Barack Obama was elected in part to fix America’s health-care system. Now is the time for him to keep his word
DIAGNOSING what is wrong with America’s health-care system is the easy part. Even though one dollar in every six generated by the world’s richest economy is spent on health—almost twice the average for rich countries—infant mortality, life expectancy and survival-rates for heart attacks are all worse than the OECD average. Meanwhile, because health insurance is so expensive, nearly 50m Americans, an obscene number in such a rich place, have none; those that are insured pay through the nose for their cover, and often find it bankruptingly inadequate if they get seriously ill or injured.
The costs of health care hurt America in three other ways. First, since half the population (most children, the very poor, the old, public-sector workers) get their health care via the government, the burden on the taxpayer is heavier than it needs to be, and is slowly but surely eating up federal and state budgets. Second, private insurance schemes are a huge problem for employers: the cost of health insurance helped bring down GM, and many smaller firms are giving up covering employees. Third, expensive premiums depress workers’ wages.
Every rich country faces some of these problems (see article), but nobody suffers worse from them than America. This summer’s debate about health care may determine the success of Barack Obama’s presidency. What should he do?
Uncomfortably numb If he were starting from scratch, there would be a strong case (even to a newspaper as economically liberal as this one) for a system based mostly around publicly funded health care. But America is not starting from scratch, and none of the plans in Congress shows an appetite for such a European solution. America wants to keep a mostly private system—but one that brings in the uninsured and cuts costs. That will be painful, and require more audacity than Mr Obama has shown so far.
The uninsured are the relatively straightforward bit. All you need do is “mandate” everyone to take out health insurance, much as drivers are legally required to have car insurance. Poorer Americans would get subsidies, and (as with car insurance) insurance-providers would be forced to offer affordable plans and not exclude the sick or the old. This has already happened in Massachusetts as well as in a raft of countries, including the Netherlands, Israel and Singapore. All the main proposals now working their way through Congress include some version of a mandate. Mr Obama opposed a mandate on the campaign trail, but since he has not come up with any plausible alternative, he should quietly swallow one.
The snag is that all these subsidies are expensive. Those congressional plans might cost $1.2 trillion to $1.6 trillion over ten years: the White House is feverishly trying to massage the estimates downward, as well as working out how to plug the hole through various savings and tax increases. But the sticker-shock for the mandate is really just a reflection of the second big problem: the overall cost structure of American health care. Indeed, one of the worst things about Mr Obama’s oddly hands-off approach to health reform (see article) is that he is concentrating on a symptom, not the underlying disease.
A bolder president would start by attacking two huge distortions that make American health care more expensive than it needs to be. The first is that employer-provided health-care packages are tax-deductible. This is unfair to those without such insurance, who still have to subsidise it via their taxes. It also encourages gold-plated insurance schemes, since their full cost is not transparent. This tax break costs the government at least $250 billion a year. Mr Obama still shies away from axing it, as do the main congressional plans on offer; but it ought to go (albeit perhaps in stages).
Perversity on stilts, or crutches The second big distortion is that most doctors in America work on a fee-for-service basis; the more pills they prescribe, or tests they order, or procedures they perform, the more money they get—even though there is abundant clinical evidence that more spending does not reliably lead to better outcomes. Private providers everywhere are vulnerable to this perverse incentive, but in America, where most health care is delivered by the private sector rather than by salaried public-sector staff, the problem is worse than anywhere else.
The trouble is that many Americans are understandably happy with all-you-can-eat health care, which allows them to see any doctor they like and get any test that they are talked into thinking they need. Forcing people into “managed” health schemes, where some species of bureaucrat decides which treatments are cost-effective, is politically toxic; it was the central tenet of Hillary Clinton’s disastrous failed reform in 1994.
But to some extent it will have to be done. There is solid evidence to suggest that by cutting back on unnecessarily expensive procedures and prescriptions, anything from 10% to 30% of health costs could be saved: a gigantic sum. The Mayo Clinic in Minnesota and the California-based Kaiser Permanente system have shown that it is possible to save money and produce better outcomes at the same time. So reform must aim to encourage more use of managed health care, provided by doctors who are salaried, or paid by results rather than for every catheter they insert. Medicare, the government-run insurance scheme for those over 65, could show the way, by making much more use of results-based schemes and encouraging more competition among its various providers and insurers.
But in the end it will be up to the private health-care system. One thing that should be unleashed immediately is antitrust: on a local level many hospitals and doctors work as price-fixing cabals. Another option, favoured by many Democrats and the president, is for the government to step in with a results-based plan of its own, to compete against the private industry. That could harm innovation and distort the market further. Mr Obama should use it as a threat, rather than implement it now. If the private sector does not meet certain cost-cutting targets in, say, five years, a public-sector plan should automatically kick in. Such a prospect would encourage hospitals and doctors to accept a painful but necessary reform now.
