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Wednesday, September 17, 2008
A Doctor Mom's View of Proposed Health Care Reforms
Mark Graber
Posted by Dr. Julia Frank, Professor of Psychiatry, George Washington University
Comments:
What impact would you expect Obama's plan to have on provider incomes? The New England Journal of Medicine Article you cite states Obama's "plan could control costs, but its effectiveness in slowing spending would depend on its enrollment and the political willingness to restrain provider payments."
There are simple, but painful, free market solutions for all three problems:
Health insurance needs to be universal to avoid free riders, private to keep waste under control and cover only preventative and catastrophic care. All other medical expenses should be paid out of a medical savings account filled by the government and from which the account holder can keep half of all monies not spent. In turn, to make shopping easy and to promote competition between medical providers, all medical providers must provide their costs in a transparent manner to their patients. It would be great to be able to compare medical expenses on the net just like we do airline flights or any other service. Steve Forbes implemented one of these plans at his magazine about 20 years ago and health insurance costs plunged as soon as his employees actually had to start shopping around for medical services and weighed costs vs. keeping half of the cash they did not spend for other costs of living. Medical care is one of the few services where consumers do not shop for the best combination of service and price. That needs to change. DO NOT set wage and price controls on the medical industry. These are a recipe for shortages of medical care like they have been shown to be for every other good and service. Doctors will not treat and Pharma will not make new medicines. Right now, the US is making the lion's share of new medicines because other country's pharmaceutical industries are hamstrung by price controls. Run citizenship checks on all patients and report illegal aliens to ICE for deportation. Illegal aliens are the worst of the free riders and are causing skyrocketing Medicaid costs that are bankrupting the states. Tax the medical industry to set up a health and disability supplemental insurance to cover all medical care and basic support for those injured and life insurance for those killed by medical malpractice. Eligibility will be determined by an administrative hearing. In exchange, med mal suits will be prohibited. Doctors make mistakes like all other human beings. This is a risk patients assume by agreeing to receive treatment. There is no reason for spending literally tens of billions per year on attorney's fees and costs as well as pain and suffering. All university tuitions including Med school are growing far beyond the base inflation rate because supply is limited and demand is being subsidized by the government. Government assistance needs to be capped and set to increase only at the rate of base inflation. Without the subsidy increase, tuition will either stop increasing or the universities will lose customers/students. Supply and demand. Problems solved. However, there is not a chance in hell that the Dems are going to cut off their academic and plaintiff's bar supporters or support a plan where people are treated like adults and have responsibility for shopping for their own medical care. Likewise, the GOP will not be keen on universal health insurance, especially where the insured get to keep government money they did not spend, or creating the medical malpractice supplemental insurance. Neither party will want to alienate the increasing hispanic vote by cutting off illegal aliens. Thus, we muddle along with a very expensive medical system which is completely screwed up by the government.
Was this some sort of joke? Like the last line:
We need to elect policy makers who will make policies, rather than those who flatter and cajole us into thinking that we moms can do this for ourselves, from where we sit, in the minutes of free time we have left over from just keeping our day to day teams on the field and our family ships afloat. It's like an awful conservative parody of liberalism. But you're serious! (At least I think so.) Don't flatter me into thinking I can actually make my own decisions, make them for me.
I don't know what Obama's plan would do for provider incomes--but income is not the only thing a provider should consider. If a provider's malpractice costs and debts are reduced by sensible, systematic reform, the provider can experience a net gain despite a reduction in direct patient care income. In addition, given the opportunity, many physicians would work for salaries and benefit packages, rather than as private practicing entrepreneurs. Many more students seek public health scholarships, for example, than they can currently find. Many young physicians are not lured into private practice because of the financial incentives, but driven there because other options are limited (not by salary level, often, but by unacceptable working conditions).
Free market forces based on an individual mandate, and individual purchasing decisions, cannot solve the health care problem. Patients when they are ill find it very difficult shop around for care based on price comparisons for the particular service they need to restore them to health or productivity. When they are well, they have little incentive to put their money into a health expense, rather than into education or simple consumption. Some price competition among providers might help, and indeed this exists in the burgeoning market of providers who do not accept direct insurance payment--though with no discernible effect in making services less expensive. But as a general strategy, such competition creates perverse incentives.It may cost the doctor years of training and the system a great deal of research to develop better treatment for a disabling or life threatening condition. The cost of developing and providing any new or established service is not related to the income of the patient who may qualify for it, or need it, on medical grounds. Relying on individual buying decisions to control the costs of services will return us to world in which the sensible physician will specialize in diseases of the rich and rest of us will be consigned to a Dickensian world in which treatable diseases are allowed to "decrease the surplus population." Forbes magazine presumably covers healthy, well educated staff--it would be impossible to extrapolate from their experience to the entire US population. The ones with the highest medical costs, the elderly, the chronically ill, the disabled and the very young, are hardly comparable to the staff of a sophisiticated financial magazine. The statement about new drugs coming only from the US is false. The "new drugs" being developed here are mostly me too drugs, often newly designed delivery systems, that allow companies to extend their patent advantage and keep prices high, but do not benefit the sick or the system overall. The huge research budgets of US firms are actually significantly committed to MARKET research. Much real innovation comes from publicly or philanthropically funded non-commercial science enterprises, here and abroad. As to the statement about individuals making policy decisions, I stand by it. Individuals can make purchasing decisions, but they are simply not in a position to see the policy implications of each of their acts. Women are smart enough to vote for the candidate whose policies they favor, but that is a different issue than deciding which insurance to purchase to cover a particular family's health care needs. Basing all of health care financing on the decisions of individual purchasers of units of care is a recipe for disaster.
