Greed Based Health Care Has To Go
We have socialized the losses and privatized the profits in health care.
We must reduce our rate of increase in health care spending from 15.7% of our GNP on health care in 2006 and keep it from growing to the estimated 17.6% or 17.6 cents of every dollar in 2009. We need to reduce our percentage of health care GNP to about 10.5% to 12%. That means we need to cut our health expenditures by 4.2-7.1 cents of every dollar of GNP or reduce our health care spending by at least 33%.
That's nearly impossible with our current political environment. A cut that large needs the cooperation of everyone (consumers, employers, providers, medical education, insurance companies and pharmaceutical companies). Everyone will have to give up something. Rearranging deck chairs isn't going to do it. Expecting the consumer to shut up and foot the bill as either the consumer or a tax payer isn't going to work either.
- We need affordable medical homes.
- We need to cut 20% of the revenues off private insurance companies.
- We need to cut a similar amount from pharma and no longer subsidize the world's drug purchases.
- We need an all payer reimbursement scale that will minimize cost shifting.
- We need a more efficient medical education system that yields greater numbers of primary care providers and reduces physician student loan debt.
- We need to encourage and pay for telemedicine and other distance medical programs.
Cost Cutting Must Move Beyond the Consumer
- Your spouse comes home laid off with no job prospects. You must reduce your spending by 33%. Would you find a cheaper home? Cut your food or household budget? Spend less on transportation? Take
a cheaperno vacation? Chances are you would skip your vacation and let your health insurance lapse. A family like this only seeks care when they are in a health care crisis.
If you make $18/hour and spend $670 per month on health insurance (pre tax) for your
family, you'll end up saving a little over $6,800 per year or cutting your expenses by 18%
(providing you don't have a health care disaster) by eliminating your health
insurance premium payments. It's a gamble that insurance companies want to legally
want to take away from you.
- Your company has made changes to your health plan. You now have a $600 deductible per person ($1,500 maximum for your family), your copays have doubled and several services you use are now excluded from your policy. Do you cut from other budgeted expenses or tell your doctor, you no longer can do the excluded services? Chances are you let your insurance company go ahead and ration your care and go without the excluded services. You then stop seeing your doctor, because you feel guilty about not getting the services they prescribe. You don't go back unless you are in a health care crisis.
- You find out you have a chronic condition and your doctor prescribes the drug on your insurances' drug formulary. That drug doesn't work and you need the drug "not on the list". Your cost for the drug comes to $300 per month. Do you go back to the poorly performing drug or go to the more expensive drug? Maybe you go for the one "not on the list", but skip doses or cut doses in half? This works until you until the original chronic condition spirals out of control and you are in a health care crisis.
Law makers, lobbyists and insurance companies are focused on the short-sighted approach to health care reform. Instead of dealing with the affordability problem they think passing a regressive insurance mandate in exchange for eliminating pre-existing condition clauses will do the trick. The moderates are siding with the right wingers in determining a public option will undermine private insurers, but there's the lie. Private insurers have no intention of making the price of their insurance policies reasonable and they have paid their Congressional members enough campaign contributions to keep as much of the status quo intact as possible.
Health Care is Not a Free Market
Consumers have very limited options and have made decisions that hurt the corporate health sector's bottom line. So, now the solution is to force the consumer to buy what they can't afford? Where's the "free market" in this approach?
When we require people to buy a product they 1. Don't think they can afford or 2.) Don't think they need or 3.) Don't want; we don't have a "free market".
When we require people to buy insurance and insurance companies have little or no restraint on their business practices or pricing; we don't have a "free market".
The Health Care Sector hasn't been a "free market" for a very long time. Consider how many drugs, products and tests like mammograms that can only be sold with a prescription. Health insurers require you to get permission before you can be admitted to a hospital, receive treatment or receive a test. We even have to get permission (some more than others) to get contraceptives.
When we require people to seek permission to buy a good or service, we have said farewell to the "free market".
You can justify the prescription system, but that's not my point. The issue is when you have to pay someone to give you permission to buy what you really need, that's not a "free market"; that's extortion. You can call it benign extortion or a necessary safety measure, but it's not a "free market". This is why consumer driven health care reform plans fail - there's no realistic way for the consumer to bargain for their care. The flip side, where of insurance companies require preauthorization prior to treatment isn't a free market either. That's an insurance company rationing health care based upon their profit projections.