How Other Countries Judge Malpractice The health-care systems Democrats want to emulate don't allow contingency fees or large jury awards.
By RICHARD A. EPSTEIN
In his recent speech to the American Medical Association, President Barack Obama held out the tantalizing possibility of reforming medical malpractice law as part of a comprehensive overhaul of the U.S. health-care system. As usual, he hedged his bets by declining to endorse the only medical malpractice reform with real bite -- a national cap on damages for pain and suffering, such as the ones enacted in more than 30 states.
These caps are usually set between $250,000 to $500,000, and they can make a substantial difference. Other reforms, such as rules that limit contingency fees, shorten statutes of limitation, or confine each defendant's tort exposure to his proportionate share of the harm, have small and uncertain effects.
Medical malpractice, of course, is not just an American issue. And now that the U.S. is considering universal health-care systems similar to those found elsewhere, it's worth a quick peek at their medical malpractice systems -- which usually attract far less controversy, and are far less expensive, than our own. [Commentary] Chad Crowe
Litigation in the U.S. has at least four distinctive procedural features that drive up malpractice costs. The first is jury trials, which can veer out of control and in any case introduce significant uncertainty. The second is the contingency-fee system, which allows well-heeled lawyers to self-finance litigation. The third is the rule that makes each side bear its own costs. This induces riskier lawsuits than are undertaken in most other countries, such as Canada, England and most of Europe, where the loser pays the legal costs of the winner. The fourth is extensive pretrial discovery outside the direct supervision of judges, which occurs far more readily here than elsewhere.
Even these features aren't the whole story. American judges frequently let juries decide whether honest mistakes are negligent. Judges in other nations are less likely to do so. American courts commonly think it proper for juries to infer medical negligence from the mere occurrence of a serious injury. European judges usually will not.
American plaintiffs are sometimes spared the heavy burden of identifying particular acts of negligence, or of showing the precise causal connection between a negligent act and an actual injury. Lastly, damage awards for lost income and medical expenses in the U.S. tend to dwarf awards made elsewhere -- in part because governments elsewhere provide this medical care from their nationalized systems. In sum, the medical malpractice system provides incentives for plaintiffs that really do matter. Americans, for example, file claims about 3.5 times more often than Canadians.
The overall picture is still more complex, since there are major variations in medical malpractice rules in different American states, and differences within states, such as between juries in big cities and those in small towns. Doctrinal reform cannot stop these abuses. What is needed is the replacement of juries with specialized commissions like those in France, which help reduce litigation expenses and promote uniformity in case outcomes across regions.
What then does this quick survey teach us about the ability of our system to deter medical injuries and compensate its victims? Not much that's encouraging.
A study led by David Studdert published in the 2006 New England Journal of Medicine concluded that the administrative expenses of the malpractice system were "exorbitant." And worse, it found errors in jury verdicts in about a quarter of the litigated cases. Juries denied compensation properly due in 16% of the cases, and awarded it about 10% of the time when it was unwarranted. These error rates don't include damage awards set at improper levels.
More disturbingly, a careful 1992 study by Donald Dewees and Michael Trebilcock in the Osgood Hall Law Journal concluded that the frequency of medical malpractice in Canada was about the same as in the U.S. -- for about 10% the total cost. In other words, our costly system doesn't seem to do much to deter malpractice. On medical malpractice at least, Canada does better than we do.
The U.S. cannot ignore serious reform. To be sure, medical malpractice premiums constitute well under 1% of the total U.S. health-care bill. But defensive medicine adds perhaps as much as 10%. High malpractice costs can shut down clinics that serve vulnerable populations, leading to more patient harm than the occasional case of malpractice.
The best reform would be to allow physicians, hospitals and patients to contract out of the liability mess by letting the parties reject state-imposed malpractice rules. They could, for example, choose to arbitrate, to waive jury trials, or to limit damage recovery. Stiff competition and the need to maintain reputation should keep medical providers in line in such a system. Market-based solutions that make the private sector more responsive should in turn undermine the case for moving head-first into a government-run health-care system with vast, unintended inefficiencies of its own.
Mr. Epstein is a professor of law at the University of Chicago, a senior fellow at the Hoover Institution, and a visiting professor at NYU Law School.
Published June 27, 2009 Stockton REcord Wealth trumps health for many
It's the dollars, dummy!
A year ago, I found myself at the other end of the stethoscope. As a patient, I personally experienced American health care.
