expanded Medicaid, those without legal documentation, and some others. The powerful provider, insurance, and pharmaceutical industries have an outsized voice in determining health policy. The disorganized and fragmented nature of our health system and piecemeal nature of coverage and incentives for coordination of care, even with the ACA, lend themselves to healthcare industries (including doctors and hospitals) finding “work-arounds”, or “gaming the system”, for their self-interest.

The key, essential issue in considering past, present and future healthcare and health insurance reform is whether the goal is to maximize the health of the American people or something else (mainly, as I have suggested before, industry profit). There is a cohort of politicians, pundits, and commentators, who are ideological devotees of the unfettered market (and of Ayn Rand novels) who actually are against maximizing health for all; they may be unusually influential, but they are few. There is a larger group, the corporations who are believers only in their making profit, which means the free market only when it advantages them and government support of their industries when that advantages them. And, of course, there are the many politicians and pundits who are on their payrolls, direct or indirect (e.g., campaign contributions). Their role has always been powerful and is greater since the Citizens United Supreme Court decision that said corporations are people and money is speech.

But the largest group is regular people, trying to get by and trying to make sense out of these purposely-obfuscated policy issues. They include folks with and without insurance, like those who are interviewed by Dr. Paul Gordon on his Bike Listening Tour across America, who say things like “Obama Care helped the poor, but now the working class is struggling”. People who are trying to figure out what kind of insurance to purchase on an exchange, and very often opt for the plan with the lowest premiums that will take the least out of their monthly income so that they have more for food, housing, and other necessities as well as some entertainment or relative “luxuries”. And who only find out when they get sick how bad that coverage is, and how much debt they are going to be in, because they lost that gamble.

The reason for this is that, as I have often discussed (perhaps first in “Red, Blue, and Purple: The Math of Health Care Spending”, October 20, 2009), most people are, at any given time, not sick. Most people, especially younger people, will not be sick at any time for the whole year, or a number of years. Thus spending high monthly premiums for good (or better) coverage seems like a burden, and it is. Until, of course, they get sick. Until they get cancer, or get in a car wreck, or have a premature baby, or find their hitherto pretty-well-controlled chronic diseases spiraling downhill. Advocates of consumer choice may say “tough luck, that’s the market”, but this is people’s health. Consistently, surveys of the American (and most other) people find that the vast majority want everyone to have access to high-quality care when they need it – and even want it for “other people” that they don’t know. But the solution, even with ACA, forces them to gamble on their future health while ensuring that insurers and drug makers and the biggest healthcare providers make money. It is a plan to create fear and anxiety and insecurity, despite the accuracy of the overall improved health, and financial, picture that the President paints in his article.

There is a solution. It is indeed a single-payer system. One where everyone is covered, and pays what their incomes can reasonably afford, where the whole society is the risk pool rather than the individual, and people don’t have to gamble with their future health. We could have that, and most of us would relish it (like the vast majority of citizens of other developed countries who have it), and it would provide our only reasonable hope of truly controlling cost and improving quality.

But we are going to have to fight for it. Power does not relinquish control and money easily.

President Obama on the ACA and next steps: what do we really need to improve our health?

On July 16, 2016, the JAMA took the unusual step of publishing an article by the President of the United States. “United States Health Care Reform: Progress to date and next steps”, by Barack Obama, JD, is by definition “political” and a defense of his administration’s health care policy and achievements, but it is also a well-documented piece of policy research. In it, the President details the improvements in both health care access and actual health status achieved by Americans since the passage (in 2010) and largely-full implementation (in 2014) of the Affordable Care Act (“Obamacare”), and provides evidence to support the central role of the ACA in creating those positive changes. He particularly notes that this improvement is not simply a result of improvement in the economy recovering from the Great Recession of 2008; this is supported by the fact that many indicators of breadth of coverage (what percent of people had health insurance), quality of coverage (how good was it), cost of coverage, and quality of care were getting worse for a long time before 2008.

The President provides data to demonstrate the increase in the number of insured people, especially in the 31 states that have expanded Medicaid. But coverage has expanded even in the others, due mainly to the availability of coverage on the Health Insurance Exchanges, the decrease in cost despite dire predictions for rate increases by insurers, the move (seen variably across the country) away from fee-for-service and towards comprehensive care reimbursement for health care providers, the decrease in the Medicare drug coverage (Part D) “donut hole”, the improvement in health status and quality outcomes from greater tobacco control, and many other positive results of ACA.

President Obama also bemoans the changes that the ACA was unable to achieve because of Republican opposition (while this could be perceived as partisan, it is fact, and fact strongly acknowledged by the Republican Party which has voted to repeal ACA dozens of times). He ends with a lengthy plan for the future, a future in which he will not be President, and what yet needs to happen to improve health and health care in the US. This includes the expansion of Medicaid to all 50 states, increasing competition in the marketplace so all Americans have access to a choice of plans, and limiting the control of special interests, especially drug companies:
The second lesson is that special interests pose a continued obstacle to change. We worked successfully with some health care organizations and groups, such as major hospital associations, to redirect excessive Medicare payments to federal subsidies for the uninsured. Yet others, like the pharmaceutical industry, oppose any change to drug pricing, no matter how justifiable and modest, because they believe it threatens their profits.

