The Amazing Maze of US Health Care

I have a hard time getting my arms around the public plan option debate.  As other have said far better than me, it is not central to health reform, although it clearly central in the debate around health care reform.  Instead it is a proxy for a lot of other issues.

UHCAN Rally June 25

 Just about everyone in the health care debate/discussions has their lynchpin issue.  It’s what I call the “just fix this” syndrome. They range from, “If everyone would just exercise more,” to “if the government would just pay for everything.”  In between is a whole range of touchstone issues, including numerous proposals for delivery system reform, payment reform, tax reform, the list goes on. 

My three key issues

 First is  “universal affordable coverage.”  Everyone tosses those words around, but few people grasp their own words.  How do you make sure that the guy who lost his job and his health care coverage (in today’s world) yesterday, can “afford” health care tomorrow? 

 How does a tax rebate, for example, help someone who can’t make his next mortgage payment.  He or she lived paycheck to paycheck before the job loss.  

 Or the guy my daughter met recently selling picnic tables he made who also had two part time jobs.  He had no health insurance.  

 We do have a model in this country that addresses that – the Taft-Hartley multi-employer health funds.  Employers pay a fixed amount per hour worked and the fund pays for coverage for the families and during periods of unemployment.

 We also have many models of companies who charge employees for health care coverage percentage of income, some on a graduated scale.  

 These examples demonstrate that payments based on income rather than “the cost of insurance” is not Un-American.

 Payment Reform

The second key issue is payment reform.  For me that means that physicians and hospitals get paid the same regardless of who they treat.  No insurance company should gain market power by leveraging reimbursement.  The current system that pays providers less for treating poor people compounds already existing health care disparities.  The only thing differentiating provider payment should be provider performance.  

The third key issue is to deprive providers, primarily doctors, of any incentive to perform unnecessary services.  As long as there is fee for service compensation, cutting service fee rates only provides an incentive to perform more unnecessary procedures.  That could perversely increase total costs.  There needs to be payment reform that puts doctors at risk for managing care within a budget.

 It can be capitation, or episode of care reimbursement, or some other form of global reimbursement.  

Many years ago, I was at a seminar at Dartmouth.  A panel of three medical directors addressed this new phenomenon called “managed care”.  They dared to suggest that we were entering a “new paradigm”.  This new paradigm would demand that physicians not treat each patient as if unlimited resources were available, but instead that resources for this patient might deprive the next patient of needed care.  We never got there.

 The current paradigm is “Stand at the gate until you can pay the freight.”

 I recent article in the New Yorker by Dr. Gawande that has attracted a lot of attention describes the perverse incentives of fee for service medicine without calling it out.

 The debate around the public plan option addresses very few of these key issues.  Instead it is a debate of form over content.  It is a debate that is frustrating only because it is long overdue

 The debate around the public plan option is more about “public” and less around “plan.”  It is clear that the public wants public.  Poll after poll supports that idea.  They don’t trust the private insurance companies.  And private doesn’t want “public”.  Campaign coffers and lobbying contracts offer ample evidence of that.

 The argument is ultimately about our values as a society and about the public trust.

Our plan just completed its annual open enrollment.  Members are permitted to change medical or dental plans; to add or remove dependents, and change life insurance options.

Open enrollments highlights certain flaws in our current system.

The logic of an open enrollment is compelling.  The object of any insurance is to spread the cost of any risk over time and over as many people as possible.  Open enrollment helps to spread the risk over time.

The risk of health care is different than other risks that we insure against.

We buy life insurance to insure against death; auto insurance to protect against an automobile accident; homeowners insurance to shield against damage to our home.

Those hazards (the technical term) generally occur without warning.  No one is likely to approach their insurance agent to buy auto insurance because they anticipate an auto accident in the near future. 

Illness, on the other hand, can offer some warning.  Someone may experience symptoms and has not seen a doctor.  The doctor may have recommended expensive surgery.  Or maybe it’s just a young couple planning to start a family.

Open enrollment is the only opportunity that insurers have to spread risk over time.  By insisting that people enroll only during a specific time period, the insurer reduces the risk that someone is only enrolling because they know they have an approaching medical expense.

