Healthcare reform – Slow down, Mr. President, and do it right
We all agree the country needs real healthcare reform, but the pace at which you are pushing proposed solutions, to such an incredibly complex matter, through the legislative process is scary. Please slow down and fix the problem by addressing its root causes. Yes, the current system in place is not right and I was one of those who voted you into power to help fix it, but your current hasty approach will probably create a bigger problem.
Rising costs and limited access to care is what is plaguing healthcare in this country today. These two problems and the many variables that contribute to their current state are the main reasons we need reform, yet I do not see how current reform proposals effectively provide longterm solutions to the problem.
To create a healthcare insurance system that covers all Americans, you first have to figure out how to address the cost issue so that monies saved can be used in providing coverage for all.
Traditionally, people tend to seek medical care when they get sick. They go to a doctor who sees and examines them, orders tests, makes a diagnosis and prescribes treatment. If needed, they are directed to another healthcare institution for further testing and/or treatment. Someone has to pay for this care. Usually, it is the patient’s health insurance – Private Insurance, Medicaid, Medicare, VA, etc or out-of-pocket. Now, in a perfect world, year after year, the cost of taking care of a patient would remain fairly constant, with the only expected change being the increase attributable to general inflation. If we plan or draft healthcare reform based on ‘perfect world’ assumptions, we may adopt a fairly simplistic approach – and these days, one can’t help but to think that this is the path we tread. This approach promotes the current practice of blaming key stakeholders in healthcare delivery, for rises in healthcare costs above general inflation. After all, based on this premise, dealing with the persons or entities intentionally causing the rising cost would quickly solve the healthcare problem. Unfortunately for us all, this world is less than perfect and blaming or getting rid of some of the players only changes the dynamics of the game and eventually shifts the blame but leads to no real solution.
Doctors typically put the wellbeing of their patients first, but they also do have to meet their own financial obligations. According to the AMA, the average medical school debt for the class of 2007 was about $139,517 with more than 75% of indebted students owing more than $100,000 (1). This represents an increase of almost 7% from the previous year, surpassing general inflation rates for the country. Obviously, doctors’ incomes cannot remain stagnant and probably cannot grow at the same rate as inflation. This affects the cost of the care that patients receive as doctors’ reimbursement rates creep higher. You can attempt to control reimbursement rates but you would equally have to control inflation and medical trend if there is to be acceptance amongst physicians. The fact that some doctors are reluctant to see patients covered by government entitlement insurance (typically Medicaid) should not be overlooked. Obviously, you can also take the socialist approach of training doctors for free and putting them all on a fixed salary adjusted yearly for inflation. As long as free enterprise remains the driving force behind success in America, that approach will remain an idealistic fantasy.
Primary Care physicians are much needed in this country as a way to control costs yet we are unable to lure our young medical students into Primary Care specialties. The cost of medical school and the debt it creates, coupled with poor primary care reimbursement makes its easier for these students to make a decision not to go into primary care. Specialists and the care they provide, costs more. The problem arises when we begin to look up to specialists to perform tasks that are traditionally performed by primary care physicians. It costs much more. Without a good primary care base, we cannot even begin to address the problem of unnecessary ER visits, unnecessary tests and unnecessary hospitalizations, all of which drive up costs. Developing a good primary care base will not only promote better preventative care and make us a healthier nation, but will also save lots of money in the long-term. Evidently, we cannot fix healthcare while ignoring the pillars of healthcare coordination and delivery – the Primary Care Physician! Healthcare reform must address and support primary care physician training and improved reimbursement methodologies.
