Rattrap’s Rants

I am incensed by this headlong rush to get a healthcare bill on the President’s desk before the State of the Union address. I am incensed that I will have to pay for Nebraska’s Medicaid in perpetuity and Louisiana’s roads. I am incensed by Democrat leadership that is forcing an unpopular bill down our throats. I am incensed that $500 billion is coming from an already unfunded Medicare program.
Unlike others, I offer you an alternative.
I hope you will take the time to read my short analysis below. For your sake and our children’s sake I hope you will. Thank you.

COMMON SENSE HEALTH CARE REFORM

Is the system broken and in need of repair? Assuredly, yes.
Quality is superb…perhaps best in the world.
Price is not…perhaps worst in the world.
With healthcare representing 16% of GDP and healthcare inflation running 8% + or -…three times the rate of overall inflation, affordability continues to decline. Uncontrolled, healthcare for future generations will be problematic.
Congress wants to provide universal coverage but has no realistic way of paying for it…let alone as costs increase down the road. Look at what’s happened to costs in Massachusetts or the UK. The cost overruns are staggering.
The Senate Bill, a huge new entitlement is said to subsidize insurance for tens of millions of people—and reduce deficits by $81 billion at the same time according to the CBO. Not possible. Ten years of taxing for five years of service, not to mention taking money from $500 billion from an already unfunded Medicare allows Congress to make this claim. Obviously, its sleight of hand, but it, or some version of it, could pass.
What would happen if this bill or something similar is enacted?
Taxes skyrocket…and not just on the rich. A value added tax is already being discussed…to continue taxing boomer seniors during their retirement years. As government is inevitably squeezed on outlays, rationing will occur…essentially totally impersonal cost/benefit analysis, not on whether your condition is curable, but whether you are “worth” curing. It now even has an acronym…QALY…meaning quality adjusted life years. Medicare benefits are also going to be cut to pay for it. This is not speculation. It is being actively discussed by Congress today. The majority of Americans clearly don’t want this.
If reform is essential, why hasn’t the healthcare industry acted?
No-one, except those paying for healthcare insurance has any vested interest in controlling the rate of healthcare inflation. Amazingly despite protestations to the contrary, this includes doctors, hospitals, clinics, the medical equipment industry, pharmaceuticals, and biotech, managed care companies, the medical malpractice insurance industry and sadly as you will read, the current US Congress or Administration.
As arguably the wealthiest nation on earth, one must also ask why we have so many (est. 30 million) uninsured.
Where does the solution lie?
I am only an interested observer…an analyst if you will…who has studied this industry for years.
I believe we should be discussing affordability…not forced and unfunded universality.
There are good programs already in place to provide medical care to the least fortunate among us.
I present here ideas I have heard health care executives, analysts and informed observers make over the years that collectively make sense. Some are politically sensitive, but if reform is to occur, statesmanship, not partisanship is essential.
Make no mistake; healthcare reform is an issue that should be addressed…not tabled. The status quo is unacceptable…if not for you then definitively for future generations.
Do we have any elected officials who are statesmen? I hope so.
The question then becomes, do we want a government run/single payer system similar to Canada and the UK? The public option (consumer option), the co-op, trigger mechanism, etc. all lead down this path.
What about market-based solutions?
Having grown up in a single-payer system and studied the pros and cons for more than a decade, it is my conclusion that a market-based solution is the only “affordable” option for our nation in terms of both quality and price.
I would add that it will take governmental action to generate a market-based solution, so I applaud President Obama and Congress for their healthcare initiative. This said, a bad and unaffordable solution is not the answer.

SOLUTIONS THAT MAKE SENSE

* Tort reform:
o Without tort reform, there can be no meaningful reduction in the cost of health care in the US. (Fifty-four percent of every malpractice award goes to trial lawyers. In the 2008 election cycle, the American Bar Association was the #1 contributor to the Democrat Party donating $47million. The quid pro quo…no tort reform. Polls indicate 83% of Americans are in favor of tort reform. The healthcare industry is totally on board as well. Despite this, we have a few thousand trial lawyers blocking reforms that would benefit 300 million Americans. Howard Dean admitted publically his party was hand tied on this issue. I say this not to fan a partisan mind-set. Reform needs to come, but will only come through non-partisan effort. ) The total absence of tort reform has two pernicious effects:
+ Without limiting malpractice awards, insurance for doctors, hospitals, clinics, etc. has soared. Jury awards remain high and unpredictable. This presents risk to insurers, limiting participants. The cost of malpractice insurance has thus skyrocketed and is passed on to consumers of healthcare directly through their managed care companies.
+ Defensive Medicine: Aware they may be sued, healthcare providers schedule every test remotely connected to the problem, because failing to do so might be the tipping point in a malpractice verdict. The AMA estimates defensive medicine costs $200 billion per year. (The Senate “claims” its’ plan will cost $83 billion per year. Compare the numbers. Taking tort reform off the table is at best disingenuous.)
+ Special Health Courts are one possibility worth examining. Absent the adversarial nature and cost of a trial, these courts would simply decide whether a patient received good or bad care.
* Limit Insurance Coverage to Major Medical:

o We don’t insure our homes against leaky faucets or light bulbs dying. If we insured against major medical only, the cost of healthcare insurance would decline, becoming affordable. Just as important, if we are going to add 30 million new healthcare consumers, is the fact that it lightens the case load on the existing fixed base of medical practitioners. Why does health insurance cover the simplest doctor visit? It breeds expensive indifference to both price and usage.

