The Massachusetts experiment in health care reform is all about expanding access. But it doesn’t try to control costs. This, in a nutshell, is why it’s running into trouble.
The plan didn’t reform health care delivery, just coverage. Granted, in terms of bringing more people in under the tent, it’s been a success: Since the plan went into effect in 2006, 439,000 people have signed up for insurance—a number that represents more than two-thirds of the estimated 600,000 people uninsured in the state two years ago. This surge in coverage has reduced use of emergency rooms for routine care by 37 percent, which has saved the state about $68 million. (Going to the ER for routine care drives up health care costs by creating longer wait times and tying up resources that can be used to help patients who are critically ill).
But even with these savings, Massachusetts is having trouble funding its plan. Earlier this month the Boston Globe reported that the governor’s office is planning to shift more responsibility for funding to employers. Currently, the Mass. Health care law requires most employers with more than 10 full-time employees to offer health coverage or to pay an annual ‘fair share’ penalty of $295 per worker: this is called ‘pay or play’, an employer either provides coverage or pays a fee toward the system for not doing so).
To “play” rather than “pay,” employers must show either that they are paying at least 33 percent of their full-time workers’ premiums within the first 90 days of employment, Or that they are making sure that at least 25 percent of their full-time workers are covered on the company’s plan. (In other words, they must be paying a large enough share of the premiums so that 25 percent of their employees can afford the plan they offer.)
Now, instead of giving employers this Either/Or option, the new
proposal requires that employers do both –or fork over the penalty fee.
In a sense, this is an admirable move by the government, since its
intention is to push toward truly universal coverage. But there’s also
a game of scrounging-for-dollars going on here: The state wants
employers to pay more—to, in the words of Mass. Governor Deval Patrick,
“step up” and embrace “shared responsibility”—either by covering a
greater share of health care costs or paying more in penalty fees.
As you might expect, businesses are putting up a fight. They say that Patrick’s proposal “ignores the obvious,” which is the fact that
“employers definitely are doing their part.” While it’s tempting to
vilify “Big Employer” as stingy and selfish, the truth is that there’s
only so much you can ask businesses to do without harming citizens.
As I pointed out in a March blog post,
research shows that there’s a big tradeoff between health care costs
and workers wages: when employers have to pay a lot for health care,
they take the cost out of employees’ paychecks. Or, as a 2004 study
from the International Journal of Health Care Finance and Economics put
it, "the amount of earnings a worker must give up for gaining health
insurance is roughly equal to the amount an employer must pay for such
coverage."
In other words, you can’t bleed employers dry without also screwing
workers. True, big corporations might have deep enough pockets to pay
more for health care without adjusting workers’ wages. But they’re
still bottom-line driven enterprises, which means that they’re going to
try and break even wherever possible. Unless you want to see laws that
strictly regulate the correlation between business health care costs
and workers’ wages, the working Joe’s income is going to take a hit as
employers shoulder more health care costs.
The other choice employers have is to opt out of coverage and instead
pay the penalty. Many have pointed out that, for employers, this is an
attractive option—particularly in Massachusetts, which, as of 2007, had
the highest annual health care costs per
employee in the country: $9,304. That’s a lot more than $295 a year.
We can be certain that this fee will rise in the future. And once it
gets high enough for employers to choose health coverage over the fee,
they’re still going to take the cost of that coverage out of workers’
wages.
On the one hand, one might argue that this is fair—that workers are
better off with health insurance rather than higher salaries.
Massachusetts is a relatively wealthy state: in 2008, median income for
a family of four stood a $85,420 (so half of the population earned more
than that). Insofar as some of Massachusetts wealthier citizens don’t
have health insurance, it probably would make sense for them to earn a
little less, and be covered. Some would insist that this should be an
individual choice, but the truth is, if an individual decides to go
without insurance, we all wind up paying the cost when he or she
becomes seriously ill. On the other hand, many households could not
afford to take a pay cut—especially when you consider the cost of
housing in Massachusetts.
Ultimately, the only way to make a universal health care system
sustainable both for employers and employees is to tackle the high cost
of health care in Massachusetts. As noted, in the Commonwealth, the
average annual premium for an employee’s health care is $9,304
—significantly more than the national average of $6,881.
As Maggie has pointed
out in the past, this is not because insurers in Massachusetts are
profiteering. Insurance is expensive in the Commonwealth because its
citizens consume more healthcare than people in many other states.
They undergo more tests and procedures than most of us, and they see
more specialists. Look at a graph of average healthcare expenditures
per person in Massachusetts compared to average healthcare expenditures
in the rest of the U.S., and you find that in Massachusetts,
individuals receive an average of nearly $10,000 worth of care each
year—compared to just a little over $7,000 per capita nationwide.
