Universal health care doesn't mean we're entitled to all the health care in the universe

nhs1-copy.gif The AFL-CIO and its community arm, Working America, just released their 2008 Health Care for America Survey. Most of the 26,419 online respondents are insured, employed, and college graduates — those, the report explains, most likely to react positively to America’s health care system.

But with its pie charts and tables, enhanced by 489 “heart-wrenching stories about the effects of this broken health care system on them and their families,” the report is like a PDF version of Michael Moore’s movie “Sicko.” Of course, it’s to be expected that many of those who took part were prompted by the chance to air their grievances.

One of the premises on which Senators Clinton and Obama are running is the extent to which they feel our pain. In fact, Hillary consented to an in-depth interview on her plans for universal health care with Kevin Sack of the New York Times.

When taking either of their plans into consideration, one must first disabuse him or herself of the notion that, if implemented, you’re going to walk into a doctor’s office like in England and out again with nary an exchange of cash nor any paperwork. Both Obama and Clinton’s versions of “universal” coverage call for a bill that would require Americans to buy health insurance.

Require? Who doesn’t want health insurance? A few twenty-somethings too blinded by their partying to picture the illnesses they’re courting? For many others, the heart is willing, but the pocketbook is weak.

Then Sack writes, “Mrs. Clinton said she would like to cap health insurance premiums at 5 percent to 10 percent of income.” We’re not trying to pick on Hillary — she’s catching enough grief as it is — but that doesn’t sound like much in the way of relief.

Sacks adds: “She has previously said that garnishing wages would be one option” to guarantee participation. Garnishing wages?

Already you can feel yourself hyperventilating. It’s like finding out after an emergency room visit that the attending physician wasn’t on your plan. Or when doctors shoot bills — which by all rights should be sent to your insurance company — out to you like baseballs from a pitching machine.

It’s not quite as bad as all that. “Refundable tax credits would help make the newly mandatory policies affordable for low- and middle-income workers,” Sack writes. Also, “Government insurance similar to Medicare would be available to all consumers.” And, of course, Hillary “would require insurers to cover every applicant regardless of age or health status.”

Meanwhile, Obama at least understands that concerns about premiums is paramount. Mandating coverage only for children, he opposes requiring us to buy insurance until it’s affordable.

To achieve that end, Hillary suggests rolling back President Bush’s income tax cuts for those who earn more than $250,000 a year. Not to mention taxing everybody’s favorite whipping boy, the smoker.

But there’s one cost-cutting measure that Hillary, Obama, or, for that matter, anyone championing universal health care won’t touch. As one of the respondents to the Health Care for America Survey said, “Everybody deserves high quality, affordable health care.”

That’s an easy sentiment to sign on to to. But don’t “high quality” and “affordable” operate at cross-purposes to each other? In other words, measures such as increasing taxes and reducing administrative costs — such as dismantling the apparatus devoted to denying claims — may not be enough to shore it up.

In fact, it’s time to ask ourselves: Does universal health care really mean that we’re entitled to all the health care in the universe?

A critical factor sending health-care costs rocketing into the stratosphere is medical technology. For example doctors prescribe tests, MRI’s and CT scans like they’re handing out candy at Halloween. While reassured, the patient can’t help but suspect that the doctor’s underlying motive is either the promise of kickbacks from the medical technology industry or bullet-proofing the doctor from malpractice suits.

Is there a way to intercept this knee-jerk response on the part of doctors in hopes of keeping costs down? Yes, but it requires a leap of faith from a public conditioned to believe that the technological assigns a precision and accuracy to our random existences which we can no longer do without. Besides, to many of us, prosecuting a successful malpractice suit is the equivalent to winning a state lottery.

What if we freed doctors from concern about medical malpractice except in the face of criminal negligence? In other words, to keep costs down why not enable them to diagnose the old-fashioned way — by using their know-how and experience?

But the faith of doctors in technology rivals that of their patients. Like pilots who are instrument-rated, the last thing they want to do is turn the clock back to the days when they flew by the seat of their pants no matter what the visibility. Their diagnostic muscles, if ever developed, may have have long-since atrophied.

In full hyperventilation mode by now, we ask, “What? Trust doctors?”

That’s a barometer of how far health care in America has fallen in our eyes. Doesn’t anybody remember those halcyon days when we trusted no one more than our doctor?

14 replies »

  1. Excellent commentary. Sadly, it’s very true that the current crop of doctors are mostly trained to rely on the technology and do not necessarily have the knowledge and skills to diagnose / treat in the low-tech ways that a previous generation of doctors employed. This is demonstrated very clearly in the field of obstetrics, for example. Our standard practice is much more invasive and reliant on technology than many European countries, for example. The less invasive approaches to various presenting conditions are no longer taught (breech delivery, as an example). Yes, these other countries have much better overall outcomes.