While the President does not call out the insurance industry as he does the pharmaceutical industry, he renews the call for a “public option” to compete with private insurance companies. He stops short of supporting a single-payer system, invoking “pragmatism” (defined as “we have to find something palatable to those who oppose change because they are doing so well now) “Simpler  approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all.”

When I am confronted by this pragmatism argument, I am somewhat sympathetic. Given the opposition both from Republicans in Congress and entrenched, wealthy and powerful industries (not only pharmaceutical and insurance, but also providers), the passage and implementation of the ACA was a formidable victory. All of the data cited by the President is true, and almost all of it is good. More people ARE covered, the quality of their coverage has improved, the cost to the system (and in most cases to individuals) has gone down, and there have been positive developments in the areas of quality improvement, fraud, value, and moves away from fee-for-service to comprehensive care. The President led this effort and has the right to be proud, but the holes in the health system that remain are still very large.

For many people, good health insurance coverage is unaffordable; they buy policies on the exchanges that do not cover their needs when they get sick. For many others, there is still no coverage – most of those below 137% of poverty in states that have not expanded Medicaid, those without legal documentation, and some others. The powerful provider, insurance, and pharmaceutical industries have an outsized voice in determining health policy. The disorganized and fragmented nature of our health system and piecemeal nature of coverage and incentives for coordination of care, even with the ACA, lend themselves to healthcare industries (including doctors and hospitals) finding “work-arounds”, or “gaming the system”, for their self-interest.

The key, essential issue in considering past, present and future healthcare and health insurance reform is whether the goal is to maximize the health of the American people or something else (mainly, as I have suggested before, industry profit). There is a cohort of politicians, pundits, and commentators, who are ideological devotees of the unfettered market (and of Ayn Rand novels) who actually are against maximizing health for all; they may be unusually influential, but they are few. There is a larger group, the corporations who are believers only in their making profit, which means the free market only when it advantages them and government support of their industries when that advantages them. And, of course, there are the many politicians and pundits who are on their payrolls, direct or indirect (e.g., campaign contributions). Their role has always been powerful and is greater since the Citizens United Supreme Court decision that said corporations are people and money is speech.

But the largest group is regular people, trying to get by and trying to make sense out of these purposely-obfuscated policy issues. They include those with and without insurance, like those who are interviewed by Dr. Paul Gordon on his Bike Listening Tour across America, who say things like “Obama Care helped the poor, but now the working class is struggling”. People who are trying to figure out what kind of insurance to purchase on an exchange, and very often opt for the plan with the lowest premiums that will take the least out of their monthly income so that they have more for food, housing, and other necessities as well as some entertainment or relative “luxuries”. And who only find out when they get sick how bad that coverage is, and how much debt they are going to be in, because they lost that gamble.

The reason for this is that, as I have often discussed (perhaps first in “Red, Blue, and Purple: The Math of Health Care Spending”, October 20, 2009), most people are, at any given time, not sick. Most people, especially younger people, will not be sick at any time for the whole year, or a number of years. Thus spending high monthly premiums for good (or better) coverage seems like a burden, and it is. Until, of course, they get sick. Until they get cancer, or get in a car wreck, or have a premature baby, or find their hitherto pretty-well-controlled chronic diseases spiraling downhill. Advocates of consumer choice may say “tough luck, that’s the market”, but this is people’s health. Consistently, surveys of the American (and most other) people find that the vast majority want everyone to have access to high-quality care when they need it – and even want it for “other people” that they don’t know. But the solution, even with ACA, forces them to gamble on their future health while ensuring that insurers and drug makers and the biggest healthcare providers make money. It is a plan to create fear and anxiety and insecurity, despite the accuracy of the overall improved health, and financial, picture that the President paints in his article.

There is a solution. It is indeed a single-payer system. One where everyone is covered, and pays what their incomes can reasonably afford, where the whole society is the risk pool rather than the individual, and people don’t have to gamble with their future health. We could have that, and most of us would relish it (like the vast majority of citizens of other developed countries who have it), and it would provide our only reasonable hope of truly controlling cost and improving quality.

But we are going to have to fight for it. Power does not relinquish control and money easily.

Saturday, July 9, 2016

Is the US health system about "health" or "profit"?

There are two forces at work in the system of health care delivery in the US which are essentially incompatible. One, which might be called the “health” approach, is focused on improving the health of the people. This could, should, and does include efforts to control costs, because this makes it possible to maximize the number of people who can benefit. This approach, which is codified in almost all international and most national health goals, seeks to use whatever resources exist (financial, structural, institutional, and human) to have the greatest health benefit for the most people. The World Health Organization (WHO) defines health as “…a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity”. A cornerstone of this is understanding that public health measures, which benefits populations, are generally of greater urgency and wider benefit than individual medical interventions.

