Healthcare Reform’s Most Important Issue: How to Make it a High-Value System

In his July 22nd press conference, President Obama said something that, I contend, is the single most important issue about reforming our healthcare system. He said: "…here's what I'm confident about. If doctors and patients have the best information about what works and what doesn't, then they're going to want to pay for what works. If there's a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that's going to make you well?"

I'd add a logical extension to the President's statement by including this sentence: "And if there's a white pill that works even better than the blue and red pills, while costing the same or less, then why not pay for the more cost-effective white pill."

By expanding the word "pill" to mean "any health-related treatment, approach, method, or procedure," I read the President's message (and the logical extension) to mean that curing the healthcare crisis in a sustainable way requires that we focus on knowing ever-more about answering these three questions:

• What are the most cost-effective (high-value) ways to prevent, manage, and treat problems with people's physical health and psychological wellbeing?
• How can such high-value care (including prevention, self-maintenance, and sick-care treatment) be implemented safely, effectively, and reliably by all persons involved?
• How do we put into action an incentive program that makes it increasingly likely the high-value this will implemented successfully by everyone?

While it is certainly necessary to have a deep, rational debate about universal insurance versus single payer systems, it is equally (if not more) important to address the core issue, i.e., dramatically increasing cost-effectiveness (value to the consumer).

Why? Because the only sustainable strategy for giving everyone access to affordable quality care requires (a) knowing what constitutes high quality and (b) assuring such quality care is delivered efficiently.

Why? Because making informed healthcare decisions and taking competent/responsible action requires that we know the personalized methods of self-care and professional treatment most likely to get the best outcomes (results) for each particular person. These evidence-based outcomes include illness avoidance, symptom reduction, disease control or elimination, complication prevention, quality of life improvement, etc.

Lacking such crucial scientific knowledge means there will continue to be plenty of over-treatment (errors of commission), under-treatment (errors of omission), ineffective (unproductive) treatment, and inefficient (inappropriate, wasteful) treatment, which all result in overly costly, poor quality care. This, in turn, means healthcare expenditures will continue to rise for reasons such as these:

• Instead of doing things right the first time, errors, ineffectiveness, and inefficiencies will prolong a "fix it and pay again when it breaks" process resulting in excessive care, which may then result in even worse outcomes and greater expenditures (e.g., due to increased risk of medication side-effects, drug-drug interactions, and complications).
• Unless we know the most cost-effective approaches to care, there is a good chance that the more expensive/profitable methods of care will be chosen over the lower-cost alternatives.
• If clinicians don't have the scientific evidence need to guide them in making informed, justifiable decisions, this lack of certainty can cause them to feel pressured into doing unnecessary tests and treatments because (a) they want to avoid malpractice suits and (b) there are economic pressures to use available resources when guidelines for determining their appropriate use are inadequate (such as use of medical scans).
• Waste and fraud will not be adequately controlled unless we know when something is wasteful (excessive, unnecessary, inefficient) and fraudulent (e.g., purposely doing something for monetary gain that knowingly harms or disadvantages a person); such controls require valid, reliable, targeted guidelines and incentives for following those guidelines.

Replacing our ignorance about what works best for least cost requires doing two basic things:

• We have to learn, through valid scientific research, how to answer questions about what health-related treatment, approach, method, or procedure has the best clinical outcomes for the best price for particular types of people with particular types of problems. These answers would identify the most cost-effective kinds of self-care and treatment that give consumers/patients the greatest value ("bang-for-the-buck").
• Whenever such knowledge exists, any healthcare program that is government run or supported should only pay for the most cost-effective (high-value) approaches to care. Of course, special arrangements should be made for sound research studies and experimental treatments. In any case, people who want to waste their money by paying out of pocket for less cost-effective care should be informed about it, but not be prevented.

Implementing this rational forward thinking healthcare reform strategy presents daunting challenges and requires some radical changes to our current system. The challenges include the following:

• It is well documented that the current fee-for-service model penalizes healthcare providers for rendering high-value care because doing more means greater income/revenue than doing better; they are thus punished for providing high quality services efficiently.
• The healthcare industry knows very little about cost-effectiveness because there has been great resistance in doing the necessary research.
• There are too many ways to "play the system" for personal financial gain that adversely impact one's health and wellbeing.
• Doing the necessary research is costly, complex, time-consuming, and requires large-scale collaboration between clinicians, researchers, and consumers across the globe.

What are the options?

• Doing little or nothing. Simply giving into the pressure and deceptive politics of special interest groups who currently gain financially from our current broken healthcare system means maintaining the status quo. This solution is supported by people who: (a) lack of empathy for those who currently suffer [see a series of posts starting at this link], (b) refuse to accept that the current system is so dysfunctional that it is unsustainable and threatens our entire society [see this link], and/or (c) fear they have too much to lose financially from significant changes to the current system.
• Focus on payment strategies to provide some sort of insurance coverage for just about everyone (i.e., universal access), without adequate acknowledging and embracing the cost-effectiveness issue. This half-backed approach would lead to ever-increasing costs and poorer care quality since:
  
  
  • Inefficiency and ineffectiveness remains unconstrained because knowledge of what works best for least is lacking, which means there is pressure to do what pays the most, or to purchase what costs the least without knowing if its of lesser quality.
  • Simply paying healthcare providers less will result in worse care as clinicians cut back on the time they spend with each patient (which is often too brief already) in order to maintain their current standard of living by adding more patients to their already over-demanding case loads. This is already having a negative impact on care quality.
  • Even if there are pay-for-performance incentives, lacking adequate knowledge of what works best for least means that such rewards will be based on inadequate performance guidelines. In other words, clinicians will be paid more if they follow certain procedures, even though it is uncertain if those procedures will actually help, harm, or have no meaningful affect on a particular patient.
  
  
• Implement strategies based on a Patient-Centered Life-Cycle (PCLC) Value Chain. As I discussed two years ago in a series of posts starting at this link, the PCLC Value Chain focuses on rapid and radical (profound) transformation, so that people are aware of cost-effective approaches to care and are rewarded for implementing such cost-effective care in a high-value, patient-centered healthcare system.

I welcome all comments.
Related links:

• Healthcare Reform Models Focusing on Value to Consumers - Part 1
• Healthcare Reform Models Focusing on Value to Consumers – Part 2
• What is the Most Sensible way to Diagnose, Treat and Prevent Health Problems?
• Four Interlocking Issues about Fixing American Healthcare
• Low-Cost, High-Quality Care In America: A Reply
• How to Reform Healthcare Sensibly: Focus on Two Clear Goals
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform – A Timely Debate (part 1)
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform – A Timely Debate (part 2)
• Healthcare Reform: Where to Focus?

Empathy, Taxes, Personal Responsibility, and Healthcare Reform

Two years ago I wrote a four-part blog post presenting answers the questions: Who is worthy of having adequate health insurance and high-value (safe, cost-effective) care; and what makes them deserving? And who, on the other hand, is unworthy; and what makes them undeserving? It includes debates with others about issues including free market forces, as well as government and individual responsibility, universal healthcare, taxation, smart economic growth, and problems with healthcare insurance. Here's the link http://curinghealthcare.blogspot.com/2007/09/worthiness-socialized-medicine-and.html

In January '08, we presented an in-depth analysis of the presidential candidates' healthcare proposals. The analysis included a discussion that compared (a) a publically funded universal healthcare program that included a private insurance to (b) a single-payer program (no private insurance) at http://www.nhds.com/candidate_analysis/healthcare.htm#EN3. Then we discussed whether it's necessary to increase taxes in order to fund a publically-funded universal healthcare system at http://www.nhds.com/candidate_analysis/healthcare.htm#EN4. The bottom line is that the Republicans' main focus appeared to be on minimizing taxes and making only minor changes to our current healthcare system, while the Democrats appeared more focused on providing some form of universal coverage (be it single payer or a hybrid system). The debate today seems to be along the same lines.

