Health care reform has long been one of my main interests and currently, it seems to be everyone else’s. The President said he thought a single-payer system would be best, but submitted a proposal he thought could be passed. The outcome is in doubt.
Actually, the single-payer system is the second best possible solution. The government would hold the money but would remain vulnerable to political manipulation, bureaucratic inefficiency.
The best system would be a well regulated “Everybody Hold Your Own Money and Pay Your Own Way System.” It would empower patients to deal directly with their caregivers without third-party interference or regulation and lead them to become sensitive to the potential benefit and the cost of their care.
This could be accomplished without taxes and without insurance premiums by a properly designed system of health care savings accounts (HCSAs). These should be funded with pre-tax money from regular automatic savings, like payroll deductions, and everyone should have one from birth. Children’s accounts should be funded by their parents. In only a couple of years, normally healthy people would save enough to stay ahead of their health care expenses. They would save the same money they now pay in insurance premiums, so once in place, the new system would cost less because no money would go to insurance company administration and profit, and unnecessary procedures and tests would decrease because people would keep the money they didn’t spend.
When any account becomes large enough to cover anticipated needs (with, say, 90 percent probability) the extra money could be rolled over into a retirement account, or children’s HCSAs. At death, a person’s HCSA could be rolled over to heir’s HCSAs, after an inheritance tax which would be used to fund HCSAs for the poor and unhealthy. Everyone would keep the money they didn’t spend, so they would not spend it unnecessarily.
Government’s role would become only regulatory. A commission might be needed to determine a fair market value for services and patented drugs, but it is likely that market forces would control these and make the mix of available services more appropriate to people’s needs.
To insure that account money was spent on effective care, and not wasted or stolen by fraud, standards of medical practice should be established with a Wikipedia-style online system to allow each licensed practitioner and researcher to propose, amend and vote on standards of practice in his or her’s field. A true consensus statement would then be available on every relevant standard of practice, which would be more up to date and represent truly effective practice, better than the opinions of a panel of “experts.”
The quality of evidence on any issue varies from one study to the next, and leaves room for differences in opinion about what is good treatment. HCSAs should be allowed to pay for all procedures which received an overwhelming vote of approval, and not for those with overwhelming disapproval. The more money in an account, the lower a procedure’s vote would need to be to have it included. The list of approved procedures would change, and its quality would improve as fast as new evidence and experience accumulated.
Regulations should also end patents for new drug which do the same thing as established drugs, as well as new preparations of established drugs. Advertising of prescription drugs should end, because it leads to unrealistic expectations and misdiagnosis. And these regulations should require saved money to be invested conservatively.
Charles W. Patterson is a psychiatrist.
*This blog post was originally published at KevinMD.com*
Newsweek tries to refute the “Five Biggest Lies In the Health Care Debate.”
But I’ve heard much bigger lies than the ones in this article.
I mean, are people really showing up angry at town hall meetings over fears that “the government will set doctor’s wages”?
Misinformation – or just plain old confusion – about our health care system is common. To try to help fix this, I offer five of the biggest, most commonly repeated misconceptions I hear regularly about the U.S. health care system.
1. Government plays a relatively small role in American health care. Government actually plays a big role. In 2007, federal, state and local governments paid for more than 46 cents of every health care dollar – more than $1 trillion. In fact, since 1980, the government has paid at least 40 cents of every dollar, and as early as 1960 – 5 years before Medicare – government paid a quarter of health care expenses. Government is a massive health care customer and has the impact one might expect such a big customer to have.
2. Health insurance companies drive the increasing cost of care in America. Not true, and here’s why: perhaps 200 million Americans don’t get their coverage from a health insurance company.
Most of these people, or a family member, work at one of the thousands of companies that self-insure (the rest are covered by government programs). What this means is those companies take the health care risk themselves, and use an insurance company mostly to handle the bills. For these companies, the cost of health care directly affects their bottom line. It’s one of the reasons employers have implemented so many programs to try to help their employees live healthier lifestyles, make sure they’re getting good care, and many others. Some data suggest it is working to control health care costs.
The exception is small groups and individuals. They have to buy health insurance, and face few, expensive options. There are many reasons for this, which I’ve blogged about extensively here. One of the most important is that there is not a truly competitive market for this kind of coverage. Still, many of these insurance companies are not-for-profit (some say as many as half of Americans with health insurance are covered by non-profit plans), and so it cannot be that profit drives the premium increases they, too, experience.
3. America has a free market in health care. Health care may be the most heavily regulated industry in America, with layers of state and federal regulation of care and insurance. For example, your doctor can only practice in the state in which he is licensed. If he wants to move to another state and be a doctor there he can’t do it unless he’s gone through a licensing process in that other state.
One of the most important reasons why the market for health insurance is so uncompetitive is that it, too, is regulated by 50 different state bodies. If an insurer wants to sell in another state, it has to go through an extensive process in order to do it, and be subject to all kinds of mandates and other requirements that make it very impractical to do so. It makes for a market that is much less dynamic than it could be.
I suspect one reason people call the U.S. system a “free market” is that rich or well-connected people can get better care than those who are less fortunate. This may be true, but this is just a reality of the human condition, not the health care system.
4. There is an Obama reform plan, and you’re either for it or against it. Much of the media – and even Chuck Norris – describe the various health care reform ideas as part of an “Obama plan” or “ObamaCare.” But other than broad outlines of what the President thinks are important principles, the President has not proposed any plan. Most of what people are talking about – including the entirety of the Newsweek article I started this post with – is the 1,017-page bill from the House Ways and Means Committee. While there are indications that the President is going to propose something concrete in the coming days, calling what is on the table Obama’s plan is more politics than reality.