While the need for a public health approach is perhaps more obvious for poor countries which lack, for example, clean water, it is no less important for wealthy nations such as the US; we just don’t usually think of the fact that we usually have clean water as a “health benefit”. As with many things, we are less likely to notice things that are good than those that are problems, and we relegate them to the background of our consciousness. We don’t wake up each morning saying “I’m glad I don’t have cholera because I have access to clean water!” Indeed, it is only when we travel abroad and have to use only bottled water, or when a crisis like the lead pollution of the water supply in Flint, MI grabs our attention, that we give this any thought at all. The result is that public health efforts pay the price; less than 6% of our US health expenditures are on public health, with the bulk spent on direct individual medical care, and the profit that insurers, providers and middlemen skim. In addition, our country spends much less, proportionally, on efforts that impact upon the social determinants of health, those characteristics of people’s lives (housing, food, safety, education) that affect people’s lives much more than health care.

Still, when we – or those we love – are sick and in need of medical care we are grateful that it is there. But for many or most of us, it is often hard to pay for it. When we cannot, when the incredible amount of money we have to pay for medical care (often even when we are insured) threatens our families’ well-being, our ability to pay for shelter, food, education, it is a different story. And we know that access to and use of such individual medical care is neither randomly distributed among the American people nor allocated based on the greatest need; no one is shocked to discover that rich people get more medical services. (What may be shocking to learn, however, is that this does not always lead to better health. Services are often delivered -- to those who can pay -- whether they are really necessary or not, and sometimes this leads to complications and worse health!)

It is in this context that a new study in the journal Health Affairs by Dickman, et al., “Health spending for low-, middle-, and high-income Americans, 1963–2012[1] is very revealing. The authors provide data on both the amount health spending among the American people over that 50 years, and how it has been distributed by quintiles of income. To summarize the findings: in 1963, before Medicare and Medicaid, spending was heavily skewed toward wealthier populations, but after those programs were implemented spending became more equal among the quintiles (although, adjusted for disease burden, which is higher in low-income populations, it was still not equitable). Then, over the last decade studied, the spending gaps returned, with much more being spent on the upper than lower quintiles (despite the generally better hea
lth of those who are better off), for the population under 65 (presumably because those over 65 all have Medicare). The authors state that “The rising income-based disparity in spending suggests a shift from allocation of health care according to need to allocation by willingness (and ability) to pay,” and it clearly does. They add that “It is unclear whether this shift arises from the underuse of needed care among the poor or overuse of unnecessary care by the wealthy,” but I am going to go out on a limb and suggest that it is both.

The reason for this is the prominence of the second force at work in health care systems (you were wondering if I would ever get to this!), which I will call the “profit” approach. This approach looks at health care as a commodity to be purchased and marketed. Unsurprisingly, those taking this approach choose to preferentially market both certain services over others (those for which the reimbursement is much higher than the cost of providing them, called even in non-profit institutions the “profit margin”), and market them to certain populations over others (those with money or insurance, and relatively good health so there are less likely to be costly complications). While this approach tends to favor the wealthy, leading to the data presented by Dickman et al., it also favors the less sick. Since older people tend to be sicker than younger (and are covered by Medicare, which pays less well than private insurance), this may in part explain why the quintile-of-income differences are less for the elderly. In summary, health care providers (mainly hospitals and physicians, but also others), want to market the services on which they can make the most money to the people who, arguably, need them the least. You can have greater difficulty accessing care because you are the wrong person (too poor, too sick) or have the wrong condition (one for which treatment has a low profit margin).

Dickman and colleagues present their data fairly dispassionately, without hammering home the obvious conclusion that it reflects a society more driven by the “profit” than the “health” approach to health care delivery. Essentially, it is a story of half-hearted (called “practical” by its advocates) efforts to introduce greater equity into our health care system being overcome by the tactics that smart and well-paid insurers and providers employ to “game the system”. In his regularly outstanding “Quote of the Day” commentary on the Dickman article, titled “Redistribution of health care from the poor to the wealthy”, Dr. Don McCanne takes the discussion a little farther, noting that a single-payer health care system, in which everyone had the same coverage and which could regulate the marketplace, decreasing the profit incentive, would improve the population’s health.

When I wrote to Dr. McCanne that the effort to find ways to preferentially deliver high-profit care to well-insured high-income folks rather than those who needed it most upset me (OK, I said it made me want to puke), he wisely responded that it “seems like our health care system has excelled at creating ‘work arounds’ for those measures that health care justice advocates keep attempting to advance.” Usually when people use the term “work arounds” they are referring to finding ways to do what needs to be done in the face of bureaucracy or inefficiency. In this case, however, it means propagating inequity in order to make money.

The two different approaches, putting “health” or “profit” as the primary impetus to our health care system, get different results. Personally, I favor “health”. Sadly, though, the other is often more prominent.




[1] Dickman SL, Woolhandler S, Bor J, McCormick D, Bor DH, Himmelstein DU, “Health Spending For Low-, Middle-, And High-Income Americans, 1963–2012”, Health Affairs 35(7):1189

Sunday, June 26, 2016

Private Profit and the Public's Health: Which is More Important?

Health care is pretty complicated, and insurance coverage is even harder to understand.This is the message that comes through clearly from the interviews being done by Dr. Paul Gordon and recorded on his blog, https://bikelisteningtour.wordpress.com. Dr. Gordon is taking a unique sabbatical, riding his bicycle across the country from Washington (DC) to Washington (state), interviewing regular people, mostly in cafés and such, about their take on Obamacare. 

