Feldstein: Empower Patients to Make Health Care Cost Decisions

Harvard professor Martin Fedlstein had an Op Ed in Thursday's Washington Post proposing a variation on the idea presented in a recent article at TheStreet.com and by Seeking Alpha contributor Charles Hugh Smith. The essence of these ideas center on the need to put cost control decisions in the hands of patients and their doctors, while providing protection from bankruptcy from occasionally very large medical expenses.

Feldstein's proposal centers on changing health insurance from a system that encourages unquestioned consumption of medical services of questionable value to a system that has medical procedures subjected to a cost/benefit analysis by the consumer (patient). Note: The preceding words are mine and are not directly stated by Feldstein.

Let Feldstein's words speak for themselves:

Private health insurance today fails to achieve these goals. It is also the primary cause of the rapid rise of health-care costs. Because employer payments for health insurance are tax-deductible for employers but not taxed to the employee, current tax rules encourage most employees to want their compensation to include the very comprehensive "first dollar" insurance that pushes up health-care spending.

A good system should not try to pay all health-care bills. That would lead to excessive demand, wasteful use of expensive technology and, inevitably, rationing in which health-care decisions are taken away from patients and their physicians. Countries that provide health care to all are forced to deny some treatments and diagnostic tests that most Americans have come to expect.

Here's a better alternative. Let's scrap the $220 billion annual health insurance tax subsidy, which is often used to buy the wrong kind of insurance, and use those budget dollars to provide insurance that protects American families from health costs that exceed 15 percent of their income.

I can hear those who have these tax-supported medical plans through their employers complaining about this. They will object to this proposal based on Obama's oft-repeated promise that "if you like your current plan you can keep it." I don't think I ever heard that you can keep your current plan and not pay for it.

Before you jump my bones as an outsider, I will disclose that for the past 40+ years I have personally benefited from having tax-favored, employer-provided, low-deductible and co-pay health insurance. I have such coverage in place today. I am not an outsider. I am an insider who realizes there is, in the final analysis, no free lunch. This arrangement is not on an equal footing with others in society. To the extent it is a free lunch, it is actually somebody elses lunch; somebody who in one way or another is paying while I enjoy the meal. Ultimately, I would argue that I also am paying for my free lunch indirectly in the long run.

The other aspect I would emphasize is this: the corporate benefit is coming out of a fixed bucket. Corporations are apportioning the compensation paid to employees to salary and benefits. For all extent and purposes, this bucket is fixed. The $220 billion tax savings for corporate health insurance plans could be retained if the health care benefit cost were paid directly to the employee. Salaries and wages are still tax deductible.

Here are some advantages:

1. Tax payments by the corporation are unchanged.
2. Personal income is increased. Individuals can use the increased income for health care and insurance.
3. Tax policy can be implemented that will offer tax deductibility for health care expenses in a way that will encourage prudent consumption of health care services. (Compare this to the current system that offers tax breaks for wasteful consumption of health services.)
4. This clears the way for implementation of a catastrophic expense insurance system that could dramatically reduce personal bankruptcies from medical expenses.
5. Employee mobility is improved. The situation common today of people remaining in a position they would otherwise leave, simply to retain continuity of health care coverage, would cease to exist.
6. The exposure of rapidly rising health costs will be removed from the corporate cost structure.

There is one significant disadvantage for employers who presently have health plans: the golden handcuffs of health insurance for retaining employees will be gone. The exposure to more competitive wage and salary action to fill positions will occur as all businesses will compete for talent on a more level playing field.

Feldstein goes on in his article to discuss a number of possible steps that could be taken to provide low-income vouchers to supplement insurance premium payments. He also proposes making purchased insurance or self-insurance optional for medical expenses up to 15% of AGI. I had suggested 10% in my article at TheStreet.com. The exact amount is not important. What is important is that health care costs will not be brought under control until the consumer/patient has a central role in the cost/benefit analysis.

In our current system, too many people see the system as all benefit. And, of course, there are some who have no benefit and see no way to participate. The first group imposes wasteful expense upon the system. The second group imposes a significant cost on the health care system without making any significant payment at all.

Of course, there are a number of health care cost issues that have not even been mentioned here. Among these are health care provider compensation based on outcomes rather than procedure, increased preventive health care (more inexpensive prevention equals less high expense treatment) and unhealthy lifestyle issues.

There is still a long way to go in getting costs under control for health care. Further discussions along the lines of the ideas discussed here may eventually lead to some progress in cost control. Ultimately, we will not get there until everyone is paying for his own lunch.

