Better and Cheaper Health Care for America?

WASHINGTON– The health care debate has morphed into a free for all inelegant cacophony; resembling at times mean food fights or may be  bar brawls. These fights often feature emotionally charged, angry citizens who attack law makers in town meetings because…well…because they are angry at “everything”. And now they have a target. They are mad at another Government attempt, (health care reform), at intervening in the lives of the people. So, this is opposed by many, as a matter of principle. Because……well, because anything concocted by Washington these days is suspect. So, hapless Congressmen are attacked for what nefarious stuff their constituents think, believe, assume or just suspect will be included in this still half baked reform plan.

Much of this emotion appears to be a way for people to vent their existential (literally) frustrations. The vehemence of some attacks against the health care reform blueprints is clearly not in sync with what is actually on the agenda. But now, this is the new Zeitgeist and, apparently, anything anti-Government goes. And so, the Government is accused of trying to surreptitiously nationalize health care without saying so. The Government is accused of secretly plotting schemes that would in effect amount to euthanasia, denial of care for the elderly and/or terminally ill patients in hopeless conditions. And so on….

Separating fact from fiction is difficult. Who knows what people are really angry about? Certainly, their own circumstances, on average at least, are not brilliant. But, if this is so, it would appear that now any opportunity to attack any Government action is fair game. Is the rage about health care in any peculiar way connected to the failure of the stimulus package to produce the magic healing that it was supposed to yield?

Or is it more broadly that the American public, after having briefly flirted (2006-2008) with the idea that “Big Government” is necessary, friendly, capable and basically “Good”, has quickly reverted to the old Yankee skepticism about what public powers can do? It has been said, probably correctly, that Middle America is on average right of center. The people’s focus is on individual empowerment. Big Government may be acceptable in truly exceptional circumstances to fix exceptional problems. But, as a rule, Government is not trusted to be able to do the right thing.

Notwithstanding the marked shift to the left going back to the elections of 2006, the US Congress has exceptionally low public opinion ratings, around 30% favorable. So, the same people who voted the Democrats into office seem to have second thoughts. Otherwise, how could we explain why are so many people now instinctively fearful that whatever the Democratic majority in Washington, (Congress and the White House), may be concocting on health care, this will translate in less service at a higher cost? Maybe it is because, intuitively, they feel one or two things. The first one is that Government cannot deliver. Government may be good when it sends welfare checks and other subsidies. But it cannot be trusted to do complex things, such as health care reform, right. The other thing is that Americans intuitively feel that they are not being told the whole story.

At this point the debate has been framed and thus it is probably futile to try and redefine it. And yet, let me be futile, and try nonetheless. Here is a basic assessment. The problem with this health care reform plan is that it does not touch the existing fundamentals. Maybe a bite here and there; but no structural change.

Let me explain: on health care, here are the fundamentals. Number one, we have a system that encourages and rewards financially doctors and all other practitioners for performing more stuff, more interventions on patients. If we leave this untouched, then the only realistic way to cut cost, even as we extend coverage to millions, is to ration care. Long term, there is no way around this. Number two, we have to confront the fact that, as a nation, our life styles have deteriorated, thus increasing the incidence of many, otherwise avoidable, chronic, (and thus costly), diseases . We are increasingly more sedentary and increasingly obese. All this causes a growth of maladies, such as hypertension and diabetes that could be substantially reduced, assuming drastic changes in nutrition habits and level of exercise on the part of millions of Americans.

So, like it or not, we have runaway health care costs because of two negative factors perversely combined. We live unhealthy lives that increase the incidence of many otherwise avoidable diseases. At the same time, the providers have a vested financial interest in having more rather then fewer sick people around. “Your doctor prospers when you are sick”. Of course, all this is obfuscated by the medical insurance system that creates a screen between the patient’s out of pocket cost and the doctor’s bills. But eventually something has to give. Insurance costs go higher in order to pay for all these procedures. And we have ended up with the most expensive health care system within the developed world, both as a percentage of GDP (16% as opposed to a 10-11% average) and on a per capita basis (around US $ 7000 per person as opposed to an average of about US$ 3,000). This is astonishing.

If these two issues, structurally and unfortunately combined, one about people’s bad habits, the other about the economic structure of health care provision that encourages more treatments and thus higher cost, are not radically dealt with, the only way to cut cost is by mandating cost cuts.

But this is not how the issues are presented. Which is to say, the policy-makers now debating the issues are not transparent and truly honest about the nature of the problem. They say that they want reform to guarantee coverage to all and affordability. And the say that they can ensure sustainability through smart changes that are actually going to reduce overall cost. But without addressing and radically transforming the fundamentals, this reform cannot succeed as intended. Sure enough, we may cover more people and improve the system here and there. But, longer term, we shall not cut cost, because the system encourages and rewards doctors for doing more stuff.

But nobody says this. Details aside, health care reform has been presented as a benign, major social intervention, guided and directed by Washington. Now, this sounds great. But, indeed, probably too good to be true. This idea of getting more, for more people, at a lower cost, while possibly believed by some reform advocates, is disingenuous pie in the sky. “More for less”? Within a formula concocted by and regulated in Washington? It usually does not exist. And this is why some, perhaps a bit paranoid, smell a rat and look for the catch, the fine print, the swindle that they assume must be built into a system too good to be true. This is why people fear fuzzy details. What about these “experts commissions” that will have to evaluate and recommend best practices that would “streamline” medical protocols? On the surface, this is rather innocuous. It would be about examining what is available and recommending best practices. “Oh yes? –says citizen Joe Public–Well, what if these experts start mandating cheaper, outdated practices under the disguise of efficiency? Isn’t this an oblique way to allow denial of care, under another name?”