Has anyone been actually listening to doctors during these healthcare reform talks? I am not referring to the AMA. I am referring to doctors in the trenches. Doctors buy medical malpractice insurance to protect their livelihoods. In a perfect world, their insurance rates would remain constant and would have no additional effect on medical costs above general inflation. In our less than perfect world, malpractice insurance premiums continue to rise, forcing doctors to pay more in premiums and even change how and where they practice medicine. Increasing numbers of family practitioners opt not to deliver babies due to the impact on their malpractice premiums while other physicians are opting to move to states with more favorable malpractice laws. In its 2003 report, the US General Accounting Office reported that losses on medical malpractice claims appeared to be the most important driving force behind increases in malpractice insurance premiums (2). Increases in these premiums add to the cost of delivering healthcare in this country. Many doctors have adopted ‘defensive medicine’ as their mantra while they traverse the treacherous waters of the current malpractice wilderness in which we live. For example, if you woke up with a headache after a night of binge-drinking and were to visit your primary care physician requesting a brain MRI because you “heard it was a good test” and you were “worried about having a brain tumor”, what would he do? Better yet, what should he do? Clinically, it would be very unlikely that your headache was being caused by a brain tumor but do not be surprised if the doctor went ahead and ordered the MRI of the brain. The doctor’s behavior is a learnt one. Doctors have learnt over the past few years that it may be better to order the test to ‘be on the safe side’. They know that if they were free to practice evidence-based medicine without the fear of frivolous litigation, they would order far fewer tests than they order now. Healthcare reform must include legislation that supports the practice of safe, evidence-based medicine. The creation of a national clearinghouse or think-tank that develops and regularly revises and maintains practice guidelines that are accepted and supported by federal legislation, would be instrumental in healthcare and tort reform. Healthcare reform should also clearly separate negligent practice from non-negligent medical errors. Federal Tort reform cannot wait because medical malpractice is an integral part of the current healthcare crisis and must be a part of the solution. Defensive medicine is a direct result of the current malpractice situation. Why are we not talking about capping malpractice claims at the federal level? How can there be health reform without tort reform?
Insurance companies pay for the healthcare services that their members receive. The MRI or CT scan ordered in the previous example would have been paid for by the insurer. As these unnecessary tests are performed in increasing numbers, insurers see themselves paying more for the care of their beneficiaries. They in turn pass on the costs to the insured and their employers in the form of increased premiums or decreased benefits. One way some insurers have tried to tackle this issue is through medical necessity reviews, where someone is looking at the appropriateness of care delivered. In some cases, the insurance company serves as the reviewer while in other cases like in some Medicare Advantage plans, the primary care provider assumes that role as they assume global financial risk for the care of their members. The only insurers that do not seem to care are the entitlement ones that are funded by taxpayers. If a patient has regular Medicare or Medicaid, the (unnecessary) test would probably be done and all providers would be paid – by the taxpayer. Traditional Medicare and Medicaid lack any significant mechanism of cost control, utilization management and even quality management. This encourages fraud and is one of the reasons Medicare is headed towards insolvency. Addressing the lack of utilization management and tackling fraud may save the government enough money to help fund healthcare coverage for all. How can we proceed with Healthcare reform that does not address money pits like traditional Medicare?
Pharmaceutical costs are a huge contributor to healthcare costs in this country. Pharmaceutical companies do invest a lot of money into researching and developing their drugs. They rightfully have to recover their investments and also reward themselves for their hard work. They are, after all, in the business of making money while developing life-saving or life-improving drugs. Their products are therefore very expensive. Ask any insurer and they will identify pharmaceutical costs as one of the biggest items on their expense sheets. Consumers in the US pay the most for brand drugs compared to anywhere in the world and there are several reasons for that. This is an area we have to address with healthcare reform. We should make transparent the process of drug pricing in the USA and compare the process to what happens elsewhere in the world. The sheer fact that the Medicare Prescription Drug law stripped the federal government of any right to negotiate drug prices is a huge red flag. We must revisit the issue. Patent law can also use some reform. If patents are meant to protect and help recover a drug company’s investment in research and development of a drug, shouldn’t the length of the patent be based on the amount invested and the rate of investment recovery? The protection should be just that – reasonable protection of the initial investment. If a drug company recovers all its investment in the first 5 years of putting a drug on the market, why should the patent be in effect for the following 15 years? Even if the patent is active for the remaining years, shouldn’t there be room for price negotiation? Shouldn’t this be a dynamic process? Yes, patents are important and must be preserved but the process could use some reform if we really want to impact drug costs. Also, why not close the loophole allowing manufacturers to extend a patent by coming up with new dosage forms, new indications or a new way to manufacture the drug – even when the chemical composition has not changed?