High consumption of care is driven, Maggie explained,“by the fact that
the state is a medical Mecca, crowded with academic medical centers,
specialists and the equipment needed to perform any test the human mind
is capable of inventing.”
As she originally explained in this
article, in states where there are more hospital beds and more
specialists, the population receives more aggressive, more intensive,
and more expensive care. Even after adjusting for local prices, race,
age, and the underlying health of the population, supply drives
demand. And it turns out that the Bay State has one doctor for every
267 citizens—versus one doctor for every 425 people in the nation as a
whole. Meanwhile, the state boasts an abundance of specialists, while
suffering a critical shortage of primary care physicians.
For reform to work in Massachusetts, the state needs to make care more
cost-effective, not just more accessible. That means encouraging
providers to emphasize proven treatments that can do the most good for
the most people which avoiding over-priced, not fully proven bleeding
edge services and products.
This won’t be easy. As Ezra Klein recently pointed out on his blog at The American Prospect:
“people generally like to equate better health with awesomer
technology, but developing a slightly better drug for late-stage cancer
— a good, profitable innovation — will do much less for health than
getting the flu vaccine to everyone who needs it, or creating systems
so everyone with elevated cardiac risk is on statins. These
interventions are low innovation, but actually extremely
effective…Saving some level of money on innovation in order to
rechannel it to access and basic interventions would probably make the
country a whole lot healthier. But I don’t think you’re allowed to say
that.” Yet if health care is to improve—in both Massachusetts and the
U.S.—this is exactly what we need to say.
In fact, Massachusetts is a classic example of the technology-cost problem. According to a Boston Globe report, between 1997 and 2004, the number of MRI scanners in Mass. tripled
to 145, about the total for all of Canada. From 1998 to 2002, the
number of patient MRI scans in the state increased by 80 percent, to
almost 500,00 a year. With insurers paying between $500 and $1,400 to
cover a scan, the numbers add up: in 2003, Harvard Pilgrim, a
non-profit insurer, shelled out $73 million on MRI scans, even as other
costs increased as well. It should come as no surprise that a state
with so much medical technology, also has more
medical and clinical lab technicians than any state in the union.:
184.06 per 1,000 of the population, almost twice the national average
of 101.32
Massachusetts also reports an abundance of hospital beds—enough to
allow patients to spend an average of 11.8 days in the hospital during
their last six months of life—compared to 9.5 days in Maine. None of
this is consciously planned. It’s just that if the beds are available,
it’s easier to hospitalize the patient. And once they are in the
hospital, it’s easy to refer them to a dozen specialists, assuming that
enough specialists are available.
Bottom line, health care in Massachusetts is extremely expensive,
thanks to supply-side factors—which means expanding and sustaining full
coverage is, fiscally speaking, a tough proposition. Luckily, steps are
being taken to address cost issues : in June, the state’s biggest
insurer and the state itself said that they would stop reimbursing doctors and hospitals for 28 medical errors.
Certainly punishing doctors isn’t the key to sustainable health
reform—and some errors are more “preventable” than others. But changing
health care delivery—that is, changing patterns in the types and volume
of treatments and procedures made available to patients—is the key to
making health care run smoothly in the long-term. Universal coverage is
wonderful and necessary. But it’s only one piece of the health care
puzzle.
with apologies to the Lone Ranger, there is no silver bullet. so why not just simply insure everyone today and worry about cost issues later. that’s how medicare was introduced and it worked for more than a few decades.
health economics are a two-edged sword. it is true that higher employer paid premiums depress wages, but it is equally true — and more important politically — that ratcheting services in Mass. back to national norms would put 40% of health workers out of work. Their complaints about losing their jobs, cloaked by arguments about resulting inconvenience to patients “needing” the services they provided would be extremely potent politically. the fact is that health is a pillar of the economy in many of our nation’s oldest, biggest cities.
Here we go again! We are finding out that the Massachusetts plan is not sustainable. Surprise! Surprise!
In March, I had a letter published in the Boston Globe. Here is an excerpt: “May I suggest that employers and employees alike, in businesses large and small, are tired of taking the hit for costly health insurance. . . . The Massachusetts plan protects the profit stream of private insurers.”
What is the current cap on administration costs for the Mass. insurers? And haven’t they complained about that recently?
Treatment costs are rising across the globe. Paris, like Boston, is a center of medical activity and innovation. But somehow the French, and other free-market democracies, have figured out how to provide quality health care for their people without penalizing those who cannot afford premiums.
Economists (see the Lewin Group report to the stste of Colorado) tell us that only a nonprofit single payer plan would save us beaucoup bucks, and would enable us to control costs going forward.
At http://www.thomas.gov, one can read the text of HR 676, the single payer bill in Congress. And business owners should look at pnhp.org to see how business and labor would benefit from a single payer plan.
