TBTAM on Healthcare Reform

I figure it’s high time I weighed in on the discussion. I don’t claim to have all the answers, but I do have all the questions. Ten of them, to be exact.

1. Why is healthcare reform going so badly?

Healthcare won’t get fixed as long as the stakeholders in health care with the biggest voice in its reform are the insurance and pharmaceutical industries, medical device makers, lawyers and others whose business thrives on the increasing health care expenditures of the American public.

Asking these folks to help us reform healthcare is like asking Master Card, Walmart, Verizon and Best Buy to help figure out your monthly budget.

Real reform won’t happen until the American people take their seat at the head of the table and invite doctors, ethicists and healthcare experts (not industry lobbyists) to bring their best knowledge about what interventions are most important, most effective and most cost efficient. Then we can sort out our priorities (you can call it rationing if you want) and create a budget.

Only then we can begin to negotiate with third parties (insurers, Big Pharma, etc) to sell us what we need at the best price. That’s called competition, and it’s what American capitalism is all about, right?

The problem is, the American healthcare consumer (and I include myself here) still thinks someone else is footing the bill. Who that someone is, I don’t know. Maybe the rich. Maybe our employers. Maybe the Federal Government.

What we have yet to get is that there is no “someone else”. The deep pockets are our own pockets, and they are empty. Our tax dollars. Our pensions. Our companies going bankrupt from paying employee health care costs.

Until the American people get it that it is our responsibility to get our spending in line, and until our representatives have the guts to turn away the industry lobbyists and represent their constituents instead of their campaign bankrollers, we will continue to have uncontrolled health care spending.

2. But what about the Insurers?

You think when you buy insurance, you’re paying for healthcare? It’s not healthcare – it’s insurance.

The way insurance works is this – you pay in, they pay out. Their profits are the difference between the premiums we pay and the healthcare they cover. So, the less they cover, the more money they make. Your healthcare needs will always be secondary to their ultimate goal, which is to increase profits.

And here’s the thing – If we spend less, it doesn’t go back into our pockets – it lines theirs.

That said, the insurance indutry’s goal of us spending as little of their money as possible is aligned with our goal to stop healthcare spending. So if there’s a place for a “win-win” between the US healthcare consumer and one of our vendors, this is it. But there have to be limits on profits, or we get nowhere.

3. What do you think about a public option?

If it’s anything like Medicare, it won’t run well and it won’t work without rationing. Sorry.

I do like the solution offered up by Mayo Clinic chief Dr Denis Cortese. Namely the package offered to Federal employees, which allows wide range of choice but limits the profits of the insurers. Cortese suggests that the program eventually replace Medicare, and I agree.

4. What about Big Pharma?

What is it they say? Oh yeah – Ask your doctor. Well, here’s what this doctor says. We use way too many drugs in this country.

Which is not to say I don’t use or prescribe drugs, because I do both. But the marketing of drugs is out of control. In addition, Big Pharma is driving health care policy and clinical care standards. Not to mention populating the medical literature with ghost-written articles whose goal is to teach docs to write prescriptions for their drugs.

How did it get this way? Mostly, I believe, because the business model for success in the industry (ie, happy shareholders) demands that every new drug be a blockbuster. That means getting it out as fast as possible to as many as possible before the side effects catch up with the marketing.

How do they do it? One way is advertising, disease-awareness and fear-mongering. Because the sicker you are, the more illnesses you think you have or might have someday, the more drugs you will buy, and the more money they will make. (Notice this is the exact opposite of the business model for the insurers, who make more money when you are healthy.)

Another tactic Big Pharma uses is to expand the indication for their drug. Grow the population at risk. It’s not just diabetes, it’s pre-diabetes, pre-hypertension, prealzheimers… you get the drill. In fact, let’s forget waiting for the illness (or pre-illness) to strike – let’s treat everyone “at risk”. If they can identify you as high risk for, say, breast cancer, and then sell you a drug to lower your risk – Bingo! No matter if that drug increases your risk of something else (for instance, blood clots)- you’re not worried about that risk because they’re not “educating” you about it.

If all that doesn’t work, they can always pass a law mandating the drug.

