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How Many Uninsured Are There?

September 22nd, 2009 by Shadowfax in Better Health Network, Health Policy, Opinion
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*This blog post was originally published at Movin' Meat*

What Do Americans Want From Their Healthcare System?

September 20th, 2009 by Toni Brayer, M.D. in Better Health Network, Opinion
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I read a good post from NYT about Health Care Reform and ‘American Values’ and it got me a thinkin’…just what are American Values when it comes to health care? Usually I get a little anxious when I see “American Values” in a sentence, because what usually follows is something about rugged individuality, pulling oneself up by bootstraps, getting the damn government out of our lives and those damn immigrants and welfare mothers who won’t work and want to live off others.

But I have listened to about ten thousand patients over the past 25 years, and I have a good idea of what these Americans want for health care. They are the silent majority…the people who work, study, raise their kids and seldom call into a radio talk show. They don’t have time to go to town hall meetings and shout slogans.

They range from age 17 to 101 and most of them are middle class. They come in all races…Asian, Black, White, Pacific Islander and mixes of all.

Some are wealthy enough to have multiple homes and private planes.
Some are uninsured and watch their health care spending very closely. Most were thrilled to get Medicare and I’ve never heard a complaint from a Medicare patient.

Here is my list of what these Americans think about Health Care:

• They do agree that everyone should be covered for basic health care and would pay higher taxes if they could believe that there would not be fraud and waste. (The recent banking meltdown has destroyed all confidence that government can regulate or be independent from special interests)

• They want choice of physicians and hospitals

• They are sick of insurance companies and all feel like they have been screwed in one way or another. They are shocked at how little insurance companies pay toward the doctor visit and the way those fees are discounted.

• They are technocentric and want tests, imaging, referrals and think “more is better” when it comes to health care. They think tests are cures. Because of the perverse incentives, the “more is better” philosophy benefits doctors and hospitals, but not necessarily patients.

• They fear losing insurance if they have it.

• They are confused about the current reform debate and mostly fear losing whatever coverage they now have, because they know how impossible it is to get by without any coverage at all.

There are no such thing as “American Values” because we are a diverse group of people. But we all have certain things in common. We want to be healthy. We don’t want to be screwed by anyone (big business or the government).

We want to be able to manage our own health care but we don’t want to have to decide between numerous health plans every year with pages of information that cannot be understood. We are tired of not knowing where all the $trillions really are being spent.

We want to know the price of a service up front, and we want a trusted physician to help us decide if that is how our money should be spent. We want smart, committed physicians to know us, and not hurt us.

Sounds American to me.

*This blog post was originally published at EverythingHealth*

Eight Quick Reactions To Obama’s Healthcare Speech

September 14th, 2009 by EvanFalchukJD in Better Health Network, Opinion
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Eight quick reactions to the President’s speech:

1.  It was a good speech.  Reaction around the blogosphere and elsewhere seems to be dependent on how you felt about reform plans going in.  If you were in favor, you thought it was terrific (warning strong language at the link); if you were against, you thought it was disingenuous.

2.  The interesting question is how people who weren’t sure will react.  By this I mean people who are anxious that reform will affect their health care in ways they don’t like.  There is still the mixed message that created this anxiety in the first place.  On the one hand, the President repeated “Nothing in this plan will require you to change what you have. “  Sounds like no big deal.  On the other hand, he quoted Ted Kennedy as saying the plan “is above all a moral issue; at stake are not just the details of policy, but fundamental principles of social justice and the character of our country.”  Sounds like a very big deal.  Which is it?

3.  The boorish Congressman who screamed “you lie!” at Obama during the address must have been confused and thought he was at a town hall meeting.  But I’ve always thought it would be cool if we had a “Question Time” like they do in the UK.  Presidents would have to face much more interesting and uncomfortable questions than they otherwise get, and it would make for a terrific spectacle.  Obviously this wasn’t the time or place for that sort of thing.  And if we ever do get an American Question Time, representatives will have to come up with better questions than “you lie,” too.

4.  The President talked about “30 million American citizens who cannot get coverage.”  This is different from the 46 million “uninsured” he usually talks about.  The Associated Press thinks the other 16 million are people who could buy or otherwise get coverage but choose not to, as compared to those who want coverage but can’t afford it.

5.  I was surprised to hear the President give more than just a nod to the Facebook health care status update meme.  I mean he quoted it directly: “in the United States of America, no one should go broke because they get sick.”  This must be the first time a President has ever quoted something from Facebook in an address to Congress – it’s some kind of a milestone for social media.  Thoughts on that meme are here.

6. The President talked about the uncompetitive insurance market, noting that “in 34 states, 75 percent of the insurance market is controlled by five or fewer companies.”  It sounds like he’s not just talking about the “public option” when he talks about creating competition in these markets.  His idea of insurance exchanges and a federal health insurance regulator seem to be direct challenges to the state-by-state system of insurance regulation.  It will be interesting to see the reaction of state insurance regulators to this speech.

7.  I was right: the President didn’t talk about the three things I said he wouldn’t talk about.  In fact, he said almost nothing about the delivery of care- it was all about how to pay for it.