I favor a national plan, but, if the health insurers and HMOs were eliminated, it is possible that Massachusetts taxpayers, as a group, could self-insure. Forming one large pool, sharing risk and cost, they could pay for health care the way we all pay for fire and police protection.
Louisville, KY
A significant part of the problem is that inferior insurance IS available to pay for so many costs.
We are at a point, in my opinion, that the premiums themselves are getting difficult for the average family to afford.
We need to understand that the insurer, be it the government or the commercial variety, is a middleman, merely passing on the costs to the participants.
Whatever administrative savings are available are a onetime savings. The medical costs of the services still remain.
While insurance is for the sick, it is the healthy that make the system work.
If we price the premiums from discouraging the healthy to participate, then the insurance becomes even more expensive.
Requiring the healthy to participate would not be necessary if the products themselves were more attractive.
Simply requiring people to purchase inferior products, whether government or private, does not solve the cost problem.
Don Levit
Hey — wait a minute!
The Democrats said they were going to get as much medicine as anyone wanted.
Were the Democrats lying?
Darn them.
I agree that the main problem with the Massachussetts system is that it continues to allow the fox to guard the chicken coop by maintaining the insurance companies as the gatekeepers of the system. But there is another problem with the proposed alteration in the plan to shift a greater burden to employers. The fact is that the current Massachussetts plan viotates Federal ERISA statutes by penalizing employers who do not provide health coverage for their employees. The low penalty in the current plan is the only reason the employer penalties have not been challenged in court. Raising the penalty will insure a court challenge, and every single jurisdiction that has enacted programs with employer penalties has been struck down by the courts when challenged.
The only way to control costs and cover every one is by enacting single-payer healthcare. We won’t solve our healthcare crisis until our legislators have the guts to pull the rug out from under the health insurance industry, which has proved itself unworthy to administer our healthcare system.
I strongly disagree that a single payer system would solve our problem of high (and rapidly growing) medical costs. First, any administrative savings would be comparatively small as a percentage of our total healthcare bill (perhaps 2%) and those savings would occur just once while underlying medical costs continue to grow. Second, I think a single payer system would result in less innovation and much less competition. A monopoly insurer doesn’t have to worry about pleasing either patients or providers if it is the only payer in town.
Instead, I think our fundamental problem relates to how we pay for care, namely, fee for service. Providers get paid more if they do more whether it is cost-effective or not. Medicare rewards resource utilization and not value, while private insurers feel that they have no choice but to follow Medicare’s lead. At a minimum, we need to move toward bundled pricing for complete episodes of care related to expensive surgical procedures, and, eventually, to capitation that would reward cost-effective care and good outcomes..
While federal financing may well be the quickest and surest route to achieve universal coverage, there are a host of strategies that can affect medical costs that lend themselves to state level experimentation and innovation. These include: (1) medical dispute resolution reform, (2) more robust efforts to combat fraud, (3) more aggressive efforts to promote living wills and advance directives, (4) price and quality transparency, and (5) rules that would require doctors to offer patients shared decision making where appropriate and to fully explain the risks and benefits of care options related to end of life care.
I am not a big fan of artificial supply restrictions, and I don’t think insurers or drug and device manufacturers are the villains that many critics make them out to be. Doctors’ decisions drive well over 80% of all healthcare spending. The incentives embedded in the way we pay them (and hospitals) matter. CMS has it wrong so far, and it needs to get it right so it can start to reward value instead of resource utilization and private insurers can then follow CMS’ lead.
“As Maggie has pointed out in the past, this is not because insurers in Massachusetts are profiteering”.
Maggie couldn’t possibly be more wrong.
Barry Carol wrote in part:
“A monopoly insurer doesn’t have to worry about pleasing either patients or providers if it is the only payer in town.”
————-
Boy, there is a lot of healthcare system mission related ideas that are brought to my mind as I read this! Does the payer really control the patient experience rating of the medical mission, or just the after treatment concept of paying?? What should the system’s mission require–easy payment or no payments and/or best treatment results?? Also, should the professional related results of medical care be related to competition and costs or to the proper processes being used throughout the encounter to diagnose and treat the complaint? For example, in an ideal world you would go to the provider with a list of complaints. From that list ALL providers would use the current guidance to further narrow down a differential dx, and then the treatment options would be found and presented to the patient. Where in that ideal is the role for competition and costs?? Maybe access would be tied to costs and competition, but I think that gets us back into a fairness bind like we have currently!
Like I said, lots to think about from Barry’s post here, at least for me!
Thanks everyone.
Jim, you’re right, it’s very hard to do all at once, and there’s a real argument to be made for incrementalism–but there’s also a danger of going too far in the other direction. I think the gridlock and constant state of crisis in Medicare today speaks to the long-term dangers of saying “we’ll get to it later”: constituencies and interests coalesce around a program as its introduced, even as competing priorities emerge, and suddenly that Step 2 that looked so easy on paper becomes a whole lot more difficult.
