Saturday, August 24, 2013

My proposed system vs. the Accountable Care Act/Obamacare

It has been almost four years since I last posted to this blog.  I’ve been busy on other priorities but also waiting to see how the Affordable Care Act/Obamacare would play out.  A few thoughts on a few aspects of the ACA:
1. Under the ACA, insurance companies will no longer be able to exclude coverage of pre-existing conditions.  Too much administrative effort and cost is spent on underwriting for pre-existing conditions, and this will no longer happen.  This is one positive change.
2. Under the ACA, everyone must purchase insurance or pay a penalty.  At first glance, this seems oppressive.  However, it is only fair–if pre-existing conditions are immediately covered, then the cost of covering them must be spread as widely as possible.
3. Under the ACA, employers are required to provide insurance for employees who work more than a certain number of hours per week, which is leading many employers to increase the number of part-time positions and decrease the number of full-time positions.  This does not bode well for an economy in which many are still unemployed or underemployed.  In my proposed non-governmental single payer system, insurance centers on the individual rather than on the employer, but employers would contribute something for each employee rather than for separate health insurance and workers compensation insurance.
4. Under the ACA, premiums for the oldest pre-Medicare age individuals cannot exceed three times the premium for the youngest adult.  This may raise premiums for the youngest and lower them for the oldest.  In my proposed system, individual contributions would be based on income, not age.
5. Under the ACA, young people may remain on their parents’ insurance until age 26.  This assumes they will have achieved steady employment and employer-based insurance by age 26, which is often not the case.  In my proposed system, there would not be arbitrary age cutoffs.
6. Under the ACA, there are premium subsidies for individuals and families with income below certain thresholds.  In my proposed system, individual and family contributions would be based on income, which would be administratively simpler.
7. My main criticism of the ACA is that, rather than achieving administrative simplification, it is administratively far more complex than my proposed system and even more complex than what we have now, with state health insurance exchanges as an added layer of bureaucracy.  As a result, I anticipate even less of the health care dollar going toward health care and more toward administration.  
In short, I believe that by enabling more people to have health insurance, the ACA is merely putting more people into an inherently broken system, whose failings I have described in my earlier posts.  If the cost of health care in the USA is to be lowered, we need a radical overhaul as I have proposed, rather than more of the same.

Wednesday, September 16, 2009

Defensive Medicine and Medical Malpractice

Defensive medicine is the practice of medicine in such a manner as to minimize the likelihood of the physician being sued. This has several components. First, and most costly, is the ordering of tests to look for serious, but unlikely, conditions. For example, a brain tumor may cause headaches, but most headaches are not caused by brain tumors. In dealing with a patient presenting with headaches, good medicine involves taking a careful history, performing a neurological examination, and only ordering costly neuroimaging procedures if there are additional suggestive symptoms or signs. A practitioner of defensive medicine would order a scan on every patient with headaches, for fear of missing a tumor and being sued. Unfortunately, due to fear of litigation the distinction between good medicine and defensive medicine has been blurred, and defensive medicine practices are seldom recognized for what they are.

Second is the use of precautionary hospitalization when it is not likely necessary. When a middle-aged overweight hypertensive sedentary male smoker comes to the emergency room with chest pain, one may be justified in admitting him to rule out a heart attack. On the other hand, when a young thin healthy woman with previous history of anxiety attacks comes to the ER with chest pain, it is unlikely she needs the same diagnostic/therapeutic approach, but she may receive it anyway.

Third is the avoidance of high-risk situations by physicians. Many qualified specialists have stopped taking emergency room call, doing hospital work, and treating patients with complex medical problems.

Medical malpractice is the occurrence of an adverse event directly resulting from a patient’s failure to be provided proper medical care. This is often litigated, with competing experts giving different views of by what standard proper medical care should be judged.

When a patient suffers an adverse outcome of medical treatment, it is far more likely due to bad luck than to improper care. He/she is less concerned with whose fault it is than with having the situation made right. The money spent on litigation and on excessive judgments in our present system could be used more effectively to help more patients who suffer adverse outcomes.