From a psychological perspective, here's how I see it:

Many fortunate people with plenty of money or a secure job with an excellent health plan do not want to pay more taxes nor to risk changing the coverage they believe benefits them; even if such changes may benefit many others who are suffering.

Some of those fortunate folks likely experience cognitive dissonance (i.e., are conflicted) when considering the plight of the millions of Americans who cannot afford adequate insurance and top quality care. Some may reduce this emotional discord/distress by believing that those less fortunate are somehow less deserving and should even be punished for having health problems. They may, for example, believe in the "moral hazard" myth, which states that providing adequate health insurance for all encourages risky and wasteful behavior by the insured persons since the cost of healthcare consumption is paid by someone else. So, they conclude that there ought to be considerable "skin in the game" (i.e., out of pocket expense to reduce consumption), which can have a devastating impact on the working poor and other struggling to make a living; see http://curinghealthcare.blogspot.com/2006/11/moral-hazard-idea-myth.html.

Interestingly, one key thing absent from all this is EMPATHY (i.e., the ability to put oneself in the shoes of another). That is, it's much easier for many who are better off financially and health-wise to blame those who struggle and suffer for their own woes, than it is for them to feel others' pain and willingly pay increased taxes to help them. This is not surprising since:

• Judge Sonia Sotomayor Supreme Court confirmation hearings in which empathy—the quality President Obama has proposed as a criterion for his judges—was considered a dirty word.
• Many of the bankers, brokers, and others responsible for our economic collapse didn't feel empathy for those losing (or destined to lose) their homes while they profited.
• Empathy is often absent in the health insurance industry as evidenced by insurance exec turned whistleblower Wendell Potter, who spoke out against health insurance industry at http://www.democracynow.org/2009/7/16/former_insurance_exec_wendell_porter.

Based on all this, I'm not at all surprised with the current opposition to universal healthcare—I'm saddened by it—but not surprised. After all, the "me generation" and their children are in power in the USA … and focusing on "me and mine" to the exclusion of others does not promote empathy (or compassion). This bodes very poorly for the future of our civilization, btw!

I'm not without hope, however. President Obama appears to be pushing strongly for change in a direction that will help level the playing field and improve the lives of those who suffer. Increased taxes from the more fortunate to help the less fortunate cannot be avoided, imo. So, we can expect pushback from those lacking empathy.

In my next post, I have a contentious debate with people working in the health insurance industry.
Related links:

• Low-Cost, High-Quality Care In America: A Reply
• How to Reform Healthcare Sensibly: Focus on Two Clear Goals
• Healthcare Reform’s Most Important Issue: How to Make it a High-Value System
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform – A Timely Debate (part 1)
• Empathy, Taxes, Personal Responsibility, and Healthcare Reform – A Timely Debate (part 2)
• Healthcare Reform: Where to Focus?

Can our government be trusted to run a universal healthcare system?

I've been involved in several discussions about the Analysis of the Candidates’ Healthcare Proposals web site I published last week (and have updated since then). Much of the debate centers on mandates and trust of our government to run a nation-wide universal healthcare system.

One reader had this to say:

Within the current system, the mandated "Medicare drug plan" appears to be heavily weighted to benefit the pharmaceutical manufacturing & distribution industry. Please give me your thoughts or analysis on the recognition of the candidates in what certainly appears to be an industry with very powerful influence in government. My personal assessment/feeling leans toward a more competitive market with as few government controls as possible. However I do feel government has a needed and viable role in the healthcare of our citizens.

I responded as follows:

I haven't analyzed who benefits most from the Medicare drug plan, but based on my understanding of our current healthcare system, I have little doubt that powerful lobbies influence policy. For example, a 2004 study on healthcare lobbyists [here’s the link] found that, of the of 1192 organizations were involved in healthcare lobbying, pharmaceutical companies spend more money lobbying Congress than other health care organization. Other top lobbyists are medical device manufacturers, insurance companies and healthcare provider organizations. In 2000, healthcare lobbying expenditures totaled $237 million, which was more than the lobbying expenditures of every other industry, including agriculture, communications and defense.

This supports your implication that our government can’t be trusted to do the right thing for the masses due to the influence of special interests.

At the same time, these data imply that these special interest groups--i.e., those making money from the current system--will not likely start delivering high-value to the consumer/patient on their own since greater cost-effectiveness for the consumer/patient eats into their profits under our current broken healthcare system (see this link for more about the need for a greater value).

So, I agree that more sensible competition is one part of the solution, and I agree there must be government mandates if we are to have quality improvement, cost control and good care for all. But it’s debatable as to the kind of government influence is needed (e.g., what types of mandates) and what can be done to hold politicians accountable to the people/consumers/citizens?

Personally, I’d like to see our government provide funding and management for all the reasonable quality improvement and cost control strategies presented in the candidate comparison web site. I’d like this to be done in the most effective and efficient way possible, with all government agencies involved being closely watched and scrutinized by an independent oversight organization whose allegiance is to the consumer.

One question is whether a single-payer system, which is run completely by the government as in other countries, would be better than a system in which private insurers compete with a government run universal healthcare program. As discussed in the candidate comparison web site, the main arguments against a single-payer system can be disputed. CMS does run Medicare and Medicaid after all, which is a single-payer system.

The issue of trust in our government, however, remains unresolved. I suggest that these be the healthcare-related issue we focus on.

Analysis of the Candidates’ Healthcare Proposals

After analyzing the details of each Presidential candidate’s healthcare proposal, it appears that a person is likely to select a proposal based on one’s:

• Current health insurance plan
• Level of wealth
• Priority for assuring good healthcare for all.

Combining these three factors results in eighteen groups of voters--each with particular wants and needs--who would prefer different candidates' proposals based on these factors.

Here is a link to the Analysis of the Candidates’ healthcare Proposals web site. It presents a systematic detailed comparative analysis of each candidate's healthcare proposal based on the wants and needs of the 18 voter groups. The analysis resulted in the following conclusions:

• The candidates most concerned with improving the quality and controlling the costs (i.e., increasing the value) of healthcare are: Clinton, Edwards, Kucinich, Obama, Richardson and McCain.
• Voters who want good care for all are willing to do what it takes—including paying increased taxes, etc.—to support a publically-funded UHS. Candidates who want a Federal Employees Health Benefits Program UHS (FEHBP-UHS) and want to keep private insurance as an option are: Biden, Clinton, Dodd, Edwards, Obama and Richardson. Only Kucinich proposes a government-run Single Payer UHS (SP-UHS). Choosing between these two options is discussed on the web site.


• If an FEHBP-UHS is desired, then Clinton and Edwards are the best choices because they also more focused on increasing care value, with Obama and Richardson coming in second.
• If an SP-UHS is desired, then Kucinich is the only choice. Note that his plan (HR 676) is also the most detailed (has the greatest specificity), which means it may be the most credible.

 

On the other hand, any Republican is a suitable choice for voters who (a) are not concerned about the care others receive (they aren’t interested in good care for all) and (b) are confident they will always have excellent insurance, or can afford to pay for the care they need out-of-pocket if they lack adequate insurance. Choosing between Republican candidates would likely be based on their strategies for:

• Minimizing taxes and reducing personal health-related expenses
• Increasing healthcare value (cost-effectiveness), in which case McCain is probably the best choice since he proposes the most strategies of all Republicans for improving quality and controlling costs (as well as being the only Republican addressing the health need of veterans through the VA).

