Sustainable health reform requires a solid foundation…unfortunately the proposals we’re seeing out of Washington create a more elaborate house of cards, as we continue to create an elaborate health care ponzi scheme. The House that built Medicare has already saddled our country with Trillions in unfunded liabilities. The proposals we see look to continue to reward a medical-industrial complex that creates and manages diseases rather than focusing on optimizing the health of people.
So what are the criteria of a sustainable health system? continue reading »
Jonathan Kellerman sparked a firestorm of comments with his op-ed in today’s WSJ, titled The Health Insurance Mafia.
His premise, which I’ve been arguing for a while, and which Dr Rich has written about eloquently as Covert Rationing, is that insurance, rather than solving the problems of cost, creates much of the problems we see today.
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Kudos to the Happy Hospitalist for pointing out a great piece of research by AHRQ on actual use of the health system.
For those who want an executive summary, my major point is that the median expenditure for medical care in the US in 2002 was ~$700. The vast majority of individuals in the US can afford health care. The shift to the premium-based insurance model that spends a disproportionate share on the very sick is what is making healthcare unaffordable today. Moving away from that model is the only way to ensure good healthcare for all (vs. ridiculously high health expenditures for the few). Its odd to find all the liberals (and less odd to find the health insurance execs) looking to supplement the head of the Pareto curve.
Their findings are as follows:
Theo Francis’s article in the WSJ called “Medicare offers overhaul of hospital reimbursing” contains a number of statements that reflect what side of the carrot/stick equation Medicare’s “solutions” for provider quality will fall.
Medicare proposed sweeping changes to the way it reimburses hospitals, outlining a plan that would essentially redistribute cash by reducing payments across the board and then giving providers a chance to “earn back” money by meeting quality-of-care thresholds.
Its not surprising to see individual providers opting away from Medicare patients with reimbursement not tracking to inflation, and with a 10% punitive Medicare reimbursement cut hanging over their heads, and noise about further requirements for installation of EMRs making their economics look even worse.
Unfortunately for hospitals, demographics dictate that a large portion of their patient population and revenue is tied to Medicare, where these unilateral decisions can be made. (Medicine and Economics blog has a great post on government’s difference from corporations and charity being the ability to use force, Covert rationing blog has a great post on how Medicare/insurance contracting is non-negotiable, and therefore monopolistic and potentially illegal)
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Scott Shreeve has an interesting marketing take on CDHP plans, and a good one. Rather than emphasizing the high deductible (more relevant to insurance thinking), he emphasizes the low premium (certainly changes the dynamic of the conversation with consumers)
The whole notion of “high-deductible” is a misconception – why not change the paradigm by saying “Low-Premium” Health Plan (LPHP). The point is that the we are talking about insurance – you are buying risk protection from someone who is willing to assume it in exchange for your money. The more risk you want to avert, and the lower co-payments you want, the higher your monthly premium is going to be. If you are willing to go at risk, up to a defined level ($5,000 my case), you can save dramatically on your monthly insurance premiums. In addition, as you play the numbers out, your overall spending can also be 15-20% less with a LPHP over a traditional plan. This doesn’t even account for the behavior change that occurs when you are spending your own money and therefore become engaged in the decision making process.
As I posted before, the sticker shock of medical items is not financially worse than watching all the premium money previously being paid go “poof” every month. And, as I mention in my metrics article, what is being rewarded today certainly isn’t working– why shouldn’t we look to reduce excess premiums being paid as opposed to overall cost of healthcare? After all, people aren’t looking to reduce overall cost of consumer and high tech sectors despite outsized gains in those industries the past few years.
For most people (estimated 80-90% of employees), a CDHP plan will put them out ahead if most of premium savings (at least on for at-risk insurance) are given back in the form of HSA contributions (zero-sum balance).
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There is a push by the political body to expand the SCHIP program to the middle class, providing a government entitlement for children in households up to $83K in annual income.
On the surface, this sounds good– coverage for more children. As someone who strongly considered pediatrics as his calling, I wholeheartedly believe that better health for kids is something strongly needed– especially in an era with increasing childhood obesity, diabetes, etc. While at the LA County hospital, I cared for a number of kids with SCFE– kids so heavy that their growth plates in their hips started to slip/break from the weight being placed on them. It was heartbreaking to see young kids (12-14) who’s health was already compromised to the point that they were unlikely to live full, active lives.
One would expect that any additional funds for children’s health would be invested in creating additional programs to improve wellness, increase physical fitness, emphasize good nutritional habits, and screen for early-stage addressable illnesses.
However, this isn’t about better health for more children…this is about expanding government programs to those who don’t need them– and will likely be harmed by the change.
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