"Bart" DePalma:
Run citizenship checks on all patients and report illegal aliens to ICE for deportation. Illegal aliens are the worst of the free riders and are causing skyrocketing Medicaid costs that are bankrupting the states. Cite for this "fact"? And how much would it cost to run "citizenship tests" on the patients in the ER? And do we just let them bleed until the results are in? Cheers,
"Bart" DePalma:
There are simple, but painful, free market solutions for all three problems. How is this ("Run citizenship checks on all patients and report illegal aliens to ICE for deportation....") a "free market solution"? Cheers,
Run citizenship checks on all patients and report illegal aliens to ICE for deportation.
Yeah, because one thing you really want to do is put in place a system that discourages people from getting healthcare. Personally, I don't want to see emergency rooms turned into a wing of law enforcement. Not to mention, this would pretty quickly turn into non-white-people profiling.
Without the subsidy increase, tuition will either stop increasing or the universities will lose customers/students. Supply and demand.
Problems solved. Right. Let the poor people do poor people work and let the rich people get a quality education. Problem solved. It worked in the 1890s, why wouldn't it work now? What're you poor people whining about? You heard the Man--get a job!
In addition to the obvious illegal immigrant issue everyone else flags, Bart is also wrong about Health Savings Accounts. The problem with making people pay for non-catastrophic care out of their own pocket is that too many people will skip regular checkups and screening. What you want to do is make those things free because they reduce expenses down the line. HSA's, in contrast, concentrate all the cost cutting there, which just increases costs in the long term.
I do welcome Bart's support for universal catastrophic care. At least that would be a good start.
pms_chicago said...
BD: Without the subsidy increase, tuition will either stop increasing or the universities will lose customers/students. Supply and demand. Right. Let the poor people do poor people work and let the rich people get a quality education. Problem solved. It worked in the 1890s, why wouldn't it work now? Universities are businesses like any other. The only reason they can get away with these insane tuitions is because the government is subsidizing tuition growth. If you cap the subsidy, the tuition growth cannot continue or they will lose customers. The Universities will relent on the tuition increases because they cannot afford to lose their customers and the same people will be admitted to college as there are now.
dilan said...
In addition to the obvious illegal immigrant issue everyone else flags, Bart is also wrong about Health Savings Accounts. The problem with making people pay for non-catastrophic care out of their own pocket is that too many people will skip regular checkups and screening. You are correct. That is why my suggested HSA covers preventative care.
Bart, what you want is preventative care paid for by the government or the insurance company. The reason is if it comes out of the HSA, there's a financial benefit to the policyholder to not do the preventative care because the money stays in the HSA and may be recoverable.
Indeed, while the concept of the HMO has been perverted over time, the original idea was for the HMO to spend lots of money on preventative care in the hopes that this would cut costs in the long term. What you want to do is make preventative care basically costless for the consumer. And the problem for HSA plans is that this doesn't leave much room left for "everyday" medical expenditures that consumers are going to shop around for in order to cut costs.
dilan:
My HSA, like nearly every other one I know, includes both the account and the insurance. I completely agree that preventative care should be covered in the insurance portion of the HSA to save money later on the catastrophic part of the insurance. What I want the consumer to decide is what to spend on everything in between like minor illnesses and quality of life items. Government mandates to insurers to cover these things ruined our experiment in cost control with HMOs and PPOs.
The problem I see with making preventative care “free” is (a) defining what constitutes “preventative care” and (b) a lot of people wouldn’t use it even if it were costless to them.
What about this? Start with a free market with respect to private insurance, but have the government provide reinsurance for catastrophic care (ie, the private insurers would receive reimbursement for a certain portion of the costs). The percentage of reimbursement would vary depending on the insurer’s preventative care record. For example, if there were a type of preventative care that would have had a strong likelihood of preventing the illness in question and (a) the patient had not received that care and (b) the insurer had not covered it, the reimbursement would be very low. If the patient had not received the care but the insurer did cover it, it would be somewhat higher. If the patient actually received the care, higher still. That way, the insurer, not merely the patient, has an economic incentive to provide preventative care. Of course, you would have to figure out how to handle this problem when the patient had been covered by a number of different insurers over the course of his or her lifetime. Also, there should be incentives for insurers and providers who are able to keep patients healthy over a long period, whether through preventative care or other means.
