Thursday, September 3, 2009

Health Care, Step 1: Does the System Need Reform?


Before any of us can form solid opinions on the health care bill, we should probably understand the essential nature of the health care system.

I recently sat down with a man who worked as a doctor for 20 years before he became frustrated enough with the system to pursue a Master's of Public Health; here's a summary of our conversation, which he described as "A semester of Public Health in an hour":

There are three ways to measure the Public Health system in a given country: Cost, Quality, and Access.


1. The US as a whole - government and citizens - spend $2.5 trillion per year on health care - drastically more than any other country on the globe. About $1.2 trillion comes from the US government, and about $1.2 trillion from individual citizens. It comes out to about $7,000 per person, which pulls about $2,000 per person more than the next leading country, which would be somewhere like Switzerland or someplace with excellent health care.


2. Despite this incredible investment of money, the US health care system is not among the best in the world - in fact, we're generally ranked between 25 and 50 internationally on any given standard of measurement (usually decided by the World Health Organization, generally recognized as the main authority in these matters). We are not #1 in anything, and we are behind Western Europe in almost everything. (*Note: I asked about our level of research here - we are #1 in the world in novel innovations - but he said that we are dealing with public health costs/care, not research. I'd be interested in seeing if the two are financially linked, i.e. if cancer research would suffer from funding being cut for the sake of free checkups - which would be an entirely different ethical discussion)

3. One of the reasons that we, according to Dr. Powers, will never be #1 in the world in anything, is our diversity of population. We have much more to worry about than any other country because of our genetic, ethnic, and socioeconomic disparities are so pronounced.

Genetic diversity: We must worry about sickle-cell anemia and the flu, diseases crossing borders through immigration and intra-city passing of diseases. We have a distinct set of challenges to customize medicine to unique persons, whereas Europe generally has a homogenized culture.

Cultural/Religious Diversity: It is difficult to pass any sort of standard of medicine without offending someone.

Socioeconomic diversity: we are more capitalist than Europe. One could debate the pros and cons regarding this - in fact, that would constitute the heart of the health care debate - but a certain result of this is a more dramatic difference in health care depending on one's socioeconomic class. Take infant mortality, a common measure of the standard of health care in a country: a white woman in the suburbs of Chicago would have a very low infant mortality rate - in fact, one of the best in the world, perhaps #1 or #2. Take a Hispanic woman in the inner city of New York, and the infant mortality rate skyrockets - those in the inner city "drag our statistics down." And why? Often for lack of basic prenatal treatment: ultrasounds, prenatal vitamins, regular checkups, which cost more overall for someone without health insurance than someone with insurance (Insurance companies get a discount). Which brings us to


In the US, there are about 300 million people. Around 200 million have access to health insurance and affordable care. The remaining 100 million are either uninsured or relying on a Medicaid program which is typically inadequate to meet health needs.

Of those 200 million, most have employment health insurance, and the rest are on Medicare or are entitled (Veterans or in the Military). In the 1960s, the elderly were among the poorest and sickest, so they developed Medicare. Now, the elderly are among the healthiest and wealthiest. In terms of employment health insurance, jobs and health care have historically been connected since World War II. Some quick history:

During WWII, America had a worker's shortage, since all of its young men went to war. Businesses, striving to stay alive, started competing with each other to offer higher wages to attract more workers. What started to happen, was that big businesses could afford to pay very high wages, drawing workers away from small businesses and overall hurting the economy. So under FDR, a cap was put on excessively high wages. Now the businesses needed to find another element to make them more attractive - and that thing was benefits. They started offering health care benefits along with their employment, beginning the tradition of employment-based health insurance plans. The government supports this system by allowing health care obtained through employers to be tax-free - employers and employees cut the cost of health care about 50/50, easing the burden of health care on the steadily employed.

Now, the other 100 million citizens do not have health care access. About 50 million are unemployed, or work minimum wage jobs. Another 50 million are underemployed - that is, their jobs neither pay enough to cover a cost of living, nor provide health care coverage. Some of these people have access to Medicaid, but, according to Dr. Powers, the Medicaid system is hopelessly flawed.