Consumers already go without care. This self-rationing is the only part of the "free market" affecting our health care system and it's closing our public hospitals or reducing their services. Quite a few hospital administrators and physicians actually like the idea of an insurance mandate because they know under a mandate every patient they see will ostensibly bring in some revenue.
That's a short sighted point of view because a mandate will inflate health insurer revenues and fuel health care inflation. That's right:
Increasing the Supply of Insured Patients Will Increase Health Care Inflation.
We must have a system that encourages proper health care utilization as we increase the number of insured. Health care providers (like the rest of health care stakeholders) blame everyone, but themselves for the state of health care in the U.S. and forget why Medicare implemented the Prospective Payment System in the 1980's under Ronald Reagan. By the 1980's, Medicare costs were spiraling out of control. Hospitals had no incentives to send Medicare patients home. Physicians and hospitals said the over utilization was due to "defensive medicine", but really it was the perverse fee for service payment structure that spurred the growth of health care costs to be over twice the rate of inflation. Counterproductive incentive systems pervade U.S. health care today. This article in The New England Journal of Medicine explains:
The extreme failure of the United States to contain medical costs results primarily from our unique, pervasive commercialization. The dominance of for-profit insurance and pharmaceutical companies, a new wave of investor-owned specialty hospitals, and profit-maximizing behavior even by nonprofit players raise costs and distort resource allocation. Profits, billing, marketing, and the gratuitous costs of private bureaucracies siphon off $400 billion to $500 billion of the $2.1 trillion spent, but the more serious and less appreciated syndrome is the set of perverse incentives produced by commercial dominance of the system.
Markets are said to optimize efficiencies. But despite widespread belief that competition is the key to cost containment, medicine — with its third-party payers and its partly social mission — does not lend itself to market discipline.
The article sites a statistic that calculates between one fifth and one third of medical outlays do nothing to improve health. The reasons for the health care system's failure is has several aspects to it.
- Private insurance holds down costs with risk selection, limiting covered services, reducing payments to providers, and shifting costs to patients, but all that does is allow private insurers to use those savings to make bonus payments to their top executives. Those savings are not passed onto consumers through lower premiums.
- The U.S. health care system is not standardized. It's a fragmented blend of private enterprise, public providers and non-profit organizations that features perverse incentives that, depending up on contract, encourages overtreatment and undertreatment (which ever way is more financially rewarding to the health care provider).
- Cost shifting - the practice of charging patients with better reimbursing insurance or no insurance much higher prices than patients with Medicaid or Managed Care contracts to recoup losses further exacerbates cost escalation.
- The result is most cost-effective care is squeezed out. Gaming the system to squeeze out greater profits is more important than rendering appropriate amounts of care due to medical need.
The Greed Based System Has To Go.
We need greater consumer participation instead of greater consumer spending. Utilization cannot be governed by simply making the consumer pay more. The estimate that 20%-33% of all health care expenditures are unnecessary exposes the lie of promoting an HSA/HDHP that can require 3 encounters (with no price controls) before the consumer obtains what they really need.
We have to change the dynamic of the status quo that promotes health care consumers with "good insurance" to seek care for the most trivial of ailments and then cruelly discourage and/or deny care to underinsured or uninsured people who may be in desperate need.
Controlling health care costs requires all of the sacred cows to be on the table. Unfortunately, our current Senators and Representatives don't seem to have the stomach for it
It's no secret that reforming health care in the U.S. is going to require some cost controls. Republicans scare people with the health care rationing bogey man to fend off health care reform and ignore the fact that health insurance companies currently ration health care based upon cost effectiveness tables that favor the insurers' profits at the expense of their member's health.
Republicans also ignore cost controls that shift costs to "out-of-pocket" expenses and that health insurance rates have doubled in 8 years. These cost shifting approaches have worked well (for all but the consumer), but not so much since 2005. This failing approach now has 25 million underinsured people routinely forgoing office visits, prescriptions and needed tests. We are losing out on prevention and early detection. In 2009 health care is slated to become 17.6% of the U.S. GDP, but cost controls still focus on shifting costs to consumers.
We have systemic protectionism of corporate health care and rampant abuse of the consumer's and tax payer's pocketbooks.
or, you could say