5. Rising health care costs are a uniquely American problem. America’s not the only country suffering with rising health care costs. In Canada, for example, the government of British Columbia has seen its health care costs increase by 45% over the last 6 years. It’s created a budget crisis, and efforts to steadily increase the premiums it charges consumers and employers. The U.K. has actually experienced a higher rate of growth in health care costs than the U.S. over the last several years. So while it is true that the cost problem is worse in America than in in other countries, this is a matter of degree, not of kind.
I’ve heard lots of others, but these are the ones I most commonly run into.
What kinds of misconceptions have you heard?
*This blog post was originally published at See First Blog*
Bad news in the paper today: health care costs are expected to rise another 10.5% next year. It’s a serious problem that affects businesses and families across the country.
But the headlines miss something important: the rate of increase has been steadily slowing.
Are we already bending the health care cost curve?
Here is a chart of the rate of increase in health premiums for a PPO plan beneficiary from 2002-2009 (all data are from today’s Aon press release):
The data for other plan types are similar. What’s happening?
Aon’s Chief Medical Officer Paul Berger says it’s because of the variety of measures employers have taken over the last several years to implement programs to improve their employees’ health. He emphasizes there is still much more to be done.
He has a point. It’s something we have seen in our survey of major employers, and in the work that leading employers like EMC and Genzyme are doing. It’s what my company does, too. Employers are getting increasingly sophisticated at understanding what drives their health care expenses and are developing increasingly effective ways at addressing them.
So, yes, of course, we need reform of our health care system, and of course rising health care costs are a serious concern. But American employers are doing something about these problems all on their own.
*This blog post was originally published at See First Blog*
Just as “all politics is local”, so is all medical care personal. One patient; one physician; one moment; one decision. And in this era of balanced physician and patient autonomy, that decision often is an informed joint decision. Many patients now make serious efforts to learn about their conditions both before and after visits to their physicians. Many physicians welcome such informed patients and willingly discuss comparative effectiveness of the available diagnostic and therapeutic options. However, a frank discussion about the comparative costs and charges for the options, whether they be to the insurance company, Medicare, Medicaid or out-of-pocket for the patient, is usually missing.
Many health economists insist that the medical marketplace does not behave like other markets and believe it is fruitless to expect market principles to usefully inform the medical arena. That bias is true in emergencies,
operating rooms or intensive care units, and with patients who are mentally disabled.
Such behavior does not have to persist in an outpatient setting. In my book Severed Trust: Why American Medicine Hasn’t Been Fixed (Basic Books, 2000, paperback 2002), I presented the concept of “the economic informed consent.”
I believe that every patient who is mentally competent and in a non-emergency situation should be informed of the cost of a proposed diagnostic or therapeutic procedure or product, before it is “ordered.” This includes referral to another (often more specialized and costly) physician, no matter who pays the bill. The costs should all be discussed IN ADVANCE decision. This discussion should include whether it is worth it and
whether there a less expensive good alternative.
A recent NPR/KFF/HSPH survey reported that 55% of Americans believe that their insurance company should have to pay for an expensive treatment, even if has not been proven to be more effective than a less expensive
treatment. This attitude underlies the ruling convention, “if insurance will cover it, do it,” that lies at the root of our problem of health care cost inflation. No one is held accountable.
If we as a country could widely apply the “economic informed consent,” physicians and patients would become educated together. They could both become wiser shoppers for the most cost-effective diagnostic tests,
prescribed drugs, and specialists.
With an “economic informed consent,” physicians and patients can reset attitudes toward a healthy concern for the total costs or charges, stifling the usual knee-jerk response, “if the insurance covers it, do it.” No one
knows whether this approach, diligently applied, would actually cut down on wasteful spending, such as choices that drive huge geographic variations, but we do know that pricing an automobile, an airplane ticket, a dinner or a bottle of wine does affect consumer decisions. Why not try it for medical charges as well? Current sweeping proposals for health system reform all state that there must be “cost control” but offer little likelihood of delivering real cost savings.
Now is the time for the US Health Information Technology Initiative to create inter-operative systems that would provide the data to support widespread use of the “economic informed consent” in a timely fashion and
let the medical marketplace speak. Knowing the cost of a medical decision in advance should become a part of a new “Patient’s Bill of Rights”. In a medical care decision, it is the right of a patient to know “who pays whom
how much for what.” All of us in health care laud “transparency”–let that include economic transparency.
Many of the surgeries I do are elective. They can and should be scheduled to be convenient. It happens – God laughs at our plans or life interrupts or …..
Last week was such a time for one patient. She called, very apologetic, “Dr Bates, I need to reschedule my surgery. My father is having tests done. He hasn’t been feeling well.”
I quickly assure her that no apology is necessary. Her family comes first. I suggest we simply cancel the surgery for now until the “dust settles.” She can call me back when she is sure things are okay with her family. We’ll reschedule then.
She is still worried. “The surgery center called me today. Do I need to call them? Will I need to pay them or anesthesia or you for the canceled time?”
Again I reassure her, “No, I’ll call them and take care of canceling the surgery. No, we don’t charge you for surgery we don’t do. It happens. It’s okay to cancel surgery for whatever reason – another family member gets sick, an accident happens, you just get scared.”
It happens on both sides. Sometimes (as for me earlier this year when my mother had surgery) it’s the doctor who has to cancel or reschedule. Sometimes it’s the patient. I once had a patient not show up for surgery, only to find out later she had been in a motor vehicle accident the evening before her scheduled surgery. She turned out to be okay, but it really cemented how I fell about patients who call to cancel or reschedule. It’s okay. No need to apologize. Thank you for letting me know.
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