Health Care: Two Problems, Not One
I admit to being completely perplexed about how health care should be reformed in this country. That there is a problem is undeniable: costs are already much higher than they are in the rest of the world and are growing at rates far above inflation, large numbers of people lack coverage, and medical outcomes are mixed. Add to this an absurdly complex administrative system that makes scheduling visits and paying bills a nightmare, and one gets a clear picture of a badly broken system.
While the problem is undeniable, the solution remains unclear to me. And unfortunately, I find the debate about what to do about health care remarkably superficial and unenlightening. What bothers me most is that the discussion seems to focus on just one part of the problem: how we pay for care. Should there be a single payer? Should insurance companies still be involved? What is the right role for employers? How much should the government pay and how much should stay in the private sector? All these questions about paying for care are important, but they only address one of the problems affecting health care. And it may not be the most important problem.
A much more significant problem, in my mind, is the underlying cost of medical services. Why are they so high in the US compared with the rest of the world? Why are they growing so fast? And what do we do about about them? There's a tendency on the left to blame the insurance companies for all the excess cost. While the insurance companies do deserve some blame, I think it's disingenuous to attribute the entire problem to profit-taking and administrative overhead. Even if the insurance companies skim 10% to 20% of the money being pumped into the system, the remaining 80% to 90% paid to doctors, hospitals, drug companies, and other providers still represents the bulk of the huge and growing cost.
By changing the payment system, we may get more people covered and may reduce some of the cost and hassle of obtaining care--but the cost gains are likely to be temporary if we don't address the underlying cost of care problem. I don't have a solution to the problem to offer today--but I hope my post will at least stimulate some debate on this second, and possibly more essential problem: how do we control (or adjust to) the underlying cost of health care services and products?
While the problem is undeniable, the solution remains unclear to me. And unfortunately, I find the debate about what to do about health care remarkably superficial and unenlightening. What bothers me most is that the discussion seems to focus on just one part of the problem: how we pay for care. Should there be a single payer? Should insurance companies still be involved? What is the right role for employers? How much should the government pay and how much should stay in the private sector? All these questions about paying for care are important, but they only address one of the problems affecting health care. And it may not be the most important problem.
A much more significant problem, in my mind, is the underlying cost of medical services. Why are they so high in the US compared with the rest of the world? Why are they growing so fast? And what do we do about about them? There's a tendency on the left to blame the insurance companies for all the excess cost. While the insurance companies do deserve some blame, I think it's disingenuous to attribute the entire problem to profit-taking and administrative overhead. Even if the insurance companies skim 10% to 20% of the money being pumped into the system, the remaining 80% to 90% paid to doctors, hospitals, drug companies, and other providers still represents the bulk of the huge and growing cost.
By changing the payment system, we may get more people covered and may reduce some of the cost and hassle of obtaining care--but the cost gains are likely to be temporary if we don't address the underlying cost of care problem. I don't have a solution to the problem to offer today--but I hope my post will at least stimulate some debate on this second, and possibly more essential problem: how do we control (or adjust to) the underlying cost of health care services and products?
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the underlying cost of care problem
At least 7 users of TPMCafe heartily recommend Atul Gawande's recent New Yorker article, "The Cost Conundrum" on this topic. If you're interested and haven't read it, you absolutely should, it's at least a start at comprehending the enormity of the changes we need.
I find the debate about what to do about health care remarkably superficial and unenlightening
Me too, a lot of it is the same old, same old.
I understand why people do it, for the agitprop, to make sure everyone is convinced. But I've gone way beyond that, I learned those things at least fifteen years ago. And judging from recent polls, most other people have too. Yeah, the health insurance situation is a nightmare, we all know it, I don't need to keep reading it over and over and over. If we haven't experienced it ourselves, we surely have friends and relatives who have, and we have all heard the horror stories already since the Clinton years.