Individual doctors mean well, but it important to understand the way they frame their comments and recommendations. Unfortunately, when some of the framing is deconstructed, the remaining content is not always so helpful. The following comments are not directed at Dr. Frank, the individual doctor who sees patients. They are in response to Dr. Frank, the physician who purports to speak on behalf of her profession.
Post a Comment
1. There are two monopolies at the core of the health system (let's not confuse things and call it a "health care" system): the MD monopoly (through its universal scope of practice enacted in each state’s medical practice act or equivalent); and the pharmaceutical monopoly. The latter has 2 components: the IP monopolies on drugs; and the statutory restriction on government CMS bargaining with drug companies for reduced prices on the drugs it buys. Unless these monopolies are addressed there are no proposed solutions that can be reasonably evaluated. 2. There are 3 causes of disease: physical/mental causes such as accident, environmental exposures, genetics, etc.; personal acts such as diet choices assuming adequate resources with which diet choices can be exercised; and socio-economic causes as a result of economic and social policies. Of the three, only SES correlates well with mortality and morbidity; i.e., policy makes the difference in health, not docs or choice. 3. As a general matter, without training in the social determinants of disease no-one can adequately make or evaluate health policies. Medical training produces a world view that is so meager it is a negative when evaluating policy. It includes almost nothing of value about social determinants because doctors have to learn how to treat diseases in individuals. Unless they also get public health degrees they are lost in the policy world. This myopia is cultivated by the AMA because the job of the AMA is to protect the market for the MD degree. If doctors knew what was going on they would not be able to support their own monopoly because it is unjust and directly contradicts “medical ethics.” One does not have to have an MD to deliver very high quality primary care, and many medical specialties can be learned and practiced well by non-MDs. The legal scope-of-practice should be tied directly to training. The docs allow themselves an unlimited scope of practice, one not tied to training, but require through lobbying strength that all other health professions have limited scope of practice. The result is unethical because it means well-trained and competent people cannot legally engage in their competency, stunting their political and economic health. In this context, when doctors moan and groan about policy, their statements are so grounded in false consciousness, economic and social striving, and so on, it is impossible to take them seriously. 4. Dr. Frank represents that neither candidate will be liked by the "medical profession." By this she means medical doctors and excludes all "non-physician" health workers. The main reasons MDs do not like these kinds of policies are 1) because they erode their social authority by creating systems in which doctors look more like employees (now 90% of docs) than stand-alone professionals; and 2) they delegate to non-physician providers greater legal authority to diagnose and treat, expanding scope-of-practice and decreasing the effect of the MD monopoly on diagnosis and treatment. The monopoly on diagnosis is significant, and at the heart of the health system, because it is the gatekeeping function by which patients, the food of the health system, are created. The treatment side of the monopoly is also significant because it is how drugs get distributed to populations. Doctors create patients and distribute drugs. That is a toxic combination in this heavily corporate, institutional and population level setting. 5. The drug distribution problem has to be addressed at the policy level because it is a population level thing. For every $1 Big Pharma spends on direct to consumer advertising it makes about $4, something along those lines. DTC theory says doctors have to see the patients so there is a "learned intermediary" between the advertisement and the drug company. This is a legal and factual fiction though, as any marketer or other person who has studied population dynamics understands. Apparently the NJ courts understand this as well. DTC is really direct to consumer advertising, because the medical profession is completely instumentalized by Big Pharma in this scenario. The illusion doctors like to maintain is that they are significant here, because that works to maintain their authority. But many studies have shown that the $25k spent by Big Pharma on every doctor every year pays off. Doctors disclaim being influenced, but they are, they prescribe what the detailers have told them to prescribe. This problem links the pharma monopolies with the MD monopolies. If both of these monopolies are discarded, then perhaps some progress on one front of the economic disaster can be made; and then we can more accurately evaluate the other influences. Let me not forget to mention the medical device IP monopolies. Some health economists, such as Sherry Glied, lay a significant amount of blame for increased spending in the health sector on technological advances. Some countries forbid (or did forbid) patents in medical technologies on the grounds they are public goods. That is the best approach. 6. Health care should be considered a social good, not a commodity. As with so many other things, economic ideology (and later the law and economics movement) deeply influenced thought about health care. This framing fit nicely with the intense focus of the medical profession through the AMA and other organizations on protecting the docs monopoly on providing health care, on their ability to make lots of money. That effort dates to the Gilded Age. 7.So, when Dr. Frank makes the following statement: I agree with my medical colleagues that health care reform must address three factors simultaneously: health insurance, malpractice costs, and the cost of medical education. I see another self-serving statement by a myopic profession seeking to maintain its lifestyle. The socio-economic solutions that are most likely to work for the health of the populace have been dismissed as socialistic and unworthy of Americans by the medical profession since the 20s. Whatever their proper classification as a matter of political or economic theory, they are opposed to the monopolist interests of the medical profession We could well look to Cuba and Chile for inspiration, but their physicians are not trained to have the expectations, attitudes and world views that inform and underlie the three factors listed above.
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