I was fortunate to have access to the best care that one could get, but a pervasive burden as I made my medical journey was my insurance.
It determined which physician or hospital I could seek treatment from and the medications I could get.
The day after surgery, a discharge planner informed me that I had exceeded their approved "length of stay" for the recently performed surgery. I would now be responsible for any costs incurred by continued hospitalization. I willingly signed an agreement of responsibility as an intravenous drip transported me to a pain-free narcotic nirvana.
Health care reform is the current conversation du jour. Discussions about it are passionate, with liberals describing it as a social necessity and conservatives as a socialist conspiracy.
A television talk show host with attractive "experts" recently expounded on the topic; a Google search revealed the "experts" had degrees in art history and law. Cyberblather is driven by interests not really interested in health but in their wealth.
The contentious parties all agree that health care should be available to all Americans. The debate shifts to costs and what interest groups must sacrifice to control them. Every dollar of medical care is a dollar of income for them.
In excess of $2 trillion is consumed by health care, more than all the expenditures of a billion Chinese and twice as much per person as countries with standards of living similar to ours.
Yet we have nearly 50 million uninsured Americans and areas of overutilization where Medicare costs per individual exceed their per-capita income.
Who really pays for this? The answer is, you do.
In the past 30 years, after adjustments for inflation, health insurance premiums have increased 300 percent, corporate profits per worker before taxes 150 percent and 200 percent after taxes, and average hourly earnings for nonagricultural workers have decreased 4 percent as wages stagnate to pay for health care.
The American Medical Association opposes a public option, fearing that physician fees would be subject to Medicare-like price controls.
Forgotten is their opposition to this program, a major source of its members' wealth. Lip service is given to primary care; organized medicine is afraid that pay increases would lead to reduction in prices of overutilized specialist services. Removing a skin blemish is better compensated than treating a gangrenous appendix.
Health plans oppose a public option, citing competitive reasons. Sen. Lindsey Graham, R-S.C., rejects it as putting a "government bureaucrat between a doctor and the patient."
Not mentioned are insurance dictates that result in physician effort which, if compensated, would increase the average physician income nearly $70,000 per year.
This sum translates to nearly $31 billion a year, enough to cover a significant portion of costs of health reform.
Pharmaceutical companies fear change would force them to bid competitively in the public marketplace while they ask Americans to pay multiples more for the same drugs they sell at a discount in controlled health economies.
The losers may be your community hospitals; they operate on margin caring for the poor and uninsured. Their survival depends on the abolition of community tax benefits for their "not for profit" competitors, whose charity is clothed in legal sack cloth and ashes.
The difference between wealth and health is a single letter of the alphabet.
We can measure the former, but not every health care intervention promotes health.
When health care waste is abolished, we will be healthy and wealthy.
Mirror, Mirror on the wall:Which is the safest of them all??
This article is a discussion of a complex subject that does not lend itself to a fifteen minute office visit. It is not designed to give the reader personal medical advice
The Harvard Nurses Study had its start in 1976; it examined the effect of hormone replacement therapy (HRT) in 60.000 nurses. It reported in 1985 that there was a 37% reduction in the rate of heart related events in the subjects who used HRT.
The adherents of HRT treatment were also further convinced by a pronouncement several years earlier by Dr Robert Wilson the author of Feminine Forever where he proclaimed "menopause is a hormone deficiency and totally preventable".
Drs. E. L. Severinghaus and J. Evans in 1929 were the first physicians to attempt to treat the symptoms of menopause. Their treatment was a derivative from the amniotic fluid of cattle. A German , Bernhard Zondek found that urine from pregnant mares contained water-soluble estrogens. Emmenin a product of the urine of pregnant women in 1933 became the first estrogen replacement product marketed in the United States.
Work soon started on producing a less expensive version from pregnant mare’s urine.
Diethylstilbestrol (DES) was marketed in 1942 as a more potent form of estrogen than Emmenin. By 1948, it was advertised as having therapeutic value for the prevention of pregnancy complications, such as toxemia, low birth weight, and early pregnancy loss. Approximately two million women in those years were exposed to DES.
The text in major medical journals in the 1950s describing DES read, “Recommended for routine prophylaxis in ALL pregnancies . . . Bigger and stronger babies . . . No gastric or other side effects.” It wasn’t until 1953 that a controlled trial using DES showed it had no clinical benefit in preventing complications during pregnancy.
By 1942 the higher-dose Premarin—1.25milligrams a product of mares urine—was introduced. Six years later, lower doses of Premarin—0.625 milligram and 0.3 milligram—were made available.
