Curing The Crisis

Options For America's Health Care

Michael D Reagan

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429722554
• Edition: 1
• Topic: Médecine
• Subtopic: Politique de santé

With private health insurance costs averaging over $300 per month, per person-and with 36 million Americans lacking coverage of any sort-it is easy to understand why health care has captured the public imagination as the domestic policy issue of the 1990s. Americans spend well over $800 billion a year on health care, yet we are neglecting ba

Part One
A Snapshot of Health Care Delivery Today

1
Perspectives and Perceptions

How is the American health care system doing? The answer depends on where we put the stethoscope and who is doing the diagnosis.

Looking at the results of distributing health services largely on a price basis (i.e., if you have the dollars, you can get the service), international health economist Uwe Reinhardt is highly critical. "Uniquely in the industrialized world," he writes, "American health care exhibits opulent splendor and shocking deprivation side by side."¹

With a different lens, Dr. Carl Weber, a surgeon in private practice, points out with pride that the United States cut the death rates for cardiovascular disease 10 percent and the rate for cerebrovascular disease 19 percent from 1980 to 1985; England's improvement was 3 and 5 percent, respectively. He points also to the queuing (waiting lists) for operations in England—patients wait 18 months on average for a hip replacement—and his New York Times (May 30, 1990) commentary is titled "In Health Care, U.S. Is Best."

"Where we sit is where we stand" is a relevant aphorism. Our perceptions derive from the pictures already in our heads as well as from objective facts, and the health care system is so large and so complex that there are many, many perspectives. The result is a bewildering and often paradoxical range of opinions. Depending on what you happen to read, you may gain very different pictures of how well our health care needs are being served. And the reader's sense of what needs to be done will also depend on where she or he sits: If a person has top-drawer insurance coverage paid for by an employer, the system is going to appear a lot healthier than it appears to someone working for a small firm that does not provide health benefits or to someone who has a low income but one not quite low enough to qualify for Medicaid (the jointly financed federal-state health program for some of the poor).

A seemingly endless list can be made of interested parties in health care and health care policy: doctors, patients, nurses, hospital administrators, prosthesis manufacturers, insurance companies, physical therapists, utilization reviewers, public health officers, medical school deans, large and small employers, state governments, managed-care consulting firms, the agency that administers Medicare and Medicaid, the National Institutes of Health, lobbyists for the Alzheimer's Association, pharmaceutical manufacturers—and literally hundreds of health-related organizations ranging from the American Academy of Podiatric Sports Medicine and the American Medical Association through the Group Health Association of America and the National Hemophilia Foundation to the U.S. Department of Health and Human Services. All of these groups evaluate differently the strengths and weaknesses of our medical capabilities and our ways of distributing services to patients.

Here, to illustrate, are the responses you might get if you were to ask some participants in the essential, exciting, and expensive adventure of U.S. health care how well they think we are doing.

• A corporate leader or employee-benefits manager might tell you:

Our employees have a good thing going in their health benefits. Too good, in fact. Because the company has been paying all or most of the bills, workers haven't had to think about costs, so they've overused doctors and hospitals.

But the costs of health care have a decidedly unhealthy effect on our balance sheet. Our sales may go up 8 percent this year, but our employee health insurance premium will probably go up 15-20 percent. In 1965, corporate health care spending consumed 4-8 cents per dollar of profit; by 1990, it was 25-50 percent. And business's share of the health care spending burden has risen from 17 percent in 1965 to 30 percent in 1989.

Our workers are losing out, too—more than they know. A report from the Employee Benefit Research Institute shows that direct wage and salary compensation by corporations, per employee, rose only 1 percent over the 1970-1989 period (measured in constant 1989 dollars), but health benefits went up 163 percent.

My company suffers because our overseas competitors don't shoulder the same burden. We've got to cut costs, or accept nationalized health care.

• The U.S. Congress, through its collective actions, is saying:

Medicare is a fine service for our elderly citizens. But for too long we let the hospitals and the doctors dictate the terms of their participation in this taxpayer-funded program, so charges rose too high. The taxpayers' Medicare bill rose from $5.1 billion in 1968 to $110 billion in 1990. We've already taken steps to slow down hospital costs; now we're beginning to impose new constraints on physician charges, too.

The medical care is great, but the cost is too high. The most effective remedy we have found is to squeeze the incomes of the providers (the hospitals, doctors, and other health professionals) supplying the services. We think there is enough slack in the system so that we can do this without hurting either their willingness to meet the health needs of the elderly, or the quality of care provided.