The economic status of these people varies from poor to pretty well-off (but none really wealthy), from well insured to uninsured. Their political perspectives range from “everyone should be covered” to “benefits just make people lazy”. Three recent quotes: ‘People use Medicaid as a crutch’, ‘You can’t penalize someone for not having health insurance when it’s so expensive and the economy is doing so poorly’, ‘Here’s my take on it – everyone should have insurance’. What they share with each other, and with most of us, is a general lack of understanding of how Obamacare works (or doesn’t) and why. The flaws in Obamacare are the result of the political tradeoffs that allowed insurance companies to continue to have control and make huge profits, but this is often not clear to most people.

Here is something that is easy to understand, however: when you call “911” as you have been trained to do in an emergency, and they don’t come. Or they don’t come for a long time. Or they come with inadequate supplies. Who do you get angry with when you, or your loved one, dies? The government? They are surely in part at fault, even though they probably contracted the service out, to save money, probably because voters want to pay less tax. But there is another reason, explained in an excellent special article in the New York Times, When you dial 911 and Wall St. answers” (June 26, 2016). The piece, by Danielle Ivory, Ben Protess, and Kitty Bennett, details how many city services, including ambulance services, are provided by companies that are owned by “private equity firms”. These are companies whose investment capital comes from wealthy individuals and particularly from pension funds, unlike banks whose money comes from depositors. They are even less regulated than banks, and thus more able to pursue their core mission, making profit:
Unlike other for-profit companies, which often have years of experience making a product or offering a service, private equity is primarily skilled in making money. And in many of these businesses, The Times found, private equity firms applied a sophisticated moneymaking playbook: a mix of cost cuts, price increases, lobbying and litigation.

Whoa. This is starting to get complicated again. Banks vs. “private equity” vs. just plain old for-profit businesses? They are really just different forms of for-profit, and provide a stepwise progression, from public services operated by government for the benefit of the people, to private companies that are contracted by government to do a service but might care about doing it well, to having those companies owned by banks who really just want to make a profit, to having them owned by private equity companies who care about nothing but making a profit. The photo accompanying the Times article is of Lynn Tilton, owner of Patriarch Partners (an ironic name, given that she is a woman), which owned the emergency services company TransCare that served many East Coast communities. TransCare went bankrupt, leaving those communities without emergency medical services. Ms. Tilton’s picture is accompanied by the quote from her reality television stint “It’s only men I strip and flip.” As a poster child, she could become the Martin Shkreli of ripping off necessary public services the way he was of ripping off consumers of life-saving drugs.

The business of America,” Calvin Coolidge is often paraphrased as saying, “is business.” This perspective, that it is not about doing things that are best for the American people, is based in a belief that capitalism – “business” – will, through the magic of the market, eventually meet those needs. OK, maybe not those of people at the margins, people too poor to buy, so maybe we need a safety net. But most people. A similar statement appeared today in the print edition of the Kansas City Star from KC Mayor Sly James, discussing the controversy over replacing the terminals at Kansas City International Airport with one big, new terminal. Surveys consistently show that the large majority of Kansas Citians (84% in this article, “Regarding KCI’s future, city ponders a new flight path”) like the current arrangement, with short security lines and easy access in and out from one story terminals, but the airlines and big businesses do not. In the large-type quote accompanying his picture in the print edition (but, along with the photo, left out of the online edition), Mayor James said “The people of this city need to be convinced of what I believe is a basic reality, that this airport is about a lot more than ‘how fast can you get out of your car and get to your gate?’” Right. Business interests first. Take that, 84% of Kansas Citians!

Because they most obviously involve life and death, emergency medical services and firefighting (yes, firefighting too has been contracted out to companies owned by private equity firms!) get the greatest play in the Times article, but many other services (like water!) are in the same situation: controlled by companies whose goal is to make a profit rather than to provide effective service for people. This is what happens when municipalities are starved of funds because people vote to cut taxes.

Whether it is health insurance or emergency medical services or municipal water, the system becomes very complicated and hard to understand when it is trying to meet conflicting agendas. When the need for people to receive critical, health-producing service (fire and police protection, clean water, garbage collection, ambulances) is compromised by provisions built into contracts (or the law) for companies (insurance companies, banks, private equity firms) to make profit. I guess it is fine if these services can be effectively and reliably provided by for-profit companies, but when their pursuit of profit through “a mix of cost cuts, price increases, lobbying and litigation” conflict with actually providing services, there is a big problem. In the case of emergency medical services, the problem was that “…many newly insured Americans turned out to be on Medicaid, according to the Kaiser Family Foundation. Medicaid restricts some of the most aggressive billing tactics.”

A variety of other difficult to understand strategies are also employed at the macro level to place the interests of wealthy corporations above those of the people. These include the unlimited political contributions permitted by the Supreme Court’s Citizen’s United decision, incredible gerrymandering of congressional districts so that we have states where the majority of voters vote for Democrats but most districts are solidly Republican (see the New York Times Book Review Where votes go to die”, June 26, 2016), and the provisions of the Trans-Pacific Partnership (TPP) that prevent national governments from regulating multi-national corporations.

We could solve this if there was a single, over-arching principle, always codified into law, that the interests of the people as a whole always trumps the profit potential of corporations. I vote for that.

