Health Reform in Perspective, Chapter One

This is first chapter on my new book Health Reform in Perspective.

Prologue: Health reform affects 310 million Americans. It is too big for most of us to grasp. Yet we all have our bias. This chapter is about seeing health reform in perspective – the good, bad, and ugly.

Six Positives and Six Negatives of Health Reform Bill

In fairness, it is essential to put Health reform in perspective. This is especially true of physicians, who must abide by its provisions.

I see six positives and six negatives to the recently enacted health reform law. As with all contentious issues, it’s six of one and half-dozen of the other.

Positives

The six positives are:

1) 32 million more Americans will be insured.

2) Patients with pre-existing coverage will be covered.

3) Adult children can stay on patients’ policies until 26.

4) Arbitrary lifetime (coverage) caps will go away.

5) The Medicare Part D “donut hole” will be closed over ten years.

6) The bill provides a ten year framework for testing, changing, and even reversing its various provisions.


Negatives

The six negatives are:

1) Given past government performance and politic timidity to cut Medicare costs and to offend senior voters, its costs are likely to explode.

2) It fails to fix the Sustainable Growth Rate (SGR) formula, which calls for a 21% cut in physicians Medicare reimbursement, and more in subsequent years.

3) It fails to address the growing problem of physicians opting out of Medicare and Medicaid, which will surely take place when its provisions are implemented for cutting physician payments, rationalizing, and rationing care.

4) It fails to tackle the problem of tort reform, which, according to the OMB, costs the system $54 billion, and many times more, if one factors in the practice of defensive medicine.

5) It fails to acknowledge the growing physician shortage, not only in primary care but in specialties like general surgery, nor does it offer funding to stimulate more medical students or residency slots in primary care.

6) It fails to offer solutions or funding to address the looming physician access crisis: Who is going to care for those 32 million newly insured and for those 78 million baby boomers, who will begin enter the Medicare ranks at the rate of 13,000 a day in 2011?

Ten Checks and Balances

Here are ten thoughts on checks and balances in health reform.

One, Democrats vs. Republicans - Democrats won the first round with passage of the health bill. But nearly 60% of Americans still oppose the bill, nearly half want to see it repealed, and it is a long way between 2010 and 2020. Obama is spending $125 million in a pre-November PR blitz to sell the good parts of the bill. Democrats control the spending and sending of checks for now. But come November, if Republicans take back the House, they may begin to cut off health reform checks.

Two, the President vs. Congress –As his approval ratings drop, it has become clear the President has very short political coat tails, and endangered Democratic politicians are not rushing in to ask the President to campaign for them.

Three, centralized vs. limited government - A recent Gallup polls indicate two-thirds of Americans think government is "too liberal," and resistance to excessive government spending and too much federal debt, now $13 trillion, is palpable and growing each passing day.

Four, specialists vs. primary care physicians - Two thirds of American doctors are specialists. That is the way Americans seem to like it. Despite all the rhetoric about primary care shortages, the health law does little to correct the situation, and 98% of medical students are voting with their feet by becoming specialists. Universal coverage without universal coverage to primary care doctors may be meaningless.

Five, proceduralists vs. cognitive doctors - Americans prefer doctors who do something concrete to physicians who advice caution, watchful waiting, and conservative therapies. We remain a nation of doers. We prefer action to inaction, and specialists who do what they are trained to do.

Six, government vs. market reforms - The health bill is heavily skewed towards government reform. Market reforms, e.g, health saving accounts, be damned. This is generally presented as government benevolence vs. market greed. In short, it is better to spend other people's money rather than your own.

Seven, doctors vs. consumers - This is often characterized as the Health 2.0 or patient-centric care vs. doctor-directed care. The idea is that the Internet will empower consumers to challenge their doctors,become equal partners in the decision making, and separate the the good doctors and hospitals from the bad. Not a bad idea, but patients still trust doctors more than outside sources.

Eight, the old vs the young - Politically the Medicare crowd dislikes the bill because it cuts $585 billion from Medicare, and through the individual mandates, the young and healthy must buy coverage at the same rates as others to support the old and sick.

Nine, hospitals vs. doctors - To make the Medicare budget balance, government will have to cut hospital and doctor pay. Since hospitals and doctors often compete for the same piece of pie, this will upset the competitive equilibrium between hospitals and doctors and will force them to collaborate.