Now, if they’re lucky and get market share before the FDA calls them on their ads, and the post-marketing adverse events don’t kill the drug, then they can continue to sell as much as they can till the patent expires, at which point the generic manufacturers (which are increasingly becoming the initial makers of the drug) can step in like Walmart and clean up on the volume.

Bottom line – The pharmaceutical industry’s goal is simple – sell more drugs. Whatever it takes. Asking them to help us cut healthcare spending is like asking the schoolyard pot salesman what you should do with your lunch money.

Healthcare reform has to include restrictions on Big Pharma – limits on direct to consumer advertising, banning of ghostwriting and full disclosure of all conflicts by any doctor, medical center or university who accepts their funding. We also need more watchdogs on the media and their role in fear mongering and disease “awareness”.

5. What Happened to Malpractice Reform?

It seems to have dropped off Congress’s “to do” list as far as reforms go. Too bad. We won’t get anywhere without it (see my rant on expectations below.)

6. How about the docs?

We docs have got to get our act together, stop fighting over the pie and help America solve this thing. Unfortunately, we are part of the problem. One reason is that we’re too busy seeing patients and trying to survive. That’s because our current business model demands volume for survival. As our costs of doing business (insurance overhead, malpractice, cost of wages and healthcare for employees, rent, the EMR) have risen, real reimbursement has dropped. Ergo the 15 minute visit, now the 8 minute visit.

Proposed solutions that include cutting reimbursement to docs will only make the problem worse, especially for primary care, which is going the way of the dinosaur.

The good new here is that, overall, docs will follow the money. You wanna’ reimburse specialty care at a higher rate than primary care? No problem, we’ll churn out nothing but dermatologists and back surgeons. You’re willing to pay us cash for Botox and fillers? Sign us up! You’ll reimburse AIDS care at a higher rate? Why didn’t you say so? Look, we built you an AIDS Center!

Not to mention that deep down, a whole lot of us really do have our patients’ best interests at heart, but are just as trapped in the maelstrom as you are. Tap into that interest and make our business model fit your needs, and we’re on our way to fixing this Magilla.

Some docs have decided they can’t wait for national reform, and are taking matters into their own hands, offering quality healthcare at a price they can afford to deliver it. It’s called Concierge Medicine. Unfortunately, Concierge Medicine currently defines only a small portion of the healthcare market. Critics say it cherry picks the healthy and the wealthy, and won’t work for the average American. Others say it’s a choice that most sensible Americans can afford if they choose to use their dollars this way.

I think it’s a step in the right direction.

7. What about the patients?

Or should I say “healthcare consumers”? As I said, we are part of the problem. The American consumer has unrealistic expectations, both in terms of outcomes and costs, when it comes to healthcare. We expect perfection, 100% certainty in diagnosis, and have no tolerance for any delay in diagnosis. We want every test that can be done, damn the cost, when it is us or our family who is sick. We want every last second of life, regardless of the price to society. We want to smoke as much as we want, eat as much or as poorly as we like, and have our cardiac cath and CABG covered, no questions asked. And we want cheap premiums to boot, with unlimited access.

At the same time, we are being sold to, fear-mongered and pushed in every direction by those whose major goal is profits. Which feeds perfectly into our skewed expectations.

8. Can’t we just ration?

It’s a good idea, but it ain’t happening. Not yet. We might accept gas lines, but we won’t accept having anyone tell us what we can or can’t have when it comes to our health.

Bob Wachter at the excellent Health Care Blog has written a fabulous post on healthcare rationing that I encourage you all to read. He concludes that Americans will never accept rationing in other than the imperfect form that currently exists in our capitalistic society.

Twenty years ago, the great Princeton healthcare economist Uwe Reinhardt observed that there are two kinds of rationing: “civics lesson rationing” and “muddling through elegantly.” … The muddling through option, which Reinhardt felt was far more likely, involves limiting the resources available – the number of ICU beds, or MRI scanners, or CT surgeons – and allowing docs, patients and administrators to duke it out at the bedside. The evidence is that they do a decent job at triaging to provide the most good for the most people.