Comments

[John Lounsbury:]

OG - - -

Thanks for the link. I try to follow a number of daily papers and the NY Post is not one of them.

My reading of this situation is that the doctor has established a pay for outcomes compensation plan and it is running afoul of laws designed for pay for procedures systems. I read this to mean that the Mayo Clinic would have to register for approval as an insurance company in New York. I don't know if they do so in Minnesota. What about all the patients they have in Iowa, Wisconsin and possibly other states? Do they have insurance law problems with multiple states?

I think this doctor needs to find a backer and take this to court. By the logic of the NY State Insurance Department, prepaid legal services would be required to register for approval as insurance plans. The same is true for landscapers who have "whatever it takes" contracts. What about automobile maintenance contracts? Extended warrantee contracts?

I don't know the regulations affecting all these commercial activities. That's why I have asked questions.

By the way, for much of my adult life I lived in New York State and consider the NY State Insurance Department to be an excellent consumer protection agency. In this case, I think they are trying to enforce laws that are not suited to where we should be going. However, the law is the law and should be changed, rather than simply cursing the insurance department.

How much influence do the insurance companies have in the NY house and senate?


On Oct 08 05:15 PM optionsgirl wrote:

> correction: He was trying to provide medical visits to the uninsured.
>

Oct 08 07:21 PM

[ncalmd:]

I don't have the time to comment in depth at the moment, but as a practicing primary care physician (28 years), I share the general sentiments, but have no idea of what "pay for performance" would look like. More importantly, contrary to what every politician trots out as the solution to healthcare costs, preventive medicine while a very good thing in terms of improving health status, simply hasn't been shown to save money. For example, it costs less to treat
strokes from high blood pressure, than to pay for the medications and visits over 20 to 30 years. Hopefully, will be able to get back to this in a couple days, as I'm very interested in healthcare reform, as our current system is basically broken almost beyond repair.

Oct 08 11:16 PM

[ncalmd:]

BTW: With regards to the New York doc... what he is actually providing is similar to an HMO... although with a far more limited
range of services, or perhaps a better comparison is to "concierge
medicine." The latter is expanding, as it's a "win-win" generally for the patients and physicians, except that for patients, the monthly fee
will come out of their pockets. If they do see the physician and happen to be insured and their health plan doesn't limit them to a "network", a claim will be generated for any services, and the patient will receive the reimbursement.

Oct 09 12:20 AM

[John Lounsbury:]

ncalmd - - -

I hope you do have time to come back and share your thoughts. I expect you can provide some detailed perspectives that the readers here will benefit from. Sometimes comment streams go on for days. Occasionally I get a comment on something months old and start a new discussion.


On Oct 08 11:16 PM ncalmd wrote:

> I don't have the time to comment in depth at the moment, but as a
> practicing primary care physician (28 years), I share the general
> sentiments........

Oct 09 12:58 AM

[The Khan:]

"Feldstein's proposal centers on changing health insurance from a system that encourages unquestioned consumption of medical services of questionable value to a system that has medical procedures subjected to a cost/benefit analysis by the consumer (patient). Note: The preceding words are mine and are not directly stated by Feldstein."

Are you nuts? The insurance companies encourage unquestioned consumption? You have clearly never had any dealings with an insurance company. John, I generally like your articles, but this line is madness. The "questionable value" remark is accurate, but let me assure you, insurance companies do NOT encourage consumption!

I also question the assumption that the average Josephine can, or wants to, perform cost/benefit analysis on proposed procedures. You just have to look at the blind toeing of the line with childhood immunization to see that almost all parents are doing what they're told. It takes about 3 minutes research online to see that there are serious questions about the US vaccination schedule, serious enough that a lot of people should be saying no thanks. They aren't. So they are either not doing the 3 minutes research, or they are unwilling/unable to make their own decisions. Which makes you wonder about where the protective instinct has gone...but that's another issue.

Oct 09 10:08 AM

[YoYoMama:]

As a daughter of a mother who had a debilitating stroke which has left her partially disabled, I find this comment chilling. That a doctor would find more palatable on a cost basis for a patient to have a stroke than to take the medication to prevent the stroke is very disturbing.

Preventative care, at the end of the day, is not about nickles and dimes. It should always be about maintaining health. Period.

In fact, if we promoted HEALTH - instead of health care - this would solve many of our health care problems, would it not? Wouldn't we have LESS worries about the cost of health care if 60% of our population were not overweight or obese? If we had eliminated smoking? Drug use? How about the costs of promiscuity - VD, AIDS, unwanted pregnancy? The list of unhealthy or risky behaviors Americans engage in, the results of which are paid for on SOMEONE ELSE's dime through their insurance policy, is endless.