Ayerst Laboratories in the 1950s funded a massive campaign to educate doctors on menopause, menopausal symptoms, and the consequences of estrogen loss—and on the use of its product Premarin to treat menopausal symptoms.
By the 1960s the use of hormone (estrogen) replacement therapy (ERT) included 12 percent of all postmenopausal women.
Premarin sales grew 170 percent between 1963 and 1966, making it the most dispensed drug in America.
The spurt in HRT use was given a boost in particular when Dr. Robert A. Wilson published his article “No More Menopause” in Newsweek magazine in January 1964.
Ronald the son of Dr. Wilson in 2002 revealed to the New York Times that his father’s research foundation, book, and speaking tours were funded by Wyeth-Ayerst, the makers of Premarin. The father had earlier to himself as a “gallant knight” on a mission to help women through their “loss of womanhood “even suggesting Premarin would prevent their husbands from having extramarital affairs. His opinion: “In truth, an extramarital affair may not, in the literal sense of the term, involve any infidelity at all. For a man may loyally maintain a deep love for his wife and yet feel the need for a kind of thrill that a wife with her aura of comfortable domesticity cannot give.” There was a hint that the hot flashes of menopause would be replaced the fires of a new sexuality.
Dr. Susan Love a pioneer in the treatment of breast cancer at UCLA has been a critic of the menopause industry stating “If estrogen deficiency’s a disease, all men have it!”
There was a decrease in the popularity of HRT in the 1970s when it became apparent that there was an increase in the incidence of uterine cancer when HRT involved estrogens alone. This waning in popularity was soon overcome by a finding that this effect could be overcome if the estrogen were combined with another hormone progestin.This combination rapidly became one of the most prescribed therapies for American women.
The benefits of hormone therapy in preventing some of the accompanying symptoms of menopause such as the vasomotor symptoms (hot flashes) and vaginal dryness have never been disputed.
The American Heart Association, the American College of Physicians and the American College of Obstetricians and Gynecologists had all concluded by the mid 1990s that H.R.T. could be recommended to older women as a means of warding off heart disease and osteoporosis. By 2001, 15 million women were filling H.R.T. prescriptions annually; perhaps 5 million were older women, taking the drug with the sole belief that it would allow them to lead a longer and
healthier life.
Despite these endorsements there were physicians who remained unconvinced of the ability of HRT to prevent heart disease and were yet concerned about their ability to increase the incidence of breast cancer and blood clots. Others were convinced of the efficacy of this treatment based on earlier reports from the Harvard Nurse Study and other anecdotal evidence and believed that further studies were not only unnecessary but may be morally inappropriate.
This uncertainty and Wyeth’s need to expand the indications for use of its prize products, to indications beyond hot flashes drove studies to evaluate these hypotheses The National Institutes of Health funded a study the Womens Health Initiative (WHI) and a parallel study was funded by Wyeth, the Heart and Estrogen/Progesterone Study (HERS).
The results of the HERS study when first available were worrisome, though HRT did in fact reduce the bad cholesterol (LDL) and increase the good cholesterol (HDL) this study where nearly 2700 women (average age 67)with heart disease were randomly assigned to receive HRT or a placebo (inactive pill) HRT did not reduce the incidence of heart disease. In women treated with HRT an increased incidence of blood clots in veins and the lungs was also noted.
It was postulated that the adverse effects of HRT wee an early treatment result, but if treatment was continued the positive effect on blood fats would negate the earlier effects and the net effect would be positive.
The reports of this study though widely cited were generally ignored, though a recommendation was made that women with heart disease not be given HRT.
But the perfect storm was brewing. Women in the HERS study receiving HRT for an additional three years were reported to have no reduction in heart disease but had a persisting trend of increasing rates of breast cancer.
The results of the WHI became available at the same time as the extended results of the HERS study.
The WHI though similar to HERS tested two forms of HRT, estrogen alone and estrogen combined with progesterone (believed to protect against uterine cancer) comparing both with placebo.
The WHI was different from HERS in two features, the women studied had no evidence of heart disease, this study also involved more than 16,000 women. This number believed by statisticians to be large enough to detect small differences in outcomes between the treatments.
The results supported those of the earlier published HERS study.
When estrogen was combined with progesterone it did reduce the incidence of uterine cancer but disturbing increases in coronary heart disease, blood clots to the lung, stroke and breast cancer were recognized. These negative effects outweighed diminished incidences of colon cancer and osteoporosis also observed. An increase in dementias was noted in women over 65 treated with hormones.
Two years later a subgroup of women with prior hysterectomies who received estrogen alone were evaluated. The incidence of strokes, dementias were yet noted in alarming numbers, the occurrence of coronary heart disease and breast cancer decreased when compared with the combination hormone treatment group the decrease had no statistical significance.
