Friday, April 29, 2011

Shifting cost is NOT healthcare reform!



I am getting tired of the shell game some prominent people are playing with their proposals for health care "reform" in this country.  Almost every proposal is essentially an effort to shift the cost this way or that rather than actually reform health care in the U.S.

Take an analysis of the proposal by Rep. Ryan (http://www.cepr.net/documents/publications/ryan-waste-2011-04.pdf).  If you look at the graphs, he "saves" the government Billions of dollars only by shifting Trillions of dollars of unfunded future health care cost to future medicare beneficiaries.

You can argue the exact amounts, but in fact the plan bails out the US Government only by shifting the future increases in health care cost to the individual senior rather than doing anything to limit the growth in that cost.   He assumes that somehow (supernaturally it seems) that giving people a voucher will allow them to purchase benefits similar to what they now enjoy in a competitive market, and that the cost of such a plan will not outpace inflation in future years.  Of course, all you have to do is look at the history of health care cost to see that this is not going to happen without a fundamental change in how we buy and deliver health care in this country.

Seen from the inside, the third party payers, including CMS (Medicare,) have used several tricks to cut the cost of care.  First, they simply pay less and less for a service, with little actual investigation of which services are relatively "overpriced" compared to others.  Second, they limit services through vetting - often rationing through inconvenience.  This has primarily occurred in high-end imaging where requiring pre-approval for an MRI for example can be such a demanding and time-consuming process that the physicians office simply gives up on appealing a denial of coverage after spending way too much time trying to get through the company that has been hired by the insurance company to vet the request (and of course the more request they decline, the more income they ultimately make either through incentive rewards or future contracts.)  This was recently challenged in the courts where a company with an incentive contract was found to have denied an excessive number of cardiac imaging exams with no medical justification for the denials.  Third, payers are beginning to limit services to the cheapest provider or to the least expensive product. 

To respond to this hospitals and providers are doing several things. Increasing productivity, limiting overhead, and more creative ways are being used to maintain income levels (and this includes so-called "non-profit" hospitals.) We are reaching the point where only someone using a cheap, used or reconditioned low-end CT or MRI device can profit at medicare fee schedules, and there are many of these in the hands of private entrepreneurs who are more concerned with the bottom line than with producing the most informative exam.  There are now hospitals that will only give the option of using prosthetic joints, etc that have been purchased from the lowest bidder.  

 Much of what can be done has, by this time already been done, and providers are now beginning to restrict, or completely opt out of government care.  This is most critical in the Medicaid (as opposed to Medicare) programs run by the states.  Even the University of Colorado last year began limiting the number of medicaid patients they would take because medicaid patients were filling all the available appointment slots.  There was at that time reported to be no Urologist in the state  that would take a Medicaid referral.  

Medicaid problems are now beginning to get headlines as the benefits have to be cut even further still because of state budgets falling apart just as the number of patients needing Medicaid coverage increase.  Poor, unemployed people are pretty much running out of options, and even working people are finding insurance coverage impossible to obtain at anything approaching affordable rates.  The only "affordable" policies available to an individual are those with very large deductibles and high co-pays, and it is nearly impossible to buy an individual policy with maternity coverage at any price.  To compound the problem, companies are finding it difficult if not impossible to offer medical insurance as a benefit because of increasing cost.  As an employer I can tell you it takes commitment to continue to offer company insurance with consecutive yearly policy cost increases of 14-31%, even with greater deductible and co-pay requirements.

My final beef is with those who are of the opinion that "no one goes without health care in the country," suggesting that they can go to the emergency room anytime they want, and if they need hospitalization they get the best care available.  All I can say is that they have blinders on or just don't have the opportunity to see the real (lack of) care such people receive, be they in a rural county or a large city.

OK, what would I do?  I would define the goal, and that goes far beyond balancing the federal budget.  The problem funding Medicare and Medicaid is really a universal problem for all our citizens.  We should be hunting for a way to provide basic health care needs to every citizen, regardless of their economic status.  This sounds a little socialistic, but we have agreed that everyone deserves police protection, fire protection, etc, and I would at this point in our country's development add basic health care.  This doesn't necessarily mean a giant VA -type care system for the population.  The problem with Ryan's plan is that he thinks individual families can in some way negotiate with the health insurance monoliths, and that's pure fantasy.  This was tried with the Medicare Part D (drug plans) without doing anything to control drug cost.  If Ryan really wanted to do something immediately that would decrease Medicare cost he would support legislation that would allow Medicare to directly negotiate for drug purchases(Medicare is not allowed by current law to do this, I assume due to drug company influences), and thus be able to bring government drug cost more in line with those of Canada, England, France, Germany, etc. where drug cost are 30-50% less.

Unfortunately, we have been trying to make the fee for service model work, and it has failed.  We (the providers) are highly paid piece workers, and the more we "do" the more we earn.  Every hospital CEO, every group practice manager, every manager of any patient care provider is tasked with maximizing the bottom line, and to do this you have to increase volume/procedures delivered.  

In the absence of a single-payer model, there will have to be some form of capitation, where the amount you are paid is not rigidly linked to the number of procedures you do, thus eliminating the incentive to do more than is really needed, and making it important to keep people healthy to avoid future expensive illnesses.  This would include of course dental care, which is needed for maintenance of health, but never accounted for in "comprehensive" care plans.  Of course, the danger to we patients is that the company providing care over-restricts care in order to maximize short-term profits.  The Kaiser system, and I will admit that it is a far from perfect system, has a large network of salaried physicians, and must be recognized as a workable model, attempting to balance too much care versus too little care while maximizing health, rather than procedures..  This is a threat to many physicians, as in Kaiser the physicians are employees, and the higher paid specialist earn ~3 times that of a Family Practitioner (as opposed to a 20-30 fold difference in many communities.)

The government may have to define what constitutes basic benefits, and assure that the current common practice of denying major medical coverage to anyone who is likely to need it will be no longer allowed.

I may not have all of the details, but I have not read anything that indicates that these issues have been addressed by Congressman Ryan.