But this paranoia, if sometime bizarre, about untoward schemes and secret plots is blossoming because fundamentally the Government is unwilling to tell the whole truth. Health care cannot be treated as a workshop where you take your car when it develops a malfunction.

Health care should be about the promotion of “Health” and this the real “Prevention”, (as opposed to the more pedestrian understanding of prevention entailing testing and screening everybody in order to find disease). Health care should be a lot more than curing sickeness. Health begins with good personal habits, good nutrition, plenty of exercise and the avoidance of addictive substances such as illicit drugs, smoking and alcohol abuse. And it is not that we do not know anything about this. When policy makers made up their mind to go to war, literally, against tobacco, they did so.

Of course, changing the personal habits of tens of millions of Americans is much more complicated and it will take years. So, it is difficult. But the pay off could be immense. People on balance healthier would need less care and thus the cost of insuring them and paying for services when needed would be significantly lower with cascading benefits in every direction. Healthy people are more productive. They show up at work. They do more. Reduced health care cost would benefit all who pay for it: businesses, individuals and Government.

By the same token, we have to change the nature of the medical profession and the expectations of those who engage in it. Right now it is mostly fees for services. And thus the doctors are inclined to overdo, because that is the way of increasing their financial gain. So, true health care reform has to break the connection whereby a doctor makes more money only if they “find” more stuff to do for the patients, with the result that many procedures are redundant, wrong or at least unnecessary.

You want real reform? Then address these issues. “Alright –someone might say– but this is gigantic, it is too difficult. We cannot do all this”. Instead, we are going to tackle other aspects that are still worthy: the plight of the uninsured, portability of insurance, more transparency about billing, streamlining of procedures. Fine. Let’s be more modest in our goals. But let us be honest and admit that this is like overhauling an old car; not about introducing a new model. And –most fundamentally– let’s stop pretending that, by tinkering here and there, we are going to cut cost.

Admittedly, structural reform may be truly overwhelming. But this is where the real problems are. If most doctors were paid a monthly salary, unrelated to the number of procedures that they prescribe, the perverse incentive that leads to overdoing and thus over billing which in turn leads insurance companies to jack up their premiums would vanish. If people on average led healthier lives, the demand for services would also shrink, at least to some extent. But this would mean that doctors, now mostly free entrepreneurs whose economic gain is determined by how many treatments they perform, would become employees. And who wants to tell doctors that this is the end game?

As for the relevance of personal habits on the “National Medical Bill”, surprisingly, while this whole health care debate was unfolding, a huge news item indicating that the doubling of obesity in America is costing about 150 billion dollars a year, (due to obesity related ailments), was not referred to at all in the debates. Why? Because this is a peripheral non issue? Well, 150 billion is by no means the bulk of the cost of medical treatments, but it is a very substantial chunk. And, as obesity is increasing exponentially, amidst the quasi indifference of the guardians of health care, this figure is likely to go higher. Now, obesity is caused in most cases by bad personal habits and ignorance about the value of proper nutrition and exercise. Assuming appropriate education, most of it could be reversed, with an obvious impact on the national health care bill. But nobody says any of this. Maybe there is fear of offending large numbers of voters. Maybe they could get scared. They might start thinking that, as their obesity induced diabetes is their own fault, going forward it may not be covered by insurance. Or something like this.

Be that as it may, the truth is that, while a great deal of disease does indeed happen randomly, or may be due to heredity, personal habits do matter. But do we hear any of this in a debate that is supposedly aimed at improving not just the reach but the rationale and the “quality of life” of Americans through a more enlightened health care delivery system? Not really.

So, here is a drastically different way of addressing health care goals.

Number 1: we as a nation take responsibility for embracing a healthier life style. This would have to include individuals in their daily lives. It would have to include public and private schools and many other institutions that provide millions of prepared meals on a daily basis. And it would have to include the food industry that will commit to withdraw the processed foods that are low in nutritive value and high in all the bad stuff (sugar, fat, salt) that induces over eating and obesity.

Number 2: we stop paying doctors on the basis of the number of procedures they perform. Other systems of compensation may be devised, as long as the financial interest of the doctor is no longer tied to how many things he does to a patient. Of course, there is nothing outlandish about any of this. Indeed, there are already hospitals and clinics in which doctors are salaried employees. Assuming that the level of financial reward for these professionals is commensurate to expertise and skills, then doctors could really focus on what is best for the patients, severing this perverse link that creates an incentive for doing more, and billing more, regardless of real merit.

Short of this, whatever the outcome of this round of reform, if we really want to get America’s cost down to the average of other modern countries, there is only nationalized health care –yes, a government run program!– or any other modality that would effectively ration availability in order to contain cost within pre-established limits.

It is time for the elected representaitives to level with the public and tell them the truth. All this stuff about re-jigging this health care system so that magically it will do more for less is unrealistic and disingenuous; with the added side effects of further eroding the confidence of the public in governmental actions and its effects.

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