Health Wonk Review spotlights the best healthcare posts of the past two weeks. The most recent edition calls attention to Joe Paduda’s two-part post on Managed Care Matters. Part 1 is titled, “Your Life Without Healthcare Reform.” (See http://www.joepaduda.com/archives/001615.html
Paduda begins by observing that reports from consulting firms Segal and Aon reveal that health benefit costs will jump more than ten percent next year—and that this “shows exactly what we’re in for if reform efforts fail.
“And by 'reform'” Paduda adds, “I mean reform with strong cost controls.”
I would add that, for the past 10 years, the amount that private insurers have been spending on health care has been levitating by roughly 8% a year. If we continue on the current track, this means that in nine years, healthcare costs—and your premiums—will double.
“But when something can no longer continue, it won't,” says Paduda. “When enough Americans lose their coverage, when cost-shifting gets to the point where those left with insurance are paying thousands in premiums to cover those without, when local taxes to pay for teachers' and police benefits get so high that folks are losing their houses, when Medicare finally goes insolvent, when hospitals are collapsing due to the cost of indigent care, when big pharma and device companies are no longer making the gazillions they so richly deserve, then, and only then, will the screaming hordes at Town Hall meetings decide that any health care coverage is better than none.
“While the opponents of reform may well win this battle,” he concludes, “in the long run they will lose the war.”
I agree, and like Joe, I can only hope it doesn’t come to that. If it does, by then health care inflation will have driven a spike into the heart of the economy. If that sounds like an overstatement, keep in mind that White House budget director has told us that climbing health care costs represent “the single greatest threat to the U.S. economy.”
In part 2 of Paduda’s post, “Your Life Without Healthcare Reform,” he sketches what a future without reform holds. Here are just a few details (for links to his evidence, go to the post here: http://www.joepaduda.com/archives/001616.html
n 178,000 small business jobs will be lost by 2018 as a result of health care costs
n If employee contributions stay at their current level (about 30% of premiums), workers will be paying $9000 per year, or $750 per month, towards their health coverage – not including deductible, copays, coinsurance, and services not covered
n More Americans will have to rely on the kindness of others for their health care. Because 65 million of us will be without health insurance.
“Unlike the distortions, misrepresentations, and outright lies being spread by McCaughey, Limbaugh, Palin et al, this is the real deal,” Paduda writes. “So fight against reform if you wish, but don't complain later when you can't afford insurance, your employer can't afford insurance, your taxes are going up to pay for teachers' benefits, and our economy is sinking under the weight of health care costs.”
Kudos to Paduda, who understands what is at stake here.
To explore many other excellent health care posts included in the newest Health Wonk Review, check out the Lucidius Report http://lucidicus.org/editorials.php?nav=20090903a which is hosting Health Wonk Review this time around.
This brings up one critical feature of the health care debate:
If the high costs of expensive ineffective medical care and of errors and poor practice are not brought under control and the cost trends reversed, Medicare, at least as we know it, will disappear. Finances will require that the program either end, or that costs for enrollees rise to levels that would exclude a majority of beneficiaries, or that Medicare taxes increase by several fold.
Unlike what the tea partiers like to say, reform is not a threat to Medicare. Lack of reform is the threat to Medicare.
Maggie – Since this is your blog, I hope it’s not presumptuous of me to provide a link to a YouTube video I’ve posted making the same general points that you make here so cogently. It lacks the details, but enjoys the advantage of an audience that wouldn’t ordinarily visit your site, and would benefit from the information. The URL is
http://www.youtube.com/watch?v=g1ZFNOAL-Tg
Fred & Pat S.
Fred– Not at all– thanks. And thank you for your ongoing contributions to the comments.
Pat S–Well-put. Now I’m waiting for a post that fleshes that out . ..
Could we have the President quote this article at length during his next week address?
Some brain-challenged people need that kind of stark description to begin to fathom what is at stake here.
As for the town-howlers, they must be ignored. I still can’t find anything of value in their, err, arguments.
As an FYI,
Those who glibly think that cutting teachers and civil servants’ benefits would solve their problems are in for a rude awakening.
Contrary to the auto workers and Wall Streeters, THEIR contracts are sacrosant. If there is a shortfall, John and Jane Q. Public MUST fill in the difference. Same for pensioners from the State.
Opponents of reform, know that any long-term resistance is futile. One way or another, the USA shall join the rest of the countries of the Western world.
This statement has nothing to do with a particular wish of mine. It stems from a simple fact: You CAN’T negotiate with demography.
Any protestation posterior to this, is mere postponement of the inevitable.
Res ipsa loquitur.
If someone wanted to destroy America, not reforming health care would be the perfect way to do it.