• A medical researcher or university health center specialist might say:

We're doing fine. Look at the practical results of research since the 1950s: amniocentesis, polio vaccines, coronary bypass surgery, specialized intensive care units, laser treatments, organ transplants, hip and knee replacements, the development of noninvasive imaging machines, and an ever-proliferating catalog of prescription medications. We even have a technique—laparoscopic cholecystectomy—that uses a television camera inside the body to guide a surgeon in removing the gallbladder through a tiny incision. The patient is home in a day rather than a week and is able to resume normal activities in a week's time rather than the six weeks customary after traditional surgery that cuts into abdominal wall muscles.

Medicine has already been revolutionized by recent research, but that's only the beginning. Look at what's coming along: a temporary artificial lung that will be simpler, less costly, and safer than existing mechanical ventilators; growth hormone supplements that actually slow the effects of aging; and—the most exciting frontier—disease treatment through gene modification. Just increase the National Institutes of Health budget (and its grants to university medical researchers), and we'll have more and better miracles to report in future years. One now in development, for example, is electrotransport of medications, in which genetically engineered drugs may be propelled through the skin by a small electrical current.

• Some practitioners of the "dismal science" (economics) look at the financial incentives pattern of providing health care and say:

We're probably spending too much on health care relative to other needs that the same funds could meet. In the third-party payment system the doctor, the first party, treats the patient, the second party, and the insurance company or employer or government program, the third party, pays for the transaction. In the fee-for-service billing system, a fee is charged for each separate service rendered. By combining these systems, we encourage over-utilization of medical care. A system that sets payment limits in advance of treatment—called prospective payment, or PPS—makes providers compete and makes patients pay enough of the charges to think twice before asking for unnecessary services. That's the way to handle this resource allocation problem in a free market economy.

• As usual, however, economists are split into rival camps, and some of those most knowledgeable about health care matters argue this way:

The Canadian and British health systems—though quite different from one another in crucial ways—both largely avoid imposing cost-sharing charges on patients yet have lower costs per capita and as a share of gross national product than we have in the United States.

As for competition, we were obsessed with it during the 1980s, but it has not noticeably reduced the rate of cost increase. What it clearly has done, however, is to cause disruption and skewing of services. Now, in the 1990s, competition is propelling an effort by insurers to avoid clients who have needed medical care in the past or who possess "indicators" of potentially heavy use in the future.

• An advocate for the health care needs of the uninsured might respond to the more hopeful evaluations in this manner:

Despite spending almost three-quarters of a trillion dollars a year on health care, 31-37 million Americans currently lack health insurance. (Estimates vary widely, with 35.7 million in 1990 probably the closest to a consensus figure—at least until the 1991 recession added perhaps a million more who lost their insurance when they lost their jobs.) We think of the uninsured as the poor and unemployed, assuming that the employed all enjoy middle-class employee-benefit health insurance. But that's a myth. Eighty-four percent of the uninsured live in families where the head of the family is employed. Health coverage in the United States has actually shrunk in the proportion of the population covered in recent years, falling from about 88 percent in 1978 to 84 percent in 1989—and each percentage point is 2.5 million people. Medical science may be doing fine, but the system of delivering medical care to the people isn't working.

• And a state Medicaid administrator might add:

Some may suppose that the unemployed poor have an advantage here—that Medicaid takes care of them. Everyone speaks of this program as if it covered all poor persons—but it doesn't even come close. First, the patient can't just be poor. She—less often he—has to fit a specific category, such as being a single parent with a dependent child and eligible for welfare. And most state legislatures have set the income limit for welfare so low that a majority of those who are poor by federal poverty standards are, incredibly, too "well off" by state eligibility guidelines to be eligible for help.

The complex reality behind this range of perceptions is even reflected in pronouncements from the citadel of organized medicine, the American Medical Association (AMA). The AMA's Executive Director, Dr. James S. Todd, writes of contradictory elements in U.S. health care. He asserts that our system "at its best is universally acknowledged to be the best in the world," yet concedes that "enormous problems .. . exist." After enthusing about "the can-do spirit that has fostered what is best in American medicine—the breakthrough research, technological advances, and widespread availability of life-enhancing procedures," he turns around and calls for a "greater sense of restraint" in availing ourselves of these marvels, because "we can no longer do everything for everybody just because it is possible."²

• The perspective of an individual physician, one whose practice has spanned the pre- and post-Medicare/Medicaid eras, might run like this:

Once I could be a true professional—a person whose medical judgment went unchallenged by patient or payer. As a solo practitioner, I took patient histories myself, performed simple tests, made diagnoses, prescribed medicines, and decided when and for how long my patient might need hospitalization. My fees were my own business, higher for my well-off patients so that I could afford to treat the indigent according to my conscience. There was little second-guessing—now called "utilization review"—and government generally did not intrude between me and my patients.