No wonder our system is out of control.

If the American populace were more educated, motivated and proactive regarding their health, the result will be we will need less health care. But in our current system, Americans have no skin in the game to create a healthier society. Why eat a healthy diet, when Americans can eat like pigs and just take pills to combat the negative effects - and IT'S PAID FOR BY INSURANCE.

So again, I question the motives of doctors who dismiss outright preventative care in reducing costs. As long as America remains FAT, smoking, stressed out and irresponsible, doctors will stay in business.

Oct 09 10:43 AM

[margel:]

Feldstein's proposal would reduce health care costs but only by significantly reducing access. The average person does not have the ability to make rational decisions about their health care, especially if they have debilitating or chronic illnesses. Having worked in the health care field for many years, my impression is that only the well-to-do and the highly educated have the ability to perform a cost-benefit analysis on health care decisions, but even they often have difficulty understanding complex procedures. As a matter most patients with serious health cannot even describe in clear language their diagnosis and treatment options.

Oct 09 03:47 PM

[John Lounsbury:]

The Khan - - -

You are correct. Insurance companies do not encourage unnecessary consumption of medical services. (I have had do deal with insurance company denial of claims for services that turned out to be very necessary.)

What I am referring to is the situation that I have heard again and again from friends and family. When there are medical problems and the subject of cost comes up, the response is invariably: "I don't care whether it is needed or not. I don't care what the cost is. It is covered by insurance." Others have commented on the same problem. What I want to see is personal responsibility for health care cost management. Yes, I agree with you (and margel) that many individuals are ill equipped, too distracted, and/or too lazy to deal with these issues. That is why we need doctors who are compensated based on outcomes and not procedures to help advise their patients.

The entire structure of the health care system model is out of whack. The system is loaded in such a way that patients with insurance are incentivized to "get as much as they can", working with insurance companies motivated to spend as little as possible, combined with incentives for doctors to run as many procedures as possible. How can any efficiency of result be accomplished here?

Insurance companies can work for cost containment, but the rest of the participants in this scheme are working to milk it.

Don't get the wrong idea. I am not defending the insurance companies. Quite the opposite. I would maintain that a decision about payment for treatment made at a hundred mile distance has many opportunities for error. The judgment made by a patient and his doctor (who will be compensated on the result, not the process) has many fewer chances for errors and much greater opportunity for cost efficiency.

The other side of the system has the uninsured who get medical treatment at costs much above the reimbursement rates from insurance plans. If, of course, they can even get into a doctor's office without insurance. This is another travesty of the system as it has evolved.

The final factor that several commenters have mentioned is the subject of preventive medicine. ncalmd mentioned that, while good preventive medicine programs do promote good health, they have not been proven to reduce overall health care costs. I have heard this from other doctors who have corresponded with me. I'll give a hypothetical.

Consider 100 patients. With no preventive health program, the expectation for serious stoke or heart disease requiring major costly treatment may be 40%. Let's assume the added health care cost for the afflicted averages $100,000. With a good lifetime of preventive health care, the incidence may be reduced to 20%. Here are a summary of the finances (time value of money excluded):

Preventive health program at a cost of $1,000 for 50 years, times 100 patients = $5 million. Cost of 20 patients afflicted = $2 million. Total cost is $7 million.

No preventive health care cost is $100,000 for 40 patients. The total cost is $4 million.

In this example the cost of preventive care is greater by 75%. If you cut the annual preventive cost to $500, the no preventive care scenario is still cheaper, but by a small margin.

If you add the time value of money into the calculation, the present value of no preventive care costs goes way up.

This entire discussion misses the point of externalities. How much money is lost (or spent) because of loss of productivity from the afflicted and their family members? How about the economic dislocations and bankruptcies that occur because of the loading of so much more health care into the final years of life?

I apologize for disappointing you by the misleading brevity of my article. I don't think our thinking is as different as you initially inferred by the incomplete discussion I presented originally.