In real life how should a woman facing the dilemma of HRT consider her options?
Beyond the age of sixty the options are clear, HRT either estrogen or estrogen combined with progesterone are associated with an increase in the incidence of heart disease, breast cancer, blood clots and dementias.
The combination therapy has greater hazards than the estrogen alone.
The HERS and the WHI have one significant flaw, the women studied were above the age of 60, data evaluating women between the ages of 50 and 59 noted more favorable effects against coronary heart disease than in older women though the risk of stroke, blood clot, uterine and breast cancer remain unchanged.
One must realize that the results of these studies have often been trivialized, detractors of these studies have flawed mathematical reasoning they argue
Example:
If a treatment increased the incidence of breast cancer by 5 women in every 10,000 who received it the figure may seem inconsequential
But if this treatment is given to 2 million women it would result in 1000 breast cancers that could otherwise have been avoided.
If an automobile defect was known to result in a 1000 extra deaths each year would you buy one for its GPS feature?
Relevant practical considerations:
1) The absolute magnitudes of the risks are small but sufficiently concerning for a treatment given to women with NO preexisting disease.
The Food and Drug Administration has a special prescribing warning advising that these drugs
2) HRT administration is yet appropriate for bothersome symptoms of early menopause but should be used in the smallest dose that relieves symptoms and their need periodically assessed. The acceptance of this recommendation is already apparent. It has resulted in a decrease in prescription of these agents and a parallel decrease in the incidence of breast cancer 3) Heart disease and breast cancer are more lethal than hot flashes, the risks for the former should be evaluated and if present high blood pressure, diabetes and elevated levels of cholesterol treated with drugs specifically targeted for these conditions.
4) Medications that alleviate hot flashes and vaginal dryness with no increased risk should be used and are available.
5) Transdermal (skin patch) preparations of estradiol have been shown to reduce hot flashes and progression of osteoporosis with a reduced risk for breast cancers when compared with hormones taken by mouth. Compounded hormones sold by pharmacies that are advertised as being "natural" have a capricious absorption through the skin and may possess all the all the harmful effects of those taken by mouth while not offering any advantages.
6) One size does not fit all and each menopausal subject must be evaluated, the use of hormones if needed combined with other proven necessary health interventions
A link to a breast cancer assessment tool is provided for a personal risk analysis
Finally why was the Harvard Nurses Study flawed? Retrospective analysis noted that only those without significant health problems and model lifestyles took the hormones. Lifestyles not hormones were the answer.
This conclusion has a message for all of us.
Pasted in its entirety is probably the best analysis of the health care food fight. It was published by David Brooks a columnist at the New York Times. He is one of the least liberal (note I did not say conservative) of their contributors.
To those who doubt Mr. Obama's political pugilistic talents read on. He can teach Mohammed Ali some rope a dope tricks.
Let’s say that you are President Obama. You’ve inherited a health care system that is the insane spawn of a team of evil geniuses from an alien power. Pay is divorced from performance. Users are separated from costs. Rising costs threaten to destroy your nation and everything you hold dear.
Because you have a lofty perspective on things, you know there are basically two ways to fix this mess. There is the liberal way, in which the government takes over the health care system and decides who gets what. And then there is the conservative way, in which cost-conscious consumers make choices in the context of a competitive marketplace.
You also know that these two approaches have one thing in common. They are both currently politically unsellable. Others have tried and perished. There are vast (opposing) armies arrayed against them. The whole issue is a nightmare.
You are daunted by the challenges in front of you until you remember that by some great act of fortune, you happen to be Barack Obama. This calms you down. You conceive a strategy.
The first step in this strategy is table-setting. You will spend the first several months of your administration talking grandly about the need for reform. You will invite all interested parties to the table, and you will serve a great heaping plate of pabulum. You will talk about things that no sentient person could possibly disagree with — about the need for better information technology and for more preventive care.
There will be less health care nitty-gritty here than in your average pre-K circle time, but you are getting everybody talking. You are building relationships.
In stage two, you pass everything over to Congress. You’ll need these windbags at the end, so you might as well get them busy at the beginning. This will produce a whirl of White Papers, a flurry of committee activity, a set of legislative rivalries as every chairman in the stable seeks to be the lead horse in the romp to legislative glory. All you have to do is raise a portentous eyebrow from time to time, signaling grand approval of the various proposals as they blow by.
This brings us to the current stage: The Long Tease. Every player in this game has a favorite idea, and you are open to all of them. The liberals want a public plan, and you’re for it. The budget guys are for slashing Medicare reimbursements, and you’re for that. The doctors want relief from lawsuits, and you’re open to it. The Republicans want you to cap the tax exemption on employee health benefits. You campaigned against that, but you’re still privately for it.