Note, however, that there are significant gaps in every candidate’s proposal. It would be useful to know how what it would require to (a) evaluate all the quality improvement and cost control strategies described in this document and to (b) implement the effective ones efficiently.
All these and other related issues are examined on the web site, including issues concerning healthcare quality improvement, cost control, financing new publicly funded universal healthcare systems, subsidies, mandates, tax changes, and more.

I welcome your comments.

Presidential Candidates’ Healthcare Proposals: Public Insurance & Single Payer Plan

In my last post, I discussed whether the U.S. needs universal coverage. In this post, I examine the candidate's proposals concerning how universal coverage can be achieved. A key strategy involves the deployment of new and expanded public insurance programs, which includes a heated debate about a government run single-payer system.

All the Democrats propose universal healthcare (coverage for all Americans). Only Kucinich supports HR 676, which is a single-payer, "Medicare for All" plan that gives everyone comprehensive coverage. Gravel also proposes a single-payer solution, but through use of federally funded vouchers. All the other Democrats propose a public Federal Employees Health Benefits Program (FEHBP) type program and/or Medicare, Medicaid, SCHIP, which are supported by subsidies (e.g., through tax credits or vouchers) to low income persons.

Republicans, on the other hand, do not propose new public programs, the expansion of existing public programs, nor universal coverage. Instead, they all propose market-based private insurance solutions through tax deduction/credit subsidies to lower insurance premiums and deduct medical expenses from the taxes of lower income persons. Other strategies include increasing competition, tort reform, and payment changes to providers.

New and Expanded Public Programs

All Democrats (and no Republicans) propose new public programs.

v Comments about Public Insurance in General

Consider the following:

Public insurance programs offer the greatest potential for automatic and continuous enrollment and the ability to cover everyone. Enrollment could be facilitated through local Medicare or Social Security offices. Those failing to enroll could be signed up when they seek health care services or coverage could be verified as part of income tax filing. With everyone eventually enrolled at birth in an expanded Medicare, people would automatically be enrolled and stay enrolled across their lifespans. Most proposals would establish a minimum standard benefit package modeled on the typical plan offered to members of Congress or to employees of large firms. For those proposals requiring enrollees to pay cost-sharing or a portion of premiums, a ceiling on out-of-pocket costs and premiums as a percentage of income would be established to ensure affordability. Some proposals modeled on the Canadian health system, for example, would not include patient cost-sharing for basic services and would be financed by federal and state taxes.
Given Medicare's low administrative costs and broad risk pooling, substantial savings could accrue in an expanded Medicare approach through a reduction in administrative costs. Other sources of savings would likely arise from paying providers Medicare rates that are lower, on average, than private rates.

The proposals modeled on the current Medicare program would provide choice of plans, including the private plan options currently available to Medicare beneficiaries and the program's self-insured plan.

The public insurance approaches to health insurance reform would create dislocation, with people moving from their current coverage to coverage through Medicare or another public plan. However, people would still likely keep their same set of providers. Proposals that would allow employers to continue offering coverage would be less disruptive initially, although it is anticipated that most employers would ultimately prefer to pay a part of the Medicare premium rather than private coverage premiums, which would probably be higher.

These proposals would allow the nation to develop and utilize common quality metrics, gather data on the health care outcomes of the full population, and evaluate and improve the performance of providers based on a large pool of patients not fragmented by insurance type. They also would allow for the creation of uniform provider payment systems that reward high-quality care, standardization in health information technology, and the creation of universal processes to improve safety systematically across health care institutions.

Financing is likely to come largely from federal income and payroll taxes or new taxes, such as a value-added tax or consumption tax. This would be less administratively complex than providing premium subsidies based on income. The distribution of financing is most likely to be more progressively related to income than either individual insurance market or mixed private–public group insurance proposals. [Reference]

Single-Payer Government-Run System

Kucinich is the only candidate proposing a single-payer government run system (HR 676), which gives each person their own healthcare card.

v Comments about Single-Payer Government Run System

The case for universal healthcare was discussed above. But should it be a government run single-payer system?
The primary arguments in favor of a single-payer system center on cost control issues.
Here are views about how it would reduce administrative costs:

The most obvious difference between [European] health care systems and ours — that their governments provide universal insurance — certainly plays a big role in the cost differences. Look behind the receptionist at your doctor's office, and you will very likely see a staff of people filing claims to different insurance companies. The insurance companies, meanwhile, employ a small army charged with figuring out how to avoid covering the unhealthy. The administrative costs of our patchwork bureaucracy eat up about 25 percent of health spending… Even in Europe's single-payer systems, administrative costs account for about 15 percent of health spending [italics added], once everything is included, according to the Lewin Group, a consulting firm…. Medicare, which has administrative costs roughly as low as those of other countries' universal plans. Younger Americans, by contrast, have private insurance, with all its inefficiencies. Yet elderly Americans' share of national health spending is similar to that of the elderly in other countries, as Arnold Kling, an economist, has noted [source].
Private insurers spend large sums fighting adverse selection, trying to identify and screen out high-cost customers. Systems such as Medicare, which covers every American sixty-five or older, or the Canadian single-payer system, which covers everyone, avoid these costs. In 2003 Medicare spent less than 2 percent of its resources on administration, while private insurance companies spent more than 13 percent … Although it's rarely described this way, Medicare is a single-payer system covering many of the health costs of older Americans. (Canada's universal single-payer system is, in fact, also called Medicare.) And it has some though not all the advantages of broader single-payer systems, notably low administrative costs. [source].

Here's a discussion of how a single-payer system would control healthcare delivery costs:

…the evidence clearly shows that the key problem with the US health care system is its fragmentation. A history of failed attempts to introduce universal health insurance has left us with a system in which the government pays directly or indirectly for more than half of the nation's health care, but the actual delivery both of insurance and of care is undertaken by a crazy quilt of private insurers, for-profit hospitals, and other players who add cost without adding value. A Canadian-style single-payer system, in which the government directly provides insurance, would almost surely be both cheaper and more effective than what we now have. And we could do even better if we learned from "integrated" systems, like the Veterans Administration, that directly provide some health care as well as medical insurance. … 

[Another] source of savings in a system of public health insurance is the ability to bargain with suppliers, especially drug companies, for lower prices. Residents of the United States notoriously pay much higher prices for prescription drugs than residents of other advanced countries, including Canada. What is less known is that both Medicaid and, to an even greater extent, the Veterans' Administration, get discounts similar to or greater than those received by the Canadian health system. 

We're talking about large cost savings. Indeed, the available evidence suggests that if the United States were to replace its current complex mix of health insurance systems with standardized, universal coverage, the savings would be so large that we could cover all those currently uninsured, yet end up spending less overall. That's what happened in Taiwan, which adopted a single-payer system in 1995: the percentage of the population with health insurance soared from 57 percent to 97 percent, yet health care costs actually grew more slowly than one would have predicted from trends before the change in system [source].

And the following argues that a single-payer system is the only way sensible solution:

A mere shift of power from Republicans to Democrats would not, in itself, be enough to give us sensible health care reform. While Democrats would have written a less perverse drug bill, it's not clear that they are ready to embrace a single-payer system. Even liberal economists and scholars at progressive think tanks tend to shy away from proposing a straightforward system of national health insurance. Instead, they propose fairly complex compromise plans. Typically, such plans try to achieve universal coverage by requiring everyone to buy health insurance, the way everyone is forced to buy car insurance, and deal with those who can't afford to purchase insurance through a system of subsidies. Proponents of such plans make a few arguments for their superiority to a single-payer system, mainly the (dubious) claim that single-payer would reduce medical innovation. But the main reason for not proposing single-payer is political fear: reformers believe that private insurers are too powerful to cut out of the loop, and that a single-payer plan would be too easily demonized by business and political propagandists as "big government." 