On Oct 09 10:08 AM The Khan wrote:

> "Feldstein's proposal centers on changing health insurance from a
> system that encourages unquestioned consumption of medical services
> of questionable value to a system that has medical procedures subjected
> to a cost/benefit analysis by the consumer (patient). Note: The preceding
> words are mine and are not directly stated by Feldstein."
>
> Are you nuts? The insurance companies encourage unquestioned consumption?
> You have clearly never had any dealings with an insurance company.
> John, I generally like your articles, but this line is madness. The
> "questionable value" remark is accurate, but let me assure you, insurance
> companies do NOT encourage consumption!
>
> I also question the assumption that the average Josephine can, or
> wants to, perform cost/benefit analysis on proposed procedures. You
> just have to look at the blind toeing of the line with childhood
> immunization to see that almost all parents are doing what they're
> told. It takes about 3 minutes research online to see that there
> are serious questions about the US vaccination schedule, serious
> enough that a lot of people should be saying no thanks. They aren't.
> So they are either not doing the 3 minutes research, or they are
> unwilling/unable to make their own decisions. Which makes you wonder
> about where the protective instinct has gone...but that's another
> issue.

Oct 09 05:27 PM

[ncalmd:]

YoYoMama: Sorry if what I wrote left the wrong impression. I was trying to make the distinction between the benefits of preventive care, which improves people's lives and health care costs.

"...preventive medicine while a very good thing in terms of improving health status, simply hasn't been shown to save money."

I can assure you that I treat blood pressure elevations very aggressively and have done so since the day I started to practice. I do this because it improves people's lives, but it does not decrease overall healthcare costs.

There seems to be a misconception that if doctors focused on prevention, it will decrease overall costs. There is simply no evidence that this is true, and in fact if you look at the costs of performing preventive procedures over many years, for example mammograms, colonoscopies, PSA, pap smear, etc. you will not find any studies that show that these decrease overall health care costs, and to the contrary appear to slightly increase health care costs. (since we don't have a metric for improved health status)

On the other hand, those things that people can do on their own,
stay lean, exercise, etc. MIGHT decrease health care costs, but there aren't any actual studies which show this. For example, if you are genetically predisposed to developing diabetes, staying lean, exercising may delay the onset of diabetes for a number of years, but won't prevent it's ultimate appearance unless you die young from some other cause. From a isolated perspective, it would make seem that this would save money. On the other hand, if the individual who is predisposed to having diabetes doesn't take care of themselves, they may not live long enough to have a couple knees or hips replaced, or live long enough to develop dementia with its associated costs. For those not predisposed to diabetes or hypertension, staying lean and exercising will delay the time until they need a hip or knee replacement, but since they will likely live longer and therefore more likely to need replacement, there might not be a decrease in actual health care expenditures. The point being, we don't in fact know whether preventive measures will end up saving money even though superficially, it seems that it would.

I brought this topic up specifically for this reason... We need to make serious changes in the costs of medical care, and I fear that people will assume that as a society we will in fact save huge amounts of money by increasing preventive care.

In case anyone is wondering about my "political predisposition" given that health care reform is now a political football, I am a conservative who feels the republicans are just this side of being of demonstrating "brain death", and the democrats aren't making any sense.

Oct 09 06:03 PM

[ncalmd:]

As I read through the comments I do think just about everyone is on the same "page", although everyone is coming at this issue from different perspectives. Perhaps, the following can redirect the discussion of health insurance effects on medical costs.

Lets say that your employer, the state or federal government provides you a insurance policy that pays all or for most of the costs of preventive maintenance, brake, tire replacement and any necessary repairs on your car. Additionally if your take your car to a mechanic or dealer and they fail to identify a problem fails to identify a problem that later might contribute in some part to an accident, they can be held liable. Clearly in this scenario, the consumer will want the brakes and tires replaced far more often, and have less incentive to keep tires inflated etc. The mechanic on the other hand is going to spend a great deal more time looking over the car, doing more diagnostics and even more time documenting what they looked at. If it comes to replacement parts for their car, do you think the consumer will want rebuilt, or "original" parts, and would the consumer actually be able to make an informed cost benefit analysis?

What I can guarantee, is that costs of car maintenance and repairs would rise dramatically under this scenario, and likely deliver very little in terms of decreased accidents.

Please don't mistake this example as an attempt to trivialize the discussion, rather it is meant as a way to step back and look at how insurance, liability, and the individual consumer's predispositions interact to create the problem we now face.

Oct 09 07:47 PM

[TinyTim:]

John-
You've touched pretty much all the bases with this one and the comments.

As another "insider" who has been covered by "the company" for years, I've seen some of the dark side of health care. Docs who want you back every 4 weeks, unnecessary procedures, patients who think it's free once the deductible is met, mountains of paperwork and intractable insurance companies. I'm not sure why they're even called insurance companies when they're involved in every health care transaction. Only because the overall fees are so high, every interaction is considered a "claim."

