Healthcare in Critical Condition

The US healthcare system is in somewhat of a Catch 22. Although it leads in healthcare innovation and technology, a great number of its own citizens are left without access to that technology. Cutting edge devices and drugs cost money to research and manufacture, and in turn the cost is passed on to consumers in order for these companies to make a profit. The more profit they make, the more research they can do, and the more innovation will continue. And the more healthcare costs will rise. The people bearing the brunt of this cost have paid the price of higher healthcare costs in the forms of higher insurance premiums, less coverage, and declining health. Add to the mix large corporations who see the opportunity for profit based on these costs, and you’ve got a real mess. President Obama has directed the legislative body of the government to create legislature that would help solve these problems, within the outline of a particular framework which he calls the 3 bedrock principles of healthcare reform. These principles are goals that include:

Reduce Costs — Rising health care costs are crushing the budgets of governments, businesses, individuals and families and they must be brought under control.
Guarantee Choice — Every American must have the freedom to choose their plan and doctor – including the choice of a public insurance option.
Ensure Quality Care for All — All Americans must have quality and affordable health care.

I personally agree that the implementation of these 3 principles would indeed result in substantial healthcare reform. Whether you are Democrat or Republican, Independent or Martian, I think that most people could get behind these basic principles. The disagreements, debates, and problems arise though in just how these principles should be implemented. I applaud President Obama for at least bringing the healthcare crisis into the public dialogue and trying to get the ball rolling on a solution. I also applaud that there are 3 Republicans and 3 Democrats who seem to be earnestly working together to implement a viable solution. Rather than simply bashing current proposals and stopping there, it is important that both sides take the opportunity to come up with a viable solution to this growing crisis through rational discourse and compromise. Although I personally agree with the basis of the principles I still take issue with some of the current proposed implementation of some of them. As complicated as this issue is, it is important to note how critics and proponents alike have attempted to reduce the pros and cons to quips and catchphrases. I would like to address these points and discuss some of the alternative proposed solutions.

Reduce Costs: The main criticism of the current proposal is that the public option would cost one trillion dollars. The congressional budget office has stated that this is the estimate for such a public plan. A trillion dollars seems like a lot of money. Its definitely more than my grandma used to put in my birthday cards each year. But thinking about it on a national level, here’s some food for thought. Whether you are for or against the following, here are some examples of trillion dollar spending by the federal government.
The war in Iraq has been conservatively estimated to cost three trillion dollars as of February 2008. The federal government has used approximately 3 trillion dollars to bail out failed financial institutions. The current national debt is currently about 11.4 trillion and counting. Niether of these former endeavors was the best use of 6 trillion dollars. What many people fail to realize is that there are currently roughly 46 million Americans who do not have medical insurance. These people still get sick, still have life threatening emergencies, still go to the hospital, and are not denied service. They can’t pay for their treatment which leaves the rest of us to pick up the tab. Estimates range from $48 billion to about $100 billion annually that taxpayers end up paying for the uninsured. Simply sustaining the status quo will amount to that amount of money spent over the next 20 years anyway by using taxpayer money to foot the bill for those uninsured who need medical care. A trillion dollars amounts to about one half of one percent of the current gross domestic product. Other countries typically spend up to 3 percent of their GDP to provide healthcare to their citizens. If healthcare could be provided for all americans for around one trillion dollars its money well spent. So, the trillion dollar price in and of itself is not a valid arguement. However, a valid argument does exist and here it is. The problem with this idea lies not with the fact that it will cost a trillion dollars, but with the fact that the spending of this trillion dollars does nothing to address the underlying problem of how to actually pay for medical insurance and healthcare. I have to agree that it is probably a pipe dream to buy in to the notion that we will be able to make this money up through trimming and cutting here and there. Though I don’t believe that this proposal would necessarily lead to an increased level of deficit, it would at best just continue the current trajectory towards increasing costs and debt rather than alleviating it. Most economists and health experts agree that this is probably not feasible.