Barry, as along time reader of the blog, you know by now that I agree with your point that the reimbursement system is all screwed up and actually discourages cost-effectiveness.
As for the insurers-as-profiteers meme, a few points:
1. I understand the philosophical objection to someone running a for-profit industry around health care. It’s not right–it skews priorities and is generally anathema to what health care should be about, which is providing the best care for those who need it now without compromising the prospects for those who need care later. Money and medicine don’t mix.
2. That being said, the existence of for-profit companies does not mean that they are successfully milking the system. By almost any reasonable metric, private insurers are on financial thin ice.
From an earlier post here on Health Beat, “The Managed Care Roller Coaster”:
“Joe Paduda of Managed Care Matters reports that UHC will be cutting 4,000 jobs as part of a restructuring plan that includes eliminating Uniprise, one of its major brands. Since last fall, UHC stock has plummeted from $53 to $22 a share. WellPoint, another huge private insurer, has watched its stock drop from $82 a share in 2007 to $49 a share in June.
“As Robert Laszewski wrote on the Health Care Policy and Marketplace Review in April, ‘Wall Street finally seems to be figuring out that the health insurance business is, and has been for years, on a long walk off a short pier. What’s sustainable about a business whose costs have continually exploded at 2-3 times the growth rate of the rest of the economy or the wage rate? Just where did Wall Street think this business was headed all those years the sector has been the darling of Wall Street?'”
Consider Blue Cross Blue Shield, the largest private health insurer in Mass. In Q1 of FY 2008, it posted a $2.2 million net loss–and this was great news! in Q1 FY2007, its net loss was $31.9 million.
http://boston.bizjournals.com/boston/stories/2008/05/12/daily38.html
Such poor performance isn’t a new phenomenon : in the first half of 1996, for example, BCBS had a net loss of $53.5 billion.
http://findarticles.com/p/articles/mi_m0EIN/is_1996_August_7/ai_18564892
Yes, you can say that insurers have more than an enough money; yes, you can even point out that they have investment income which can help compensate for operating costs. But still, they usually end up in the red.
If you want to get rid of private insurers, that’s fine, one can take that position. They’re certainly part of the problem, given the extent to which they waste resources on marketing and underwriting, their use of unfair practices like punishing pre-existing conditions, and boneheaded management practices (again, see the “Managed Care Roller Coaster” post: http://www.healthbeatblog.org/2008/07/the-managed-car.html
But the central issue really isn’t that they’re bilking all of us for billions of dollars in profits. They’re by no means innocent, it’s just that this isn’t their big crime.
I want to say something about “statistical” medicine. I claim it is one of the causes of high health spending. I’ll give an illustration of what I mean.
The PBS shows “Now” had a segment last week about economic distress from the current downturn. One of the people interviewed had lost her job and, hence, her health insurance and was hard-pressed to pay $300 per month for high blood pressure medicine.
This type of drug is what I’m calling “statistical” medicine. There is no direct evidence that her taking this pill will have any specific benefit to her. All that is known is that people with lower blood pressure tend to have less complications than those with higher blood pressure.
In her case she was obviously overweight. One of the factors affecting blood pressure is obesity. So a good doctor, knowing her straightened circumstances, could be making a big push to have her lose weight and tell her to forgo the drug. Losing weight wouldn’t strain her budget, except to the extent that eating healthier costs more.
But everything conspires to work against the logical course of action. The doctor makes nothing from recommending a diet. The patient has to put in the effort herself. The society has implanted the idea that one need only take a pill rather than alter one’s lifestyle. The drug companies have pushed statistical medicine as if it were the same thing as actual disease fighting treatments. The rise of antibiotics and vaccines put people in the mindset that drugs “cure” and the drug makers have been using slight of hand to push drugs with no direct curative action based upon this experience.
I’m not one to blame things on lack of personal virtue, but there has to be some balance. We have gone too far.
Response to Barry Carol: I must take issue with your contention that
“A monopoly insurer doesn’t have to worry about pleasing either patients or providers if it is the only payer in town.” Tell that to the Canadians or the French who are, overall, very pleased with their system. In Canada, the voters, i.e. the taxpayers, have insisted on shorter wait times for hip and knee surgery. The problems are being fixed. It’s much easier to implement changes within a single payer system. In our current flawed, and often inhumane multi-payer system, we live (and die) at the mercy of the for-profit insurers–with little ability to protest.
For example, the recent Congressional hearing on recisions may cause Congress to seek redress for the victims, but how many of the 1200-plus private insurers will be held accountable? Would voters allow our own publicly funded Medicare to dupe and dump patients?