o How did this strange coverage pattern emerge? States regulate managed care. The vast majority of the regulatory controls on the industry have come about on an ad hoc basis driven by regulators’ and legislators’ desires to improve the performance of managed care organizations. New Jersey for example requires managed care companies in its jurisdiction to provide all-encompassing insurance. The patchwork of state regulation prevents interstate competition among health insurers…reducing competition. The playing field must be leveled, yet I see no-one addressing it. It will be tough, but with 347 million Americans affected…necessary…if healthcare is to become affordable. Inter-state competition among private insurers would increase competition for the healthcare dollar…the sole supposed purpose of the “public option.” Managed care companies would need to establish new provider networks, but saying this would totally thwart interstate competition is a canard.

* Minor Medical Expenditures:
o It is worth noting that there are three specialties where medical inflation is actually NEGATIVE. These are…in vitro fertilization, laser eye surgery and plastic surgery. What do they have in common? None are covered by insurance. Consumers shop for the best value for their money. The market system works.
o Retail chains like Wal-Mart, Walgreens and CVS have set up in-store clinics with healthcare professionals to deal with common colds and other basic health problems. They would be more than delighted to compete for your business. Who knows…maybe doctors would even hire nurse practitioners who could handle these types of problems in their offices at reduced cost?
o A huge added benefit would be a reduction in overuse…critical if we are to add 30 million new healthcare consumers without increasing the number of caregivers. Competition reduces cost…another market-based solution.
o Medical Savings Accounts could be established to make these periodic, unpredictable out-of-pocket expenses tax deductible…hence pre-funded and more affordable.
* Disease Management/Wellness:
o The healthier a population, the less expensive medical care becomes. Preventative care works. Incenting the population to watch its diet, to exercise, to quit smoking…in essence to proactively maintain a healthy lifestyle has demonstratedly reduced the rate of increase in healthcare costs…not to mention provided a plethora of tertiary benefits. Perhaps a sliding scale could be applied to health insurance policies to reward those making the effort. Lose a few pounds consistently through diet and exercise and see your premium decline. This does not negate the fact that the healthy population must subsidize those less fortunate, but it would certainly provide a financial incentive for health.
o It is a fact that 5-6% of the population…primarily those with chronic diseases…generates 70% of healthcare costs. Disease management/wellness has proven it can retard the development of chronic disease and help those with chronic disease handle their problem more efficiently. This does not mean withholding care…it does mean taking earlier action. Actively addressing obesity can slow the advent of diabetes, for example. Properly coached by healthcare professionals, the early stages of any chronic disease provide many teachable moments that permit the sufferer to take better control of the issues that affect them. Studies on this indicate incredible potential savings are possible. Disease management/wellness is selectively available now. It must be expanded.

* IT
o Get over it America. We live in an electronic world. We must get over privacy issues. Providing healthcare professionals up to date electronic records of your medical history, allergies, prescriptions and prior treatments would save billions of dollars of unnecessary duplication annually. Remember, doctors, hospitals, clinics and insurers currently have no incentive to avoid duplication…and it provides each a cushion of safety…in the aforementioned absence of tort reform.
o E-prescriptions: While actual drugs may differ, prescriptions can and often do overlap, causing undue harm. Instantly available electronic records should eliminate this problem.
* The delivery system we have is inefficient. It requires rethinking.
o Let’s assume a patient requires a heart-bypass operation or a hip replacement. Your local healthcare professionals undoubtedly have the ability to provide these services, but how efficient can each be if only one or two of these operations is performed a month. How efficient can the hospital or its OR be if every procedure requires different equipment or expertise? Bring the lessons of Henry Ford to the delivery system. Think about regional medical centers performing nothing but hip replacements or heart by-pass operations. Specialized equipment and medical skills would be fully utilized…making each more cost efficient. This has begun on a limited scale…successfully. Let’s expand this concept. It will also aid the existing pool of healthcare professionals in coping with 30 million additional customers.

There is more obviously…paying doctors based on outcomes rather than procedures performed for example (the Cleveland Clinic swears by it)…but the bottom line is congress needs to sit down, listen to experts, deliberate in an unrushed bi-partisan manner if anything constructive is to be achieved. The headlong partisan rush to hammer out hastily designed, ill-thought out and unaffordable reform dooms the process.
We cannot afford to fail or adopt a bill that does nothing to reduce health care costs.

David F. Baird
Punta Gorda, FL