For example, people talk as if "Medicare for all" would solve the problem and then everyone will be happy. Now someone like me, I'd be happy because I have no coverage right now and something is better than nothing. But excuse me, hello fairy tale believers: current Medicare is in crisis and its projected costs for the boomer generation are a big problem! Not to mention if you have any experience with it, like with elderly parents, you realize Medicare is not the only coverage many over 65 have, and if many that have problems did depend on it, they would be in real shit trouble. You know how good retirees' medical benefits caused such problems for the auto companies, because they were so expensive? That was for over and above what Medicare covers, duh! I read the argument often that nobody complains about Medicare. Well, nobody complains because most people have extra coverage from former employers or the Veteran's Administration or the like, and if they don't they are too poor to be blogging about it or too poor to be talking to pollsters, OR they are dead from improperly treated chronic illness because Medicare Part B didn't cover the preventive measures necessary, like check ups.
already much higher than they are in the rest of the world
I think even this oft-repeated point, though true, skews the discussion towards pie-in-the-sky land. We are way behind in reform, but that doesn't solve the problem. BECAUSE most other countries are experiencing the skyrocketing costs of all the new medicine available TOO, costs are eating up a greater amount of their GDP each year, too, and they TOO are in a quandary about what to do about it. So the reality is that reform of our system to be like other country's systems would still leave us with skyrocketing costs. To promise that single payer or whatever would fix all of this is to insure disappointment and failure. We have to do BETTER than those other countries, even though we are starting from behind. They don't have the whole answer.
I'll give you one example. We currently "stealing" a lot of doctors from places like India right now because we have the higher renumeration for doctors and the need for them. If we are no longer so attractive to doctors in renumeration, where are we going to get the doctors? We really do need to reform the way we doctors and the way they get trained, I have heard Obama push this and he is right to do so. We don't even have enough primary care doctors to take care of a retired boomer generation, and expecting the few we have to take less pay is unrealistic, many will just opt out and serve those who are willing and able to pay out of pocket.
I am starting to think that perhaps the boomer generation (of which I am part) will just have to deal with not getting ideal service during a transitional period, sort of serving as the guinea pigs, so that the next generations have a decent system that works. It's not going to be fun, The least of which: I predict lots of health care complaint threads, on that old-fashioned medium, blogs, by retired people, heh.
June 23, 2009 9:57 AM | Reply | Permalink
We could do things like fund medical school so young MDs wouldn't have so much debt. We could do more with working conditions to attract young MDs. Many are women now and could be attracted by the kind of practices that would give them time to start their own family.
I'm increasingly believing that we could address many of our wacky compensation issues if we just went back to a more progressive tax system. Level the playing field. Let's have more incentives for people to do what they love to do and fewer incentives for people to do something they hate just because they can make millions doing it.
June 23, 2009 10:20 AM | Reply | Permalink
You can also fund more wars, more King Corn agriculture, more military bases, or more bridges to nowhere with higher taxes on the rich. I know it's one of your favorite themes, but sorry, in and of itself I don't see higher taxes on the rich as a solution to anything except perhaps making certain income levels more undesirable. People, including the rich, will more readily pay higher taxes if those taxes are specifically targeted to a plan, whether its "win WWII" or "make old age more secure" or reform health care.
June 23, 2009 12:18 PM | Reply | Permalink
I disagree. I think it just makes it easier to attack the costs of the plan and then nickle and dime it to death while at the same time robbing funds from the plan as we do with Social Security to pay for all those free wars we love so much to fight.
June 23, 2009 4:16 PM | Reply | Permalink
P.S. I have personal intimate experience dealing with the primary care doctor situation, and the type of problem described in Gawande's article, so maybe I understand it more than most. I had a close retirement-age family member with serious multiple chronic illness over 13 years, managing crisis after crisis. In our current system, someone like that ends up bouncing from specialist to specialist with one specialist okaying the costs to health insurance company (which is not always so tough on approval because Medicare is picking up some of the cost and it is clear the person has serious problems--still, we experienced some pretty agonizing attempts at denial). But no one is truly directing the care, making sure that all the doctors meet in a room and discuss the patient. So they spend and spend and are sometimes may be doing counter-productive or even damaging things. If you are net savvy, sometimes you end up trying to become the substitute for the missing primary care doctor, but you have no power to effect anything and you have to spend hours and days waiting to contact doctors and the stress of trying to politely question their work.
I assure you many people go through this, just visit an ICU and talk to families there.