Direct-to-consumer marketing must be controlled. With good tort reform and a strong evidence-based clearinghouse, this might not represent a significant problem at all because doctors can reject a patient’s request for ’designer’ drugs with confidence, knowing their decision is backed by clinical evidence supported by federal legislation. Sometimes, a ‘designer’ drug might not be indicated for a given patient’s condition or there could be equally-effective and cheaper generic equivalent, but the doctor usually faces an uphill battle trying to convince the patient otherwise. Sometimes, there is fear of the patient firing the doctor and finding another who would prescribe the requested drug. There might also be some fear of litigation. Regardless of the fears, many doctors agree to write the prescription for the medication to appease the patient and maintain their practice. Unfortunately, someone has to pay for the cost of these prescribing practices. Eventually, we all pay either through increased premiums or copays on the private insurance side or by making a dent in the Medicare money vault. Pharmaceutical advertisements must be regulated to some extent. This regulation could take the form of mandatory disclosures of effective alternatives to their ‘designer’ drugs if applicable. Maybe saving some of the monies spent advertising directly to consumers could help reduce drug prices. Obviously, if the evidence shows that a drug is definitely superior compared to its generic or rival brand equivalent, there wouldn’t be much to argue against.
Has anyone looked at the way medical products, devices and services are priced in this country? Are we going to address this problem as it directly affects costs? Are we going to look at GPO models that work and eliminate pricing practices that border on unethical and illegal? GPOs, as shown by Dr. Schneller’s recent study, can play a vital role in reducing healthcare costs.
The current reimbursement structure has to be overhauled completely. Physicians are reimbursed for the quantity of work they do. Would you rather see a doctor who spends 5 minutes with you each visit and barely allows you to talk, or one who listens, looks, feels and talks to you? Would you sacrifice quality for quantity when it come to your healthcare? Well, that is exactly the predicament physicians face daily in the United States. The current traditional Medicare reimbursement model pays doctors more as they do more so the incentive is to do more. For example, a doctor gets paid more if they document that they examined several organ systems and they addressed several issues. There is no focus on the quality of care while addressing these issues. Faced with financial strains on their practices due to poor reimbursement and increased costs, doctors are forced to see as many patients as they can to generate decent revenue in their practices. This quantity incentive tends to promote less quality care, missed preventative care opportunities and increased risk of medical errors. A traditional Medicare beneficiary could go without recommended screening tests even after several visits to their primary care provider because of the pressure on the provider to see more patients. It takes time to address all the preventative care needs of a patient and time costs the doctor money. Why not incentivize quality instead of or in tandem with quantity. There is a national movement supporting this model of incentivizing good quality clinical care with favorable outcomes. Healthcare reform must bring these models to the forefront and make them a part of our healthcare delivery system. Electronic Health Records will play a key role in the delivery of quality care and reduction of medical errors but its implementation is almost impossible for small practices regardless of the token incentive currently offered by the government. This concept of incentivizing quality care and promoting and supporting technology will in turn have a long term positive impact on healthcare costs.
Judging from the way Medicare and Medicaid are administered in this country, it is evident that any form of health coverage that is controlled by the government is going to be fraught with the same old problems and will probably be inefficient and of fairly low quality. I hope I am proved wrong but the proof is out there in all the government-administered or funded programs. Healthcare reform must address traditional Medicare and all its problems. Problems like fraud and lack of significant quality and utilization management. Utilization management is almost non-existent in traditional Medicare. Patients and physicians get virtually any test they want done and with a few exceptions, as often as they want it done. Patients stay in facilities as long as their benefits allow, even when the stay is not medically justified. Utilization management, case management and disease management, can be labor and staff intensive and adds to administrative costs. Traditional Medicare does not provide any of that. When a patient with traditional Medicare is discharged from the hospital without home healthcare, the federal government does not assign a nurse to call to see how they are doing. No case manager calls to assess their needs. No disease management nurse calls to help them figure out how to decrease the likelihood of another hospitalization from their chronic disease. Sure, the government can do that but it costs money. When private insurers manage Medicare plans (Advantage plans), these are some of the additional benefits they provide and that is why seniors tend to sign up with these plans. That is also why the government has to reimburse these companies for the administrative costs. The silver lining here is that the government knows that their cost is capped and predictable. These administrative costs have been targeted as a potential source of revenue to fund healthcare reform. This approach ignores or downplays all the benefits seniors receive from their Advantage plans. There are several other reasons why seniors could descend on Capitol Hill if the are forced to give up these benefits and accept traditional Medicare as run by the federal government.