Of course, these limits are naturally present when resources are truly scarce – like livers for transplantation – and in these circumstances we developed thoughtful rationing approaches. The point is that health care dollars increasingly resemble livers.

I happen to think he is right. For the moment.

This first year of national discussion is a preamble. At some point in the not too distant future, reality will set in and we will begin to understand that we need to ration healthcare. Maybe by then, someone will have come up with a better word than “rationing” that doesn’t have such negative connotations to most Americans. Whoever it was who came up with the term “Death Panels” seem pretty good at this sort of thing, maybe we can ask them…

9. It’s a mess, isn’t it?

Darn tootin‘ it is. There’s no way we’re fixing it in one year. But we seem to be finally getting our heads out of the sand, and that’s a start.

I do happen to like much of what Paul Levy is recommending – except I would keep insurance premiums pretax and allow the self-employed to deduct them as well.

10. What’s going to happen this year?

Here’s what I predict will come out of healthcare reform this year –

The insurers, Big Pharma, lawyers, hospitals and others with big profits at stake will be sure to prevent any meaningful change to their bottom line. Healthcare consumers as a whole will continue to expect blood from a stone, which aligns perfectly with industry’s need to keep healthcare growing.

Which will leave the docs with a pie that is unchanged in size, but that they will be forced to split differently. In the one good thing to come out of this whole mess, primary care will win a bigger piece at the behest of the specialists.

And the spending will go on.

15 Responses to TBTAM on Healthcare Reform

  1. TBTAM-

    I find it remarkable that here it is, three days later, and not a single comment has been deposited on this excellent post. This is truly telling. I suppose its because the stakeholders in this debate know you're correct in your excellent assessment of the state of affairs. Thanks for articulating what most of us are seeing so well.

    I fear now the American people will get a "reform" bill that will do nothing of the sort, and saddle us with ever-increasing taxes, "fees," and "assessments" (for God sake, don't call them "taxes!") as we dig ourselves deeper in debt while the Big Pockets, piñata-like, grab for all the money they can as the whole mess careens into fiscal insolvency.

  2. nobody is commenting because everyone either has the flu or is swamped taking care of it. Excellent post.

  3. Dr Wes –
    Pinata – great analogy. (How do you get that little squiggly thing on your N?)

    Thanks for being the first commenter. It means a lot.

    Happy –

    The flu or taking care of it – Not sure which is worse, huh? Thanks for reading.

  4. Thank you, thank you, thank you, Dr. P, for this clearly written piece on health care reform that might actually work. For a layman like me who is utterly baffled by this grand mess of a system we have, it helps to have educated insiders who can see the big picture and the reality on the floor at the same time. (Thanks also to Dr. Wes for referring us Web wanderers to Dr. P's post.) I am not hopeful that we the peeps can even understand enough to find our way to the head of the table, but it does help immensely to have something I can refer others to that isn't laden with partisan water-totage, socialist utopian visions (or their laissez-faire counterparts), etc.
    I'm thinking my best bet at this point is to buy a wheelbarrow, so I can push along stacks of mostly worthless cash to buy bread and vodka as our nation's financial edifices continue to collapse. Health care, already a luxury tied to the fragile bonds of employment, will only become more so.

  5. Excellent post. Love the analogy to a Wal-Mart & Best Buy creating the household budget. Thanks for taking the time to write & share.

  6. The blog identifies the major players and the importance of them coming together to control the health care juggernaut. I have a bit more hope that these players will move towards addressing some of the critical problems, because many of the big players are encountering evidence that the status quo–including their financial gains from the status quo–are unsustainable.

    The mystery is how large of a crisis must occur before that realization turns into action.

    My focus in the puzzle is the reluctance of health care providers to function as effective teams. But that reluctance is not simply a personal hesitation, but is perpetuated by professional recognition systems, liability concerns, time pressures, and spatial design of health care facilities.

    Again, an important part of this post is the way all of the factors influence all the other factors, keeping the whole thing rolling along.