Saturday, June 18, 2016

Serving others or self-serving? All generations have both kinds of people

The current generation of young adults, commonly called “millennials”, is often criticized for being self-centered, “spoiled”, the product of “helicopter parents”, showing the signs of having grown up in a culture where “everyone was a winner”. On the other hand, studies also show them to be the most socially conscious, idealistic, and optimistic generation in a long time (despite the evidence that things are not going so well for them, and little reason to think they’ll improve soon). They, as a group, have become politically involved, shocking the established political order with their enthusiasm for the presidential candidacy of an old Jewish socialist from New York City via Vermont, making Sen. Sanders a viable contender

This generation includes most medical students, as well as most residents, so I get to see them a lot. I can say that there are many in this group who are committed, hard-working, idealistic and self-sacrificing. And there are a lot who are not. In short, they are people. Yes, there are those who, for whatever reasons in their personality or upbringing, are “all about me”, argue their grades, have no time for giving to others, seem to have no sense of the collective good, and sometimes make me wonder why they want to be doctors. But you know what? We had those people back in my generation. I was in college in the 1960s, and not pre-med, and there were pre-meds around who had the reputation as narrow, grade-grubbing, and not socially involved. There were also pre-meds who were very involved in the major struggles of the day, anti-war, civil rights, racism. I was in a post-baccalaureate premedical program in the early 1970s, when the Vietnam War, with its extension into Cambodia, was peaking. Many of my fellow students, going to night classes after working all day, could not be seen as privileged, but many, including veterans, were active in those movements. And many were not.

I was in medical school in the mid-1970s, and there were many who were all about themselves and their futures. And many whose futures turned out to be very distinguished and productive. There was also a lot of social involvement. Chicago had a number of medical schools, and students knew each other across schools, even sometimes roomed together. When a physician researcher at one school was discovered to be doing research that targeted poor black women, students there protested; when he planned to leave for a job at another school, students there made an issue of it. I was involved in some of these struggles, and some in medical school. When, at a forum of the whole school to discuss the impact of our 3-year curriculum, the Chairman of Surgery announced he thought our 3rd-year medical students were ill-prepared because he had heard some of them asking nurses for advice on skills such as starting an IV (“in my day, we would never have asked nurses for advice!”), I stood up and spoke on how we were glad to not be like that, that we wanted to be able to learn from anyone. Maybe not my smartest hour (the chair of another department tried to get my year-old grade in his clerkship changed), but I bring it up because there appeared to be generational differences then, as now. I am not an expert on generational trends (for this I recommend the outstanding book by Paul Taylor, “The Next America”[1]), but looking back I also remember senior faculty who were very supportive of progressive efforts; I think that then, as now, it is people who are different, not really generations.

Our current and recent medical students at KU created and continue to staff and work hard for the Jaydoc Student-run Free Clinic, which provides care for folks with little or no money or insurance in the evenings; succeeding classes, if not generations, have expanded the scope and impact of the clinic. Students frequently volunteer for, and self-fund, trips to provide care in poorer countries – and even sometimes in our own, for those left out of our non-system of health care. (These trips are generically called “mission trips” even when there is no explicit evangelical religious component; however, many are indeed organized by religious organizations, and personed by students, doctors and others motivated by their religious beliefs. I may not be a big fan of religious evangelism, but I am a big fan of people doing good work!) Many of our students are active in the community, in local as well as national programs. They regularly volunteer for the school-based health clinic at a local high school, named the Bulldoc for the school’s teams, the Bulldogs, by the high school’s students (post-milennials?). The clinic itself was created by a collaboration between the school, school district, community groups (particularly pastors), medical school faculty, and students – in particular one medical student, without whose efforts it would never have come to pass.

When I was young, and even in earlier generations, many students, like other people, worked for the interests of others as well as themselves. Many do so now. Others, it is sad (to me) to say, are indeed self-absorbed, and all about themselves. Like other people, like doctors – and nurses and accountants and steelworkers and retail clerks and unemployed people. We can only laud those whose work demonstrates the “better angels” of human nature, and hope that narrow, selfish behaviors will extinguish.

To those who are in medical school, I want to say “No, it is not about you. It is about the people for whom you will be caring. And let’s not forget what ‘caring’ means.” Sometimes I actually do. Maybe we should all say, or at least think, that more often.



[1] Taylor, P and the Pew Research Center, “The Next America: Boomers, Millennials, and the Looming Generational Showdown”, 2014.

Sunday, May 29, 2016

The US health and social service system is evil

I have often written about how our health system is “deeply flawed”, but I realize that there are many ways in which this is a grand understatement. I initially intended to call this piece “health insurance companies are evil”, but realized that this singled out but one player. I mean, insurance companies are at least as evil as other parts of the health and social services sector, but naming only one part both does a disservice to that part, which is acting rationally in relationship to the other aspects of the system, and tends to forgive the others.

The thing wrong with our health system is that it is a mess; there are dozens or hundreds of ways to have health insurance coverage, or not, and each costs a different amount and covers different conditions, for different percentages, with different amounts of coinsurance and co-payment and deductibles. A single-payer health system, where everyone is covered with the same benefits for the same care (all that is needed, none that is not) and payments tiered to income, is the only rational and effective way to make sure that we have the possibility of quality health care. There can be no quality without equity. While I will not spend more time here making this case, because I and others have previously done so extensively, I will refer to it.