The issue of access will become an easier proposition once cost has been addressed effectively. Thinking we can cover more people and drive down costs, while depending on the same broken system is ludicrous. Our cost is going to balloon and the system will cave in and implode.
Regulating restrictions or discrimination by health insurance companies on people with preexisting conditions is fairly easy to fix with legislation. However, we must also look at some of the underlying forces behind these practices. It is usually a question of financial risk based on the increased medical risk that a given patient population poses to their health insurer. Its like buying insurance on a home in a flood zone. You usually pay more in premium because the company insuring you knows that your home has a higher risk of being flooded compared to homes that are not in flood zones. They know they might have to spend more money on your home and so they require more money to assume that risk on your behalf. In healthcare, we all know that it is more expensive to take care of a person with diabetes compared to a person with no health problems. Insurance companies should cover both people but should they charge more in premiums due to the preexisting conditions? We can argue that if they have a big enough pool of members, the risk is shared amongst all members in the pool so there shouldn’t be a price differential. Others can argue that the pool is sometimes never big enough (especially in rural areas) so there should be a premium differential. Maybe the government can provide a means or methodology for adjusting insurance premiums according to risk and offer to subsidize the risk adjusted portion of a person’s insurance premium if they meet certain federal qualifying guidelines. Surely, profits play a role in some of these insurer behaviors and practices but ignoring the other factors while crafting a solution, makes the solution less robust and more likely to fail.
The public option plan, if truly just a public option competing fairly with private plans, will be an interesting experiment. Without deep federal pockets behind it, a public option plan may end up becoming ‘dressed up’ Medicaid if not implemented in a significantly different way than current entitlement programs. If on the other hand, the federal government gives such a plan unrestricted access to funds, the plan would be a disguised and insidious implementation of Universal Health Coverage. With such financial backing from taxpayers, a public option would be able to hold down prices artificially regardless of market trends. The economists can tell us what the eventual financial fallout would be, but it is clear that it would definitely cost much more and we might be having this discussion all over again in just a few years. Private insurance companies would eventually feel the pressure to fold as individuals and employers opt for the (artificially) cheaper public plan.
The long term consequences of a public option plan that offers unfair competition cannot be ignored. With the influx of members, demand for services would overwhelm the public plan’s capacity. It is easy to predict long waiting times for services, customer service issues, and eventually decreased access to timely care. Just take a trip to the nearest Community Health Center funded by federal dollars and you would have travelled forward in time (assuming the public option plan is implemented unfairly). Can this lead to rationing of services? You bet. Can this lead to waiting six months for elective surgery? No doubt. Expanding healthcare coverage to all Americans is the right thing to do but doing it expeditiously without addressing the underlying problems of the current system, is irresponsible. Of what use is access that truly isn’t access?
Those who say the government can run the post office effectively and compete with private couriers without putting them out of business, should remember that they are talking about healthcare, not inanimate objects traversing our highways, seas and air spaces. Personally, I do not mind receiving my mail a day or two later than expected and do not mind the stains or dirt on the torn envelopes, but I do want to receive timely and good quality healthcare when I need it and would expect the same for my patients!
So, Mr. President, go slow and get it right!
Dr. Theo Sai
Facts you should know about the author:
- Political Affiliation : Democrat
- Board-Certified in Internal Medicine
- Medical Director for an Insurance Company
- Medical Director at a large Community Health Center in Tampa, Florida (1 year)
- Founding Medical Director at a Community Health Center in Chicago, Illinois (4 years)
- Practised Ob/Gyn in Public Hospital in Nassau, The Bahamas (4 years)
- Medical School in Havana, Cuba (Lived in Cuba for 13 years)
- Electives surgical rotation in Ontario, Canada
- Childhood in Ghana, West Africa