These are the same political calculations that led Bill Clinton to reject a single-payer system in 1993, even though his advisers believed that a single-payer system would be the least expensive way to provide universal coverage. Instead, he proposed a complex plan designed to preserve a role for private health insurers. But the plan backfired. The insurers opposed it anyway, most famously with their "Harry and Louise" ads. And the plan's complexity left the public baffled. 

We believe that the compromise plans being proposed by the cautious reformers would run into the same political problems, and that it would be politically smarter as well as economically superior to go for broke: to propose a straightforward single-payer system, and try to sell voters on the huge advantages such a sys-tem would bring. But this would mean taking on the drug and insurance companies rather than trying to co-opt them, and even progressive policy wonks, let alone Democratic politicians, still seem too timid to do that [source]. 

Two important lessons can be learned [from the Massachusetts Health Reform Law]. First, we need to sever the connection between healthcare and employment. People need continuous, portable coverage that is affordable, comprehensive, and equitable. Second, we cannot depend on the private insurance industry to provide this for us.
Piece-meal reform such as the new law will not work. Both employers and the public support the concept of single-payer healthcare. Big business is starting to realize that a single payer system will be the only affordable way to cover everyone. When will our politicians understand that their political futures will depend on supporting this kind of comprehensive reform? [source] 

The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one-third (31 percent) of Americans' health dollars. 

Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $350 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.
Under a single-payer system, all Americans would be covered for all medically necessary services, including: doctor, hospital, long-term care, mental health, dental, vision, prescription drug and medical supply costs. Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.
Physicians would be paid fee-for-service according to a negotiated formulary or receive salary from a hospital or nonprofit HMO / group practice. Hospitals would receive a global budget for operating expenses. Health facilities and expensive equipment purchases would be managed by regional health planning boards. 

A single-payer system would be financed by eliminating private insurers and recapturing their administrative waste. Modest new taxes would replace premiums and out-of-pocket payments currently paid by individuals and business. Costs would be controlled through negotiated fees, global budgeting and bulk purchasing [source]. 

Single payer, universal health care administered by a state public health system would be much more democratic and much less intrusive than our current system. Consumers and providers would have a voice in determining benefits, rates and taxes. Problems with free choice, confidentiality and medical decision making would be resolved [source].

The primary arguments against a single-payer system center on concerns about:

• Loss of options or increased expense to those who currently have employer-paid plans
• Rationing of care
• Stifling of innovation
• Long wait for care.

Regarding the first two bullets, consider the following:

Most lucky Americans with good insurance are doubly isolated from financial reality. They don't pay for their health care and they don't even pay for most of their insurance—their employers or the government pays. …[With a single-payer system, the government would have to start] saving money by simply not providing effective treatments that cost too much. …Should people be allowed to opt out of [such] rationing if they can afford it? That is, if the system (private or single-payer) won't pay for the $100,000 pill, should you be able to pay for it yourself? …There are the makings of a deal here. Better-off or better-insured people could be told, individually or as a group: Give up your health-care subsidy [i.e., buy insurance or healthcare with your own money] and you may opt out of any rationing-type restrictions that the system imposes [source]. 

In a Single-Payer system, everyone has an EQUAL access to insurance coverage. But it doesn't mean that everyone is able to access all the care that they want or even believe they need. …Since users of the system don't pay for care directly, the only way to control costs is to limit utilization & access to medical technology. A single-payer system's economic success is …to limit access to services, as well as access to the most sophisticated and expensive types of medical treatment and services. …Significant savings in single-payer systems come from limiting the supply of medical services to curb demand (rationing of treatment and technology)… 

Residents in countries with single-payer systems pay significantly higher taxes…Canadians are currently paying 40 percent more taxes than Americans, and Europeans are paying 60 percent more than we are! [source]

A counter argument is that our system needs to increase value to the consumer, so that everyone gets the safest, most cost-effective care possible. That will only happen when (a) we know what care gets the best results for the least cost for each person (which is a problem in its own right) and (b) there are mandated rewards for delivering such high-value care and punishments for not. Single-payer system countries are working diligently to identify the most cost-effective tests, treatments and prevention methods, and to minimize over-testing, over-treating and use of expensive drugs and procedures when more cost-effective options exist. The U.S. healthcare system, on the other hand, does just the opposite: More profits go to providers, pharmaceutical companies and medical device manufacturers when patients get sick, receive more tests and treatments, especially when they're expensive; this does not bring high value to the consumer [see this link]. This means that we've got to transition from "pay-for-volume" to "pay-for-value"—instead of arguing that waste is "a benefit" private insurance allows—and a single-payer system can help drive such value.

Nevertheless, what if certain consumers want to throw their money away for expensive care with little evidence of efficacy? Or what if they want to pay more than is necessary for care when there are less costly options that are just as good? If they are willing to pay for it out of their own pocket for it—through costly private insurance or cash—then shouldn't they have that option? Should our government refuse them access to overly expensive or ineffective care? Well, this depends on whether allowing people to opt out of the single-payer system drains so much money from the system that it cannot survive. This issue is discussed later in the mandates section.
Anyway, here's a discussion of why rationing makes sense:

Americans seem to be less willing [than Europeans] to take no for an answer and more willing to try almost anything, no matter how expensive or how slim the odds, to prolong life. … It has made us obsessed with medical advances and turned this country into the world's research laboratory. …But much of it is simply wasteful. Expensive procedures…are often no more effective than basic ones, according to research. Yet doctors can keep on getting reimbursed for the expensive ones. "Basically, anything that doesn't kill patients is paid for by Medicare and insurance companies," said Jonathan Skinner, a health care researcher at Dartmouth College. …We Americans tend to treat any rejection of a health claim as some conspiracy by insurance companies, the government, doctors and the pharmaceutical industry. In other countries, people have arrived at a better understanding that health care necessarily involves economic triage [reference].

The argument that switching to a single-payer system would stifle innovation is based on the fact that since the U.S. spends so much more on healthcare than other nations, it enables researchers to obtain superior financial compensation, which leads to more medical discoveries in our innovation-rich environment. The counter-argument states that there isn't any proof:

…that it is the difference in health care systems that has caused the agglomeration of research facilities in the U. S. Even if the U.S. were a single-payer system, drug companies, etc. would still do research and it is likely that much of it would be carried out in the U.S. just as it is now. In addition…much of the research that is done here is funded directly or indirectly by the government. [And,] given that European countries can free ride on this research, comparing the amount spent in the two countries may not accurately reflect European willingness to fund health care research since the two figures may not be independent. If the U.S. spent less, European countries might be induced to spend more [source].

When it comes to waiting for care--while people in the US go without needed healthcare because of cost more often than people do in the other countries--waiting time for specialized healthcare services (e.g., elective surgery) is typically shorter in America than in other countries, at least for insured Americans. However, the US ranks low when it comes to the prompt accessibility of appointments with primary care physicians, often waiting six or more days for an appointment, and having trouble making an appointment on weekends and evenings [ reference ]. So, waiting time for non-emergency care is an issue in countries with universal healthcare. Nevertheless, things are improving in many of them [ reference ]. In other words, there are problems with both systems and the question is whether access to excellent primary and specialist care, even if there's a longer wait for elective surgery, is a better option than not being able to afford excellent care.