Ten, inpatient vs outpatients - Two forces are at work here: one centripetal forces driving consolidation of care into large institutions; and two, centrifugal forces, pulling consumers and patients into ambulatory settings and to home care. The two forces can be complimentary, but don't count on it. Hospital administrator and physician egos are strong, and so are incentives to control care and cash flow.

Twelve Politically Correct (and Twelve Politically Incorrect) Health Care Ideas and Beliefs

Political correctness (or incorrectness) is using (or avoiding) expressions or actions the might be perceived to marginalize or insult groups who are socially disadvantaged or discriminated against.

Political correctness is about telling people what you think they want to hear in an ideal world. Political incorrectness is about telling people what they are reluctant to believe in the real world.

ONE

• It is politically correct to believe that everyone, no matter what their class or income or health status, deserves and should receive government guaranteed health coverage.


• It is politically incorrect to say that this is difficult in America because it superimposes a cumbersome, politically unpopular reform upon a complex, fragmented system without controlling costs.


TWO

• It is politically correct to say that the U.S. health system compares unfavorably to health systems of other developed nations.


• It is politically incorrect to say that the U.S. health system is a creature of our culture that reflects America’s values.

THREE

• It is politically correct to blame high health costs and discriminatory policies of profiteering health plans that exclude those with pre-existing illnesses, children, and disadvantaged individuals and social groups.


• It is politically incorrect to point out that profits are necessary to run a health plan and satisfy stockholders, the new law with its taxes and rules will raise premiums, and government plans could not function without health plan administrative help.

FOUR

• It is politically correct to say 30% of American health care is “wasteful” and “unnecessary” because of regional variations and provider greed.


• It is politically incorrect to say regional variations largely result from poverty and cultural conditions that combine to produce high costs for treating neglected or advanced diseases.

FIVE

• It is politically correct to say that centralized government programs and regulations will save the health system money.

• It is politically incorrect to observe that never in the history of the Republic have government entitlement programs saved money.

SIX

• It is politically correct to believe health outcomes, e.g., obesity and diabetes, are due to physician inattention, failure to advise patients properly, or misguided treatments.

• It is politically incorrect to say adverse outcomes may more often stem from lack of patient compliance, bad personal habits, poor nutrition, and sedentary life styles.

SEVEN

• It is politically correct to say we can solve our health care cost problems by broadening the primary care base and coordinating care.

• It is politically incorrect to say only 2% of medical students select primary care careers, most Americans prefer to go directly to specialists, and concepts like medical homes are untested.

EIGHT

• It is politically correct to say that doctors are responsible for high care costs and if we could only herd them into cost-accountable groups costs would drop.

• It is politically incorrect other factors contribute to high costs, many doctors prefer to practice independently outside of managed groups, and dominant larger groups negotiate favorable contracts not intended to lower costs.

NINE

• It is politically correct to assert that the health system is so complex consumers lack the intelligence, information, and knowledge to select the right doctors or right hospitals.

• It is politically incorrect to say health savings accounts, now owned by 10 million Americans, cut premiums by 20% or more without producing negative outcomes.

TEN

• It is politically correct to say with omnipresent, interoperable electronic health records, we can standardize and homogenize physician, hospital, and consumer health practices and behaviors.

• It is politically incorrect to say in America, freedom of choice of doctors, open selection of hospitals, latitude to live as one wishes, and personal privacy are considered God-given constitutional rights.

ELEVEN

• It is politically correct to insist a wise and benevolent government can fine-tune, direct, and coordinate care in all economic sectors, including health care.

• It is politically incorrect to point out centralized governments more often produce economic stagnation, unemployment, long health care queues, than dynamic economies reflecting the individualistic , entrepreneurial, pragmatic, adaptable, and innovative nature of its most enterprising citizens.

TWELVE

• It is politically correct to say that within the next ten years (the time frame for implementation of Health reform) we will know and appreciate government overhaul of health care.

• It is politically incorrect to note health reform is patterned after Massachusetts’ four year old universal coverage plan, which has raised premiums to the highest level in the country, produced the longest waiting lines in the land, overcrowded ERs, caused many physicians to close practices to new patients, and doubled state budget costs.