What is evil is how the system affects our actual people. However, people are not really ever seriously considered in “health reform” (or social service “reform”). Yes, people’s suffering sometimes gets mentioned by political candidates, who note that some people are paying too much or are not getting care. Indeed, this has been a big theme of Republican candidates who are critical of Obamacare, but whose only plans are ones which will make it a lot worse for most people. Actually making the system work for people is never really on the table, because when the political negotiations begin, the big players (insurance companies, providers, drug companies, device manufacturers, etc.) enter the picture.

Let’s get right down to it: people in the US, even those who are citizens, just do not get the coverage and services to which they are fully entitled, not to mention the coverage and services that they actually need. You have to sign up for Medicare, pay for Part B (which is what covers everything except inpatient hospitalization, including doctors’ fees), choose and pay for a Part D plan. If you are lucky enough to be able to afford one, you have to look through a maze of possible Medicare supplement plans and hope you chose correctly, given the multiple variables of your health status, the benefits profile, where you live, your actuarial as well as self-perceived probability of getting ill, and what you can afford. Even Social Security, a benefit that you have paid into for your entire working life, requires you to sign up and show you are eligible. This is nonsense; there is no reason it should be this way. We start with a non-system that does not cover everyone, provides inadequate coverage for those who do have it, and makes it difficult to sign up, presenting numerous obstacles which allow people to fall through the cracks.

Actually, this is more than nonsense; to the extent that people pay the price of inability to navigate the system with their health, it is evil. It would work, and be much simpler, if everyone, when they retire, got Medicare. And if Medicare covered everything for everyone wherever they live. Why not just make sure everyone gets Social Security? Why make it the responsibility of the person to demonstrate that they not only are truly eligible but that they can get through a jungle of options, often confusingly computer based, when they are getting to the end of their careers? Of course, if we had a single payer system, everyone would be in and there would be no change when you retired or became 65; you’d already be in a system in which everything you need and nothing you don’t need is fully covered.

Actually, in a good system you’d be better than “fully covered”. You’d be covered appropriately; you would, whoever you are, get the care that you need, but you would not be eligible for coverage for things that you don’t. We would have a health system that provided necessary, appropriate, and proven diagnosis and treatment for people, rather than emphasizing the provision of services which were most profitable to the providers. Insurers would not do their best to risk-select, would not be able to charge more for some people than others (and they can under Obamacare; they have to cover you even with a pre-existing condition, but can charge more), and would not even have to be for-profit. I favor a single-payer health care system such as Canada’s, a (fully-funded) Medicare for all, as does Sen. Sanders. But there are other reasonable alternatives; Switzerland, for example, has, instead of a single payer, multiple insurance companies. But these companies have to cover everyone, provide the same benefits, charge the same price, and be non-profit.

Critics of Sen. Sanders often say that a Medicare-for-All system would bankrupt us. This is also nonsense.  It presumes the built-in profit for insurance companies. It presumes that we would continue to pay the most of the most complex and high-tech procedures, and let providers (via the complex system of the RUC --  Changes in the RUC: None…How come we let a bunch of self-interested doctors decide what they get paid?, July 21, 2013, which essentially sets the Medicare rates on which all other payments are based) set the rates for their own procedures. The evidence is in every other wealthy country, all of which spend much, much less on health care and have much, much better outcomes. They also provide much better social services, not only for the needy and the poor, but for everyone. Retirees get their pensions. And they keep their health care.

The system works in these other countries; that is, if your interest is in ensuring that everyone gets the health care they need, the pension benefits to which they are entitled. If your interest is in maximizing the income of (some) providers and the profit for insurance and drug companies, then they don’t work as well. So I guess our system is not necessarily evil, it depends upon your values.


But, then, I would argue that the values on which the system is de facto based, though, are evil ones.

Friday, May 13, 2016

Good Enough for Government Work: Quality, Cost, and Gaming the System

The entire text of the "Good Enough for Government Work: Quality, Cost, and Gaming the System", the 23rd Odegaard Lecture from the 27th Primary Health Care Acces Conference, is available now as a Google Doc at this link: https://docs.google.com/document/d/17oc3H5qHxA8eoYEwiQ5s5hUulvzo1JaSWldsu41nSDU/edit

The link will continue to be available on the right side of this blog page.

Sunday, May 1, 2016

Good enough for government work: Quality, Cost, and Gaming the System (Part 4 of 4)

This is the fourth and final part of the 23rd Charles Odegaard Lecture, "Good enough for government work:Quality, cost and gaming the system. I will put the entire talk up as an attachment soon.

Is this really true? Aren’t some of our costs “our fault”, or at least “their fault”, that is other people? What about those folks who are “gaming the system”, by holding out on buying insurance until they get sick? Aren’t they driving up costs? Insurers like Aetna and Anthem make the accusation that people are misusing Special Enrollment Periods (SEPs) for this purpose. This is debunked by the evidence, cited by Michael Hiltzik of the Los Angeles Times, but even if they were, they’re poor people trying to get by! Wondering if they can put off buying health insurance so that they can pay the rent! Who is really in a position to develop and implement strategies to “game the system”? 