Federal Employees Health Benefits Program (FEHBP)

Biden, Clinton, Dodd, Obama and Richardson want the new program to be based on the Federal Employees Health Benefits Program (FEHBP).

v Comments about FEHBP Model

Biden, Clinton, Dodd, Obama and Richardson want insurance coverage to be modeled after the FEHBP, but this may not be realistic. The least expensive FEHBP coverage for a family appears to cost at least $10,000 per year, and most plans cost $12,000 or more. The government (taxpayers) pay only 75% of that amount on behalf of employees leaving the employee to cover 25% of the premium plus copays and deductibles out of his or her own resources. It is highly unlikely that low income people would be able to afford that much. At the same time, to provide an adequate subsidy or limit the individual's out of pocket exposure for premiums, deductibles and copays to some acceptable percentage of income (6.5% has been suggested) would likely be a tough sell when the staff and Congressional Budget Office try to estimate the overall cost to taxpayers. While less than perfect, defining minimum creditable coverage as a high deductible insurance plan would be considerably less costly and more feasible. If we can develop ways to save money by safely driving down utilization of healthcare services, we could always expand coverage later.

Vouchers

Gravel proposes the federal government issue annual vouchers to individuals based on projected health care needs, which they would use to pay for their care.

In the next blog post, I will discuss the thorny issues of allowing private insurance, mandating that everyone has access to coverage through individual and/or employer based requirements, and the use of insurance pools.

Patient-Centered Life-Cycle (PCLC) Value Chain--Process Reform: Universal Health Coverage and Personal Responsibility

Having affordable insurance and comprehensive coverage is a cornerstone of the PCLC Value Chain. Nevertheless, one of the issues generating the greatest debate concerns universal health coverage (i.e., healthcare for all), along with the related issue of "personal responsibility." The argument tends to center on whether the young and the healthy should help pay for care that older and ill persons need, how much they should pay, and the degree of responsibility people have for staying healthy and paying for their care when they get sick. In an earlier series of posts, I made the case that all Americans are worthy of health insurance, and that personal responsibility is a complex issue we must address, but for which there are no quick fixes.

Well, I recently corresponded with two individuals who have ideas about this topic, which I present below.

Person 1 wrote:

Just an idea, but since some here are so determined that Health Care for Everyone should be equal (but not equally paid for) and that everyone is as "deserving" of "good" health care as the next person, and that EVERYONE should pay for this based (somehow) on his or her income (those with more income should pay more than those with less income but EVERYONE should get the same care) I would suggest that these folks move to Canada or Denmark, or Switzerland, or any one of several other countries the next time they need heart surgery.

While we, in this country, do not have the PERFECT health care system, we still have the best. Yes, some of us have better care than others because we PAY more for it than others. But, let me see now... some of us also have better housing than others because we pay for it, some of us have better cars because we pay for it, some of us have better educations because we paid for it, and etc, and etc, and etc.....

I will be the first to admit that there are differences in the level of care provided in this country. But, I do not know of ANY person that has been refused treatment at the emergency room because of lack of insurance or lack of money. No, they do not get individual rooms in the hospital nor do they usually get the services of the most highly qualified and educated doctors and nurses. But they DO get better care than 95% of the rest of the world and that is pretty darn good.

I, like millions of others in this country, have worked very very hard for what I have and I have gone through periods in my life when I did not have much of anything at all. But, I never went without basic health care and I am in pretty good shape for my age. I did, however, work very hard to improve upon my circumstances and succeeded very well. Not as much as many many other people, but everything is relative. I have a nice home, a nice retirement, and well educated and well behaved children and grandchildren. We have our differences, of course, but we have a work ethic that I hope most other Americans have. We truly believe we totally deserve what we have because we have EARNED it. Do I feel sympathy for those that do not have a private room in the hospital or a family doctor that they can see on very short notice just about any time and all of the other things that we pay for? Sure I do. But NOT enough sympathy to want to see the health care system in this country (warts and all) made "universal" and forced to fall down to the systems of much of the rest of the world.

I think we (ALL of us that are willing to work for a living) have it pretty doggone good. And for those that are not willing to work for it, I feel sorry for you but not sorry enough to give up what I have so you can have what you want. Not hardly pilgrim!

I Replied

A logical argument …but I only wish it were so simple. Let's start by examining the premises upon which your case is built.

You wrote: America has the best healthcare in the world.

Here's a quote from a recent article in a leading healthcare journal titled, "Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care," which refutes your premise:

"Despite having the most costly health system in the world, the United States consistently underperforms on most dimensions of performance, relative to other countries. This report…includes data from surveys of patients, as well as information from primary care physicians about their medical practices and views of their countries' health systems. Compared with five other nations-Australia, Canada, Germany, New Zealand, the United Kingdom-the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives. The U.S. is the only country in the study without universal health insurance coverage, partly accounting for its poor performance on access, equity, and health outcomes. The inclusion of physician survey data also shows the U.S. lagging in adoption of information technology and use of nurses to improve care coordination for the chronically ill." (Here's the link).

Other convincing data shows that the US lags behind many industrialized countries in delivering primary care, access and quality. See, for example, the data from this research: "New National Scorecard--U.S. Health Care System Gets Poor Scores on Quality, Access, Efficiency, and Equity, which is available at this link.

You wrote: People who work for a living have it good.

Well, this is a big: IT DEPENDS. Consider the following:

• "Over 8 in 10 uninsured people came from working families - almost 70 percent from families with one or more full-time workers and 11 percent from families with part-time workers.
  
• The percentage of people (workers and dependents) with employment-based health insurance has dropped from 70 percent in 1987 to 59.5 percent in 2005. This is the lowest level of employment-based insurance coverage in more than a decade.
  
• Nearly 40 percent of the uninsured population reside in households that earn $50,000 or more. A growing number of middle-income families cannot afford health insurance payments even when coverage is offered by their employers." (Here's the link).
  

And there are many reasons for people not having coverage, including:

• Health insurance is unaffordable to many, including individuals who are unable to get affordable individual coverage due to cost or pre-existing medical conditions.
  
• Many employers do not offer health insurance coverage.
  
• People who lose their jobs often lose their health insurance.
  
• Some workers are not eligible for health insurance offered by their employer.
  
• Workers and individuals do not take-up coverage that is available.
  
• People may be poor but not eligible for public coverage, for example, childless adults are generally ineligible regardless of income.
  
• Individuals are eligible for public programs, but are not enrolled."
  
(references: Why are people uninsured #1 and Why are people uninsured #2).

And to make matters worse, the uninsured who do pay are typically charged much more for the same procedures and medications than insured folks because they cannot negotiate discounts, which insurance companies do.

About getting care in emergency rooms, about 20 percent of the uninsured (vs. 3 percent of those with coverage) say their usual source of care is the emergency room (Here's the link).

This is not solution to the problem of the uninsured because, for example:

• Uninsured diabetics go years without any preventive care because lack of ability to pay, but once their feet become necrotic and they're rushed to the ER in need an amputation, we'll pay for the operation in the ICU.
  
• Emergency room care does not include treating cancer with chemotherapy or many other life saving therapies.
  
• The "charity care" ERs are required to give is money hospitals try to recover by raising costs for all of us, e.g., through higher insurance premiums, deductibles, co--pays, and other out-of-pocket expenses.
  

