Yet Another Socialized Medicine Thread

[Epee_Pox]

So what do you all think of Gov. Romney's plan?

Originally Posted by Mitt Romney

Only weeks after I was elected governor, Tom Stemberg, the founder and former CEO of Staples, stopped by my office. He told me, "If you really want to help people, find a way to get everyone health insurance." I replied that would mean raising taxes and a Clinton-style government takeover of health care. He insisted: "You can find a way."

I believe that we have. Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced. And we will need no new taxes, no employer mandate and no government takeover to make this happen.

---

When I took up Tom's challenge, I assembled a team from business, academia and government and asked them first to find out who was uninsured, and why. What they found was surprising. Some 20% of the state's uninsured population qualified for Medicaid but had never signed up. So we built and installed an Internet portal for our hospitals and clinics: When uninsured individuals show up for treatment, we enter their data online. If they qualify for Medicaid, they're enrolled.

Another 40% of the uninsured were earning enough to buy insurance but had chosen not to do so. Why? Because it is expensive, and because they know that if they become seriously ill, they will get free or subsidized treatment at the hospital. By law, emergency care cannot be withheld. Why pay for something you can get free?

Of course, while it may be free for them, everyone else ends up paying the bill, either in higher insurance premiums or taxes. The solution we came up with was to make private health insurance much more affordable. Insurance reforms now permit policies with higher deductibles, higher copayments, coinsurance, provider networks and fewer mandated benefits like in vitro fertilization--and our insurers have committed to offer products nearly 50% less expensive. With private insurance finally affordable, I proposed that everyone must either purchase a product of their choice or demonstrate that they can pay for their own health care. It's a personal responsibility principle.

Some of my libertarian friends balk at what looks like an individual mandate. But remember, someone has to pay for the health care that must, by law, be provided: Either the individual pays or the taxpayers pay. A free ride on government is not libertarian.

Another group of uninsured citizens in Massachusetts consisted of working people who make too much to qualify for Medicaid, but not enough to afford health-care insurance. Here the answer is to provide a subsidy so they can purchase a private policy. The premium is based on ability to pay: One pays a higher amount, along a sliding scale, as one's income is higher. The big question we faced, however, was where the money for the subsidy would come from. We didn't want higher taxes; but we did have about $1 billion already in the system through a long-established uninsured-care fund that partially reimburses hospitals for free care. The fund is raised through an annual assessment on insurance providers and hospitals, plus contributions from the state and federal governments.

To determine if the $1 billion would be enough, Jonathan Gruber of MIT built an econometric model of the population, and with input from insurers, my in-house team crunched the numbers. Again, the result surprised us: We needed far less than the $1 billion for the subsidies. One reason is that this population is healthier than we had imagined. Instead of single parents, most were young single males, educated and in good health. And again, because health insurance will now be affordable and subsidized, we insist that everyone purchase health insurance from one of our private insurance companies.

And so, all Massachusetts citizens will have health insurance. It's a goal Democrats and Republicans share, and it has been achieved by a bipartisan effort, through market reforms.

We have received some helpful enhancements. The Heritage Foundation helped craft a mechanism, a "connector," allowing citizens to purchase health insurance with pretax dollars, even if their employer makes no contribution. The connector enables pretax payments, simplifies payroll deduction, permits prorated employer contributions for part-time employees, reduces insurer marketing costs, and makes it efficient for policies to be entirely portable. Because small businesses may use the connector, it gives them even greater bargaining power than large companies. Finally, health insurance is on a level playing field.

Two other features of the plan reduce the rate of health-care inflation. Medical transparency provisions will allow consumers to compare the quality, track record and cost of hospitals and providers; given deductibles and coinsurance, these consumers will have the incentive and the information for market forces to influence behavior. Also, electronic health records are in the works, which will reduce medical errors and lower costs.

---

My Democratic counterparts have added an annual $295 per-person fee charged to employers that do not contribute toward insurance premiums for any of their employees. The fee is unnecessary and probably counterproductive, and so I will take corrective action.
How much of our health-care plan applies to other states? A lot. Instead of thinking that the best way to cover the uninsured is by expanding Medicaid, they can instead reform insurance.

Will it work? I'm optimistic, but time will tell. A great deal will depend on the people who implement the program. Legislative adjustments will surely be needed along the way. One great thing about federalism is that states can innovate, demonstrate and incorporate ideas from one another. Other states will learn from our experience and improve on what we've done. That's the way we'll make health care work for everyone.

