• Healthcare Reform: The Big Fix, Or Show Me The Money

    Posted July 10, 2012: by Bill Sardi

    In order to gain a better understanding of healthcare reforms now underway in the U.S., I decided to read the writings of Ezekiel Emanuel MD, an oncologist and former White House advisor and brother of former White House Chief of Staff, Rahm Emanuel.  What Dr. Emanuel advocates is reform that will likely take a decade to accomplish.  By then, who knows if America’s healthcare system is still intact, at least financially?

    The affordable care act in three paragraphs

    Dr. Emanuel says by 2020 the American health insurance industry will be extinct – replaced by “accountable care organizations” (ACOs) – groups of doctors, hospitals and other providers to provide a full range of services.

    He says these ACO’s, which should not be likened to HMOs, will treat the whole patient rather than just an “episodes of illness.”  Dr. Emanuel says many insurance companies just process paperwork that he wants to eliminate; $360 billion of billing and administrative costs that he says will be remedied by “an electronic platform.”  (Computerization actually slows down productivity in the clinic.  Doctors will now be forced to give eye contact to a computer monitor, not their patients.)

    Physicians will be salaried and will no longer be paid in a fee-for-service scheme, and unnecessary tests will be eliminated with ACOs being paid a fixed amount per patient plus bonuses for reaching “quality targets.”  There will be more female physicians and private practice will be a thing of the past.  Quality targets will include fewer hospital infections, lower hospital readmission rates, and preventive services will be offered (more needless and ineffective vaccinations, mammograms, colonoscopies?).

    Wealthier individuals who purchase comprehensive insurance plans will be subject to a 40% excise tax on amounts over $27,500 for a family or $10,200 for individuals.  Also, eligibility for Medicare would be delayed depending on lifetime wealth with people in upper income groups only allowed to enter the healthcare pool at age 67-68 or even 70-71, largely because they are expected to live longer.  All this Dr. Emanuel advocates.

    Doesn’t it all sound silly?

    To better understand the silliness of all these needed changes in healthcare payment and delivery, imagine you are at sea on a cruise liner with 1200 other vacationers when many onboard reports symptoms of an unknown illness.  The ship’s doctor then instructs 1st class cabin passengers to come back tomorrow and 2nd class passengers are directed to the back of the line outside the ship’s sickbay.  Helicopters drop in six salaried female physicians, no doctors who happen to be onboard can offer their help, and actually patient processing is slowed down by having to type every patient’s health history into a computer.  Healthy passengers are required to be screened for symptoms of illness.  Some passengers are still waiting for care by the time the ship docks at the nearest port.

    Greater efficiency, not reduction of demand

    Dr. Emanuel’s brand of healthcare reform doesn’t actually reduce volume of care or eliminate disease, it just addresses needed efficiencies.  He says these reforms will reduce the federal budget deficit by $100 billion over the first decade.  But Dr. Emanuel, in a pointed blog posting at the New York Times, said if a cost saving effort does not result in at least a 1% decline in health care costs, which would represent $26 billion out of a $2.6 trillion annual healthcare spending, it would not be meaningful.   So his $100 billion savings over a decade amounts to $10 billion a year, not even a noticeable blip on a chart showing total healthcare spending over time.

    We haven’t got time

    The reason I say that reform will take time is because it requires a 180-degree turn in physician mindset and public expectations.  Maybe as they die off naturally the current generation of retirees, who consume most of the healthcare, will be replaced by Baby Boomers who have different expectations.  But so far what happened is America oversold itself.

    Most current retirees grew up hearing about magic bullet miracle drugs and then medical discovery after medical discovery — from penicillin to polio vaccine to Viagra.  From 10-minute cataract lens implant operations to the implantation of coronary artery stents.  Americans became proud they had the best healthcare system in the world.  This became an indelible impression that, despite contrary information, is still a prevalent thought among many retirees.

    And a mindset was developing.  Foreigners could only envy all the modern medicines and high-tech care America put on display.  People around the globe came to America to obtain the very best care.  Americans wore these achievements in medical care with pride.  Americans felt they inherently deserved whatever the newest technology happened to be at the time, largely because they paid into Medicare over their lifetime and now they wanted a payback.

    Patients and their families clamored for bone marrow transplants for terminal breast cancer patients even though there was no data to prove it had any benefit.  If bone marrow transplants were denied by health plans, a patient’s family ran to the local newspaper to gain public sympathy.  Lawsuits were threatened.  This treatment was later disproved.

    Prime-time TV advertisements for drugs, once banned by the FDA, resulted in Americans flocking to physicians offices for drugs like Celebrex (remember the tai chi TV ad?), which later was found to increase mortality, as did Vioxx, its later cousin.  Doctors loved a full waiting room – give them what they want.  The public was lining up to die earlier but had no idea of the problem.  That is because the FDA approves drugs for effectiveness before they are approved for long-term safety.  And new drugs only have to best an inactive placebo, not current drug therapy.   As patents on old drugs expired, drug companies limited or ceased to produce the older drugs and new less effective drugs took their place.  The FDA knew all this but looked the other way.