    So, I agree with your premise but, sadly, experience has put me firmly in the hyperventilating at the idea of trusting a doctor.

  2. Russ,

    Excellent commentary, and you nailed some salient points that I think bear repeating, as well as some that might benefit from some elaboration:

    1. BINGO! Despite the popular myth that malpractice insurance is driving up medical costs, it is really technology. The current system provides an open checkbook for technology development and implementation. If you develop a technology that works, no matter how expensive, then medical providers pretty much have to buy it. And once the medical provider down the street has that technology, then eveyone else HAS to have it, as well.

    I saw this in action when consulting to health care providers. When MRI machines first became available, for instance, conventional wisdom said that a single MRI machine would serve a good-sized city, so that there would be a need for an MRI machine in only one hospital. But, of course, when one hospital got the machine, it put other hospitals at a competitive disadvantage. So, they got machines too. Then, they started marketing those machines to their physicians so that usage went up to pay for those machines.

    That’s just one example. There are many, many more.

    2. The threat of malpractice is WAY overstated. The FSAs (top actuaries) in my firm who spend their lives dealing with nothing but these issues did nationwide conjoint analyses (many, many of them) to get a handle on the real effect of malpractice on medical costs. Their conclusion was that malpractice insurance accounted for only 2% of medical cost increases. That “increases,” not total costs. Of that 2%, as much as 3/4 of the cost was justified by legitimate malpractice claims.

    A client of mine in my state is a co-op for malpractice insurance. Two years ago, they had only 38 malpractice claims go to court. They won 37 of them. They settle legitimate claiims and fight what they consider to be specious ones.

    The media-fueled outcry about high malpractice payouts for ridiculous reasons is just so much unfounded hysteria. A few, high-profile cases are covered BECAUSE they are so unusual.

    3. I agree entirely that the modern practice of medicine seems to be done out of a cookbook, with the physician prescribing a series of tests to eliminate possibilities in sequential order. It can be done by any computer so long as judgment is not required.

    4. Having everyone buy insurance will reduce cost-per-participant, because healthy and young people will subsidize old and sick people in the risk pool.

    5. I don’t think “high-quality” and “affordable” are working at cross purposes. For instance, send someone with a back problem to an orthopaedic surgeon, and you will get a diagnosis that the condition requires expensive surgery. Send that same person to a physical therapist, and you might get the condition fixed within a couple of weeks for $1.95. I would submit (and I don’t believe I’m in the minority here) that MORE and MORE INVASIVE procedures very often increase cost while reducing desirable outcomes.

    Good job!

  3. Thanks, Rose. Like many, I’ve had terrible experiences with not only my health insurance company, but doctors and even optometrists.

    Thanks, JSO, for confirming what were largely impressions on my part. Re malpractice: I guess trumped-up fear of a law suit, rather than the possibility he or she will be ruined by one, motivates doctors to be super-cautious.

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  5. Russ:

    No, Russ. I think you misunderstood. That was the point of doing conjoint analyses. Very, very little of cost runups is due to fear of malpractice. It’s a myth.

  6. Great post. I wonder what would happen if one were to allow free market competitive forces in the health care field. I can imagine that costs would go down.


  7. Interesting prmisis, business take care of our healthcare. I heard that we once had a system like that.Competition in hte medical field? I heard that we had something like that prior the the merger starts. HCA anyone? and Yes The boston area has already led the way to a diagnosing robot, or rather a computer program with sensors that help to set a diagnosis. I has/had beat all human competors that set out against it. I believe the last I heard of the system was in 2000, and MIT. And I don’t know of a insurance company that will take my healthcare issues in our society unless forced to. Thats why I cannot change carriers, and have to put up with their skyrocketing prices. You would have to mandate a coverage, or single payer, or governmnet finance but thos are socialism, for the company(facism), single payer (facism) or government socialism. Which one is the worst evil?

  8. Great post. I wonder what would happen if one were to allow free market competitive forces in the health care field. I can imagine that costs would go down.

    Nah. Won’t work, Jeff, for several reasons. First off, there is a relatively inflexible demand for life and health. Second, the average consumer is at the mercy of health care providers for how much to consume. The health care providers make that determination, not the consumer. Third, health care is so insanely expensive that insurance is mandatory for almost everyone, and having insurance separates consumers from cost/benefit decisions, even if the COULD make rational ones, which they can’t because they don’t have enough expertise to do so.

  9. “’re going to walk into a doctor’s office like in England and out again with nary an exchange of cash nor any paperwork.”

    The paperwork is increasing, there is talk, again, of a charge to see the Dr (to cut down on unecessary (in whose opinion) visits, and ever rising fees.