[Dr. Pfleschbach]

One way or another you're gonna pay, whether it's through insurance premiums, reduced wages to compensate for employer programs or $10 band-aides at the hospital, so how do we distribute the cost equitably and efficiently? I think Romney's premise that everyone must pay their fair share (hopefully adjusted according to their means) is basically on target, but if he is forcing people to purchase health insurance from privately held for-profit companies then I vehemently object. I like the Canadian single payer system model because it provides efficient, not-for-profit insurance without lining the pockets of corporations.

[lochinvar]

The basic underlying problem with the whole "health insurance" concept is that it de-couples the benefit from the cost.

Recently, while undergoing an unrelated procedure, it was discovered that I have an aneurysm in my right leg. I was scheduled for an abdominal ultrasound to determine whether I also have an aortic aneurysm, as there is a correlation (I do not). The office visit and procedure price tag: $1500. My insurance covered it.

For various reasons, I decided to have the corrective procedure in another hospital in another town. I obtained and forwarded the results of all my tests from Dr. One to Dr. Two.

Two days before I was scheduled to meet with Dr. Two, I got a call from his office requesting that I undergo a "vascular doppler" test before meeting. Not being as uninformed as the normal lay person, I declined on the grounds that I had already had one (ultrasound=doppler test), that the results were in their hands already, and that I didn't see the need to repeat a $1500 test.

I could easily have said, "Sure. Whatever. My insurance will pay for it (it would have)." Which illustrates my point.

The doctor has no incentive to keep costs down, 'cause he gets a cut of the testing fee. The insured has no incentive to keep costs down, 'cause he doesn't have to pay for it. The insurance company has no particular incentive to keep costs down--they just raise their premiums to cover their actuarial costs.

Because the cost is paid by a third party, nobody in the equation has any reason not to jack the price up. And the steep climb in health care costs corresponds with the beginning of widespread health insurance coverage. I know that correllation is not causality, but in this case I think the parallel trending of both phenomena is significant.

[Dr. Pfleschbach]

Let's assume your observation is correct, Lochinvar. What do you propose we do to solve the problem and will the solution address providing basic health care coverage to all?

[Inquartata]

Those familiar with the ways of curmudgeons can probably imagine what I think of the Massachusetts scheme. ( See, I even called it a scheme! What a giveaway! )

Good reason to move out of Massachusetts if it is implemented, I think. Levying government fines on the failure to buy a private service sets a bad, bad precedent...especially if it's a purchase required simply by virtue of living in a certain place.

By the way, EP, you are a stinker for raising this issue again! Just wait until Jeff finds it, you're in for another round of the "AMA s a Cartel, No It Isn't" show, with your moderators, Jeff and Inq. Be afraid, be very afraid!

[jeff]

Originally Posted by lochinvar

The doctor has no incentive to keep costs down, 'cause he gets a cut of the testing fee.

Only if his practice does the test. If he refers you to a lab, radiologist or hospital that does the test, then he does not get a cut of the fee. In fact, that's called 'fee splitting' and is illegal. Your main point is true: the doctor does not have an incentive to keep costs down - except for GPs who are capitated (fee per head) at a fixed $ cost per individual. This practice never worked well and is in decline. In fact, doctors have an incentive to spend money on repeated or unnecessary tests to avoid lawsuits.

Originally Posted by lochinvar

The insured has no incentive to keep costs down, 'cause he doesn't have to pay for it.

Unless there's a big deductable, of course.

Originally Posted by lochinvar

The insurance company has no particular incentive to keep costs down--they just raise their premiums to cover their actuarial costs.

This part is wrong. In the long term they can do that, but in the short term they can't, need to make their numbers this quarter, not some moment in the future, and have to compete on price with other insurers. So in fact, insurance companies have very strong incentives to keep costs down, and they very commonly delay or deny payment, or offer sharply discounted pay schedules. Their agents are compensated (bonused) on how well they control costs. Did you see the Sopranos episode where the insurance rep came by tell boot Tony out of the hospital?

[lochinvar]

Originally Posted by Dr. Pfleschbach

Let's assume your observation is correct, Lochinvar. What do you propose we do to solve the problem and will the solution address providing basic health care coverage to all?