Consider the following study showing that, despite access to the ER, the uninsured do NOT get care when they need it:

"Adults without coverage go without needed care. The uninsured are much less likely to receive preventive and routine care, such as mammograms, pap smears, or screenings for colon cancer. Only 18% of uninsured patients reported receiving a screening for colon cancer, compared to 56% of insured patients. While they can obtain care at the emergency department or a community clinic, uninsured adults are more likely to lack a regular source of care and more likely to forgo needed care. According to the Commonwealth Fund Biennial Health Insurance Survey, almost half of uninsured individuals will not seek care when they have a medical problem, compared to just 15% of insured individuals.

Adults without coverage have worse health outcomes. The Institute of Medicine reviewed 130 studies published in the past 20 years and found that uninsured patients consistently have worse health outcomes. For example, compared to patients with private insurance coverage:

• Uninsured patients with breast cancer have 30 to 50% higher mortality rates;
  
• Uninsured patients with colon cancer have 50 to 60% higher mortality rates; and
  
• Uninsured accident victims have a 37% higher mortality rate.
  

Other studies have found that uninsured patients with chronic conditions are almost twice as likely to visit an emergency department or be hospitalized as insured patients.

Short-term stabilization is not the same as long-term care health management. Because uninsured patients lack routine care, their chronic conditions are often poorly managed, increasing the likelihood of serious, acute complications. Once hospitalized, they receive treatment for acute needs but probably don't receive appropriate follow-up care, resulting in worse health outcomes over the long term.

Uninsured children also lack access to care and experience worse health outcomes. Because uninsured patients lack routine care, their chronic conditions are often poorly managed, increasing the likelihood of serious, acute complications. Once hospitalized, they receive treatment for acute needs but probably don't receive appropriate follow-up care, resulting in worse health outcomes over the long term.

The Bottom Line

Health coverage matters. Children and adults without health insurance can receive care from California's safety net or in an emergency situation. However, studies consistently demonstrate that California adults and children without insurance have difficulty accessing needed care and are more likely to have worse health outcomes." (see this link).

Person 1 responded:

There are VAST differences between the overall economies and populations of the countries you name and the United States. Universal health care stands a much better chance of succeeding and actually working in countries with relatively small populations such as Australia and New Zealand. Even Canada and the United Kingdom have systems that are NOT totally "universal" in nature. Private care in these countries is readily available if a person is willing to pay for it. But the horror stories of people that cannot afford it waiting for MONTHS to get in to see a (usually) lower tier health care professional are rampant. THAT is why so many well to do and middle class people from these countries come to the United States so often when quality health care is needed.

Your second point deserves some discussion too. "employment-based health insurance has dropped from 70 percent in 1987 to 59.5 percent in 2005." Probably true although I have seen some reports that dispute these numbers. But, granted, the numer of people with EMPLOYMENT based health insurance has dropped. That does NOT mean that those people that have lost their company health card do not have access to health care that, in most cases, is just about as cheap as what they were paying for before. Think about it, MOST people in this country do NOT require expensive and long range health care so therefore must pay for only those routine matters that come up from time to time. Again, granted that those that DO require expensive and/or long term care and DO NOT have employer paid insurance and have chosen to spend their money on other things than private health insurance face formidable obstacles. I would argue, however, that even these people are not thrown out on the street when they go to the emergency room at our hospitals. As I said before, they get care, just (perhaps) not the highest quality care. As far as those households that earn $50,000 or more, just how does this compare to the income levels of families 50 years that did earned enough to have an equivilant standard of living? One of the BIG differences is, of course, the PERCEPTION of what is REQUIRED to live these days. Two cars (or actuallly 2.5 cars), 3 TVS, Cable TV, significantly more expenditures on WANTS rather than NEEDS, and many other similar expenditures. I can argue that the LACK of health care (if it exists at all) is a result of personal CHOICE. Fifty years ago these "middle class families" had a greater sense of what was important and budgeted accordingly. This argument could, of course, be the topic (and it has) of many professional papers and conferences.

The above arguments can apply to the rest of your post as well. In short, much of the problem with health care availability can be attributed to PERSONAL CHOICE. Not ALL, of course. There ARE a lot of people that have legitimate problems, NOT OF THEIR OWN MAKING but our safety nets generally provide a basic level of care. For those whose problems are of their own making (deadbeats, drug addicts, alcoholics, people that refuse to work at ALL, and others) I, and MILLIONS of others, do not feel it is MY obligation to pay for their problems that result from their own personal choices.

I wrote back:

Note that when I refer to universal healthcare, I’m not necessarily speaking of a single-payer system. I believe that in the US a combination of private insurers and expanded public programs is probably most feasible solution to dealing with the uninsured since the 170 million or so people (including family members) currently with comprehensive health insurance--paid in large part by their employers--would be unlikely to give it up for some untested universal healthcare system.

Anyway, when it comes to waiting for care, while people in the US go without needed healthcare because of cost, more often than people do in the other countries, waiting time for specialized healthcare services (e.g., elective surgery) is typically shorter in America than in other countries, at least for insured Americans. However, the US ranks low when it comes to the prompt accessibility of appointments with primary care physicians, often waiting six or more days for an appointment, and having trouble making an appointment on weekends and evenings [ reference ] .

So, waiting time for non-emergency care is an issue in countries with universal healthcare. Nevertheless, things are improving in many of them [ reference ]. And why “medical tourism” to the US is a way for them to get such specialized care more quickly, Americans are going abroad for their care because it’s so much less expensive and the quality is just a good. In other words, there are problems with both systems. I contend that access to excellent primary and specialist care, even if there's a longer wait for elective surgery, is a better option than not being able to afford excellent care.

On to your good point about what people can afford based on their priorities and perceptions.

This is how Jeff Goldsmith, president of Health Futures Inc--a firm specializing in corporate strategic planning and forecasting future health care trends--explains the issue of households earning $50,000 or more and not having insurance:

“Families with incomes above $50,000 a year account for an improbable 93% of the 2.1 million increase in the uninsured, and now represent 38% of the total uninsured in the United States. Two-thirds of the 2005-2006 increase was actually in families with incomes above $75,000! How far up into the middle class these incomes put someone obviously depends on where they live. In Manhattan, $75,000 a year is not a lot of money (consider that just parking your car, if you are foolish enough to own one, can cost $500 a month). In Topeka, Kansas, however, it’s upper middle class.

What we don’t know (and need to know) is exactly why nearly 18 million people whose families earn more than $50,000 a year lack health insurance. We can speculate that some of them are young, and have made what seems to them to be an intelligent gamble to “go bare” and spend the money on other things. Others not so young may be scrimping on health coverage in order to make their car payments, or to afford the suddenly more expensive jumbo mortgage payments on their homes, or cover their installment debt and energy bills. These data could indicate that worsening family cash flow is changing how the health benefit is viewed. The fact that relatively well-off households are having trouble remaining covered is deeply disturbing. It would be helpful to know more.

The average US household presently spends about 6% of its disposable household income on healthcare; the above average income household spends much less. In 2005, Americans spent about $250 billion out of pocket on health services and had another $190 billion taken out of their paychecks for health insurance premiums. In 2005, we spent a comparable amount, about $440 billion, on Christmas presents and about $470 billion on restaurants and fast food. How important is health coverage for middle and upper middle class households in their mix of spending priorities? However stressed financially, these families are not among the hundred neediest cases. …Is it important enough to merit public subsidy?”

…Aging Boomers are a surprisingly large part of the uninsured population. Almost one quarter of the 47 million uninsured are between the ages of 45 and 64. Despite the large reservoir of public sympathy for “the kids”, this older group of uninsured people may be the most expensive and scariest subpopulation because they are aging into the region of expensive chronic illnesses. Their emergency room visits are far more likely to be of the $25,000 variety and lead to hospital admissions. (A surprising 541,000 thousand people over age 65 lack health insurance, despite the smug assumption that we’ve achieved universal coverage for the elderly).