You ran on a platform of hope and, boy, are you delivering. Every special interest in Washington lives in hope that they will get their pet idea incorporated into the final bill.
None will come out and oppose you because they live in hope. Even the different factions in your own administration live in hope. One of your health advisers pretended to smile at one of your economists!
This brings you to the final stage, the scrum. This is the set of all-night meetings at the end of the Congressional summer session when all the different pieces actually get put together.
You want the scrum to be quick so that the bill is passed before some of the interests groups realize that they’ve been decapitated. You want the scrum to be frantic so you can tell your allies that their reservations might destroy the whole effort (this is how you are going to get the liberals to water down the public plan and the moderates to loosen their fiscal rectitude).
The scrum will be an ugly, all-out scramble for dough. You can probably get expanded coverage out of it. You can hammer the hospitals and get much of the $1.2 trillion to pay for the expansion. But you won’t be able to honestly address the toughest issues and still hold your coalition. You won’t get the kind of structural change that will bring down costs long-term. In the scrum, Congress will embrace the easy stuff and bury the hard stuff.
Which is why you have MedPAC. That’s the Medicare Payment Advisory Commission that you want to turn into a health care Federal Reserve Board — an aloof technocratic body of experts that will make tough decisions beyond the reach of politics. You can take every thorny issue, throw it to MedPac and consider it solved.
Conservatives will claim you’re giving enormous power to an unelected bunch of wonks. They’ll say that health care is too complicated to be run by experts from Washington. But you’ll say that you are rising above politics. You’ll have your (partial) health care victory. Not bad for a skinny guy with big ears.
The President would have made a great gigolo. He wowed a group of aging professional dowagers who came prepared initially to resist his seductive rhetoric but soon not only accepted it but displayed a passion that their august bodies had not experienced in decades. The American Medical Association known for valuing pence above passion accepted his promises. In the fashion of the best Chicago hustler he promised everything but delivered nothing. He promised them freedom to practice their profession and pay them a fair wage for their efforts. Never was the wage nor the efforts needed to earn that wage disclosed. They were assured that if they electronically displayed their professional skills so that these skills could be compared with their peers that their cyber electronic confessions could earn them further financial absolutions and prevent them from ever sinning again. He even resurrected the memory of a fellow but competitive political hustler (Newt) to assure them of the sincerity of his promises. He did not assure them of protection from the legal beagles who preyed on them when they erred, explaining that fair trade practices allowed for unreasonable and extraordinary damages to be extracted to promote free trade. But was he appealing to a majority of practicing physicians? "Twenty-five years ago, AMA represented a substantial percentage of American physicians. Today, only 25 percent of active, practicing physicians belong to AMA. Previously, when AMA lobbyists and leadership advocated for physicians, they could claim they represented all American physicians. Today this is not the case. During the past 25 years, the changes ......have affected AMA as well. With more federal and state governmental hassles, increased paperwork, increased work for less pay and the continued demeaning of American physicians, today's physicians have come to believe that some of their problems have been created by a weak AMA that is not looking out for their interests. As a result, more and more physicians sought solutions to their problems through their specialty societies and/or their local, state and county medical associations. AMA was slow to respond to many of these changes because they had been firmly committed to maintaining geographic state medical associations, without acknowledging the significant potential input of specialty societies, other practice arrangements and changing physician demographics. Physicians saw few benefits in belonging to AMA, and membership began falling." . This free fall persists and few of my acquaintances find that membership in the AMA is of benefit to them financially, professonally or intellectually. A trade association which had earlier criticized a public health insurance mandate promised to accept it with the ills it can bring as long as the price was right. Healthcare is too important a public need that it be bartered by any street corner professional who seek only their profit and not their customers needs. The President would do well to protect the consumer from them.
There is an increasing acceptance that a bill reforming our current healthcare mess will be signed by the President by October.
However like one on a blind date one hopes this new piece of legislation like the unseen date will be acceptable and attractive.
Nearly a decade ago Hillary Clinton attempted to fashion a similar piece of legislation. Her complex legislative proposal was crafted behind closed doors and its rejection by Harry and Louise
Obama’s approach is different he prods Congress to pass healthcare legislation using surrogates like Peter Orzag and Rahm Emmanuel to make Congress accept ideas he champions as their own.