    All the best,
    Michael
    http://www.workengagement.com

  7. i'm right with you on lobbyists, insurance companies, and big pharm being a huge problem with reform. they put enormous amounts of money into preventing any changes that will cost their interests profits.

    a system that is driven by protecting the wealth of a few is NOT really a health care system. decisions are not primarily driven by what is best for the individual patient. [and more meds, more expensive exams, more specialists, extending every second of life at any cost is not necessarily "best."]

    i agree that we need to focus more on primary care, and continuity of care.

    one thing you didn't address is the huge number of uninsured people in our country — including people like my son, who works full-time. i find that unconscionable. one result is that people suffer badly from treatable illnesses and injuries, and do not receive preventive care. another is that emergency clinics end up overrun with people who cannot obtain health care otherwise.

    it is better to have health insurance than not, but does anyone think the current system works all that well? many insured people have seen their coverage shrink and premiums go up, year after year. health care providers need to deal with myriad insurers and their different rules.

    both patients and providers need to wrestle with unwarranted denials of claims, or even coverage — this has happened in my own family, and i have heard many stories from others. i believe that many insurers bank on the fact that most patients are not in a position to do battle with their insurers over unfair denials.

    so — i believe rationing is already taking place, but it is being guided too much by the need for insurers to make enormous profits. at the other end is the set of pressures that might lead a health care provider to prescribe too much: big pharma, the over-availability of big-ticket specialties and tech, and direct to consumer advertising of both.

    there is also rationing for uninsured people, but it is both brutal and irrational. "suffer until you are so bad off that you need the ER" is absolutely horrible policy.

    sorry for being so long-winded. i'm not a doc, just a lowly consumer with a few burrs in her hide.

  8. I watch and wait as physicians, scientists, politicians and talking heads ponder the various areas of "reform"; carefully positioning each in a numbered series and offering very good reasoning as to how doing this or that will solve that issue and therefore solve the entire problem accumulatively.

    But each of these solutions miss the main cost involved in making each of these areas impossible to resolve and as they all miss the most important fact of all, the main cost of healthcare in ever area – fraud.

    Most physicians and indeed most educated persons respect the New England Journal of Medicine and some read it diligently. So I am completely flabbergasted when the June 10th, 2009 Prospective entitled Finding Money for Health Care Reform — Rooting Out Waste, Fraud, and Abuse, Published at http://www.nejm.org June 10, 2009 (10.1056/NEJMp0904854) and evidently wasn’t read by all the medical bloggers or at least none commented on it.

    All the groups are represented there, from hospitals, insurers, physicians, medical device manufacturers and pharmaceutical manufacturers to name a few, all of whom have a long track record in waste, fraud and abuse and all pointing their fingers at the rest.

    In fact, if we looked, waste, fraud and abuse are the only things that make our “track record” in having the least effective and most costly healthcare system in the World, and the only thing that will stop our results from sliding farther will be the quick and effective bankruptcy that the “new and improved” system of adding more to the load will bring.

    It seems to me that only the NEJM and a few who have read it even know the problem, or realize that our government won’t recognize it because they are incapable of ending it.

    Our best hope is that it passes quickly with all the bells and whistles so our system quickly shows it is failing so we can triage what we can and go on the a single payer system which should end the problem when all the books of all the programs are put in one place as they are in most other countries. Who knows, we might be unable to stop paying multiple people for doing the same procedures even if there is a single payer!

    Bob

  9. I also think you would be well served to read the attached testimony (Link Below) by the National healthcare fraud expert which seems to have been hidden during this debate when it was made to Arlen Specter at his first sub-Committee meeting on May 20th, the same day the President signed legislation aimed to increase anti-fraud actions. That same day the AG and HHS Secretary announced HEAT claiming it would recover $2.5 billion in 5 years which is exactly half of what the average annual recoveries were in the last 10 years. The AG was in charge of these matters in the Clinton Administration and left in 2001 to defend large corporations against healthcare fraud cases.

