While I am very much against the Patient Protection and Affordable Care Act, or Obamacare as it has become know, I still give Mr. Obama credit, as I did with the Clintons, for at least trying to do something about the barriers that impede access to health care in the US.
While I have heard different opinions on plans in other nations (I worked with a French national for several months who could not say anything good about the plan in gay Paris, but had a recent exchange of comments on the Tossing It Out blog with a lady from Canada who loves her plan), I am against a Federal plan simply because that is not one of the powers delegated to the Federal government by the Constitution.
I also think that the debate is focused on giving Americans insurance, and insurance clouds the issue.
Insurance is a transfer of risk.
We drive cars, we acknowledge we may be liable if we cause an accident, so we buy insurance to indemnify ourselves from that liability.
We buy iPads, we acknowledge that we may drop them, so we buy insurance to cover that loss (I don't actually-those point of sale plans are incredibly profitable for insurers-unless you have a history of breaking stuff, don't let them scare you into it).
We need health care, we acknowledge that we may be so sick that the cost will be catastrophic, so we buy insurance to cover those costs.
The Obama solution, and the Clinton solution before that was predicated on two assumptions that I disagree with.
(1) Everyone is entitled to health insurance
(2) Health insurance is an employer's responsibility
I would posit that health care is an individual's responsibility, and while I would disagree that everyone is entitled to health care, I think that should be the discussion.
Because the sooner we get past the insurance discussion, the sooner we can talk about the true problem with health care in America.
It costs too much.
Our health care system is famous for its excessive costs, with drugs costing
hundreds of thousands of dollars and costly heroic care efforts at the end of life.
I have been one of many who put these extraordinary services
forth as an explanation for our $2.7 trillion annual health care bill, but it
turns out that the high price tag of ordinary services may be the bigger
driver.
I read in a series of articles on medical costs about a recent colonoscopy at a surgical center on Long Island,
where a gastroenterologist assisted by an anesthesiologist and a nurse
performed the routine cancer screening procedure in less than an hour, and
billed $6,385.
That is fairly typical: in Keene, N.H.,a colonoscopy was
billed at $7,563.56, a Chappaqua, N.Y. screening generated $9,142.84 in bills,
and in Durham, N.C., the charges came to $19,438, which included a polyp
removal. While insurers negotiated down the price, the final tab for each test
was more than $3,500.
In many other developed countries, a basic colonoscopy costs
just a few hundred dollars and certainly well under $1,000. That chasm in price
helps explain why the United States is the world leader in medical
spending, even though numerous studies have concluded that Americans do not get
better care.
Colonoscopies offer an interesting study, as they have
become the most expensive screening test that healthy Americans routinely
undergo.
Data from the Centers for Disease Control and Prevention suggesting
that more than 10 million people get them each year, adding up to more than $10
billion in annual costs.
Largely an office procedure when widespread screening was
first recommended, colonoscopies have moved into surgery centers.
Outpatient surgery facilities were
created as a step down from costly hospital care. I worked for an insurance company that owns a large group medical practice, seeing more than 150,000 patients annually in more than 20 locations in a major metropolitan area.
In the 1980's, we added these outpatient facilities to keep our patients out of costlier inpatient settings (we were also the insurer at risk on most of our patients).
A funny thing happened. In the 1990's, with a lot of capacity in our outpatient surgery facilities, we realized we could use them to generate revenue.
And all across the healthcare industry, outpatient surgery centers became a lucrative
step up from doctors’ examining rooms. Colonoscopies, for example, are now billed like a quasi
operation.
The high price paid for colonoscopies results not from
top-notch patient care, according to interviews with health care experts and
economists, but from business plans seeking to maximize revenue; haggling
between hospitals and insurers that have no relation to the actual costs of
performing the procedure; and lobbying, marketing and turf battles among
specialists that increase patient fees.
While several cheaper and less invasive tests to screen for
colon cancer are recommended as equally effective by the federal government’s
expert panel on preventive care, and are
commonly used in other countries, colonoscopy has become the go-to procedure in
the United States.
“We’ve defaulted to
by far the most expensive option, without much if any data to support it,” said
Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for
Health Policy and Clinical Practice.
If the American health care system were a true market, the
increased volume of colonoscopies — numbers rose 50 percent from 2003 to 2009
for those with commercial insurance — might have brought down the costs because
of economies of scale and more competition.
Instead, it became a
new business opportunity
When popularized in the 1980s, outpatient surgical centers
were hailed as a cost-saving innovation because they cut down on expensive
hospital stays for minor operations like knee arthroscopy. But the cost savings
have been offset as procedures once done in a doctor's office have filled up
the centers, and bills have multiplied.
Hospitals, drug companies, device makers, physicians and
other providers can benefit by charging inflated prices, favoring the most
costly treatment options and curbing competition that could give patients more,
and cheaper, choices.
The United States spends about 18 percent of its gross
domestic product on health care, nearly twice as much as most other developed
countries. The Congressional Budget Office has said that if medical costs
continue to grow unabated, “total spending on health care would eventually
account for all of the country’s economic output.” The CBO identified federal
spending on government health programs as a primary cause of long-term budget
deficits.
While the rise in health care spending in the United States
has slowed in the past four years — to about 4 percent annually from about 8
percent — it is still expected to rise faster than the gross domestic product.
Aging baby boomers and tens of millions of patients newly insured under the
Affordable Care Act are likely to add to the burden.
The amounts that employees and employer collectively pay in
premiums would be more than sufficient to cover a family’s medical needs in
most other countries. Many Americans have habits or traits that arguably could
put the nation at the low end of the medical cost spectrum. Patients in the
United States make fewer doctors’ visits and have fewer hospital stays than
citizens of many other developed countries. The American population is younger
and has fewer smokers than those in most other developed countries. Pushing
costs in the other direction, though, is that the United States has relatively
high rates of obesity and limited access to routine care for the poor.
A major factor behind the high costs is that the United
States, unique among industrialized nations, does not generally regulate or
intervene in medical pricing, aside from setting payment rates for Medicare and
Medicaid, the government programs for older people and the poor. Many other
countries deliver health care on a fee-for-service basis but they set rates as if health care were a
public utility or negotiate fees with providers and insurers nationwide, for
example.
Consumers (the patients) do not see prices until after a
service is provided. There is little available data to help consumers shop for price, and since patients with insurance (normally) pay a
tiny fraction of the bill, there is little incentive for the consumer to try to lower costs.
Even doctors often do not know the costs of the tests and
procedures they prescribe. When Dr. Michael Collins, an internist in East
Hartford, Conn., called the hospital that he is affiliated with to price lab
tests and a colonoscopy, he could not get an answer. “It’s impossible for me to
think about cost,” he said. “If you go to the supermarket and there are no
prices, how can you make intelligent decisions?”
Instead, payments are often determined in countless
negotiations between a doctor, hospital or pharmacy, and an insurer, with the
result often depending on their relative negotiating power. Insurers have
limited incentive to bargain forcefully, since they can raise premiums to cover
costs.
As a result, Americans pay more for almost every interaction
with the health care system.
Our utility companies have to get their rates approved.
Maybe instead of focusing on how give everyone insurance, a better strategy might be to look at actually controlling costs.