I like to respect the opinions of others, but I suggest the pro-market folks do a little more homework on single payer. Watch “Sick Around the World” on the PBS web site. Deign to rent SiCKO. Both documentaries were fact-checked.
And will B Spoon please elaborate. I’d like to know the capitation info on the insurers connected to the Mass plan. Thanks.
Niko:
I am not opposed to profits in the medical arena, whether one is a doctor, hospital, or insurer.
What is important, rather, is how are the profits arrived at?
Is value added for the user of the good or service?
In addition, for an area such as medicine, focusing on profits detracts from the important mission of repairing humanity, as well as a broken world.
As you wrote, we need to be concerned about treating people today, and in the future.
We have limited resources for what appears to be rather unlimited needs.
What we need to start focusing on is the value the community provides for those needing care, whether it is the physician, hospital or insurer.
A more intimate, compassionate insurer is needed for this important task, which for-profit-driven insurers will not be the ultimate answer.
Don Levit
Niki
“reduced use of ERs for routine care by 37%” as quoted from Mr. Goldstein in WSJ is not an accurate statement from either
the Boston Globe article by Ms. Lazar or the report from the Mass. Department of Health Quality. The BG article and Department’s actual quote is “37% reduction in “Hospital Outpatient Visits”. Although emergency room visits are a significant portion of those visits (20-30%), the report did not say emergency visits for routine care were cut by 37%. Hospital outpatient visits as classified by the department include
just about any contact a patient has with a hospital in Massachusetts
who is not admitted to the hospital. Don’t get me wrong, any reduction
would be good! You’ll agree that if we are going to evaluate Massachusetts’ health care reform policy then the information
must be accurate. There is just to much at stake. For your readers
information, the number of unnecessary ER visits in Massachusetts is about 46%, over 1,000,000 visits. What the expenses verses charges are for these visits I’m not sure, but have to be in the 100s of millions of dollars not to mention needless patient risk. If Massachusetts would
lobby for the NAEHCA legislation they could bring in an additional
$132 million dollars in federal aid and create a totally interconnected
system providing over 1,000,000 ambulatory visits, decompress your ERs,increase the capacity of your primary care physicians and reduce not only the cost of insuring the “newly” insured in Massachusetts, but everyone’s
health insurance in Massachusetts. Cost per capita to the people of
Massachusetts, 8 cents a day. You would probably save enough to cover the
unexpected cost increases for the state’s new health care reform. You can only lead a horse to water.
Robert, Harriet,
Thanks all. Niko’s on vacation, so I’m filling in.
Robert– I completely agree about the blood pressure medicine. I’d like to know more about the medicine–how effective it is, for what group of patients, how closely does this woman fit that profile?
So many Americans are over-medicated, feeling that they “must” take whatever the doctor prescribes. This is a reason why, whenever a doctor prescribes something, I’d be inclined to say: “I’m always a little wary of taking medication. How important is this–in other words, would I be crazy not to take it? Or are you saying that you think I would be better off if I took it, but it’s not absolutely necessary?”
In other words, try to get a feeling for where the doctor puts the drug on a scale of 1 to 10 . . .
Regarding the patient’s obesity, on the other hand, I think you are ignoring one major problem: Medicine has no effective treatment for obesity. (I’m not talking about someone who is 15 or 20 pounds overweight; I’m
talking about obesity.)
Doctors can help patients take it off, but keeping it off is the problem.
We can help people stop smoking. We can help some people stop drinking.
But obesity is a much more complicated problem. It’s not an addiction to a single substance.
The fact that we don’t have a truly effective treatment is tragic–and something that people don’t like to talk about. Who wants to discourage anyone trying to lose weight? Besides, everyone from gymns to diet-food-makers are making a fortune on the notion that if you just exercise and restrict your portions, you can take weight off and keep it off.
This from a Dr. Lustig at University of California, San Francisco (which does very fine work treating addictions):
“Robert Lustig, MD, said that although lifestyle and drug interventions for obesity can induce weight loss, their acute efficacy is variable, and their ability to maintain weight loss is questionable.
“He added that only a handful of randomized controlled drug trials have lasted for ≥12 months, and their beneficial effects have been underwhelming.
“A meta-analysis performed in 2003 of 16 randomized controlled trials (Cochrane Database Syst Rev. 2003; [4]:CD004094) showed that sibutramine (Meridia) induced only a 4.6% weight loss and orlistat (Xenical) only a 2.9% weight loss compared with placebo over a 12-month study period.
“A subsequent meta-analysis of 4 randomized controlled trials (Cochrane Database Syst Rev. 2006;[4]:CD006162) concluded that rimonabant (Acomplia) resulted in only a 4.9-kg greater weight loss than placebo at 1 year.