Under Medicaid, the burden is placed almost exclusively upon the hospital (remember, a private business) to cover health care costs. They are simultaneously required to offer things like emergency assistance to anyone who comes in, regardless of their ability to pay. Well intentioned, but the system is flawed - Dr. Powers worked in the ER for 20 years, and consistently saw hospitals overlook and delay treatment to Medicaid holders, and give preference to Blue Cross/Blue Shield and other insurance providers. Hospitals, like any business, needs to maintain a profit margin, and being required to pay hundreds or even thousands of dollars on a patient is not likely to encourage good or effective service.

Moreover, hospitals are likely to "milk" good insurance policies through excessive health care costs. As Dr. Powers puts it, a patient could come in complaining about how when they eat spicy foods, they get really bad heartburn; when they take over-the-counter medicine it goes away, but it consistently happens after meals. He says that a doctor could do one of two things: he could say "Well, this sounds like a classic case of acid reflux disease - take these meds and come back in a month if the symptoms persist." and bill the insurance company, and get $50-$70. Or he could say "This could be, well this could be bad. I think we need to run some tests - do a biopsy, maybe take an MRI, to make sure everything's okay." And if the patient hears that, of course they'll believe the doctor - he's a doctor! If they go through with it, then the doctor can bill the insurance company $700. So what, then, should stop a doctor from overdiagnosing? And sadly, Dr. Powers said, many doctors do. In other words, doctors are financially benefited not to cure their patients, but rather, in a sense, receive a commission on keeping them sick.

In fact, Dr. Powers speculated that there's already enough money wasted in the system to cover any health care reform needed, if it was redistributed, but that would take a drastic total reformation of the health care system that would take several years - and a government takeover of hospitals. (*Note: I'm unconvinced here: governments control big businesses without taking them over - can't they lay down guidelines in salaries to prevent these kinds of abuses?) One very interesting venue to explore would be whether moving doctors onto fixed salaries would stem this kind of thing - right now, doctors receive a "commission on sickness." Pay a good doctor $125,000-$150,000 a year flat, and let the costs of health care go entirely to the hospitals to cover basic preventative medicine for lower income levels. Or would overdiagnosis drop so drastically that there will no longer be that excessive money "in the system"? That's a question for an economist to deal with.

Based on the conviction that basic health care is a right, not a privilege, Dr. Powers suggests that perhaps government-subsidized medicine wouldn't be too bad. People claim that it's "socialist," but in reality the government already subsidizes half of American health care.

Back to Cost, Quality, and Access - he calls it the "Iron Triangle" - but at any given time, only two of them can thrive. You've either got low cost and good access, but poor quality, good quality and easy access, but only if you've got the money to pay the high cost, or good quality and low cost health care (say, in the military), but limited access (gov't can afford to provide only to military personnel). Obama's mistake, said Powers, is that he tried to say that the US can have all three at once - which is only possible if our economy ends up like the USSR's.

No matter what, says Powers, we need to operate under the knowledge that our current health care system is not sustainable. In just a few decades, the cost of Social Security, Medicaid, and Medicare are going to consume the entire federal budget if the status quo stays the same. Dr. Powers suggests that Medicaid is revamped (it's all pretty much wasted money), and excessive health care spending on overdiagnoses get cut. One way or another, health care needs to be reformed - it's just a matter of how it happens.


Overview: Health care should be evaluated by Cost, Quality, and Access. If one seeks to improve cost and access, people fear quality will be neglected. Access is currently rationed according to socio-economic class under a capitalist system; in response to the arguement that government "rationing" is dangerous, the liberal would argue that health care is already rationed according to socio-economic class.

Hospitals waste insurance money on overdiagnoses; this is the heart of excessive spending with little quality to show for it.

Other issues not discussed with Dr. Powers - impact of lack of competition between health insurance companies - partial monopolies = health insurance companies doing what they want.


In conclusion - these are simply impressions dutifully reported from the perspective of a Pro-Obama doctor with a Master's of Public Health and 20 years' experience in the field. They do not reflect my own viewpoints. I'm looking for a conservative alternative perspective. Until I get a chance to find one and buy him/her a coffee, we will settle with the now-famous John Mackey Wall Street Journal Op-Ed Article (which deals more with the solution than the problem) - for some reason liberals got pissed about this, which makes not a lot of sense since he's acknowledging there's a problem, but has experience with money and understands that the government's pockets are not bottomless:

The Whole Foods Alternative to ObamaCare

anyone else is welcome to add their two cents.

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