Therefore, as part of the health care reform scheme outlined herein, the tort system for medical malpractice would be replaced with a no-fault system. Patients suffering adverse events related to health care would have any extra care required because of this automatically covered by the plan. If improper care was alleged to have caused death or disability, independent panels of experts and patient representatives would review the claim and award compensation if appropriate. The panels would also recommend modifications in care protocols if deficiencies were found. Providers who practice good medicine would not have to worry about ordering unnecessary tests and treatments, and the costs saved by these not being performed, and by avoiding litigation, could be used to compensate patients who are truly harmed by improper care.

Dental Insurance

Dental care, except for that resulting from traumatic injury, is excluded from coverage by health insurance policies and covered by separate dental insurance policies, which are less prevalent than health insurance plans. From the patient’s perspective, this does not make sense. Problems with dental health can affect nutrition and general health in other ways; for example, periodontal disease is a risk factor for stroke. Having separate medical and dental insurance policies increases administrative costs. Therefore, it would make sense to cover at least preventative and restorative dentistry, perhaps even other non-cosmetic dentistry (ex, orthodontia to correct significant bite problems), as part of the single-payer plan advocated herein.

Wednesday, August 19, 2009

Is there/should there be a right to health care?

To answer this question, let’s look at some examples of rights that we have, starting in the Bill of Rights. We may practice our religion, speak freely, publish what we want to, bear arms, go to trial speedily, and be represented by counsel, but nowhere does it say that government shall pay for our churches, provide us with microphones, pay for publishing our writings, provide us with guns, or pay for our attorneys!

When people speak of a basic right to health care, what they often mean is a right to receive medical treatment with someone else paying the bill. However, health care has a cost–for salaries, capital expenses, and consumable goods. SOMEONE has to pay for these, or health care will cease to be available. If I shouldn’t be held responsible for the cost of my health care, then who should?

With rights come responsibilities. If I am supposed to pay for your health care, I want to minimize what I have to pay. This may involve my imposing rules on your behavior to limit your demand for health care and restricting your access to health care. Should I not be able to require you to exercise, eat healthy, maintain a healthy weight, wear seat belts, wear helmets when riding in/on any vehicle or animal, avoid all dangerous substances (tobacco, drugs, alcohol) and hobbies (car racing, motorcycle riding, playing football, hang gliding, etc.), avoid traveling to potentially dangerous regions, go for regular preventive checkups, and maintain tight control over your blood pressure, blood sugar, and cholesterol (regardless of side effects of treatment)? Should I be allowed to decide which doctors and hospitals you may use and at what point in the course of your illnesses or life you will stop receiving curative treatments and receive comfort measures only? Is this what you REALLY want, especially if you replace “I” with the government?

In summary, yes, you have a basic right to all the health care that you are willing and able to pay for; that someone else with deep enough pockets is willing to pay for; or that a physician or other provider is willing to voluntarily provide for you on a charitable basis.

Florida actually has a patient bill of rights and responsibilities:


Florida law requires that your health care provider or health care facility recognize your rights while you are receiving medical care and that you respect the health care provider's or health care facility's right to expect certain behavior on the part of patients. You may request a copy of the full text of this law from your health care provider or health care facility. A summary of your rights and responsibilities follows:

A patient has the right to be treated with courtesy and respect, with appreciation of his or her individual dignity, and with protection of his or her need for privacy.

A patient has the right to a prompt and reasonable response to questions and requests.

A patient has the right to know who is providing medical services and who is responsible for his or her care.

A patient has the right to know what patient support services are available, including whether an interpreter is available if he or she does not speak English.

A patient has the right to know what rules and regulations apply to his or her conduct.

A patient has the right to be given by the health care provider information concerning diagnosis, planned course of treatment, alternatives, risks, and prognosis.

A patient has the right to refuse any treatment, except as otherwise provided by law.

A patient has the right to be given, upon request, full information and necessary counseling on the availability of known financial resources for his or her care.

A patient who is eligible for Medicare has the right to know, upon request and in advance of treatment, whether the health care provider or health care facility accepts the Medicare assignment rate.

A patient has the right to receive, upon request, prior to treatment, a reasonable estimate of charges for medical care.