I remember reading another comment on SA a while ago that caused the same reaction with me as Option Girl (welcome back). The insurance companies routinely sue doctors who charge uninsured patients the negotiated insurance rates. This is blatant abuse of the legal system.

I have always been against the direct connection of heath care and employment as nonsensical. This is a classic example of the law of unintended consequences. It started during World War II when the combination of wage / price controls and labor shortages forced employers to use ingenuity in financial engineering to offer "the non-wage perk" of health insurance to attract workers. Of course, it was also a deductible business expense. So, in a sense, the current mess could be considered a basterd son of fascism (sorry Brad). Personally, I've started to think of the health care system as just another finger of instability. It took 65 years to get where it is, I give it a lot less to avalanche.

As you have been writing, it's the concentration of wealth inherent in capitalism at work. Right now, the pharmas are making a killing. Eventually, the principals in the health care industry will all be doing well. Talk about leverage over your customers. What's the only thing that's worth more than money?

Lastly, I've heard comments that because of rescission, insurance isn't worth the cost if it can be pulled out from under you when needed most. Rescission is a big issue with private insurance where the company doesn't have to worry about losing a big contract. Not surprisingly, in the several states that have legislated a no rescission waiting period (typically 12 mos), it's almost impossible to get affordable insurance with out a perfect bill of health.

Oct 09 08:34 PM

[ncalmd:]

TinyTim

Interesting that you mention price controls... since the early 1980's the medical industry has been subject to price controls for at least 80% of the market. (the vast majority of the 20% being uninsured) Medicare, Medicaid and every health plan has fixed levels of reimbursement. In fact, the health insurance industry has had a specific anti-trust exemption since 1945. (McCarran-Ferguson Act)

Big Pharma is a very interesting topic... the question for this part of the industry is do we risk stifling R&D in an attempt bring down the costs? There is a whole lot to dislike about Big Pharma, but on the other hand it would be a mistake to limit their incentives to the point where R&D suffers.

On Oct 09 08:34 PM TinyTim wrote:

> John-
> You've touched pretty much all the bases with this one and the comments.
>
>
> As another "insider" who has been covered by "the company" for years,
> I've seen some of the dark side of health care. Docs who want you
> back every 4 weeks, unnecessary procedures, patients who think it's
> free once the deductible is met, mountains of paperwork and intractable
> insurance companies. I'm not sure why they're even called insurance
> companies when they're involved in every health care transaction.
> Only because the overall fees are so high, every interaction is considered
> a "claim."
>
> I remember reading another comment on SA a while ago that caused
> the same reaction with me as Option Girl (welcome back). The insurance
> companies routinely sue doctors who charge uninsured patients the
> negotiated insurance rates. This is blatant abuse of the legal system.
>
>
> I have always been against the direct connection of heath care and
> employment as nonsensical. This is a classic example of the law of
> unintended consequences. It started during World War II when the
> combination of wage / price controls and labor shortages forced employers
> to use ingenuity in financial engineering to offer "the non-wage
> perk" of health insurance to attract workers. Of course, it was also
> a deductible business expense. So, in a sense, the current mess could
> be considered a basterd son of fascism (sorry Brad). Personally,
> I've started to think of the health care system as just another finger
> of instability. It took 65 years to get where it is, I give it a
> lot less to avalanche.
>
> As you have been writing, it's the concentration of wealth inherent
> in capitalism at work. Right now, the pharmas are making a killing.
> Eventually, the principals in the health care industry will all be
> doing well. Talk about leverage over your customers. What's the only
> thing that's worth more than money?
>
> Lastly, I've heard comments that because of rescission, insurance
> isn't worth the cost if it can be pulled out from under you when
> needed most. Rescission is a big issue with private insurance where
> the company doesn't have to worry about losing a big contract. Not
> surprisingly, in the several states that have legislated a no rescission
> waiting period (typically 12 mos), it's almost impossible to get
> affordable insurance with out a perfect bill of health.

Oct 09 11:55 PM

[Steven Hansen:]

John,
if you or a family member are sick - and especially if you have insurance - you don't give a damn about the costs. nothing wrong with this.

America is an insurance based system down through primary health care. the insurance companies are carrying the big sticks - both to the doctors and the patients.

sorry, but i see no workable solution as long as we choose to stay with this system. the insurance company ends up being the mediator, and will always be conflicted by the profit motive.

expansion of this same system into law is crazy.

we need to create a public primary care system for those who cannot afford insured health care. this public system would be bare bones - and not an alternative to insured health care.

it is just a lifeline to those who cannot afford insurance.

in the meantime, we can experiment state by state on overall solutions to drive the cost of health care down to levels seen in most other industrialized countries.

we are missing that the overall costs are out of control - and you cannot expand a system before this is resolved.