This older group of uninsured is bewilderingly diverse. It comprises homeless people, people who are widowed and divorced, laid off factory workers and computer programmers, free-agent knowledge workers, early retirees and those normal retirees whose companies either dropped retiree health coverage or went broke. (The disabled people in this age band are, of course, eligible for Medicare, though many do not enroll).

Mandating that these folks buy their own health insurance coverage, as “individual mandate” health policies such as Massachusetts’ require, poses three practical problems: the limited number of health insurers that will offer coverage to high-risk, older people; their pre-existing medical conditions (which are increasingly numerous as one ages); and the cost, which can easily exceed $2500 a month (if coverage is available at all). Even families with $120,000-a-year incomes would struggle to pay that type of premium out of pocket. For families at or below the median income of $48,000, realistically, it’s going to be impossible without public subsidy.

This is one reason why Massachusetts’ supposedly universal health plan exempted 60,000 people who could not afford even a “stripped-down” benefit. How many more “high-risk/high-need” uninsured people could have afforded Massachusetts’ health coverage if the state had seriously addressed its expensive health insurance mandates (requiring insurers operating in the state to cover chiropractors, in vitro fertilization, and breast reconstruction after cancer surgery, etc.) will be left to a future generation of doctoral students in health policy.” [ reference]

Turing to personal responsibility. People who abuse drugs or alcohol start do so for many reasons--often due to psychological problems, bad living environments, genetic predispositions, family problems, marketing & advertising influences, peer pressure, our society’s worship of short-term hedonism and self-indulgence (conspicuous consumption that drives our form of capitalism), and other such factors related to human frailties. And these folks tend to start down that negative path when quite young and more susceptible. A similar case can be made for smokers and even obese people. This doesn’t “excuse them” for their poor decisions, but it does explain why humans sometimes act foolishly. That is, there's a heck of a lot more to it than can be attributed simply to “personal choice,” like choosing a Coke over Pepsi (or visa versa). What we should be doing is working to change the things in our culture that precipitates such self-destructive behaviors, providing more effective psychological and rehabilitative services, investing more in preventive care and ways to motivate adherence to healthy lifestyles, etc. I find it rather heartless to say: “Too bad…it’s your fault you’re sick and can’t afford excellent healthcare…we don’t care why…but since you can’t afford it, you don’t deserve the same level of care that I do!”

Now, I'm not dismissing the claim that there may be some "deadbeats" out there who are psychologically stable and able to work, but wish to live in poverty just to get free medical care and be able to sleep all day, even though their health is more likely to be worse than others and they must do without the pleasures money can buy. But since 80% of our healthcare costs are for 20% of the population (i.e., old people near end of life and folks with certain chronic conditions), I don't think the deadbeats account for much of the utilization, even though you can certainly make a case that they are "playing the system" and ought to be required to pay back any publicly funded care they receive.

And here's a related conversation I had with a second individual.

Person 2 wrote:

Any solution to the multiple facets of the healthcare problem MUST consider human nature which is that if people do not have direct control over paying for services with real money out of their pockets, they will not consider the costs. No different from anything we purchase.

The start of health care insurance out of World War 2 wage and price freezes has caused us to get to this point. Most people consider health care as something for which insurance pays. They do not look at buying food, cars, homes, rent or mortgages, vacations, clothes, college tuition, etc. as something that which some kind of insurance pays. When the money comes from the person directly, they are more involved with getting as much quality for as low a cost as possible. Health care will eventually have to go back to the status of anything else we buy.

Catastrophic health care insurance could be purchased or offered to people based on income or assets. Normal market forces would keep costs reasonable and people would have the direct incentive to care for their own health--exercise, proper diet, weight control etc., for fear of spending their own money. Any other supposed solutions will keep the problem and make it worse over time with poorer care and higher costs.

I Replied:

I agree that people should consider cost-actually, cost-effectiveness (i.e., cost AND quality). This means they must have the knowledge and tools to determine when care is needed and what kind of treatment is most cost-effective, as well as to self-manage chronic conditions. Furthermore, they must be motivated to stay as healthy as possible, be able to afford the care they need, and have access to such care when it's needed. For many reasons, this is not the case today, so my point is that each of the causes should be addressed and remedied. For example:

• Before a person can go to a cost-effective provider, he has to know where to find one, and that information doesn't exist!
  
• For people to self-manage chronic conditions, which can be quite complicated and require multiple medications and lifestyle changes, many need to be educated, counseled to change maladaptive beliefs and emotions, and assisted in other ways, as well as have the resources (money, transportation, access to specialists, etc.) to carry out their care plans effectively.
  
• We have to develop better ways to educate, motivate and enable people to take better care of themselves, despite the weaknesses of human nature (this is something my company is focusing on). Unfortunately, this is made more difficult by our culture, which makes some people wealthy by promoting poor eating habits (e.g., corn fructose excesses, hormones in animals, pesticides, etc., as well as making healthy organic foods very expensive), laziness (couch potatoes), excessive drinking of alcohol, tobacco use, etc.
  
• We have to change the way we pay providers, from pay for volume to pay for delivery of high-value care.
  
• We have to invest in better health IT systems for providers and consumers.
  

So, until that happens, healthcare is NOT like buying anything else, and thus market forces alone aren't the answer.

Providing catastrophic health care insurance to all based on ability to pay is a reasonable thing to do and wouldn't be overly expensive, but it fails to address the problems above and thus will not slow down spiraling healthcare costs or poor quality. The commercial insurance companies offer a choice of benefit packages with calendar year deductibles between $500 and $10,000, along with cost-sharing in which the covered individual pays anywhere from 20% to 50% of the cost of a service, as well as a lifetime maximum (of $1-3 million dollars). Under catastrophic health insurance plans, you tend to pay out-of-pocket for doctor's visits and prescription drugs, but major hospital and medical expenses above a certain deductible are covered. Most catastrophic health insurance plans cover hospital stays, surgery, intensive care, diagnostic, X-ray and lab tests, but not other services, like doctor's visits, preventive care, dental, vision, maternity care, prescription drugs, and mental health visits. And if you have certain pre-existing conditions, you often won't be eligible for a catastrophic health plan (or have a long waiting period). Examples of such conditions are AIDS, diabetes, emphysema, heart disease, multiple sclerosis, schizophrenia, and many more (see this link).

The problem with having only catastrophic coverage only, rather than comprehensive coverage, is that very high deductibles plus co-pays can be devastating to lower income folks, and many aspects of essential care are not covered, which means people will become more ill and thus require more costly care, and the uninsured will continue to crowd emergency rooms for care that could have been provided much less expensively in a doc's office.

---

Your comments are welcomed.

In my next post in this series, I'll discuss how the Whole-Person Integrated Care solution.

Universal Healthcare, Free Markets, Taxation, Smart Economic Growth, Government, and Insurance Problems

This post is a continuation of my last post, in which I debate with someone the issues of universal healthcare, worthiness, free markets, taxation, smart economic growth, problems with healthcare insurance today, and more. As always, I welcome your feedback.

In this round of the debate, he began by referencing the following statement I made in a previous post: “The best kind of Capitalism fosters 'smart economic growth' through the right combination of small company entrepreneurial (technological) innovation and big- firm market capabilities, without restrictions on free trade, brings about a higher standard of living for just about everyone in that country.”

He then said: This is essentially what I have been espousing, with the state keeping the corporations from manipulating a free market, and leaving the rest alone. Incentives for productive entrepreneurship being profit, and the disincentive for unproductive entrepreneurship being hunger, no further incentive is required.