“Dr Lustig, of the Division of Pediatric Endocrinology at the University of California, San Francisco, said that the efficacy of these medications attenuates after 4 months of continued use. This is not because of a lack of compliance, altered drug kinetics, or tachyphylaxis, but rather due to leptin resistance, which persists even in the face of pharmacotherapy . . . ”
In other words, it isnt about compliance, or self-discipline–it’s about a complex combination of factors that we haven’t figured out how to address.
Lustig concludes: “Although many physicians believe that obesity is caused by eating too much and not exercising enough, such thinking is too simplistic. Obesity is a chronic problem that needs to be managed like other chronic conditions.”
As a “chronic disease” it is something we can’t cure, though we can try to treat and control Because our treatments are not very succesful, in some cases we resort to bariatric surgery (“stomach stapling”)–which ia a fairly dangerous operation.
I should write a post about this, but I need to do a lot more research.
Harriette–Good points– I agree.
Don– Yes, we need to focus on “value added.”
James D. —
As you say, whether the program is reducing ER visits or outpatient visits–either is good. AS long as reform is reducing Unnecessary Visits.
But the only way that will happen is if Mass. citizens are getting good
preventive care and management of care.
Here, as I understand it, the shortage of primary care physicians (and other generalists) in Mass. presents a major problem.
Even if we start paying primary care docs more, it will be years before they make their way through med school and enter the market. It’s rather like drilling for oil: we need the primary care docs now, and there is no way to suddenly create them.
Nurse practitioners could help, but we also have a serious shortage of RN’s. . .
What Government Does Better: Health Insurance
Howard A. Green, MD, FACP, FAAD, FACMS
You’ll listen to me because I’m your doctor. I only have your health interests in mind. I have written this article without ‘prior authorization’ from any insurance companies.
There are some intuitively obvious services that the government runs more productively and efficiently than private for-profit enterprises. For example, our armed forces and GI’s conquer and hold and protect territory more effectively and at a fraction of cost of private militias such as Blackwater USA and the Crescent Security Corporations. In addition, the government rules and regulations which our governments’ military adhere to insure an ethical cohesive fighting force compared to the unregulated for-profit corporate armies. Our GI soldiers assigned to kitchen duty prepare and cook meals at a fraction of the cost of identically prepared meals from the private for-profit logistics divisions of the Halliburton or Kellog Brown and Root Corporations. Government regulated public education in America such as the undergraduate and college systems of the City of New York and other large metropolises have for over a century produced more CEO’s, doctors, lawyers, accountants, engineers, chemists, poets, philosophers and military officers than any private school system, and at a fraction of the cost compared to all the private schools in the country combined. Take away the government grants, government tax breaks, and government sponsored free overseas labor from Americas top private Colleges and their classrooms and graduate programs would most likely shut down, no matter how large their private endowments. The government run and regulated public school systems of Israel, India and China are churning out competent engineers, scientists and entrepreneurs at a quality and rate much greater than that of any collection of private schools in any country in the world. These non-American people, highly educated by their government run school systems, have formed a new collective worldwide labor arbitrage system which is fueling the productivity of intercontinental private business. The Marshall Plan, Interstate Highways, Space Program, Peace Corps, and the GI Bill all demonstrate successful government run bureaucracies of their time.
In a similar fashion, our mammoth government-run health insurance company (Medicare) operates at a fraction of the cost of private insurance corporations such as Aetna, Cigna, United, Blue Shield Blue Cross, Kaiser Permanente and Humana. Medicare, the government health insurance for the elderly uses only 1-2% of your dollar to achieve rates of morbidity (sickness) and mortality (death) among their patients which are identical to those of the private health insurance corporations. However, private insurance corporate bureaucracies inefficiently siphon $350 billion per year, or 20-25% of your hard earned dollars away from doctors, hospitals and patient care into the pockets of their executives, administrative employees, shareholders and politicians. The recent stock option fraud perpetrated by the CEO of United Health Care demonstrates the negligent disdain the private insurance corporations have for physicians, hospitals, health care workers and patients. Since their founding 40 years ago, private health maintenance insurance corporations have failed to deliver what their business plans always promise; lower rates of morbidity and mortality associated with low costs to the patients. These insurance companies are financially profitable for their shareholders and executives, but medically bankrupt for their patients. Without their own massive government subsidies, government protection from malpractice lawsuits, and a government ban on collective bargaining by physicians the private health insurance corporate bureaucracies of Aetna, Cigna, United and Humana, and hundreds of other smaller health insurance companies of the health insurance industry would undoubted fail to exist. Most elderly people who call themselves Republicans, and conservative physicians in this Country have recognized the efficacy of our government regulated Medicare health insurance corporation and have enrolled themselves and utilized this Government run health insurance company for their own medical needs (despite the shrill cries of socialized medicine from their leaders). 40 years ago we heard these same shrill cries from organized medicine and Republicans concerning the establishment of Medicare. After accepting hundreds of billions of dollars in Medicare Insurance payments over the ensuing 4 decades, one can only wonder why conservative physicians still rally like Quixote against this government run insurance product.