Guarantee Choice and Ensure Quality Care for All: The most common reply from opponents of the public option is that the public option for healthcare coverage is socialism: This is the biggest, easiest and most popular argument against public healthcare for the uninformed because its a scary catchphrase that people can embrace and throw around in conversation. Unfortunately that term is usually where the argument ends. The fact is we are already doing this. Ever heard of Medicare? Medicaid? The expanding elderly population as well as the poor and mentally ill rely on this very heavily. While the system may have its faults, it beats the alternative which is to have no coverage or medical care at all. Having had first-hand experience with this system during a time in my life when I was otherwise completely helpless to assist a loved in getting medical attention, I have to say that I was definitely more pleased than not with it. Call if welfare, public option, Medicare, socialism, etc., but when its your father, daughter, or wife who's very life is at stake and they need help, you’ll likely take it and let people call it whatever they want.
One of the actual valid criticisms (in my opinion) of the public option is that it would give the government program an unfair advantage over private insurers. On the surface, I say “who the hell cares?” What have private insurers done for us lately? Well, they’ve systematically denied claims outright upon the first submission by healthcare providers as standard procedure, hoping that you won’t go to the trouble to spend endless hours on the phone with the doctors’ billing departments then the insurance company until they’ve finally given in and agreed to pay like they should have done in the first place. They’ve raised insurance premiums %100 percent over the past decade and will do so again over the next decade given the current path. Unless you’re in a good group plan they’ve denied coverage to people with preexisting conditions such as cancer or heart disease, or even being born prematurely. God forbid they actually have to pay out a claim and actually provide the service that they purport to sell. Should you incur such a serious illness while you are “insured”, the first course of action is to comb through your initial application with a fine tooth comb, looking for omissions and typos that would give them legal recourse to flat out deny any payment whatsoever and then drop you completely from your coverage. This standard has been explicitly admitted to by insurance executives during congressional hearings, with the only justification being that it is currently legal to do so. The nice word for this unethical but legal practice is “recision.”
But enough about them. If private insurers are so evil, why would it matter if they had competition from the government or even just disappeared off the face of the earth altogether?
Well, under the current proposal, people would theoretically be given the choice to stay with their current provider or go with the public option. The government promises to play fair and not give their own side any special treatment. As some proponents of the public option point out, it might only amount to the government providing very basic healthcare to those who need it while those wishing to have fancier plans could go with private insurers. This is not an entirely unprecedented or untested notion. The US Postal service has managed to provide mail service to millions of people on a basic level without driving companies like UPS or FedEx out of business. If you need to mail a birthday card to Aunt Sally, you drop it in the mail. If you need to get that contract with an original signature to corporate headquarters by tomorrow morning you use FedEx. The main problem with this analogy is that the majority of insured people who are actually content with their current coverage are those who receive their insurance through their employers under a group plan. They have options within the plan, but the employers themselves actually choose the plan. Should a public option become available that is less costly than private insurance, employers would likely eventually opt to go with the public government plan. Private companies could eventually all be driven out of business leaving the public plan the only game in town. One problem with that scenario is that this leaves the industry with no competition for lower prices or better service. The government would have a monopoly on healthcare. Decisions could be made about what treatment options would ultimately be provided to patients by government bureaucrats, rather than between doctors and their patients. To be fair, it could be argued that this currently already happens, albeit to a lesser degree, with private insurers. Your current provider may cover the cost of a generic allergy medication for example, but refuse to pay for a newer drug that might work better because the generic is cheaper. The biggest potential problem though in my eyes, is the potential train wreck that would inevitably take place between Democrats and Republicans over the types of coverage and extent of coverage that would be offered, depending on which party is currently in office. Having trouble imagining that? Probably not, but just in case, here’s a potential point of conflict: Reproductive Rights. If you thought that can of worms was big now, just imagine. Enough said.

So although there are plenty of faults with the current proposals, it is good that there are at least proposals. Proposals, whether good or bad, will lead to discussions and compromise. And with a lot of luck, a lot of cooperation and humility, and a lot less ego and political bickering, something good may ultimately come of this. The final solution will undoubtedly have little resemblance to the current proposals, but as long as these three principals are met, we will have made progress. Here are some other potential alternative solutions to meeting these principles.

