Category Archives: General Cynicism

I attended a group meeting in favor of health reform and was struck by the lack of realistic thinking. In some ways those favoring reform are as impractical and perhaps naive as those strongly opposing. This in turn got me to think about false assumptions and expectations.

1. Rationing— (the R word) Somehow our conservative friends don’t think there is rationing of care now and that there will be with health reform. In fact health care is now explicitly rationed by cost. It’s a little like the supreme court’s concept that money=free speech (campaign contributions). If you’ve more money you have more speech, and in health care………. In neither case is it appropriate.

The challenge of health reform is to “ration” care by appropriateness and efficacy, a concept opposed by our conservative friends.

2. Have access to everything: The evil twin of rationing. Many available interventions are minimally effective and prohibitively expensive. Neither the consumer nor the health industrial complex fully appreciates either of these truths. Until they do we are doomed to have double digit increases in health expenditures as we do “everything” for everyone.

We need comparison and cost efficacy studies to guide us. Wouldn’t you know this is opposed both by drug companies and our conservative brethren.

3. Socialized Medicine–Medicine has long been “socialized”. We have around 100 million citizens receiving government sponsored health care. Our soldiers serve and retire, guess what one of their benefits is………. Our elderly priced out of the market by “private industry” have been well served by medicare. Those without insurance who are cared for for “free” at emergency rooms are indeed receiving a the most expensive and inefficient socialized medical service–paid for by someone else. Ironically or perhaps hypocritically the ER access rule is cited by our conservative friends as the answer to health care access.

4. Don’t want Government making decisions about health care (a variant of #3)— Instead we have profit driven insurance companies controlling our access and charging excessive premiums to maintain their profits. In an ideal world there would be neither. And indeed for the wealthy no such limitation exists. They simply pay whatever is necessary.

By accepting the need for third party payers we cede our “complete” control and are to some extent dependent on the good offices of the insurer–government or private. That’s life.

5. Health Savings Accounts are the answer: The question is the answer to what? If you said a means of the wealthy to shelter money for their health care I’d agree. If you think it’s an answer to the health insurance problems of the great majority you’d be mistaken. (as noted here and here)

Do you have any false health Gods?

One of the republican/conservative shibboleths is that we have the best health care system in the world. Medicynic has long noted the only thing systematic about our health care establishment is that it follows the money. We found this article with some blatant false conclusions: The World Should Catch Up With Our Health Care:

The article from Real Clear Politics notes:

• “Now it’s clear, as one example, that longevity is only partially connected to health care in the first place and that when you subtract homicides and accidents, we in America live longer than anyone, despite President Obama’s constant reiteration of the reform-encouraging and utterly deceptive thesis that we do not.”
  Except that’s not true.

The author doesn’t tell on which data his broad statement is based but an AEI document makes this case here (http://www.aei.org/docLib/9780844742403.pdf) based on the above table. If indeed this is what his comments are based upon, the data is being misused.

The OECD has looked at the data on which this conclusion was based and it states: (See p. 20-21–“OECD Economic Surveys: United States 2008”, p. 1370)

“It has been claimed (Ohsfeld and Schneider, 2006) that adjusting for the higher death rate from accident or injury in the United States over 1980-99 than the OECD average would increase US life expectancy at birth from 18th of of 29 OECD countries to the highest. In fact, what the panel regression estimated by these authors shows is that predicted life expectancy at birth based on US GDP per capita (Medicynical observation: HEALTH SURVIVAL DATA FACTORING IN GDP IS NOT PURE SURVIVAL DATA, it’s skewed by the incorporation of income) and OECD average death rates from these causes is the highest in the OECD. The adjustment for the gap in injury death rates between the United States and OECD average alone only increases life expectancy at birth marginally, from 19th on average among 29 countries over 1980-99 to 17th. Hence, the high ranking of adjusted life expectancy mainly reflects high US GDP per capita, not the effects of unusually high death rates from accident and injury.”

Medicynic: in other words the data interpretation by Real Clear Politic is anything but clear–it’s flawed and the conclusion wrong.

• “We know that our treatments of serious disease produce better outcomes than elsewhere in the world, that everyone can get treatment at least in emergency rooms, that most Americans are satisfied with their care, that insurance net profits are a relatively low 3.3 percent and that the actual number of citizens without access to insurance is closer to 10 million than the 46 million number so often heard. We also know that Medicare and Medicaid have accumulated trillions of dollars in obligations to future recipients that we have no way of paying.”

Our outcomes of serious disease after diagnosis are indeed as good as elsewhere but at twice the cost. What other consumer good do we willingly buy at twice the price for the same product? Yet that’s what those opposing reform wish on us.

Regarding emergency room care. Our reliance on this has resulted in delays in care; diseases being treated at later stages than in other health care systems; it is by far the most costly inefficient care available;and is used when most problems could have been more economically treated. Guess who pays?