    Screening tests just drum up more disease to treat

    Preventive care in America became a ruse to drum up more patients to treat.  Mammograms, PSA tests (completely disregarded in Great Britain) and colonscopies only find more patients to treat.  In the prevailing “detect and collect” mentality, earlier discovery of cancer may seem beneficial, but cancer patients are still succumbing to their disease on the same calendar day.  Increases in survival time are only illusory.

    Most maladies are not diseases at all — they are pre-disease states, such as high blood pressure or high cholesterol.  But by manipulating the target numbers, many healthy individuals are needlessly being subjected to medicines and their accompanying side effects.  There is no evidence cholesterol-lowering drugs reduce mortality rates for coronary artery disease and if age-adjusted figures were employed for high blood pressure, many would not need to be taking drugs.   Is Dr. Emanuel’s healthcare reform going to address any of this?  That is, will healthcare reform take on Big Pharma?

    Colonoscopies have a remote chance of ever sparing anyone from colon cancer and detect polyps, which only 1 in 100 are cancerous.  Elevated PSA tests induce fear and immediate demand for treatment that is largely unnecessary.  Most men will die with but not of prostate cancer.

    Fearful patients are going to look elsewhere if denied care by their health plan.  Are medical boards going to sanction doctors who offer treatments that offer only imagined benefits?  Bring on healthcare reform and you are going to have a line of patients starting at the clinics in Tijuana and backing up across the US border.  Despite the fact many of these treatments are not science-backed, there will be demand for them.

    Dr. Emanuel talks about “pseudo-innovation” in healthcare, like robotic surgical devices and $180 million proton beam machines that costs $50,000 per prostate cancer patient under the presumed idea it produces less pain and damages less tissue.  But there is no evidence that proton beam treatment extends survival.  Dr. Emanuel knows about all this very well.

    The simple fact is, more can be accomplished at the public health level to reduce overall demand for healthcare, that is, produce healthier Americans who need less doctoring altogether.  Promoting self-care, which is not a primary objective of the Affordable Care Act, is the only foreseeable way to reduce demand for care.

    Fortifying foods with more vitamin D, vitamin C, vitamin B1 (thiamin), potassium and magnesium and removing iron and copper from adult multivitamins would be a good place to start reducing the incidence of age-related chronic disease altogether.  Instead, when modern medicine detects an abnormal blood test, it treats it as if it were a drug deficiency, not a nutrient deficiency.  Modern forms of rickets, scurvy and beri beri are prevalent in the American population but are inappropriately treated by clueless doctors with bone hardening drugs, steroids and vaccines.

    The American public is being gamed.  Leaving a population overfed but undernourished ensures a certain level of disease to treat in the population at large.  It has been estimated a decade of vitamin D supplementation would save over $4.4 trillion in health care costs in the USA.  That is equivalent to $1346 per person per year.  That is far more than any health savings proposal on the table.  This author forwarded this information about vitamin D to every key player in Washington DC involved in health care reform and did not receive a single reply from any recipients.

    The pharmaceutical companies don’t want Americans to know that the biological action of virtually every prescription drug can be duplicated with dietary supplements.

    Where are the trillion-dollar fixes?

    But let’s get back to the primary problem.  Medicare is $23 trillion under-funded (ouch!).  I didn’t read anywhere in Dr. Emanuel’s speeches and writings, about timely trillion-dollar fixes.  OK, he said a trillion dollars in the second decade of health reform.  By then the boat has sunk.  How this erudite doctor, who is so right on so many things, misses the bigger picture, goes unexplained.

    Dr. Emanuel begins to “talk turkey” when he addresses an important question: “Who really pays for health care?”  That is the title of one of his write-ups in the Journal of the American Medical Association.  And Dr. Emanuel succinctly explains the prevailing misconception that health care costs are born by employers, government and the public.

    He says, in his own words: “Failure to understand individuals and households actually foot the entire health care bill perpetuates the idea that people can get great health benefits paid for by someone else…. Government has no source of funds other than taxes or borrowing to pay for health care. Employers do not share fiscal responsibility and employers do not pay for health care — they pass it on in the form of lower wages and higher prices. “

    You can’t keep from thinking Dr. Emanuel is taking on The President and his divisive and polarizing campaign to make sure everyone pays their fair share when he tackles this misconception.  In other words, you can’t talk about the sour economy, dreary employment figures and diving consumer spending when the health care sector is zapping $2.6 trillion out of the economy.  Dr. Emanuel cites studies which show when American workers lose their employer-provided health insurance they actually receive pay increases equivalent to the insurance premium.

    Since real wages in America have been flat for 30 years, he suggests that is largely due to health care costs sapping away wage increases.

    OK, OK, we are getting closer to a solution now that we have asked the right question.  Dr. Emanuel says: “Employers should be removed from health care except for enacting wellness programs that directly help maintain productivity and reduce absenteeism.”

    He goes on to say, pointedly, “politicians rhetoric about shared responsibility (pay your fair share) reinforces rather than rejects this misconception and inhibits rather than facilitates true health care reform.”  Take that Mr. President!

