Saturday, December 15, 2012
Medicare: Consumer choice or choosing your poison? How about coverage for everyone?
It is now after December 7th, and Medicare recipients have had their open enrollment period and made their choices for next year. Good or bad, affordable or bank-breaking, is something they will find out during the coming year. Will their policy allow them a reasonable choice of doctors and hospitals, or force them into certain ones which may, or may not, offer quality in the areas of service they need? Will the policy cover them if they are out of their home geographic area and need healthcare? Only for an emergency, or for regular care? Does this just mean a small additional co-payment, or does it mean the whole visit will be out-of-pocket? And that emergency visit – is that approved as all-inclusive, or does the ER need to contact the insurer again for every procedure, whether minor and cheap, like running an electrocardiogram, EKG, or more major and costly, like surgery? What about drugs? Medicare’s drug plan (“Medicare Part D”) is supposed to lose its “donut hole” under the Affordable Care Act (ACA), but how will that affect any individual? And if I am just on cheap generic drugs now, but may need to be on something really expensive in the future, will that be covered? And, oh, yes, will I be able to see my own doctor? I think maybe I’ll just stay on the plan I have, and understand (sort of). Oh, but you say that plan is changing?
One thing we can say about decisions that Medicare recipients make this December 7th is that they will not know if they were wise, informed, or smart until after they see how it works out; it is far too complex, there are too many variables, and too many competing claims by insurers and possibly inaccurate information being proffered for people to make what they can be confident is a wise, smart, informed decision. One example of this complexity is offered by Frank Lalli in his piece in the New York Times of December 2, 2012, “A health insurance detective story”. Lalli, a retired journalist, has multiple myeloma, a kind of blood cancer, and takes a very expensive drug that retails for $11,000 a month! (Note: this blog piece will not address the issue of whether there should be any drug that people need that costs $11,000 a month. You probably have your own opinion.) Up until now, Lalli has been protected against great personal expense because his insurance, through his former employer, Time-Warner, had a cap of $1,000 a year in out-of-pocket expenses. That, however, is being dropped this year. So, he wondered, how much will he have to be paying for this lifesaving drug? Not even (yet) whether he can afford it – can’t know that until he knows how much it would be. So he made a call.
Or, rather, more than 70 calls. To his employer, to their contracted drug carrier, to Medicare, to the drug’s manufacturer, to AARP, and back and back again. Finally he learned – he doesn’t know: “The answers I got ranged from $20 a month to $17,000 a year. One of the first people I phoned said that no matter what I heard, I wouldn’t know the cost until I filed a claim in January. Seventy phone calls later, that may still be the most reliable thing anyone has told me.” No one seems to know. One person at the drug carrier is “sure” he will be ok and be able to afford it. Or, maybe not: “Well, ‘pretty sure.’ She’s excited. She’s been with the company only a few months. This will be her first quote.” So, until he files his first claim, Frank Lalli doesn’t know if his treatment is going to cost him $20 or $17,000 a month, or anything in between. Somehow, I guess, they’ll figure it out when it’s time to make him pay; it is just telling him in advance that no one seems to know how to do. Luckily for Mr. Lalli, he is just trying to find out what he will have to pay for his drug therapy; he is not, simultaneously, trying to decide which health insurance plan he should sign up with (although he did consider changing his drug benefit plan, until he discovered that his health insurance with Time-Warner requires him to continue using the same one).
In some ways, it would be reassuring to think that Frank Lalli was your half-senile grandfather who can’t operate a computer or a cell phone and gets lost on the way to the corner store. Then maybe you could go over, look at the materials, maybe make a few calls, and help him to make the best choice. Unfortunately, this isn’t the case. Mr. Lalli may have cancer, but he has his smarts (after all, they’re publishing his piece in the Times.) And as a journalist he wasn’t an art critic, or a sports writer. He “…had a long career as a business journalist, beginning at Forbes and including eight years as the editor of Money, a personal finance magazine.” He understands business practice, so the problem here is not simply one of business practices and the profit motive getting in the way of providing the best health care for the American people, something that I have often criticized (see recently, e.g., Gaming the system: Integration of healthcare services can just raise costs, not quality, December 1, 2012). It is not good business practice. It is not even bad business practice. It is psychotic; it is Kafka-esque. It is not something that anyone can figure out. It is bizarre that we have come up with such a system; indeed, it is incredible that someone or ones could even design it. “Must have taken a committee,” a cynic might say, but they’d be only partially right. It took dozens of committees, of Congress, of regulators, and of think-tankers, mostly not talking to each other. Frequently, looking at such a mess, it is tempting to blame the “bureaucrats”. However, if you dig deep enough you will usually find that the reason different government departments have different, often conflicting, rules, goes to the legislation. They have to abide by the law, and the laws drafted by different legislators and different committees and often very specific in some particular area about which the legislator writing the law was very concerned. This may be a result of personal experience, or a constituent concern, or (most likely) a concern on the part of a generous lobbyist.
What is most amazing is that there is a whole cohort of pundits and politicians and thinkers (using the term loosely) who believe this is a good thing. They talk about “consumer choice” as if people cared what insurance company they had. They don’t. People care about who their doctor is, about where they will be hospitalized, about whether they will be able to get the medications that they need, and about whether they will be able to afford to pay for this all. They don’t care which insurance company provides for this. If they are the idealized “informed consumer”, however, they may well wish to know how to compare them. Good luck. That information, whatever the theory, is not really available. Not to Frank Lalli. And not to your grandfather.
I have often written about single-payer health systems, and I still think that this is the way to go. But there are alternatives. In Switzerland, for example, there are multiple insurance companies, but there is a single benefit plan. That is, your core benefits are prescribed by law and companies cannot compete on the price of them. You can then choose your carrier by what extra bells and whistles they may offer, but you know what you will get for necessary care and what you will pay.
This is reasonable. What we have now is not. It is not even conscionable. And, unless you want to believe that all the right-wing, consumer-choice politicians and pundits are both rich and selfish as well as evil or stupid (and they may be), it is not even a system that they could find their way through.
We know that there are better ways. And we need one, now.