Oct 10 02:11 AM

[TinyTim:]

ncalmd-
thanks for the comment. It's no surprise that health care is rife with price controls and anti-trust exemptions. We can all see how well they're working. No offense, but if there was a union involved, it would resemble major league baseball.

From my perspective, and I'm neither an expect nor a principal, health care reform is one of the more complicated issues I've encountered. Which is why I have little confidence in Congress to pull a rabbit out of the hat, even though something needs to be done. Part of it is starting with an unholy mess. The other is putting it on the right track so that market forces can be enabled to push it in a more efficient direction. Even the starting fundamental question of whether health care is a right gives me a headache when I consider how people take care of themselves.

The pharmaceuticals industry is truly one of the miracles of modern medicine. It's a testament to them that most doctor visits culminate in one or more scripts. Like most other industries, this is primarily due to R&D. For pharma, the cost ratios may be exceptional, but still there are similar industries. I don't know what to say other than I agree with you, and the economics have probably been grossly distorted.

As someone networked to the PBM business (prescription benefits management), I hear tales of drug salesmen paying for docs' Christmas parties, etc. Actually these perquisites are not a lot different than other industries I've actually worked in, even government contracting where it's flagrantly illegal.
If it wasn't for free speech, I would have a problem with the plethora of drug TV commercials. These have to be expensive and many don't even describe what the drug is for. It must be especially annoying for doctors with patients. There are enough ED commercials now to start driving men to monestaries.

Oct 10 03:45 PM

[untrusting ...:]

Steve,
US healthcare is a total disaster in almost every way possible.

PBS has run a number of different programs on healthcare over the past year on various programs from Nightly Business Report, News Hour, Bill Mohr, etc. And they generally are excellent and have top notch commentators.

Of note was a recent program, can't remember exactly which show it was on, but it provided some very informative comparisons with the Netherlands recent move into universal health coverage. Some interesting points (if I remember them all correctly) were:

1) Basic health insurance is mandatory and everyone is covered. There are plan levels: basic, intermediate, gold, etc.
2) The program is 100% run by private insurance companies, not the government.
3) No denial of coverage for anyone, regardless of existing conditions.
4) Cost is about 7% of GDP.
5) Average cost to individual was mentioned as about $160/month (most Americans would literally kill for this)
6) Plans above basic cost more but they cover things like dental, cosmetic surgery, etc.
7) They have instituted may smart and innovative things to control costs and efficencies such as: (a) insurance companies provide and directly pay for much of admin staff functions for docs, clinics, hospitals, etc because it saves them money and frees up health professionals to focus on health not business, (b) insurance companies have set up many small neighborhood clinics and significantly reduced expensive hospital visits, (c) many home health procedures and visits are available and are simply cheaper, etc.
8) Apparently the Netherlands just switched to this overall system in about 2006 and they are making great strides with it and the population is very pleased with the changes.

Many other very interesting and informative comparisons as well, but just can't remember them all. Seemed like a great concept and so much more efficient and benefical to both consumers and health professionals that anything even remotely available in the US. Interestingly they interviewed a husband and wife (husband was dual Dutch/US citizen) who happen to have an autistic child. This couple recently left the US because of high health costs for their child and re-immigrated back to Holland where they can afford the health program. They could see looming US bankruptcy in their future in the US even though they had managed to stay affloat up to that point in time and would not have left except for the healthcare.

In short, US healthcare is just another example of an increasingly dysfunctional society dominated by the greed, self-interest, and concentration of power in the hands of a relatively tiny minority including our politicans, lobbyists, and oligarichal corporate america. One hates, to say it, but perhaps the only other explanation is just that Americans just aren't the sharpest tool in the box in comparison to many other countries in the developed world now. If every other country in the developed world has managed to develop decent solutions to national healthcare, then why can't the Americans?