    So now we get to the meat of the problem.  The game HMOs and insurance companies and even government have been playing is to extract money from Americans to gain votes and increase profits.  Health insurance companies only net 1-2% in profits (only about $11.7 billion in profits from the five largest insurers in 2010, which represents just 0.5% of total health care spending), but if the total dollar amount grows, their net dollars increase.  Patients demand more care and insurance companies just raise premiums.

    Incentives, not penalties

    Who says, when Americans live healthier, that insurance companies and even the government get to keep the extra money?  Why aren’t we studying reasons why people stay healthy and need less doctoring and medications rather than studying disease and how to deliver more care?  Why don’t we offer a refund to healthy patients if they don’t utilize the system?  Why should health maintenance organizations, insurance companies or even accountable care organizations keep the difference?

    The Affordable Care Act mandates insurance companies spend 80% of their premiums on delivering care.  As an aside, the current administration in Washington DC asserts overhead costs of government-run health care plans are far lower than private insurance plans.  But this is hogwash.  Between 2001-2005 Medicare’s administrative costs on a per-person basis are 24.8% higher, on average, than private insurers.  Government doesn’t hold the higher ground here.  What arrogance to demand that insurers spend a given percentage on delivering care when government, without need for advertising costs or paying taxes, can’t do the same.

    Reduce demand.  Dr. Ezekiel has convincingly shown that tort reform, taxes on drug-company profits, use of generic over brand-name drugs, and invoking penalties and regulations against private insurers won’t make a significant dent in healthcare costs.

    Where are the printed self-care instruction sheets for patients on how to control a baby’s fever, how to soothe a sore throat, how to deal with a boil?  All of these health issues should be solved at home, not in the clinic.  Shrink the waiting list.

    We don’t need more delivered care.  We want more undelivered care and healthier people.  Why not offer a direct pay raise to workers who are healthy?  Now you have incentive to stay healthy at the patient level, not more profiteering at the delivery system level.  If workers stay healthy, their employer offers them a bonus paycheck and the money never goes to government or insurance plans.

    Cash back for staying healthy

    Instead of a penalty for not buying insurance how about distribution of cash-back cards?  Maybe we call them America’s Stay Healthy Card, or something like that.  I can see it now.  A retiree elects to delay a non-emergent cataract operation so she can get her cash back to go on an ocean cruise. An overweight man elects to lose a few pounds to keep weight off his knees rather than have artificial knee joints implanted, allowing him to drive to see his grandsons at Christmas time.  No clamor over rationing.

    And how about offering extra cash-back bonuses for purchases of vitamins, gym fees, bicycles, instead of underwriting the cost of wheelchairs, drugs and physical therapy?  Our country is misdirected when it has incentives to use motorized wheelchairs instead of peddle-driven bicycles.  Cease paying for drugs that don’t work or are unsafe.

    And please, no lists of which vitamin supplements are government approved or which dosages meet (outdated) daily requirements.  The FDA should just see that dietary supplements are made properly (Good Manufacturing Practices) and what is on the label is in the bottle.  After that, private attorneys and health advocacy groups can question any unsubstantiated health claims in a court of public opinion or a court of law.

    As an example, recently the Center for Science in the Public Interest pressed upon Pfizer, the maker of Centrum vitamins, to withdraw unsubstantiated health claims from its product labels, advertising and websites, something the FDA wouldn’t do.  There are just too many cozy relationships between government and industry to expect the FDA to do anything more than rub out competitors for large political donors.

    Crony capitalism creeps towards medical fascism

    Stop the mandates.  Crony capitalism in Washington DC is gravitating towards medical fascism where government mandates supplant advertising and marketing for drug and vaccine makers.  Give Americans the freedom to choose.

    Give the healthy people their money back!  Promote less care, not more care.  Shrink, don’t expand, the pool of funds for health care, and it can’t be raided.  Cease catering to the most ill.

    Government is the problem, not private enterprise.  Government created a false demand for health care just like it did for real estate, and in both cases government intervention produced overpriced products to the point where health care is no longer affordable.

    If there isn’t enough money in the pool to provide immediate care, less urgent matters will have to wait, like knee replacements and cataract operations, just like is done in countries that have universal healthcare programs.  There is no rationing, just no on-demand medical care either.

    For example, there should be required waiting periods before a male can be scheduled for prostate surgery unless there is blockage of the urinary tract.  Studies show most men will opt for watchful waiting rather than undergo a needless operation.  Urologists know they have to get their freshly diagnosed prostate cancer patients in the operating room within a day or two of their diagnosis or they will change their mind.

    Reward the healthy and then care for the sick.  Move people who are well to the front of the line and except for urgent care, the others to the back of the line.  Push the wellness exams to the front of the appointment book.

    In the airline industry, frequent fliers get all the perks and upgrades.  Those who are frequently well should obtain the same from their health care providers.  Then it won’t take a decade to change the minds of Americans.  Bribe them with their own money, if you must.

    True, you can lead a horse to water but you can’t make him drink.  Maybe the 10% of the population that racks up more than half of the healthcare costs will make no changes in their lifestyle.  But I’d bet on incentives rather than penalties any day.  In a country that bills itself as the “land of the free,” you would think a truly free market would be the government’s Constitutional mandate.

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