Central to providing care for the uninsured is a proposal that would create a “public plan” one similar to Medicare with government financial subsidies. This proposal though supported by liberals is opposed by the Republican minority who argue that it would destroy “competition” in the health insurance marketplace. They seek to transfuse their anemic political future with opposition to it. This opposition is also shared by some Democrats who have offered a c.ompromise which will create private health cooperatives. These entities would be operated by local business and community groups with no federal or other subsidies.
The American Medical Association also opposes such a measure . Their opposition may be tempered by remarks and concessions that the President will offer when he addresses this body on June 16th.
American healthcare when appropriately delivered is the envy of the world. A failing of this system is its costs. These can only be truly appreciated when compared with comparable economies.
The McKinsey Global Institute has done such a comparison.
The findings are dramatic. This country spends more on healthcare than it does on food and our healthcare costs exceed all personal spending in China! Adjusting for our economic advantages we spend more than any of the member nations of the Organization for Economic Cooperation and Development (OECD) our life expectancy and infant mortality statistics are inferior to most of them. If we were able to reduce our costs to levels equivalent to these nations we would have savings of $650 billion on an annualized basis.
Two third of this excess is from outpatient care. While the United States has more successfully shifted healthcare delivery from in hospital care to ambulatory settings any cost savings have been negated by excess utilization. Payments are directed to quantity not quality and the former grows exponentially. High profit margins for outpatient ventures lead to their proliferation and overutilization, both fertilized by lack of price consciousness by patient and low or absent co pays.Inpatient care is shorter in the United States but the savings negated by larger volumes of high cost procedures and greater supply and fixed hospital outlays.
Healthcare administration and insurance is five times more expensive than that of the OECD average with private health plans accounting for $63 billion of the excess (poor argument for the preservation of these plans) and the public payers for $28 billion. Duplication of management, regulatory excess and lack of an adequate information technology support are cost drivers. Less money is spent in this country for long term care and out of pocket expenses are higher explaining some of the inpatient excess. Less than expected outlays are also evident for durable medical equipment where costs are largely not covered by insurance. Personal responsibility for costs tends to slow their growth.
Other observations of the McKinsey Study were that in 2006, 49 % of healthcare expenditures were paid for by public funds, Medicare (20%), other federal programs (14%),state and other public funds (15%). The costs of private health insurance increased as Medicare or other public programs restricted their payments. Industry and individuals already subsidize public healthcare.
A piece of medical policy reporting by a Harvard surgeon writing in The New Yorker entitled the Cost Conundrum has grabbed the attention of the administration where it is now required reading.
Its author Dr. Gawande writes
‘McAllen has another distinction, too: it is one of the most expensive health-care markets in the country. Only Miami—which has much higher labor and living costs—spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. In other words, Medicare spends three thousand dollars more per person here than the average person earns.’
He found
“Public-health statistics show that cardiovascular-disease rates in the county are actually lower than average, probably because its smoking rates are quite low. Rates of asthma, H.I.V., infant mortality, cancer, and injury are lower, too. El Paso County, eight hundred miles up the border, has essentially the same demographics. Both counties have a population of roughly seven hundred thousand, similar public-health statistics, and similar percentages of non-English speakers, illegal immigrants, and the unemployed. Yet in 2006 Medicare expenditures (our best approximation of over-all spending patterns) in El Paso were $7,504 per enrollee—half as much as in McAllen. An unhealthy population couldn’t possibly be the reason that McAllen’s health-care costs are so high. (Or the reason that America’s are. We may be more obese than any other industrialized nation, but we have among the lowest rates of smoking and alcoholism, and we are in the middle of the range for cardiovascular disease and diabetes.)”
“The place had virtually all the technology that you’d find at Harvard and Stanford and the Mayo Clinic, and, as I walked through that hospital on a dusty road in South Texas, this struck me as a remarkable thing. Rich towns get the new school buildings, fire trucks, and roads, not to mention the better teachers and police officers and civil engineers. Poor towns don’t. But that rule doesn’t hold for health care.”
“Nor does the care given in McAllen stand out for its quality. Medicare ranks hospitals on twenty-five metrics of care. On all but two of these, McAllen’s five largest hospitals performed worse, on average, than El Paso’s. McAllen costs Medicare seven thousand dollars more per person each year than does the average city in America. But not, so far as one can tell, because it’s delivering better health care.”
A search for answers from the area physicians elicited
““Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures.”
“The primary cause of McAllen’s extreme costs was, very simply, the across-the-board overuse of medicine.”
These observations make it increasingly apparent that the most expensive technological device driving up healthcare costs is the physician’s pen. Peter Orzag the principle architect of healthcare reform testified before Congress in July 2008 putting a wonks imprimaturon Gawande’s literary efforts. Does increased spending buy quality?