The following 9 steps will simply suggest how, without the inefficiencies and burden to productivity of private insurance corporations, we can deliver efficient and effective comprehensive health care with great savings and no sacrifice of jobs. In fact, we may be able to decrease morbidity and mortality in this Country with one coordinated system which cares for all Americans, and concurrently analyzes optimal diagnoses and treatment modalities through its integrated computerized billing system. The savings incurred insuring all Americans through the more efficient Medicare system will benefit all citizens of our Country.
9 Steps to Comprehensive Quality Health Care in America
1) Shut down the private health insurance corporations.
2) Enroll all Americans (including Veterans) and the 40 million uninsured citizens into the Medicare Health Insurance Corporation. Since the current functioning Medicare Insurance Company is already accepted by almost all physicians, Hospitals and clinics in the Country, hardly any infrastructure investments on the health care delivery end will be necessary. Have all private businesses pay a Medicare premium for their employees instead of private health insurance premiums. Let employees as well as businesses contribute a fixed premium amount based on their age up until 65 for their Medicare services and drugs. Freeze current premiums for all Americans over 65 and adjust in the future according to the cost of living index. These premiums paid by businesses to Medicare for their employees should be less than that paid to current private insurance companies because of the lower overhead costs of the Medicare Corporation and improved risk distribution.
3) Hire the now unemployed former private health insurance corporate bureaucrats to actually deliver and not inhibit health care by working in hospitals, doctors’ offices, clinics and nursing homes around our Country. Demographically, the percentage of elderly Americans is rapidly increasing. With every American now insured through Universal Medicare Insurance, real health care workers will be in desperate need. For the first time in the brief but bloody history of managed care, these former private insurance corporation employees will actually touch and improve care for patients by working in physical therapy, nursing, home health care and other ancillary patient care capacities.
4) Obtain by eminent domain (for the public good) the best of the intellectual property protected computer codes which the closed private insurance businesses previously used to monitor patient care and doctors utilization and performance. Private health insurance companies have used these computer programs exclusively for the purpose of strong-arming their contracted health care providers into doing less for their patients and increasing the premium costs for sicker patients in order to achieve higher corporate profits. Medicare on the other hand can use these same computer programs for the common good; to monitor, collect data and eventually improve the efficacy of diagnoses and the treatment of diseases and medical outcomes every time a doctor submits a bill. For example, wouldn’t it be nice to know as a medical consumer (patient) which oncology groups in Boston, New York or Houston have the highest cure rates for stage III breast cancer or Stage II prostate cancer? All those numbers currently exist in cancer registries nation wide and just need to be collected and honestly disseminated. Currently, instead of solid medical data which delineates morbidity and mortality and performance, the medical consumer when choosing an oncologist must rely on word of mouth, physician referrals or advertisements in the local papers which show photographs of smiling doctors in white coats who claim to be the ‘best’ doctors in town. In addition to garnering invaluable instantaneous epidemiologic data on diagnoses and treatment of diseases based on severity and other variables, a strong Medicare based utilization review computer code would also allow Medicare to monitor doctors and hospitals who abuse a fee-for-service billing system. Any physician, institution or service found to abuse the Medicare fee for service billing system after proper review and appeal should be dealt with severely through stiff penalties and loss of their Universal Medicare provider contract.
5) Freeze Medicare physician, hospital and ancillary services reimbursements at current 2007-2008 levels. Adjust reimbursements for future services yearly by Cost of Living increases, or in the event of a deflationary economy a decreases in doctor and hospital payments. Ask any physician and they’ll tell you they would accept current reimbursement rates with COLA over the current mysterious illogical fee adjustment system of Medicare, or the physician population density reimbursement formula used by most private insurance corporations. Two tiered medical systems separating the “haves and have not’s” of society have and will always exist. Therefore, we must allow physicians to practice medicine without enrolling in or accepting the Universal Medicare reimbursement. With private medical insurance no longer available, and no performance based evidence for improved morbidity and mortality among their private for-pay patients, these extraordinarily expensive private ‘VIP’ practices will be limited.