Next, he pointed to a reference I made in my previous post to France Lappe’s book, “Democracy’s Edge,” and he said ...

I would flatly disagree with Ms. Lappe, arguing that free markets are NOT the product of democratic gov’t, but that only a democratic gov’t will ALLOW free markets. The apparent battle between the free market and the gov’t issuing from the gov’t failing to keep the welfare of the people their priority by interfering with the free market, and allowing the corporation to interfere.

‘If our government begins to spend money wisely and without corruption; if it implements policies to control waste, inefficiency, fraud, greed etc’ will be a point we disagree on, as I have no confidence this or any other gov’t is capable of doing so. None has so far. Gov’t is inherently evil, as it attracts those who desire power over others, however altruistc, or not, their motive.

Those who find themselves in a poor economic situation, through no fault of their own, should be taken care of through charity. That’s the problem with entitlements, the recipient is “entitled” to the benefit, automatically deserving, while with charity, if the recipient is of no inclination to improve their lot, is ungrateful, or is deemed unworthy for some other antisocial reason, the charity may stop. The advantage to the donor of charity is that it promotes an individual’s humanity, and their sense of community. Something the IRS does not. We are a charitable people, and the gov’t has taken advantage of it. We need a drastic REDUCTION in taxes. The gov’t has stolen our humanity and used it to buy votes.

I am convinced that most of the blame for our current health care problem lies with industry providers. Their inefficiency, incompetency, and exaggerated opinion of the value of their service, has put their pricing well above what the market will bear. Add to this funds spent on research (much of them by the gov’t) to develop methods/ equipment/etc. that we as a people can’t afford. In a free market, prices automatically level at what the market will bear. The health care industry has exceeded that level. There will be a correction, one way or another. If the gov’t gets involved, they will dictate fees and services, and we will get $1 of service for $2 in taxes, that will cost $3 to deliver. In other words, much like what we have now, only instead of not being able to afford health insurance, we will be taxed for it, whether we can afford it or not.

And then I replied ...

Where we agree on the following:

1. The benefits of smart economic growth
2. The state keeping the corporations from manipulating the market
3. Our Gov’t having an inherently negative side because it attracts those who desire power over others with less than altruistic motives.
4. The need for a drastic reduction in taxes (and I’d add: on the middle class especially)
5. The Alexander Tyler quote
6. Stopping those who can afford to pay at least a portion of their healthcare, but who manipulate the system to receive free care through taxpayer handouts.

Where we disagree:

1. Since we agree that government is needed to keep corporations from manipulating the market, and since we agree that our gov’t fails to do (and actually encourages corporate manipulation), then we don’t have a free market; instead, we have a corporate controlled market that has emerged due, in part, to lack of good gov’t policies and the existence of bad ones.

2. I do not blame any group—not the healthcare providers, patient, insurers, employers, big pharma, labs, medical device makers, nor researchers—for the current healthcare crisis. Yes, we do agree that there is plenty of greed, incompetence, inefficiency, ineffectiveness, ignorance, inertia, corruption, etc., but these human shortcomings are manifested by virtue of our badly broken healthcare system. But I see it as a system’s problem that actually rewards poor performance (e.g., fix it and fix it again when it breaks), despicable processes (e.g., insurance practices exposed in the movie SICKO), as well as excessive pricing and other ways to “play the system.” I contend that we need gov’t controls to fix the system because no one else will do it, but I don’t trust our current gov’t to do it either!

My hope is that we will develop a healthcare strategy that will change this by making gov’t responsible to the people. I don’t see the need for tax increase to accomplish this, but I don’t have the numbers to support this claim.

He responded ...

Our first disagreement isn’t one. We appear to agree that our current criminal electorate, acting outside the boundaries of the Constitution, and failing to act inside those boundaries, has created the problem by interfering in the operation of a free market.

Our second disagreement remains, as I see no possibility of one of the agencies largely responsible for the problem, successfully solving it. I suspect that soon (2-4 years) we will have some form of UHC [Universal Health Care]. I doubt it will be fiscally sound (Medicare, social security), or will provide care of any quality (Veteran’s Administration).

I have no confidence in a man who “believes” the Cuban gov’t, or ours for that matter. Mr. Moore does not believe any of what he “exposes”. He has merely found a lucrative market for his fictitiously manipulated “research” among those of liberal/socialist persuasion.

The only way we can SUCCESSFULLY solve the problem is to find a way to force the gov’t to act responsibly, and within the boundary of the Constitution, by “promoting the general welfare” not financing it. A tall order indeed

To that, I responded ...

OK, you don't trust Michael Moore. So here are problems with the current healthcare economic models, as related to insurance, which create a chaotic system and encourage destructive practices (with references from this page of our Wellness Wiki):

• Cost-shifting — Charging higher prices (above cost) to one group of patients in order to offset lower prices (below cost) to another group of patients based on their insurance coverage.
• Price discrimination — Charging different patients different prices for identical healthcare goods or services irrespective of cost.
• Cherry-picking — Choosing to provide insurance coverage to the young and healthy, and treatment to the most profitable patients, while not providing the same level of coverage and care to others.
• Retroactive coverage cancellation — Payers cancel coverage retroactively for people who need expensive care in order to escape its obligations to members who become seriously sick.

A more sane payment system would encourage continuous quality improvement, while controlling costs and insuring everyone through shared risk. It would recognize the responsibility of all stakeholders in creating a sustainable healthcare system that brings greater wellness to all in an effective and affordable way.

Methods having been proposed include pricing transparency, informing consumers of the value of care providers render in terms of performance and cost, and pay-for-performance. There are serious issues with each of these proposals, but they may contribute to the development of a better payment system. In addition, it may be useful to give consumers incentives for maintaining healthy lifestyles and complying with sound medical advice.

Anyway, I happen to agree in part with your final point: The only way we can solve the problem SUCCESSFULLY is to find a way to force the gov’t to act responsibly, and within the boundary of the Constitution, by “promoting the general welfare” not financing it. A tall order indeed.

The disagreement, or should I say confusion, with that strategy is that, even if our gov't is forced to act responsibly, it has to spend considerable sums to promote general welfare through writing and policing the implementation of radical new policies that foster the delivery of high-value care, as well as supplementing coverage for those who simply cannot afford it. In other words, I just don't know how anything can be accomplished without the wise expenditure of tax monies. Do you?

He responded ...

No, nor do I expect the wise expenditure of tax revenue, it is seldom done.

A few things not adequately addressed that would require relatively little revenue:

• The monopoly of healthcare by the AMA through the FDA.
• The ineptitude of the FDA. That is, the FDA should not approve alternative health care practices not endorsed by the AMA. That which is not approved, or endorsed, will not be insured, and, in fact, may be criminally prosecuted.
• Policing/regulation of the insurance companies (corporations).
• Policing/regulation of the provider companies (corporations).
• Eliminate gov't sponsored research, except in the most dire national situation.
• More gov't control of medical licensing. (doctors mostly police themselves).
• Criminal charges and sentences for fraud/theft equitable to any other common robbery. The only difference between “white collar” and “blue collar” crime is how it is dealt with. Theft of your life savings through fraud is just as violent as a mugging.
• Elimination of regulation defining what groups are eligible to negotiate with insurance and/or care providers. Most states currently have strict regulation, which is obviously a protection of the insurance/provider companies.
• Here is an idea that just popped into my head. Reduce the tax bill of all individuals by the amount they spend on their own, or their family’s, non-elective health care. I’ll have to think about that.