“Rochester, Minnesota, where the Mayo Clinic dominates the scene, has fantastically high levels of technological capability and quality, but its Medicare spending is in the lowest fifteen per cent of the country—$6,688 per enrollee in 2006, which is eight thousand dollars less than the figure for McAllen”
“That’s because nothing in medicine is without risks. Complications can arise from hospital stays, medications, procedures, and tests, and when these things are of marginal value the harm can be greater than the benefits. In recent years, we doctors have markedly increased the number of operations we do, for instance. In 2006, doctors performed at least sixty million surgical procedures, one for every five Americans. No other country does anything like as many operations on its citizens. Are we better off for it? No one knows for sure, but it seems highly unlikely. After all, some hundred thousand people die each year from complications of surgery—far more than die in car crashes.”
“Nearly thirty per cent of Medicare’s costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level in low-cost areas,” Peter Orszag, the President’s budget director, has stated”
Gawande’s observations have provided a cudgel for doctor bashing
“Doctors largely decide what medical or surgical treatments are needed, whether it will be delivered in a hospital, what tests will be performed, and what drugs will be prescribed or medical devices implanted.”
“When President Obama speaks at the annual meeting of the American Medical Association on Monday he will need all of his persuasive powers to bring doctors into the campaign for health care reform. Doctors have been complicit in driving up health care costs. They need to become part of the solution.”
“Physicians reportedspending three hours weekly interacting with plans; nursingand clerical staff spent much larger amounts of time. When timeis converted to dollars, we estimate that the national timecost to practices of interactions with plans is at least $23billion to $31 billion each year”
Aside from the creation of a public plan and cooperatives, how will Obama reform healthcare and afford care to the 47 million uninsured. He is a pragmatist and is aware that this bill will have to demonstrate that it will eventually reduce healthcare costs.
The subsidies are 12% greater than spending on Medicare fee for service enrollees and are estimated to cost $25 billion yearly. This subsidy should be easy to eliminate for legislators calling for a level playing field. Other proposals include changes in the Medicare Prescription (Part D) program with preferences given to products proven to be most effective in their class
This proposal is vigorously resisted by the pharmaceutical industry.
“Barack Obama and Joe Biden will invest $10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records. They will also phase in requirements for full implementation of health IT and commit the necessary federal resources to make it happen. Barack Obama and Joe Biden will ensure that these systems are developed in coordination with providers and frontline workers, including those in rural and underserved areas. Barack Obama and Joe Biden will ensure that patients’ privacy is protected. A study by the Rand Corporation found that if most hospitals and doctors offices adopted electronic health records, up to $77 billion of savings would be realized each year through improvements such as reduced hospital stays, avoidance of duplicative and unnecessary testing, more appropriate drug utilization, and other efficiencies.”
“RAND’s vision of "gold in them thar hills" owes more toMerlin than to metallurgy. For believers, we offer the followinginvestment opportunity. We have invented a floppy disc witha screen saver that says "Don’t Smoke." Since 450,000Americans die each year of smoking, with each life worth $2million, if we assume 100 percent compliance by eligible participants,such an invention is worth $9 trillion. And since we are willingsell the invention for only $800 billion—less than a tenthof its value—even minimalist assumptions for packaging,distribution, installation, and the like imply a return on investment(ROI) even better than that forecast in the RAND estimates.
The RAND researchers offer an attractive hypothesis; it shouldbe tested first in one hospital (with its surrounding practices)and then in several hospitals. As Woody Allen might say, "Atthe moment it’s just a notion, but with a bit of backingI think I could turn it into a concept, and then an idea." Tomount a national program to do in every hospital what has yetto be done in any hospital might benefit the computer vendorswho paid for the RAND research, but it risks failure on a colossalscale.”
Physicians and hospital systems are reluctant to implement these capital intensive investments as any return on investment will not directly benefit them but the biggest beneficiaries financially will be the health plans who have no skin in the game. Yet there are examples where simple electronic medical exchanges are successful, one such effort is described in Western Coloradoand new federal funding to support this is detailed. Communities such as ours should visit this idea. Most recently Obama in an addresspromises further savings from reduction in costs associated with hospital waste and geographic cost variations. Orzag attempts to explain these savings and Jonathan Skinner the health economist attempts to provide a defense for these reductions but howls from the hospital industry (justified) and barbs from the editorial page of the Wall Street Journal criticize the findings that justify these cuts. For these to be successful a new relationship between hospital administrations and their medical staffs will need to be crafted. This will depend on a shared responsibility for care and profit. Reform is inevitable a visit to an emergency waiting room is adequate proof of its urgency and the cries of anguish from those beyond the pale of the current system proof of its necessity