Use of ER care in place of assured regular access to care delays treatment and results in people dying for problems they might otherwise avoid. The following is from Commonwealth Fund, Health Affairs, World Health Organization

HOW THE US STACKS UP ON PREVENTABLE DEATHS

1. France — 65
2. Japan — 71
3. Australia — 71
4. Spain — 74
5. Italy — 74
6. Canada — 77
7. Norway — 80
8. Netherlands — 82
9. Sweden — 82
10. Greece –84
11. Austria — 84
12. Germany — 90
13. Finland — 93
14. New Zealand — 96
15. Denmark — 101
16. UK — 103
17. Ireland –103
18. Portugal –104
19. US — 110

The U.S. ranks at the bottom of 19 industrialized nations in the number of preventable deaths by conditions such as diabetes, epilepsy, stroke, influenza, ulcers, pneumonia, infant mortality and appendicitis. The number at the right represents the number of preventable deaths per 100,000 population in each country in 2002-2003.

That “most Americans are satisfied with their health care is probably true, since most Americans fortunately are healthy and a large number of these satisfied folks receive their coverage from the government, one way or another. What is also undeniable is that most Americans without such coverage and/or with significant illness are dissatisfied.

Medicynical Note: I don’t think the world in interested in inequity and inefficiency. The facts are we pay twice as much for health; have 50,000,000 uncovered by insurance; have no better and in many areas worse outcomes than other countries; and are being asked by our conservative brethren to accept this as the best we can do. 60% of bankruptcies have a medical bill component. In this, our (non) system is number 1.

The health reform package’s basic tenet is that we spread; the risk of illness by charging everyone the same premium.

Economist James Kwak has these observations

• “If you’re a profit-maximizing insurer, what do you do? You try to cherry-pick the healthy, since the revenues will be the same as for the sick and the costs will be lower. If you can do this successfully — say, by only advertising in gyms and in Runner’s World, or maybe by offering additional benefits that only the healthy will want — then you can dump the sick on someone else.” Medicynical note: This is of course an extension of our current system.

So how will the disparity in healthy patients be balanced. In the Baucus bill it states: .

• “The Secretary would be required to pre-qualify entities capable of conducting risk-adjustment and the states would have the option to pick among those entities. The entities pre-qualified by the Secretary cannot be owned or operated by insurance carriers. The Secretary of HHS would define qualified risk-adjustment models which can be used by states. States can also choose to develop their own risk-adjustment model but it must produce similar results and not increase Federal costs. After risk-adjustment is applied, reinsurance and risk corridors (described below) would apply.”

Kwak observes that this is inadequate and the whole area vaguely covered in the bill. It would have been no problem in a single payer system.

Medicynical note: In our money driven business culture, we can expect such loopholes to be gamed by insurers. Their goal is profit, not a equitable health care system.

The CBO has done an analysis of the effect of malpractice reform on costs. In return for removing a citizen’s unfettered right to sue we get a cut in healthcare spending of .5%/year. (54 billion dollars over ten years)

The CBO noted:

• “CBO now estimates that implementing a typical package of tort reform proposals nationwide would reduce total U.S. health care spending by about 0.5 percent (about $11 billion in 2009). That figure is the sum of a direct reduction in spending of 0.2 percent from lower medical liability premiums and an additional indirect reduction of 0.3 percent from slightly less utilization of health care services. (Those estimates take into account the fact that because many states have already implemented some of the changes in the package, a significant fraction of the potential cost savings has already been realized.)”
• “Enacting a typical set of proposals would reduce federal budget deficits by roughly $54 billion over the next 10 years, according to estimates by CBO and the staff of the Joint Committee of Taxation. That figure includes savings of roughly $41 billion from Medicare, Medicaid, the Children’s Health Insurance Program, and the Federal Employees Health Benefits program, as well as an increase in tax revenues of roughly $13 billion from a reduction in private health care costs that would lead to higher taxable wages.”

It depends on how you spin this. .5% seems an insignificant decrease in the trillions of dollars spent on health care, but it does amount to 54 Billion over ten years. That’s not chump change. What was it that Everett Dirksen said………..

Medicynical Note: Will this change our culture of over-utilization. Probably not until we remove the profit motive. In locales, such as Texas (and here) where there was a tort reform measure enacted there has not been a cost savings. Over-utilization appears to be dependent more on it’s contribution to a supplier’s (provider, institution, patent holder) income than fear of malpractice.

This is from the McKinsey Global Institute: (FYI ESAW is Expected Spending According to Wealth)

They observe:

• Provision of health services is highly profitable, both patients and provider lack value consciousness
• We spend $650 Billion, yes Billion, more than we should.
• Our drug costs area 50% higher on average, 77% higher for branded drugs, 35% for biologics. Interestingly our costs for generics are 11% lower.
• Administrative costs are driven by the multi-payor system that lacks standardization and has high marketing, underwriting and claims costs.

McKinsey concludes that our (non) system provides “incentives optimized for suppliers of healthcare products and services. Supplier actions are perfectly rational in response to incentives.” Our excess spending results in no extension of life and that the “lack of objective value coupled with continued growth at current rates is likely unsustainable.”

Medicynical Note: McKinsey recommends a realignment of incentives, addressing the issues of supply, demand and intermediation (whatever that is) and withstanding the reactions of existing stakeholders.

In other works out current system is not sustainable we need reform.