It may seem unfair to the person with an immediate and pressing need.  But to the others in the group who ultimately foot the bill, it makes perfect sense.  It is one reason why a mandate – an employer mandate or an individual mandate – makes sense.

Medicare has its open enrollment rules.  Their annual open enrollment for Medicare Part B is from January through March each year and is not effective until July 1 of that year.

Open enrollment is expensive

Participants have only one opportunity to make changes each year; therefore, communication is very important.  We produce an attractive communication piece to mail to our 10,000 plus participants.  We pay lawyers and consultants to review it, a graphic designer to lay it out, and the printer to print and mail it.

Over time we have used specialized mailings to targeted audiences that may need special attention.

The open enrollment period is a month long.  The carriers have opportunities for member outreach.  Other plans provide even more opportunities for carrier outreach.  The carriers also have communications pieces tailored to the specifics of that group plan.  In addition, they usually have some kind of attention grabbing (they hope) giveaway for the members.  All of this costs money.

We do not have a web site yet for open enrollment but hope to perhaps as soon as 2010.  That too will be an investment.

Yet every year, just days after the close of open enrollment, someone will call our office to make a change.  The rules have a purpose within the logic of our current system.  As unpleasant as it is, we must tell those people to wait until next year. 

The choices are illusory

To appreciate what’s wrong with open enrollment, juxtapose it with an “ideal” – once and done enrollment.  For most of us, something similar is the reality.  People stay in one job. They do not frequently change their insurance.  

Conservatives often support the status quo with arguments about freedom of choice.  But what is the freedom of choice that open enrollment offers.  The choices have been preselected by the plan sponsor.  The choice is among restricted groups of network providers. 

Network providers are not locked into the same contract period that the participant is.  So a member who  chooses a carrier because his or her doctor is in that network, may learn shortly afterwards that the doctor intends to leave the network.  Usually they are dissatisfied with the reimbursement.  Doctors complain about rules, but they act on reimbursement.  Recently we had a doctor leave our IPA model HMO for our staff model HMO.  She announced the move a month after the close of our open enrollment.

The alternative could be health care as an entitlement, health care at birth, health care by virtue of citizenship.  This would eliminate the expense of open enrollment, the confusion of open enrollment, the misguided decisions of open enrollment.

In addition, it would provide opportunities for those who change jobs frequently, the marginally employed, seasonal employees, freelancers and the very small entrepreneurs. 

It would open doors instead of closing doors.  It would enable freedom of choice among health care providers instead of among a limited number of limited insurance networks.

It would open enrollment.

The Building Trades were well represented at the Health Care for America NOW rally on Thursday, June 25, 2009.

IBEW members at the Health Care for America NOW rally on Thursday, June 25th.

The International Brotherhood of Electrical Workers (IBEW) brightened the audience with their yellow shirts everywhere.  The Bricklayers and Allied Trades (BAT) cemented their presence with bright orange shirts.  Laborers International Union (LIUNA) carried their brown and yellow shirts well.  Plumbers & Pipefitters Local 5 from Washington DC gathered around their prominently placed banner.  I hope to hear from others that I missed.

The Building Trades have not always been in front of the charge for health care reform.  And in some ways there issues offer both insight into how health care has changed and guidance for how it could change. Read the rest of this entry »

Ten thousand people gathered in Senate park on Thursday, June 25 to call out their legislators for meaningful health care reform. The long lines at the porto-potties was evidence that the crowd far exceeded expectations.

Retired Steelworkers and single payer advocates rest outside Union Station after a long day rallying and lobbying for health care on June 25, 2009.

Members of the Bricklayers were just of few of the Building Trades represented at the Health Care for America Rally and Lobby Day on June 25th, 2009

The organizers called out their legislators and asked them to support a strong public plan option that would not be weakened by triggers or coops.

Some conservatives in Congress have supported the idea that the public plan only after certain coverage goals have not been met. This would “trigger” the public plan option. Another suggestion would create regional “coops” as an alternative to the public plan option.