A patient has the right to receive a copy of a reasonably clear and understandable, itemized bill and, upon request, to have the charges explained.

A patient has the right to impartial access to medical treatment or accommodations, regardless of race, national origin, religion, handicap, or source of payment.

A patient has the right to treatment for any emergency medical condition that will deteriorate from failure to provide treatment.

A patient has the right to know if medical treatment is for purposes of experimental research and to give his or her consent or refusal to participate in such experimental research.

A patient has the right to express grievances regarding any violation of his or her rights, as stated in Florida law, through the grievance procedure of the health care provider or health care facility which served him or her and to the appropriate state licensing agency.

A patient is responsible for providing to the health care provider, to the best of his or her knowledge, accurate and complete information about present complaints, past illnesses, hospitalizations, medications, and other matters relating to his or her health.

A patient is responsible for reporting unexpected changes in his or her condition to the health care provider.

A patient is responsible for reporting to the health care provider whether he or she comprehends a contemplated course of action and what is expected of him or her.

A patient is responsible for following the treatment plan recommended by the health care provider.

A patient is responsible for keeping appointments and, when he or she is unable to do so for any reason, for notifying the health care provider or health care facility.

A patient is responsible for his or her actions if he or she refuses treatment or does not follow the health care provider's instructions.

A patient is responsible for assuring that the financial obligations of his or her health care are fulfilled as promptly as possible.

A patient is responsible for following health care facility rules and regulations affecting patient care and conduct.


Saturday, May 16, 2009

The solution–a non-governmental single payer health plan

Rather than the hodge-podge of insurance plans that pay for health care, all the money would be paid into a single pot. It would be funded, call it a premium or a tax, by:
  • Individuals–based on income and actuarial risk based on preventable health risk factors (weight, smoking status, compliance with treatment for chronic conditions, etc.)
  • Businesses–based on number of employees, instead of group insurance and worker’s compensation premiums, and based on hazard of work
  • Licensed drivers–based on driving record
  • Owners of motor vehicles (cars, trucks, motorcycles, etc.), boats, and planes–instead of the medical part of their vehicle insurance
  • Owners of guns
  • Purchasers of bullets
  • Purchasers of tobacco and alcohol products
  • The Pentagon–instead of Tricare and the Veterans Administration system
  • States–instead of Medicaid
  • Medicare–which would transition into the new plan

The assessment for each would be adjusted periodically, based on its relative contribution to total health care costs.

The plan would be truly portable, cradle to grave, without medical underwriting, and without the need for determining which insurer was primary or secondary for a given expense (ex, workers compensation vs. major medical vs. Tricare).

The plan would be non-governmental, to reduce political bias in how it was operated. Administration of the plan would be based on the doctor-patient relationship. It would be run by a coalition of provider (American Medical Association, American Hospital Association, and associations of nurses, pharmacists, chiropractors, physical therapists, psychologists, skilled nursing and rehabilitation facilities, etc.) and patient (AARP, unions, etc.) organizations, working together for the common benefit. Best practices and practice guidelines would be reviewed and revised on an ongoing basis, considering both the scientific evidence and the patient’s point of view. A fee schedule would be negotiated, with adjustments for geographic area-specific factors (similar to the current Medicare resource-based relative value units system) and revised on an annual basis.

Providers would set their own fees and would have a choice of accepting or not accepting assignment, but reimbursement would be based on the negotiated fee schedule. Providers first starting out in practice would likely choose to accept the fee schedule until building up their practices, but those well established or with special expertise could opt not to. Market forces would maintain access to care.

Fraud would be easily eliminated. Because all claims for a provider of service would be processed by one payer, billing for more services than was humanly possible to provide would be quickly identified and addressed. There would also be oversight of patients for over-utilization, and outliers would be referred for mandatory case management.

The problem–the insurance model does not really apply to health care

When we think of insurance, we typically think of property/casualty insurance (auto, homeowner’s, personal articles, fire, flood, windstorm, business, etc.), life insurance, and disability insurance. Each of these insures against perils which are relatively rare and unexpected, such as fires, hurricanes, theft, accidents, disability, and death, and against these insurance policies we hope to live our whole lives without ever having to file a claim. Most of us will pay far more in premiums for these kinds of insurance than the dollar amount of the benefits we will obtain. However, when these events occur, the financial cost can be catastrophic, so we gladly pay a premium to spread the risk.