Any plan that seeks to "level the playing field", i.e., guaranteed basic health care to all, runs afoul of market forces, just as our present model does. Eventually it will collapse under the weight of unbridled cost.

On the other hand, a market-driven solution, i.e., everyone pays for his/her own care as needed, carries a great human cost (as opposed to monetary). To put it in its most extreme and naked form, the rich will live and be healthy while the poor suffer disease and death. That's overstating it, of course, but the underlying principle is discernable for all its exageration.

I don't see that there is any middle ground. I wish that I did.

[Dr. Pfleschbach]

Originally Posted by lochinvar

Any plan that seeks to "level the playing field", i.e., guaranteed basic health care to all, runs afoul of market forces, just as our present model does. Eventually it will collapse under the weight of unbridled cost.

The Canadians have had universal health care since 1971 and their system hasn't collapsed. Granted they are dealing with the same pressures we are, but their costs are significantly lower because the middle men have been cut out and the claims proceedures are more streamlined and efficient. Prescription drugs are also much lower cost. If it does collapse as you predict, it'll be long after our system has.

But won't your alternative system fail as well? Even with health care, the wealthy cannot hope to remain immune in a world where the masses have become walking vectors for the new stains of viruses or drug resistant diseases. Our inner cities would become breeding grounds for infectious diseases from which there would be no way to totally insulate oneself.

I think we're all in this together, like it or not. We've got to find a way to keep everyone reasonably healthy, or none of us will be.

[bezoar]

[quote=Inquartata]

Good reason to move out of Massachusetts if it is implemented, I think. Levying government fines on the failure to buy a private service sets a bad, bad precedent...especially if it's a purchase required simply by virtue of living in a certain place.
QUOTE]

I suspect those forced to purchase health care insurance will seek out mininum coverage policies (just like with mandated auto insurance). When costs exceed coverage, the costs one way or another will be placed back on society in general, like they are now.

Your main point is true: the doctor does not have an incentive to keep costs down - except for GPs who are capitated (fee per head) at a fixed $ cost per individual. This practice never worked well and is in decline.

Jeff, you are correct to a point. As a primary care physician my responsibility is to treat my patients to the best of my ability, and refer to specialty care when a patient presents with a concern beyond my ability or scope of practice. Insurance companies watch closely how many times we refer, and adjust our reimbursements accordingly.

Unfortunately, if I decline to refer a patient to a specialist, because his condition was within my scope of practice (like the insurers would prefer), and the patient complains to the insurer or tranfers from my practice, my reimbursements are again adjusted downward.

In my opinion the Massachusetts plan really only adds cost without really addressing the underlying problems in health care bureaucracy.

[jeff]

Originally Posted by bezoar

Jeff, you are correct to a point. As a primary care physician my responsibility is to treat my patients to the best of my ability, and refer to specialty care when a patient presents with a concern beyond my ability or scope of practice. Insurance companies watch closely how many times we refer, and adjust our reimbursements accordingly.

Unfortunately, if I decline to refer a patient to a specialist, because his condition was within my scope of practice (like the insurers would prefer), and the patient complains to the insurer or tranfers from my practice, my reimbursements are again adjusted downward.

Are you saying that you are penalized with reduced reimbursals for valid referrals and for patient complaints? (whether they leave your practice or not?) That's a Catch-22, and a lose-lose situation for the doctor. Primary care is no fun, at least, not anymore.

My point about capitation was that the doctor is paid (in this scheme) a fixed amount per patient, regardless of need, and therefore is compelled by strong economic factors (eg: the tiny amount!) to consume as little time and resource as possible per patient, in order to not be in the red. Or to put it another way, he or she doesn't have the ability to spend more than a few minutes with a patient - gotta make up in volume what can't be made since there's no fee-for-service in capitated systems. In no way was I criticising the GP - he or she is put on a treadmill that's being cranked up, and has to run faster and faster just to keep up.

[bezoar]

I didn't think you were bashing. Actually, I think you summed up the frustrations of primary care medicine pretty nicely.

[Inquartata]

Originally Posted by bezoar

I suspect those forced to purchase health care insurance will seek out mininum coverage policies (just like with mandated auto insurance). When costs exceed coverage, the costs one way or another will be placed back on society in general, like they are now.