    When Sparrow writes about $100 to $500 billion a year in fraud he has the track record to prove it. Perhaps this is what the President means to do after the healthcare act goes through, but if you look around the “Federal Government” sites you’ll see they have no idea on how to locate the fraud and stop it. Hence my comment about a single payer system being the only way it can be stopped

    http://www.hks.harvard.edu/news-events/news/testimonies/sparrow-senate-testimony#ContentTop

    Bob

  10. anonymous bob — i really do not think the top problem with health care is provider fraud. that is an awfully weak argument for single-payer coverage, and does not address any of the concerns that dr. TBATM raised.

    dr. TBATM, i suspect we might differ on some of our views, but i have great respect for dedicated health care professionals, and think we have a lot of common ground in our views at this point. i particularly appreciate your view that health care consumers need to be better informed, and not expect a perfect outcome to be served up — because that is not something anyone with integrity can promise, any time.

    i'm interested in the news today about the enormous amounts spent by lobbyists to defeat any meaningful health care reform. http://voices.washingtonpost.com/health-care-reform/2009/10/health-care_lobbyists_continue.html

    also interested in the news that the american cancer society is shifting in its views of the benefits of routine screening for prostate and breast cancer. obviously, investigation of signs and symptoms remains a reasonable course, but i'd be interested in your take on the report.

  11. If you ask me, number 7 is the biggie, and there is absolutely no way to legislate change here. You can also add in the food industry and their lobbyists. Even when people try to eat better, the information they are provided by the government and the food industry are just plain wrong. But really, people are the problem themselves, as you noted. I'll sum up with a great quote by Mark Ripptoe:

    To a great extent, the health problems experienced by the members of the ridiculous culture in which we live are self-inflicted. They are result of the reluctance of the bulk of the population to do anything that is either physically hard or something that they don’t want to do. People seem to have acquired the idea that they have the inalienable right to stroll through life without having sweated, picked up anything heavy, worked hard, or eaten less than they wanted at every meal. This approach is, of course, wrong. And it has resulted in a lot of expensive, unattractive, and entirely preventable problems amongst people who seem puzzled about why things aren’t going well.

    Well said, Mark. Well said.

  12. You had me at paragraph 1 …

    Thank you for such a clear and well reasoned discussion of such an important issue. As physicians, we have not risen to the current challenge. However, if voices like yours take the lead I'm sure we can get on the right track. Thanks again. You have a new subscriber and backer.

  13. “That’s called competition, and it’s what American capitalism is all about, right?”

    Competition would require advertised prices for common services, and that just doesn’t happen in the health care industry (in part because the AMA doesn’t allow it).

    Healing is a noble profession, but at the end of the day it’s not unlike auto repair or any other service industry. Mechanics give estimates and if they discover problems along the way, the estimates can be off. But for example if it’s a routine oil change, then the advertised price is the price you can expect. Not so in the medical profession, where the prices for even common procedures are never advertised and vary wildly based on your insurance or lack thereof, and where the estimates (if you can get one) never match the final bill.

    If the auto repair industry worked like the health care industry, then the cost of an oil change would be unadvertised and a complete mystery, you’d be expected to get this service from your primary care mechanic, and you’d rely on your auto insurer to negotiate a fair price for you. Madness! And what do you suppose would happen to the cost of an oil change if this is how it really worked?! Is it really a mystery to anyone why healthcare is so expensive? It sure isn’t to me.

    • Sparkleton –

      I agree it is indeed madness!

      The auto repair analogy is one I use all the time, but in a different way that may illustrate why healthcare will never operate the same way Pep Boys does –

      I often tell my patients that being a doctor is like being a car mechanic for a model that we did not build and for which we do not have construction plans or a repair manual.

      Thanks for reading, and for your thoughtful comments.

      Peggy

      • I think the reason we both like to use the auto repair analogy–the reason why it’s so instructive–is because both professions involve diagnostic and therapeutic aspects. Naturally all analogies break down at some point. But I would argue that the significant differences between these two professions neither warrant nor explain why one is subject to competition and market forces while the other is not. This is particularly true if you take a historical perspective and consider the practice of medicine before the advent of the AMA, the MGMA, and more regulation than any other industry save financials. Bottom line: if there’s a lack of competition in the health care industry, then it’s there by design.

        There’s far too much to write on this subject but here’s an excellent analysis that I would make required reading for any politician or association desiring to make changes: http://www.ncpa.org/pub/st296

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