On Oct 10 02:11 AM Steven Hansen wrote:

> John,
> if you or a family member are sick - and especially if you have insurance
> - you don't give a damn about the costs. nothing wrong with this.
>
>
> America is an insurance based system down through primary health
> care. the insurance companies are carrying the big sticks - both
> to the doctors and the patients.
>
> sorry, but i see no workable solution as long as we choose to stay
> with this system. the insurance company ends up being the mediator,
> and will always be conflicted by the profit motive.
>
> expansion of this same system into law is crazy.
>
> we need to create a public primary care system for those who cannot
> afford insured health care. this public system would be bare bones
> - and not an alternative to insured health care.
>
> it is just a lifeline to those who cannot afford insurance.
>
> in the meantime, we can experiment state by state on overall solutions
> to drive the cost of health care down to levels seen in most other
> industrialized countries.
>
> we are missing that the overall costs are out of control - and you
> cannot expand a system before this is resolved.

Oct 10 05:38 PM

[untrusting ...:]

ncalmd,
An interesting way to look at the healthcare debate. However, the basic issue really is the US healthcare system is way too expensive and ineffective in comparison to any other healthcare system in the developed world. The US healthcare system runs about 17% of GDP, has worse outcomes/health results, and leaves 20+% of the entire population with no healthcare. How could it be any worse? When you compare that to Sweden, Holland, Germany, Canada, Taiwan, Hong Kong, or any other country there is simply no comparison.

See for example our comments on the healthcare system in the Netherlands in another post here. It is just a matter of time until the disaster we call a US healthcare system takes the US down with it. After all, if every other country in the developed world can deal with it, then why can't the US? How long can a country like the US compete with everyone else in the world with an effective healthcare cost disadvantage of at least 2-10x the cost everyone else pays?


On Oct 09 07:47 PM ncalmd wrote:

> As I read through the comments I do think just about everyone is
> on the same "page", although everyone is coming at this issue from
> different perspectives. Perhaps, the following can redirect the discussion
> of health insurance effects on medical costs.
>
> Lets say that your employer, the state or federal government provides
> you a insurance policy that pays all or for most of the costs of
> preventive maintenance, brake, tire replacement and any necessary
> repairs on your car. Additionally if your take your car to a mechanic
> or dealer and they fail to identify a problem fails to identify a
> problem that later might contribute in some part to an accident,
> they can be held liable. Clearly in this scenario, the consumer will
> want the brakes and tires replaced far more often, and have less
> incentive to keep tires inflated etc. The mechanic on the other hand
> is going to spend a great deal more time looking over the car, doing
> more diagnostics and even more time documenting what they looked
> at. If it comes to replacement parts for their car, do you think
> the consumer will want rebuilt, or "original" parts, and would the
> consumer actually be able to make an informed cost benefit analysis?
>
>
> What I can guarantee, is that costs of car maintenance and repairs
> would rise dramatically under this scenario, and likely deliver very
> little in terms of decreased accidents.
>
> Please don't mistake this example as an attempt to trivialize the
> discussion, rather it is meant as a way to step back and look at
> how insurance, liability, and the individual consumer's predispositions
> interact to create the problem we now face.

Oct 10 06:05 PM

[optionsgirl:]

He didn't say he finds it more palatable. He just said it costs less to treat a stroke victim than prevent a stroke and take medications and have check ups for decades. Let's not twist the good doctor's words by impugning nefarious intentions to his explanation. He is relating the facts to us from his perspective as a medical professional. No one stops another from unlimited medical care. You just can't get any insurance company to pay for all of it. Our premiums simply don't cover the costs. That's reality. You can get anything you want if you can pay for it.


On Oct 09 10:43 AM YoYoMama wrote:

> As a daughter of a mother who had a debilitating stroke which has
> left her partially disabled, I find this comment chilling. That
> a doctor would find more palatable on a cost basis for a patient
> to have a stroke than to take the medication to prevent the stroke
> is very disturbing.
>
> Preventative care, at the end of the day, is not about nickles and
> dimes. It should always be about maintaining health. Period.<br/>
>
> In fact, if we promoted HEALTH - instead of health care - this would
> solve many of our health care problems, would it not? Wouldn't we
> have LESS worries about the cost of health care if 60% of our population
> were not overweight or obese? If we had eliminated smoking? Drug
> use? How about the costs of promiscuity - VD, AIDS, unwanted pregnancy?
> The list of unhealthy or risky behaviors Americans engage in, the
> results of which are paid for on SOMEONE ELSE's dime through their
> insurance policy, is endless.
>
> No wonder our system is out of control.
>
> If the American populace were more educated, motivated and proactive
> regarding their health, the result will be we will need less health
> care. But in our current system, Americans have no skin in the game
> to create a healthier society. Why eat a healthy diet, when Americans
> can eat like pigs and just take pills to combat the negative effects
> - and IT'S PAID FOR BY INSURANCE.
>
> So again, I question the motives of doctors who dismiss outright
> preventative care in reducing costs. As long as America remains FAT,
> smoking, stressed out and irresponsible, doctors will stay in business.