I was quite taken with Gatwande's article, I can easily see that if all of our systems were more like the Mayo system, costs could go down. But you are talking major major overhaul of the entire medical system which will take years. Most doctors and other providers are organized a totally different way now, a totally different hierarchy. I can see that even going to single payer wouldn't change much of this situation, if you wanted immediate drastic change of that situation, you would have to go to a complete national health system like in the UK. And I think I can safely say that would be impossible to do here--if you thought the Vietnam war draft caused problems, well, immediate transition to national health would be a magnitude of that. We are stuck with transitional change. I am pretty sure Obama knows the basics of what needs to be done in reforming the entire medical system and I think that affects what choices he has made on changing health insurance slowly. He sees slow change of insurance as aiding changes needed in the medical system, that one would start affecting the other. I just don't know if he is making the right calculations on how to get there, they are calculations about behavior choices and behavior changes, like in "freakonomics" theory.
June 23, 2009 10:22 AM | Reply | Permalink
Oh, I've rambled and ranted too much, but I should add another thing.
Primary care doctors in our system don't have the correct power. If you are an average person with a private insurance plan, you probably think they wield a lot of power. But that's probably because you've only been involved with preventive care and routine illnesses. When it comes to the stuff that is costing our system a ton of money, it's the fancy specialists that are the pride of hospitals that have all the power. They tell the primary care doctor to get lost. Primary care doctors get very little respect within the doctor profession, and they don't have power where all the major cost problems are.
And those fancy specialists know how to handle insurance companies, too. Some are powerful enough to just get everything they want ok'd. Others have semi-organized into "cartels" so they can have power, i.e., check out all the kidney doctors in a big hospital in a city and you might be surprised to find they all have the same office address and phone number. They have done this to deal with the insurance companies like a labor union would, and it has the added benefit that they can share costs and perhaps run a nice profitable diagnostic lab or whatever. (With the latter, as a patient, if you want a second opinion, you really have to research well if you want to make sure you are getting a real second opinion.)
June 23, 2009 10:51 AM | Reply | Permalink
Thanks for the link AA. At work now, but when I get some time I'll read the article and reply (probably tonight).
June 23, 2009 11:24 AM | Reply | Permalink
Very interesting article, AA. I think greedy doctors are still in the minority, but I do know they've grown more common, especially as doctors increasingly become investors in medical technology and service companies. Pharmaceutical manufacturers, for-profit hospital corporations, medical equipment manufacturers, etc., all can be avaricious too. One advantage of single-payer is it makes reducing reimbursements for medical services and products easier and therefore limits the ability of the greedy to exploit medicine for excessive profit. There may be a downside to this, too, however, if limiting the money going to health care providers weakens innovation to some degree. It would be nice to see more analysis of the pluses and minuses.
June 23, 2009 10:30 PM | Reply | Permalink
I got a sense from the article that it is not the specific greed instances that are the major problem, though some of that is involved, but the old autonomy/ego problem. The knowledge and specialization has advanced so far that it is necessary to work on teams to avoid useless testing, repetition of care, and even detrimental effects (a perfect example of the latter is the elderly person who is overmedicated by several specialists to the point of detrimental interractions and a wrong diagnosis of senility.) They can't be god anymore. Whether single payer or not, I think a salary method of payment could go a long way to help solve the problem. Along with getting rid of any capitation requirements-- a patient takes as long as the case requires to do a proper job. Being able to have long-term provider/patient relationships could also do a lot to eliminate some of those costs. With all the constant switching of plans many sick people have been subject to lately in our system of "competition" for insurance price, a lot of expensive work gets repeated, and not shared. In a way, I would say repetition is one of the things that came through clearly in the article--it's like every doctor in the problem town gets his own MRI, it's not the profit motive, it's the autonomy motive, because he's starting from scratch with every patient complaint.
June 24, 2009 4:35 AM | Reply | Permalink
Wikipedia on Meidcare Costs and Funding challenges. I would subtitle it: "there is no magic pony coming with a public plan or even with single payer." Myself, I feel I don't need to get into accuracy of the projections there as even if they are quite a bit off, there still is a major problem with skyrocketing medical costs.
BTW, those under the mistaken impression that current Medicare covers basically everything can scroll up on that page for what I think is quite accurate summary (I had to research this a couple years back using government websites) of what the various Parts do cover and what out of pocket expenses are for beneficiaries without Medigap or Medicare Advantage. There are also decent summaries there of how providers are paid.
June 24, 2009 11:33 AM | Reply | Permalink
It was almost amusing to note the following in passing while reading today's news on a totally different topic. When I commented that other countries are also dealing with the cost problem, I had no idea about this one:
from Crackdown on Protestors Drape Iran in Silence.
June 24, 2009 12:57 PM | Reply | Permalink