Unsurprisingly, as Hiltzik also reports, it is the insurance companies (as well as big health system providers) who are masters of these strategies. Besides, if we have concern about “buying to use” behavior, the best answer is to get rid of the jumble of insurance companies and enrollment periods and have one national health insurance plan that has, in the words of the recently deceased Quentin Young, “everybody in, nobody out”.
The most amazing thing about all of this, the way in which the system is gamed, is the way it transfers public money intended to provide healthcare for people into private pockets far in excess of the cost of providing that care. Himmelstein and Woolhandler provide us with data that shows that we already pay for a national health system, with over 50% of “health” costs being borne by government, far over 60% if we count the loss of revenue from employer contributions to insurance being tax deductible, but we still don’t come close to covering everyone, because our system is so inefficient, and so much boodle is being raked off.
Nowadays, when we hear the phrase “good enough for government work”, we tend to think of something that is poor quality, or only just meets the minimum standards set by government. The Urban Dictionary defines the phrase as “Probably not the best, but what the hell, at least we got the job done to minimally acceptable standards.” And, yet, when this phrase first came about it was a compliment; it meant that the government set minimum standards of quality that had to be met, and if you had someone (say a contractor) doing work that was “good enough for the government” it meant that it met those standards of quality, that they weren’t ripping you off by doing shoddy work. What we have now is our publicly-funded health system being cannibalized by profiteers, and enabled by a government that often seems to care more about cost than quality.

Charles Odegaard, the medieval historian and former University of Washington president after whom this lectureship is named was, and I quote from the Coastal Research website, “an impassioned proponent of the idea that every school within a university should be engaged in the advancement of society in the communities and regions that surrounded it. As a result of Dr Odegaard’s leadership, UW became a leader in the decentralization of medical education, including the unprecedented commitment to training physicians from and in the surrounding states of Alaska, Montana, Idaho and Wyoming.” [1]

There are great positives to decentralization, whether for education of doctors or for administration of social programs. It can decrease the cost of large, unresponsive central bureaucracies, and put control in local areas that are more knowledgeable about and responsive to the needs of their populations. There are, also, risks. Sometimes control at the local level is more about maintaining the power of one sector of the community at the expense of others; one just has to look at localities and states in the South in the Civil Rights era defying integration (or, perhaps, many states and localities more recently). More to the point of this talk, there is the risk that smaller, more decentralized activities can be more easily underfunded. Think about the deinstitutionalization of people with severe and persistent mental illness toward the end of the 20th century. When I was in medical school, I was taught that 1 in 3 hospital beds was occupied by someone with schizophrenia. That is certainly not true today, because of deinstitutionalization. And so we do not have the horror of people with mental illness warehoused in enormous facilities, but we also do not have anywhere near the degree of community-based mental health services that would allow them to live successfully in the community. We have people with mental illness living on heating grates and under bridges and, according to a June 2015 article by Matt Ford in The Atlantic, our nation’s largest mental hospital is a jail (absolutely believable to anyone who has ever worked in one).[2]. It is only ok to decentralize when we can assure that necessary programs will be maintained and will be well funded. We have long since privatized the health care in most prisons, and there is a (to me) disturbing movement to privatizing prisons altogether. Cost, again, trumps quality. Especially, of course, if the prisoners are mostly “not us”. Seeing a trend?

So…is it possible to have quality and still reduce costs? Of course. Our system is not only financially inefficient, and the victim of massive skimming by the private companies, but it is one which is geared to care for individual patients rather than populations; where there is not rational allocation of resources to the areas where they will do the most good, but rather decisions made for each individual, often where the provider has a financial incentive to do more. Oregon’s CCOs, a kind of state-sponsored but decentralized (there are 15 in the state) ACO designed only for Medicaid patients, have provided some movement in this direction, but they are limited because they are, in fact, only for Medicaid patients. This permits skimming, as we see in recent data that shows that the places long touted for their efficiency and low cost for Medicare, like Grand Junction CO and Rochester MN, are among the most expensive for private insurance. The same characteristics, integrated health systems which control most of the care in a community, that allow them to be efficient with fixed Medicare funds, also allow them to raise the rates for private insurance. Gaming the system.

We could have a good health care system. It needs to be built upon quality, and quality has to be based on consensus, and has to apply to everyone, rich and poor, young or old. It cannot be segmented into different versions of quality for privately insured, Medicare, Medicaid, and uninsured people. The “how-to” is not hard; other countries have shown us how. The money is not hard, we are already spending excessive amounts. What we need is the will. 


