Health Care Needs Should Guide Health Reform

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As the debate over health care reform proceeds in the Senate, and in the nation, it is important to take stock of the key assumptions of those planning the changes. The Democrats have chosen to combine increased regulation and requirements for insurance companies with economic incentives, in an effort to cover more people and reduce skyrocketing costs. The Republicans have chosen to combine a core opposition to any proposal originating from the Administration or the Democratic leadership (articulated by New Hampshire Republican, and almost-Obama-cabinet-appointee, Judd Gregg) with cynical attempts to portray themselves as the defenders of currently-insured Americans by opposing cuts while criticizing the proposal for not saving enough money. The classic here is John McCain, who campaigned on a platform of quite draconian cuts in Medicare, screaming that the much more modest cuts in the Democratic proposal will, essentially, kill old people.

While the Democratic proposal does resemble an effort to patch the chinks in a leaky old house as winter approaches, leaving lots of holes and at cost greater than fixing the whole thing, the Republican scare tactics should be seen as what they are. Across the board cuts in Medicare would be a bad idea, as are almost all across-the-board cuts in any organization, but cuts which reduce the over- and unnecessary use of expensive tests and procedures, while increasing access to primary care, would save a lot of money. To be sure, the doctors and hospitals who provide those tests and procedures would take a financial hit, but it is unlikely to lead them to food stamps. A colleague who is in the health care field, but not a physician, told me that he had been at a meeting in which a Canadian doctor talked about the structure of their payment system, which pays subspecialists less than they make here, and observed that such change would be opposed by the specialists who would not welcome their income being reduced from, say, $600,000 to $400,000. What is there to say? Life is tough? It is hard to see the American people, worried about their jobs and future, increasingly (as I have recently discussed) on food stamps, fighting to prevent such losses. And, more important, I am sure that we will find doctors in those subspecialties who are willing to work for the $400,000.

The bigger problem with the Democratic proposal is that most of its solutions are based on creating business and economic incentives to try to get insurers to do the right thing, or at least a little more right and a little less evil. This is, I suppose, good insofar as it goes, and seems to be convincing even progressive economists such as Paul Krugman (“Reform or else”, New York Times December 4, 2009). But the idea of patching the house of health care using economics is intrinsically flawed, when the model should be based on social justice, morality, and doing the right thing for our nation and our people. Sophisticated businesses, whether Wall St. banks or health insurance companies, will always find ways to “game the system”, to find profit by reducing service, no matter how the economic incentives are structured (although surely they can be structured better than they are now). Even organizations that are intended to meet the health needs of the underserved can, because of the way incentives are structured, find that they can do better (or even simply survive) by caring for some needy in preference to others.

A case in point is one of our local Federally-Qualified Health Centers (FQHCs), also known as Community Health Centers (CHCs). I discussed these entities nearly a year ago, on December 30, 2008 (Community Health Centers, and more recently on September 3, 2009, Public/Private funding: We’re all in this together). These clinics are financially supported by the federal government largely because, in return for caring for the poor and meeting other federal service and reporting requirements, they receive cost-based reimbursement for Medicare and Medicaid patients, leading to Medicaid payments that are usually several times that paid to private doctors. They also usually receive a federal grant that helps support care provided to the uninsured. However, that money is never enough, and the additional funds from Medicaid and Medicare help subsidize that care for the uninsured.

One branch of the local FQHC located in northeast Wyandotte County, KS, where I live, served a desperately poor neighborhood. Indeed, most of the people are not on Medicare (because they are too young) or on Medicaid (because, while many are unemployed and others work for low wages at businesses that do not provide health insurance, either they are not families with young children or, if they are, they are often undocumented and ineligible). So the clinic was financially unable to support itself, and has solved its problem by moving to another part of the county, where the percentage of poor people with Medicaid is much higher. Still poor, to be sure, and in need of providers, but a good business move for the FQHC.

The problem, of course, is those people living in their old community. They did not go away, become more prosperous, or become more likely to be insured. They just lost their only source of health care. It’s hard to completely blame the FQHC, for all other providers left that community long ago, although the FQHC was specifically designed to fill these gaps. It is possible, and popular, to blame the “illegals” who make up much of this abandoned population, but while this works for propaganda, it is not so smart in reality. These people are here, and absent access to primary and preventive care they will continue to show up in emergency rooms to receive care for advanced disease that could have been treated more cost-effectively.*

Fortunately for this community, an independent, non-federally supported, safety net clinic (disclaimer: I am on its Board) has opened a small satellite in the basement of a church in that community. In doing so, it is not employing a traditional business plan; it is going where the need is, rather than where it can expect to make money. This will be a good thing for the people of that community, but it is no solution to the health care crisis, and cannot be expected to be replicated everywhere as a means of patching those chinks in our system. Not only does it depend upon funding from private foundations to exist, it depends upon enormous “in kind” contributions from its health care providers, doctors and dentists and nurses, who all receive the same wage as every other worker in the clinic, currently $12/hour.

But it could work on a national basis; not the part about doctors and dentists earning $12 an hour (we’re not talking here about $400,000 instead of $600,000!), but rather a national plan for a system that is predicated not on profit but on caring for people. A health care system which did not discriminate among people, but ensured that providers caring for everyone could survive and make a living, so that there would not be big parts of our population left out. Like a single-payer plan. Like Medicare for All.

Our system is upside down. Every other first world country has a health system built upon the idea that everyone is entitled to access to health care. Financial incentives to providers and insurers may work to fill some gaps. Ours uses financial incentives to provide care to a majority of our population, but it is a shrinking percent and even for them the coverage is decreasing and the cost is rising, and volunteerism and sacrifice are relied upon to fill the holes.

A health system for our country should start with ensuring access to high-quality health care for all our people. As I have discussed before, it may actually save money, but the reason to do it is that it is the right thing to do.

*This is not to mention that they work and pay taxes – often payroll, but certainly sales taxes – for low wages. What happens when they really leave – see “Arizona” – is there aren’t enough people to do these jobs, and aren’t enough people to rent housing – causing a major negative financial ripple effect.
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