Strong cost control is essential.
This means, contrary to popular belief, very minimal coverage mandates, a dramatically lower cost standard of care, and ironclad tort reform. These are the features of the supposedly successful healthcare programs of Europe and the Far East.
A reform movement must stress the dramatically reduced care which our circumstances require. No one is going to take us seriously if we keep telling people we can continue to get almost everything you want for medical care, and people who make more than you do are going to pay for it all.
Although I might word the point differently, I agree with Christopher George that reform, to constrain unsustainable costs, will require “dramatically reduced care”. My wording would emphasize that the reduction must be in quantity, without any loss of the quality of the overall outcome, and requires the elimination of duplicate or unnecessary facilities, tests, procedures, and specialty referrals driven by a fee for service paradigm that rewards excess.
I would also omit the word “supposedly” when referring to the superior systems operating in all the other major industrialized democracies – in Europe, North America, Japan, Australia, etc. They cover all member of their societies at not much more than half the cost, and with better health outcomes as measured by the standard criteria of life expectancy and infant mortality.
My one other area of disagreement relates to tort reform. As indicated by the CBO estimates I cited in an earlier thread, the contribution of malpractice liabilities (the cost of malpractice insurance plus “defensive medicine”) to the total health care bill is quite small, and states that have instituted tort reform have seen only small changes in cost. This is not to say that some tort reforms are undesirable, but when it comes to concerns about unnecessary tests or procedures, the better remedy, in my view, resides not in the legal system, but in the establishment of clear guidelines to practitioners based on comparative effectiveness research. Once a guideline clearly states that a CT scan is not required in the primary workup of headaches (and may expose patients to unnecessary radiation), far fewer practitioners would order such a scan simply as a “precautionary” measure.
Fred, Christopher Geroge
Fred –Thank you.
Yes–we need to reduce unnecessary care. More than two decades of Dartmouth reserach shows that if we do that, there is plenty of money in the system to provide everyone with high quality needed care. There is no need to
reduce effective care.
And thank you for repeating the facts on tort reform.
Christopher George–
It seems that you repeat your assertions about the need for tort reform (always without evidence) almost every time you comment.
I think we all understand your views on malpractice . . perhaps you could let the subject go?
Frankie and Anonoymous:
Frankie–
The president did try to make the point about “the alternative” in a press conference not too long ago–but the point doesn’t seem to be sinking in.
I do wish he would spend more time elaborating on what happens if we don’t have real reformd this Wed.
People need to understand that if we don’t rein in unnecesary spending, Medicare will begin running out of money in a few years. And health insurance premiums will double in roughly 9 years.
At this point, I think the president needs to be very blunt in saying this.
I would add that health care reform is not quite
inevitable.
There is the possibility that, rather than joining the rest of the developed world, we’ll decide to join the undeveloped world by letting a a sharply two tiered or three tiered system develop–with only the wealthiest 5%
receiving the type of care that people with good employer-based insurance receive today.
Employers cannot keep up with 8% a year health care inflation. If there is no real reform (and cost-containment) many employers are going to hike the % of the premium with employees must pay to 50% or more while othera are going to begin dropping health benefits altogether.
One would think that would spur refrom. But as long as the wealthiest 5% have so much power (via lobbyists) over Congress
it is possible that they will ignore the interests of the majority.
Even teachers’ and other state workers’ benefits are not quite sacrosanct. As states get into more and more financial trouble, laws could be changed, and unions could be ignored.
Teachers’ unions, in particular, are widely hated by many conservatives, libertarians, and some liberals.
I’m not predicting that this will happen, but the country is very polarized at this point in time with conservatives and some moderates absolutely opposed to progressive ideas about reform.
Ultimately, it’s all about money. We’ve allowed a great deal of wealth to become concentrated at the very top of our society, and with great wealth comes great power (and, often, great corrpuption.)
We can only hope that President Obama will dig his heels in and speak truth to power.
If he can’t, who can?
Anonymous-
Yes, as White House budget director Peter Orszag has pointed out, the greatest threat to the economy is health care inflation.
If health care spending continues to grow, the deficit will grow–underming the economy.
And as health care becomes unaffordable for more and more Americans, the social fabric of the society will
be shredded.
Fred,
I agree with you that costs can be reduced without worsening outcomes. In certain subsets, improvements are to be expected. Medical care is strongly subject to the law of diminishing return. We have to do ten thousand mammograms to find ten new cancers (in a screened population); MR would allow us to find a few more. We can spend a lot less and still get almost the same results.
I really can’t imagine how the CBO, or anyone else, myself included, can estimate how much defensive medicine costs us. As Maggie has pointed out before, the waste is marbled into ordinary standard procedures.