    The NHS is good but failing in parts, debt ridden and highly selective about prescribing new drugs for ill health.

    …and yet we are taxed hugely in my country. The worst in Europe for tax levels, I believe.

  10. Russ,

    If you haven’t read it, get a copy of Neil Postman’s TECHNOPOLY. It’s about 15 years old, now, but it nails this whole issue that’s plaguing us and that JSO has so clearly delineated in his comments – that it’s not malpractice by any professionals – especially those in medicine or education that’s taking us down the road to ruin. It’s our idolatry of TECHNOLOGY in all its forms.

  11. Thanks, Elaine. Thanks, Anonymous. I’ve heard of Postman, but never read him. Looks like it’s time.

  12. JS:

    If there’s an inflexible demand for life and health, because it is a service and not a commodity, the price should go down if free market forces were to be allowed to work. That means allowing more doctors, training more nurses, buildng more hospitals, and getting insurance and government out of making our decisions. Allow things like advertising prices…..for doctors, procedures, and hospital stays. These all would encourage competition…which there is none as of now.


  13. Jeff:

    No. It wouldn’t work. Let me tell you why.

    There is relatively inflexible demand (note I did NOT say it was completely inflexible) because most people will mortgage anything they have if they think it will achieve life and/or health. Your supposition is that prices would go down if one increases supply with more doctors, hospitals, etc. But things like “more hospitals” has been a PRIMARY cause of rapidly rising health care costs.

    Health care will not work on a free market basis because of its special nature in society (in the long run), but one needs to understand a lot about the business before one gets to that conclusion.

    First, let’s take a look at free market competition that exists right now. You say there is “none.” That would be a surprise to health care providers everywhere, and it would mean that all those endless hours I spent in meetings determining how to shift costs from copays to deductibles to coinsurance to stop losses, and what we could sell to current employees and to potential recruits, using extremely expensive databases on “market” offerings at competing employers, were completely unnecessary (Gee, if only we had known there was no competition around health care. Silly us.)

    It is the “free market,” in fact, that has led to building so many hospitals that, in many places, there are too many unfilled beds. Not only are there too many beds, they are PRIVATE beds instead of ward beds, because patients are demanding private rooms and, when electing non-emergency surgery and procedures, will select a hospital, and often even a physician, depending on whether they must share a semi-private room or whether they will get a private one (note: most insurance covers only a semi-private room unless no semi-private rooms are available, in which case it covers the private room).

    Negotiation with physician groups? Been there. Done that with PPOs. The idea was classic market. Physicians would band together and give a discount in return for higher volume from employers. It seemed to work for about a year. Then total costs began to rise rapidly again. Why? Because the physicians started seeing patients more often but for less time per visit … at the same charge per visit. In one fairly extreme example, my sister, the midwife, was told by one doctor that she needed to see 60 people per 8-hour day.

    Since PPOs weren’t working, employers then looked to HMOs because HMOs provide “gatekeepers.” The best HMOs were thought to be those that took capitated rates, because that would provide an incentive not to provide unnecessary health care. We thought that was working, and it did for 2-3 years. Then, costs began climbing again. They climbed because of technology, too much oversight and second-guessing, and market competition for employer and employee dollars.

    Staff-model HMOs did better for longer than alliance HMOs, but they eventually succumbed, too. There needed to be an MRI machine in every locality. Hospitals needed to have spacious, well-decorated, single rooms, jacuzzis in birthing areas, and the list goes on and on. Every time a company made a new piece of medical gadgetry, the HMO had to have it or risk losing its employer and non-employer clients over the “quality” of its care. No HMO could afford that local newpaper article on the person or baby or what have you that could be saved had it owned a particular piece of equipment.

    In the early 1990s, I had a client that saw its health care costs jump from $12 million to $18 million in one year because there were 10 premature babies born. And it’s a LOT more expensive now, because there are a lot more expensive ways to save premies.

    You say more doctors would lower costs? Doctors fees aren’t the problem, for the most part (orthopaedic surgeons excepted). What IS a problem is utilization. Saying that more doctors would reduce medical costs is like saying that more lawyers would reduce litigation. Sure, a doctor can get more patients by advertising low, low per-visit rates, then make it all back on utilization.

    And, in fact, this is exactly what is already happening and has been happening since at least the 60s, and maybe longer.

    The market won’t work on health care because health-care providers get to determine utilization rates, with most of the costs shifted to third-party payers, with strident and relatively inflexible demand from end users, and with market pressures that actually drive costs increases for low-efficiency enhancements instead of vice versa.

    And, hey, I didn’t even scratch the SURFACE here. The list is just staggering, from perverse incentives in pharmaceuticals to emergency rooms.

  14. Thanks for that inside look, JSO. Wish you lived nearby so I could sit down and talk to you about it for a few hours.