6) Allow Medicare, much like the current Veterans Administration System and every private health insurance company and government health care system around the world, to bid on medications from pharmaceutical corporations for its Medicare drug formulary. Every physician recognizes that we don’t need a choice of a dozen redundant drugs in each pharmaceutical category. For example, we need only 2-3 statins for cholesterol, a handful of antibiotics for infections, 2 beta blockers for hypertension, and a few pain killers. Once the Government bids on pharmaceuticals for the Medicare Corporation formulary, macro economics will force prices to massively decrease to levels identical to that which all the other people of the world outside of America are paying for the same medicines. Since it has not effectively decreased morbidity or mortality in this Country, and only wastes money, we should also prohibit pharmaceutical companies and their workers from contributing to political campaigns or buying commercials on the public airways. We need to also prohibit the current practice whereby your local pharmacy and pharmacist sells your private medical diagnoses and your doctors private prescribing drug information to pharmaceutical companies so the pharmaceutical companies in-turn can directly pressure-market physicians. Prohibit pharmaceutical companies from contributing to organized medicine societies, colleges or associations because the doctors can’t rely on soft bribes or free lunches to prescribe what’s best for their patients. Prevent pharmaceutical representatives from visiting doctors’ offices or hospital pharmacies directly. Allow delivery of Medicare formulary approved sample medications for patients to physicians’ offices via post office mail only. Allow pharmaceutical companies to market products to physicians only via peer reviewed publications delivered by email or snail mail.
7) With the savings incurred from closing the private insurance corporations and paying less for drugs, have the American government fully fund the National Institutes of Health (NIH) and the National Cancer Institute (NCI) and Small Business Innovative Research (SBIR) programs. Emphasis should be placed on basic bench research carried out at not-for-profit American Institutions which employ or utilize a majority of American Citizens in their laboratories and clinics. Too often American Universities rely on free overseas labor to conduct bench research. Clinical trials should emphasize new drugs and devices which have promise to significantly decrease morbidity and mortality for any disease, including orphan diseases. Since a large percentage of private funding for drug and device studies will originate in the expanding financial liquidity and innovations and patients of the emerging developing world, we should allow the FDA to utilize research data obtained by reproduced laboratory and clinical studies performed overseas as well as in this Country.
Corruption of honest academics should be curtailed. Force all investigators to release reproduced publicly funded scientific data for all scientists to review on the internet via the Freedom of Information act (The Senator Shelby Amendment). Prohibit rights of first refusal on scientific data for private companies performing research in non-for profit institutions which receive public funding. Any rights to profits obtained from intellectual property and patents invented with combined funding from government and private sources should be split fairly among the contributing government institutions and any other private corporations funding the research, as well as with the individual inventor. Prevent organized medicine societies, associations or colleges from contributing to political campaigns since campaign donations have no relevance for physician performance or patient morbidity or mortality.
8) Offer physicians the same legal protection from malpractice lawsuits which have been established for commercial health insurance corporations during the last 3 decades.
9) The quality of current medical records software lags two decades behind business software. Therefore, we need to fund and challenge America’s best software corporations to finally develop standardized electronic medical records software for use in doctors’ offices and hospitals in order to increase the efficiency and productivity of physician charting, billing and prescribing. We should use the integrated medical records system to instantaneously and confidentially gather important epidemiologic data on physicians’ performance, patient diseases, and treatments. With new potent viruses and unsophisticated biomedical and nuclear warfare on the horizon, this system will be absolutely necessary for rapid National Security responses. Protect patient confidentiality at all costs to prevent the commercialization and abuse of patient data like that which the pharmacies trade today.
Lastly, some argue that Universal Government run health care in America will result in delays in diagnosis and treatment similar to those experienced in Britain and Canada. One can not simply compare the massive extremely functional Medicare insurance corporation based infrastructure which seamlessly delivers health care to tens of millions of people yearly in the USA to the government run westernized health care systems of Canada and Britain, France, Switzerland, Netherlands, Scandinavia, and Israel. America, for the last 40 years, thanks to the government run health insurance corporation-Medicare, has built an incredibly dense and fluid public insurance system involving almost all doctors’ offices, hospitals, clinics and ancillary services. The Medicare system dwarfs in breadth and actual practitioners and efficacy the lesser insurance systems established in all other countries. The billing and reimbursement bureaucracy for health care providers contracted with Medicare Insurance is already relatively streamlined and efficiently centralized in America thanks to 40 years of physician, hospitals and government cooperation.
We all know that the medically bankrupt private health insurance corporations and medical malpractice lawsuit threats have caused many disheartened physicians to quit practicing or downsize their practices in America. A continuation and technological upgrading of our most fair Universal Medicare based health insurance Corporation based on the concepts outlined above would undoubtedly motivate those disenfranchised physicians to return to the profession and bright younger physicians to invigorate the field. If patients, physicians and the Medicare Corporation continue to work together, without the deleterious interference of private for-profit health insurance corporations, malpractice threats and overt pharmaceutical marketing, the future for American health care will be healthy indeed.. A continuation of the status-quo mixture of a government subsidized private health maintenance insurance industry operating parallel to and within Medicare is wasteful, and will continue to provide no potential future health improvements for America.
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