Sunday, April 24, 2016

“Good enough for Government Work”: Quality, cost, and gaming the system, Part 3 (of 4 parts)

This is part three of the Charles Odegaard Lecture, delivered at the 27th National Conference on Primary Health Care Access, April 6, 2016




The VA is an example of how quality can be and is compromised when public sector funding is cut. In the area of public health, it can have an even greater impact, and no fewer apologists. When, under cost-cutting mandates from the state of Michigan the city of Flint changed its water supply from treated Lake Huron water to the industrially-polluted Flint River, the complaints of citizens were ignored. When concerned health care providers, like Dr. Mona Hanna-Atisha (pictured), raised warnings about rising lead levels in the children of that city, she was attacked and vilified. But she was right and they were wrong, or, perhaps worse, lying. Poisoning our children to save money. If individual health care is jeopardized when those responsible are being rewarded for cost-cutting, we can do a truly impressive job of harm when we destroy the public health infrastructure. And let us not forget that a major reason this was able to happen was Racism; that they were not “our” children, at least not those of the state authorities.

We need more emphasis on quality. Indeed, quality, not cost-cutting, needs to be our primary metric. Spending less should only be acceptable when quality is not negatively impacted. I realize that this is also subject to interpretation; “quality” has almost as many different interpretations as “waste”, and is frequently (if, hopefully, usually unconsciously) associated with “what benefits me”. I am talking about health care that is of benefit to most people, and is considered basic – keeping patients clean and out of their own filth, feeding them, treating the diseases that we know how to treat, doing surgery when it is of clear benefit, not having excessive waits for specialty care that compromise outcomes. And, most importantly, not providing financial incentives for limiting care. From a cost-cutting point of view, money is fungible, whether it comes from ‘cutting the fat’ or cutting needed care; but from a healthcare point of view, there is a big difference. (I refer to healthcare here as “caring for people’s health”, not the industry of the same name!)

This is the big issue, and it is amazing to me that it sometimes seems like such a mystery. If most of our incentives are to cut costs, to keep our jobs or to make bonuses or to keep our agency functioning, costs will be cut. Even when those cuts negatively affect quality, in real and dramatic ways. The argument for privatization goes something like “the private sector can do it better because, motivated by the opportunity to make profit, they will discover efficiencies that government employees do not, and run a ‘leaner ship’”. The problem is that, while there may be some examples of this happening, what usually happens is that costs are cut by cutting services, and making off with the profit, or bonus. The ship is made lean by cannibalizing its parts, and the only thing which is certain to be maintained in fine working order is the lifeboat in which the parties responsible hope to escape in while the rest sinks. This scenario is repeated over and over again, whether services are actually provided by private and for-profit organizations (think drug companies, insurance companies, nursing homes, and increasingly hospitals) or whether “private sector incentives” are built into publicly provided services, as in England at Mid-Staffordshire, or, increasingly, in the US in Medicare.

Profit may not be a great incentive to provide better health care, and is an uncertain to very poor guarantee of quality, but it is an excellent incentive to generating profit. Think of drug companies like Turing and its former CEO, Martin Shkreli, the poster child for unfettered greed, and his 5000% increase in the price of pyrimethamine, or of Valeant, the Canadian pharmaceutical company that recently doubled the price of secobarbital, an 80 year old barbiturate, in anticipation of California’s assisted suicide law. Think of the increase in price of colchicine, a drug that was used (in its plant form) to treat gout in ancient Egypt 3500 years ago, from 10 cents to $5 a pill when the FDA “encouraged” its manufacturer to conduct new studies and banned the generic (finally reversed last year, with generic colchicine again available.) Think of the insurance companies whose profit was baked into the ACA, making it costly and still not covering everyone. The ACP has recently called for government controls on drug pricing. The fact is that you can’t count on private for-profits to provide quality, unless you really trust Martin Shkreli.
Interestingly, in contrast to the Triple Aim advocates, critics of Sen. Bernie Sanders’ proposal for National Health Insurance system, Medicare for All, assert his math must be wrong, that we couldn’t both save money and deliver quality health care to everyone. (The Chicago Tribune editorial endorsing no one in the Democratic primary says: “Sanders first amused Americans who know their fiscal math with proposals for free college tuition, expanded Social Security, $1 trillion in infrastructure spending, "Medicare for all" .... The nonpartisan Committee for a Responsible Federal Budget calculates that his economic plans would push the top federal tax rate to about 77 percent”).[1] (By the way, they really mean the top marginal federal tax rate, which was, for the record, 90% when I took civics in junior high.) I don’t know if they are disingenuous or purposely befogging the issue, since it is clear that every other developed country delivers care to all its people for, usually, 1/3-1/2 of what we spend per capita in the US, with much better outcomes by most or nearly all measures.
So why are cost estimates in the US so high, when other developed countries do it for so much less? A great deal of it is that profit is built into the system. When we read about the problems of our system, we hear from insurers, who think providers charge too much, and providers, who think insurers pays too little, and each with an army to try to get what it wants. It is not because we care too much about patients. In Canada, there is a single payer national health insurance program (called “Medicare”) where the government pays the bills for largely privately-delivered care. The fact that it is private delivered is part of why their costs have risen second only to ours, but there is some central control. In Switzerland, there are multiple payers, insurance companies that are, however, forced to charge the same amount and provide the same basket of services, and be non-profit. How do they compete then? Why, on service to their patients! What an incredible idea! If you call your company to complain and can’t get through, you switch to another! As long as our system is predicated on building in excessive profit for providers, insurers, and drug companies, it will be fantastically expensive, albeit a full-employment program for those people trained to try to get bills paid and, on the other side, to deny payment. And it will be about cutting costs, not improving quality.

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