Yes. The difference, I think, between this and auto insurance is that driving an automobile is and has always been recognized as a privilege which can be limited, controlled and even revoked. Requiring insurance is merely a condition added to this privilege. And it's one which can be avoided altogether by such simple expedients as buses, taxicabs, bicycles and shank's mare. The health insurance being proposed however would be required not as a condition to a privilege but merely for existing; for living in the place one lives. Unlike driving, living is a constitutionally protected activity. Nor could the tax burden be avoided by means of foregoing the activity.

I suspect that this aspect is going to make for certain consideration by the US Supreme Court eventually, and IMO with no very favorable outcome for the insurance scheme.

[jBirch]

I always thought that the problem with the Health Care system was that you either get the premium service for a health problem, or none at all. You either go to doctor or to no-one, as it were, with the inherent economic costs with that. The economic problem for the masses is that the cost of any given doctor's visit is increasing. The only possible long term solution is to decrease the cost per visit.

Why can't others in the medical field (ie// nurses, paramedics and pharmacists) handle the routine diagnostic matters and leave the more complicated/intricate diagnostics up to the doctors? That would decrease waiting times and costs simultaneously while increasing access.

James.

[jeff]

Gee, I dunno. Why don't the flight attendants fly the planes, at least in clear weather, instead of those expensive pilots?

[Inquartata]

When I go to the "doctor's office" I am as likely to see a physician's assistant as the doctor. And I ALWAYS see a nurse first. So to some extent it's already done the way you suggest, James.

In fact the presence of PAs and nurses looks like it adds to the personnel costs of a doctor's operation rather than reducing them...

[epeeisky]

Originally Posted by Inquartata

In fact the presence of PAs and nurses looks like it adds to the personnel costs of a doctor's operation rather than reducing them...

It adds to the personnel costs, but raises the clinic's profit(ssuming a steady flow of patients). If Each doctor supervises two PAs, then in the time he would see one patient he would treat 3. This increases the flow rate and would get people in and out quicker.

Increasing PAs is not a valid solution to healthcare though, because many people refuse to see a PA. Also, often some of the worst care given is often by PAs.

[jeff]

To add to the above: there are many cases in which care is provided by a non-MD. A lot is done by EMTs, RNs, techs. Starting IVs, taking history and physical, putting in an NG tube, etc, a lot is already handed to others than the doctors. Midwives too, but I've heard horror stories from when complications happen. Pharmacists to a lesser amount, as they are trained in drug interaction, not in diagnosis or how to administer anything other than by mouth.

Since the subject of personnel costs came up, consider how doctors practices (and labs) have to hire staff to do nothing but chase the HMO down to pay their bills. That's a big expense item. Related to that: administrative overhead in Medicare is about 2%, but private insurance (eg: HMO) around 10% - showing that the stereotype "private enterprise is always more efficient" just isn't true.

[Inquartata]

Originally Posted by jeff

administrative overhead in Medicare is about 2%, but private insurance (eg: HMO) around 10% - showing that the stereotype "private enterprise is always more efficient" just isn't true.

Huh. I just Googled medicare+overhead, and apparently a lot of experts contend that this comparison is superficial and misleading.

I can tell you from my mother's experience that dealing with Medicare is vastly more frustrating and time-consuming for the patient than are most private insurers. Perhaps the former's "advantage" lies in its ability to force much of its "overhead" onto enrolees and other government agencies...

[jeff]

First things first: I'm sorry to hear of the problems your mother has experienced. Illness is bad enough without having bureaucratic crap to make it worse. I would just say that other have had lousy experiences with private insurers, and to complicate things, there is now more than one style of Medicare, including styles involving private insurers.

The sources I see say otherwise regarding overhead. Google "executive pay Aetna" for another reason for disparity in overhead ($22M for Aetna's CEO). Or more generally, see http://www.forbes.com/static/execpay2005/rank.html selecting at random for what jumps out at me:

#3 (of all USA CEOs) William W McGuire United Health Total Compensation: $124.8M
46 Larry C Glasscock WellPoint 24,970M
54 John W Rowe Aetna 22,219M
101 H Edward Hanway CIGNA Total Compensation: 13.3M
224 Ronald W Dollens Guidant 5,412M
305 Howard G Phanstiel PacifiCare Health 3,380 5
317 Michael A Stocker WellChoice 3,219
339 Jack O Bovender Jr HCA 2,978
381 Trevor Fetter Tenet Healthcare 2,395M

That adds up to a little penny here and there, plus the other executives.