Now an increasing proportion of my younger colleagues practice in health maintenance organizations, or HMOs, and other group arrangements. They have better hours and better equipment—possible because the expense is shared within the group—and the range of medicines, devices, and procedures they can draw upon is a wondrous thing, enabling them to "recondition" human bodies in ways not dreamed of when I began practice. But they pay a price.

They have lost some of their professional autonomy, subject as they are to a variety of new constraints: the protocols and even productivity standards set by their employers if they are part of an HMO staff; the urgings of hospital administrators, or of insurance clearance personnel, to discharge patients at the earliest possible moment; and the increasing fee constraints of Medicare and other third-party payers, making it harder to continue the amount of charity care they would like to do for the uninsured. Physicians are also encouraged by the malpractice incentive to overdo things in order to avoid lawsuits based on the premise that every single thing possible should be done. Physicians may also overdo in order to avoid questioning of their judgment by the much less submissive patients of today.

Medicine is increasingly practiced in bureaucratic organizations operating in a context that seems to treat the financial health of the institution as equal in status with good patient care. One result of the challenges to professional autonomy: In a 1990 AMA survey, 48 percent of doctors over age 35 said they would not recommend medicine as a career choice to students.

• The chief administrator of a hospital, whether or not he or she is a physician, looks at the situation through a different lens:

The doctors want me to provide them with their "workshop," including the latest equipment and the most experienced nursing staff. Then they want me to just leave them alone to practice as they see fit.

We have a lot of Medicare patients, however, and HCFA (Health Care Financing Administration—the agency within the U.S. Department of Health and Human Services that administers Medicare and Medicaid) no longer reimburses us for whatever costs our attending physicians may incur on our behalf by their orders for tests or for a longer stay for their patients. Instead, Medicare tells us in advance what we will be paid for inpatient treatment of a particular diagnosis—called a DRG, for Diagnostic Related Group—regardless of our costs and bases its allowed charge largely on the number of hospital days usual for that treatment. So we have to "beg and plead and cajole and put a lot of pressure" (in the words of a former hospital administrator)³ on the doctors to release patients early. And when the patient is sent home before feeling as fully recovered as might have been the case in the old days, we get accused of discharging him "quicker and sicker."

The community at large insists that we keep open our 7-day, 24-hour emergency room—but the community does not provide enough charitable contribution support to cover the costs incurred by the high proportion of uninsured ER patients—the homeless, the kids from motorcycle accidents, the unemployed, and even the employed who couldn't get insurance or who passed up the opportunity, saying "I'll never get sick."

Until recently, we could cross-subsidize our "uncompensated," or charity, care with reimbursements from employer-paid insurance plans that paid our full costs, including a share of indigent patient care. Now the employers are squeezing their insurers and refusing to share the community burden. In fact, they now want us to be a "preferred provider," which means to give them a discount!

The doctors intensely resent our overseeing their modes of practice and our insistence that cost effectiveness has to be a component of quality care today. But the fact is that they'll lose their workshop and the community its essential facility if we in the front office don't keep the bottom line in black ink.

No wonder the turnover rate among hospital chief executives rose sharply in the past decade and may be twice that of chief executive officers (CEOs) generally.

• Quite a different emphasis from that of the providers of acute care emerges in the views of a public health officer, one whose focus is on organized community efforts to prevent disease and to promote good health:

On the plus side, we can point out that overall U.S. life expectancy rose from 47 years in 1900 to 75.2 years in 1990. And infant mortality was reduced by nearly 50 percent between 1960 and 1980. On the minus side, it is appalling that the 1989 figure of 9.7 deaths per 1,000 live births put the U.S. ranking that year behind that for Hong Kong and Singapore. Lack of prenatal care as the major reason becomes understandable when one learns that only.3 percent of our national health expenditures are for health promotion and disease prevention.

From a public health perspective, I must constantly point out to local, state, and federal budget makers that the major health improvements of the past century reflect declining deaths from infectious diseases; we have eradicated smallpox and nearly eliminated polio. And these dramatic changes are more the result of improved sanitation, clean water, better diets, and mass immunization and innoculation programs than of acute treatment of individual illnesses.

I point out to them that three-tenths of 1 percent of the national budget devoted to prevention and health promotion is hardly going to produce equivalent progress in the next generation when the leading causes of death are now related to life-style: preventable accidents, cancer from smoking, fatty-diet-induc...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Dedication
• Contents
• PART ONE A Snapshot of Health Care Delivery Today?
• PART TWO Understanding the Problems
• PART THREE What Are the Options?
• PART FOUR Components of an Achievable Better System
• Notes
• List of Acronyms and Glossary
• Suggested Readings
• About the Book and Author
• Index