We already have a zillion guidelines that tell us that most people with a headache don’t need a CT scan. My old boss wrote a few of them TWENTY FIVE years ago. The problem is following the guidelines does not prevent a lawsuit. Granted, if you follow a quideline, you may well win your suit; or you may lose. Getting sued is so unpleasant, most doctors will do anything to avoid it. Utilization won’t go down for ten years after reform is in place, because of physician mistrust in the legal system. Look at Texas.
Fred, lets assume that the CBO has stumbled into the correct number for defensive medicine. It has no idea what the legal ramifications of decreasing care will be. Reducing the level of care in Miami to the level of St. Paul will require even more legal protection. The extra costs in Miami is the response to the current hostile legal environment. So if you want a system where we do significantly less than we do now, as I do, you need to change the legal system first.
Howard Dean has admitted that the administration lacks the courage to challenge the Trial Bar. Many doctors are threatened several times a week with litigation usually to do something expensive that is not needed.
How hard do we look for rare conditions with expensive tests? How hard do we treat when the outcome is likely to be poor? Not everyone is going to look at these questions in the same way. If you take away the opportunity for people who want only bare bones acute care without podiatry, aura balancing, eye glasses, psychologic treatment, acupuncture, infertility, and every other special interest that would like to be included in the insurance mandate, it is going to be very very expensive. Letting people choose for themselves what coverage they want is going to be a lot cheaper.
Our caesarian section rates are nearly ten times higher then in other countries, especially in high payout counties. Do your really think an OB in Miami is going to risk living in his car to do the “right” thing and deliver a baby naturally, or do the wrong thing, and operate and worry less about a time consuming lawsuit.
Good practice can reduce the frequency of bad outcomes, but not eliminate them. In Europe, these are considered outliers, and are not, in general the occasion for a new business jet for a trial lawyer. Does anyone really think we can have a European limited care system with an American Jackpot justice system? An animal can be as big as a hippo or fly like a bird, but no animal can do both.
Without reform I think it is more likely that the legal climate in Minnesota will grow to resemble Florida, than the reverse. This will be especially true as doctors do less of what the patient wants. Americans do not like to hear the word NO.
The pecuniary motive is misunderstood and misapplied to much of the over utilization.
Christopher – Thanks for your comment. I agree that the CBO can only “guesstimate” the costs of “defensive medicine”, because one person’s defensive medicine is someone else’s conscientious and prudent practice. They can, however, compare costs between states with or without various tort reforms (caps on non-monetary damages, arbitration procedures, etc.) and conclude that the reforms don’t dramatically lower costs.
My own experience within medicine is that the large majority of physicians in the vast majority of instances utilize tests and procedures without much thought about malpractice liability, but rather because those services are the standard of care in the community within which they operate. Here is where guidelines have the potential to make a huge difference, but only if the guidelines themselves have great weight. Mere recommendations on a sheet of paper lack force, but an evidence-based set of nationally accepted guidelines set down by acknowledged experts can provide strong support for physician decisions. Over time, I expect that even the most aggressive trial lawyers will conclude that their desire to earn large contingency fees would not be well served by taking on those guidelines.
I believe the VA, among other organizations, has already begun to develop some of these evidence-based guidelines – not for legal protection in the case of the VA, but simply to help physicians decide what is necessary and what is wasteful. In that sense, reduced vulnerability to lawsuits from nationwide guidelines would be a side benefit of an effort whose main benefit would be to maintain or improve excellent medical outcomes at lower cost.
As Lundberg wrote, “Beware the healthcare bubble.” Well that was a while ago and the bubble is here. Like all bubbles, when they burst, there are problems.
But its one thing when its your 401K, another when its your life.
Fred, I think I agree with you (assuming that is what you think) that the extent of treatment depends on what doctors percieve other doctors in the treating doctors immediate vicinity are doing. That is insane. If a headache in Duluth doesn’t need a CT scan, then the same headache shouldn’t need one in Miami. We can agree that this is the problem.
There is no greater conscensus in the world than the fact that almost every case of CP is unrelated to birth injury, but it remains the quickest way (and it is very quick) to a Lear Jet for a trial lawyer. National experts be damned.
Why would anyone think that the low utilization pracitces are not STILL overtreating?
Experts are not going to get us out of the “why didn’t you do what everybody else seems to be doing” cunundrum.
In Europe, the tort protection is absolute, and the costs are lower.
Looking at this from a UK perspective i can only say i am fully supportive for some kind of reform to be passed. It’s much simpler to be removed from the debate.. I have seen many people suffering from not having medical coverage.