Reduce Costs
1. Results based vs. fee for service payments. The current system that most physicians function within pays them proportionally for each procedure performed or test that is run, whether it is medically necessary or not. One third of each dollar spent on healthcare in the US is wasted on unnecessary medical procedures or tests. The argument can certainly be made that the more tests increase your chances for a correct and accurate diagnosis. However, statistics show that the motivation for many of these tests lies more in the billing potential rather than the diagnostic potential. The Mayo Clinic is one organization that has successfully addressed this issue by moving to a model that relies more a team approach to patient care rather than a single doctor. A group of specialists from different areas of therapeutic expertise collaborating together has been found to be an efficient model for successful diagnosis and treatment of ailments in many cases. They are paid a salary and performance evaluations are results based. A collaborative approach could offer physicians reward for the success of outcomes and results rather than the number of tests they are able to bill.
2. Increase compensation for primary care physicians (PCP) and increase focus on preventive medicine. Medical students currently graduate from medical school with a student loan debt of between $100,000-$200,000. With the average pcp earning between $100,000-$200000 a year, many medical students feel that they simply cannot afford to go into primary practice and instead, specialize so they may earn 2-3 times more than that. The shortage of primary care physicians has the consequence of less early diagnosis in patients who often have to travel greater distances or wait hours in waiting rooms to see a physician. Thus, they don’t seek medical attention until their conditions deteriorates past the “tipping point” and results in higher medical costs.
3. Patient education and lower costs/co-payments for primary care. This issue’s tie in with the above point is mostly self-evident so I won’t harp on it too much. Suffice to say that informed people make informed decisions and are proactive. A lower cost visit to a PCP would result in patients seeking medical help earlier.
4. Tax employee health insurance benefits. No one likes to pay taxes, but everyone does pay a federal income tax on their income. Though we may not like the idea, it is reasonable to conclude that the benefit of health insurance provided by an employer as part of your salary compensation package is worth a certain dollar amount. This is one idea that actually has some bipartisan support. The catch is that Obama would have to swallow his pride and go back on a campaign promise that he wouldn’t tax these benefits. It also goes against the criticism of his former rival John McCain who floated the idea during the presidential election and which Obama renounced. Again I say, put the pride and politics aside. If it’s a good idea then do it.

Ensure Quality Care for All/Guarantee Choice
1. Make recision illegal. Private insurance companies exist to make money. There is an inherent conflict of interest in the fact that a company could benefit financially from legally withholding the very service that it purports to sell. With an issue as important as healthcare, where lives are literally at stake, this should not be allowed to happen. If a corporation wants to participate in the healthcare industry they should be held to certain standards. Further they should not be allowed to back out of an agreement with a customer when the customer’s very life depends on receiving the service that they rightfully paid for in the forms of their premiums. This is a case where loopholes cost lives, and it is unfortunately currently legal. Insurance companies who deny payment or drop patients based on selective reading of their medical files or insurance applications should be made at the very least to pay the patient an amount of money equal to the sum of the total of all premiums paid to the company by the patient since the plan’s inception. After all, why shouldn’t they get their money back for a service they paid for but didn’t get?
2. Insurance companies should not be allowed to discriminate against potential customers based on past medical history and pre-existing conditions. They should be held to the standard that each individual be offered the opportunity to purchase insurance regardless of preexisting conditions or past medical history. If companies continue to have the option to discriminate, they should be taxed at a higher rate than those who don’t in order to supplement healthcare for those who have no other alternatives.
3. Development of more non-profit insurance companies and government subsidies. There are insurance providers and healthcare systems that don’t have to answer to shareholders. The northern California based Kaiser-Permanente is a successful model of an insurance provider who has been able to provide equality of healthcare coverage while simultaneously thriving as a business. The government subsidizes farms, energy, housing, and even currently some healthcare in the form of Medicare Advantage. The government doesn’t necessarily have to pay in one trillion dollars but could still contribute in the form of subsidies to both non-profit and profit insurance companies who are willing to accept and cover the otherwise “uninsurable”.


It is notable that the US, with its technology and innovation, sadly still ranks among the worst in terms of outcomes and mortality rates among most of the top industrialized countries. It has been noted that the trend in US amenable mortality (defined as deaths in people under the age of 75 who’s cause of death was considered amenable to healthcare) has coincided with an increase in the uninsured population. The best country in the world should take better care of its own citizens. Let’s hope it happens.