Oct 11 02:05 AM

[ncalmd:]

Untrusting:

Although you and I might have widely different ideas about why health care exenditures in the US are 40-50% higher in terms of purchasing power parity when compared to similarly developed countries, we are both in agreement that US system is dysfunctional, an unsustainable economic drain, and will soon come crashing down under its own weight.

My perspective is different, as I practice primary care internal medicine and 90% of my patients have significant chronic medical problems. It is the small percentage of patients like the one's I care for who account for perhaps 70% if not more of the medical expdenditures in this country. 5% of the people in this country account for 50% of the medical expenditures. The healthiest 50% of the people in this country account for 3% of medical expenditures. I don't ever remember seeing how the expenditures break down for the other 47%, of the people who account for the
other 45% of expenses, but my guess is the unhealthiest 10% likely account for 80% if not higher.

My point in all this is that I am one of those doctors whose patients generate lions share of medicare expenditures and I have limited ability to control those costs within the current legal and regulatory environment. The way I would make the most money is if I never ordered a test/consultation or admitted anyone to the hospital. I make no money from lab/xrays/or consultations with other physicians, and I could see four or more patients in my office in the time I spend per every patient hospitalized. If I want order lab work on the order, I review the result when it comes in, and then we end up contacting the patient, who a good portion of the time has additional questions since they have multiple medical problems. There is no compensation for this. If I want to put a patient on a medication, I will be called for refills, frequently force to switch medications because of a change in formularies/drug plan.

The point is, I am subject to the perfect set of disincentives for ordering testing or medications, yet I will generate far greater costs in these areas than my colleagues in other developed countries.
I do so because medicine is far being a precise science and I rarely am entirely certain what's gone in a chronically ill patient, and our legal system determines the standard of care. In a nationalized system, I still won't be certain what's going, but given practice standards enforced by physicians/govenment, rather than the legal system, I will waste for less time and money pursuing issues of low statistical likelihood.

In case its not obvious, I'm just one of the majority of physicians in the country who support the systems comparable to the Dutch, German, Canadian, etc. That's very different than supporting whatever it is that our politicians will be bestowing upon us in a few months.

Oct 11 03:03 AM

[ncalmd:]

Sorry, I should have reread and corrected the errors before submitting.

Oct 11 03:17 AM

[ncalmd:]

I'll work on being more efficient on my comments, but I should have included a few general items about our system which I believe are generally lost.

Anyone who shows up at a hospital sick enough to require admission, will be admitted, and receive the same intensity of care whether they are insured or not. Excluding isolated events like accidents, pregnancy, etc. the majority of hospitalizations are for people with chronic medical problems. If they are not insured when they arrive, they soon will be as they will end up receiving coverage from medicaid after they exhaust their resources. If you are middle class or below, it doesn't take very long to exhaust your resources and force you to quit working if you make less than about 60,000 per year, because you can't then purchase insurance for anywhere near what you can afford. Not only that, once you develop a chronic illness, you need recurring care, and more often that not, increasingly complex care and you will end up on Medicaid unless you can land a job with a large employer. Thus being uninsured and chronically ill is self rectifying, although in a somewhat perverse fashion. Those remaining uninsured can mange the average $500 or so per year of medical expenses that perhaps 80 plus per cent of the population experiences. Even in a far more rational market like auto repairs, I suspect this same group will end spending about as much on maintenance and repair on their cars.

Where I am heading although perhaps somewhat circularly, is that a rational "insurance" system penalizes those that submit repeated claims. For example, auto and property. You either fix the problem causing the repeated claim submission, or very soon you won't be able to afford insurance unless you can find a subsidized risk pool. What is particularly interesting about the Dutch system, is that they've somewhat resolved the problem of recurring claims by the their chronically ill. Every one is required to buy a policy from one what I believe is less than 20 health plans. They can choose to buy 3 levels of policies, but the rates for these policies are based on caring for people who are basically healhy. An employment tax of 7.2% up to around $3800 per year, is then used to subsidize the private insurance plans for thier enrollees with 30 different chronic medical conditons that account for the majority of medical expenditures. As a result, a profitable insurance is one that best manages those with chronic medical problems. Combine that with a legal environment that doesn't lead to defensive medicine and you have a system that spends around 9% of GDP. Attempting to simply apply patches and tweaks to a system as illogical as ours is doomed to failure.

Oct 11 06:03 AM