On the other hand, medical insurance covers losses which we fully expect to incur. People typically do not expect to live their entire lives without ever becoming ill. Medical insurance also covers some expenses which have nothing to do with illness, such as pregnancy, birth control, screening procedures, and preventive care. When we have medical insurance, we try to get more benefit from it than the cost of our premiums. In other words, we believe someone else should pay for our medical care.

Indemnity insurance was generous in paying claims and permitted costs to escalate. PPOs (preferred provider organizations) offered discounted fee for service and temporarily slowed the inflation of health care costs. HMOs (health maintenance organizations) tried to cut costs by limiting the demand for services by requiring referrals before patients could see specialists, requiring prior authorizations before obtaining diagnostic and therapeutic procedures, and using financial incentives to encourage the use of cheaper medications. Some used capitation (paying the primary care physicians a set fee per member per month) to discourage overutilization. However, too much of the premium dollars for these plans went toward administrative costs and profits for owners of these plans, and both patients and physicians were unhappy with the hassle factor. Accordingly, there has been a backlash, and open access plans and PPOs have become more popular, but costs continue rising.

Friday, March 13, 2009

A solution for Medicare

Medicare is the healthcare insurance program for retired and disabled individuals who have paid enough into the system to become eligible for coverage. It consists of Parts A (hospital), B (physician), and D (drug) coverage, each with separate deductible and coinsurance provisions. Part A is free; parts B and D are optional and require payment of an additional premium, generally withdrawn monthly from one’s Social Security payment. Some beneficiaries choose to enroll in Medicare Advantage (HMO or PPO) plans, which replace their Medicare coverage with a private insurance plan with limited choice of providers.

The majority of beneficiaries who keep traditional Medicare enroll in private Medigap plans to cover part or all of their Parts A and B annual deductibles and coinsurance. Popular Medigap plans include Blue Cross and Blue Shield, United Healthcare/AARP, United American, and USAA Life. Those whose income is below a certain level are eligible for Medicaid coverage, and military retirees and their spouses are eligible for Tricare. A few retirees of large corporations have retiree health benefits which may pay some or all of their deductibles and coinsurance; because this coverage is often only partial, many of these retirees also purchase a Medigap policy.

After a claim for services is processed by Medicare, Medicare is supposed to electronically forward the claim to Medicaid, Tricare, or the Medigap insurance company for processing and payment of any additional benefits. In the case of retiree health plans, it is up to the provider of service or the patient to copy the Medicare explanation of benefits and submit a claim to the health plan.

A consequence of this system is that each claim for medical service is processed twice (or even three times!) by different bureaucracies, costing extra postage each time and utilizing additional paper. Each bureaucracy, in turn, has its own claim processors, administrators, and human resource people to support out of the premium dollars it is paid.

A more efficient system would be to eliminate the secondary insurers. For a Medicaid-eligible beneficiary, Medicaid would pay to Medicare a fixed amount per month; likewise, for a Tricare beneficiary, the armed forces would pay to Medicare a fixed amount per month. An employer which offered retiree health benefits would pay Medicare a fixed amount per month per retiree. Other Medicare beneficiaries, instead of paying a monthly premium to a Medigap insurance company, would pay a comparable, likely lower, premium to Medicare for the level of coverage they desire. Medicare, in turn, would pay 100% (perhaps less, in the case of Medicaid beneficiaries) of the covered amount for each claim, without any need to transmit the claim to another insurer. By receiving the additional premium revenue from Medicaid, the armed forces, employers, and beneficiaries, Medicare would cut its losses. Medicaid, the armed forces, and employers offering retiree health benefits would save the costs of processing claims. Beneficiaries might see a reduction in premiums. Lastly, providers of service would receive payment sooner and save the bookkeeping cost of posting two or more payments per claim.

A downside would be loss of the jobs of those who work for the Medigap insurance companies and those who process claims for Medicaid, Tricare, and some employers.