8. The President got some laughs with his comment that he thinks “there remain some significant details to be ironed out.”  He’s right, and there’s the rub.  Whether and how that ironing out happens was the question before the President’s speech, and it’s still the question today.

*This blog post was originally published at See First Blog*

Is Physician Income At The Root Of Healthcare Inflation?

September 14th, 2009 by Shadowfax in Better Health Network, Health Policy
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Ezra Klein – The Provider Problem

Medicare keeps costs down somewhat better than private insurers, though not as well as private insurers did in the ’90s, and they do it by paying providers less money. Providers hate them for it, and that’s why doctors and hospitals and drug companies and device manufacturers have been so aggressive in opposing a public plan able to use Medicare rates. It’s also why Medicare’s growth rate is totally unsustainable — Congress keeps delaying the cuts in doctor’s payments that the Medicare law requires.

Ezra has an interesting post in which he posits that the problem in health care economics is that the rate of inflation of health care persistently exceeds the general rate of inflation.  Fine; I do not think anybody is in disagreement on that point any more.  He goes a bit further, wrongly, I think, in implying that the solution is just to pay doctors less.

The background here is that in the late ’90s, Congress decided to impose a cap on how much medicare expenses for physician services could increase in any given year, using a complicated formula called the Sustainable Growth Rate, which was indexed to GDP growth.  I should note that for some reason, Congress decided not to cap the increase in expense on hospital services, but to let the growth of Medicare Part A accelerate unrestrained.  (The hospital industry must’ve had better lobbyists.)

The SGR ran into trouble immediately, and required pay cuts for physicians, and Congress repeatedly caved and canceled the pay cuts.  So, Medicare Part B grows year over year, at a rate ahead of that of inflation, and the logic seems simple: we need to pay physicians less!

But that ignores the fact that much of physician’s revenue does not go to that physician’s income.  Most doctors (ER docs being an exception) have offices to maintain, nurses and assistants to pay, healthcare premiums for this employees, in addition to the malpractice insurance and billing expenses.   Medicine is not a low-overhead game any more!  My gut feeling was that physician income has been stagnant-to-declining over the last decade.

So I went to the Bureau of Labor Statistics and I manually pulled the data on physician income over the 1999-2008 timeframe, and the inflation rate for the same time span and saw that I was more or less right:

Note that for the first six years, physician income was less than inflation, and 2006-7 was only a little bit above the overall inflation rate.  Also note that for two years physician income was actually negative.   2008 was the only year in which physician income increased faster than inflation.

A note as to methodology: the BLS tracks doctor’s income by specialty, not as a single profession.  I pulled the data for General Internal Medicine, Family Practice, and Surgery, and averaged them.  Including surgery, unsurprisingly, greatly improved the income figures.  Internists’ and Family docs’ income lagged inflation every year but 2008.  This was not weighted, either — there are many more Internists and FPs than surgeons, while I weighted them equally.  (Also, the BLS changed data collection methods in 2002, creating a spurious increase of 33% that year, so I threw out that year and interpolated for the above graph.)  This is not a rigorous analysis, but it gets the point across that individual physician income has not been the driver of overall healthcare inflation. If anything, I think these methods tend to understate the degree to which physician income has stagnated during this period.

So why have global physician expenditures gone up so fast during the last ten years when physicians are, by and large, not seeing the increase in their bottom lines?  Several reasons, I think:

• As overhead costs increase, doctors squeeze more work into the day just to keep up with rising expenses.
• As the baby boomers age, and as lifespans continue to increase, patients are older & sicker, and physicians appropriately provide more intense care to this needier population.
• As new technologies, procedures and therapies are developed, physicians employ them more, generally at increased cost.
• For Medicare in particular, the graying of America simply means there are more people enrolled in Medicare.

So while doctors are providing more services, the increases are in low margin services or the increases are consumed by increased practice expenses.   I am sure there are more factors as well.

So, Ezra’s suggestion that simply paying doctors less (i.e. implementing the SGR-mandated cuts) would have some effect on reducing the global expense for physician services, it would do little to change the trendline towards increasing costs.  Put another way, it would lower the setpoint of the curve without changing its slope.  It would also, incidentally, have a dramatic effect on physician compensation, since the other costs of a medical practice are fairly inelastic, and the lost revenue would come directly out of doctor’s salaries.

I don’t have a solution to the costs problem, and I am not sure anybody else does either.  Cutting hospitals’ reimbursement would have terrible effects; hospitals are under tremendous economic stresses as it is, and I know most hospitals have razor-thin profit/surplus margins.  Medical devices are expensive, but they are so critical to the improvements in health care that I do not think anybody has the stomach to cut them.  Pharma probably should be cut, but their lobby has defended them very well.  There’s no good answer.

But it is overly simplistic to think that doctors’ compensation is at the root of the runaway costs problem.

*This blog post was originally published at Movin' Meat*

The Five Biggest Misconceptions In Healthcare

September 9th, 2009 by EvanFalchukJD in Better Health Network, Health Policy
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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*