Monday, March 31, 2008

Insolvency: Medicare's Hospital Trust Fund

The Trustees of the Social Security and Medicare trust funds issued their 2008 report (see summary at www.ssa.gov/OACT/TRSUM/index.html) on March 25, 2008. The report was issued under the names of Henry M. Paulson, Jr., Secretary of the Trasury and Managing Trustee, Michael O. Leavitt, Secretary of Health and Human Services and Trustee, Elaine L. Chao, Secretary of Labor and Trustee and Michael J. Astrue, Commissioner of Social Security and Trustee. Notably, the two public trustees who should have participated could not, because they were never appointed by the President, subject to Senate confirmation.

Ten years ago, I would have been significantly more trusting in the report than I am today. In the interim, our government, and particularly the Executive branch. has proved itself to be untruthful and incompetent. Rampant political bias has infected every element of decision making, personnel placement and expectations, and public communication. In short, since we have been lied to repeatedly why should we accept the truth of this report which, for the most part, comes under the signature of political appointees of that very same Executive? The integrity of the report cannot be greater than the integrity of its source.

The report ends with the statement: "This year's Trustees Reports describe large long-term financial imbalances for Social Security and Medicare, and demonstrate the need for timely and effective action. The sooner that solutions are adopted, the more varied and gradual they can be." Unfortunately, this is a political call to arms. Instead, the call should be for sophisticated bipartisan analysis and recommendations, which are isolated from political maneuvering, political contributions, and lobbyists and which will focus on the health of Social Security and Medicare as they relate to the health of our country and its people.

Thursday, March 27, 2008

Cost Shifting: From Airlines to Health Care

The concept of cost-shifting is easy to understand: once upon a time, when you flew from New York to San Francisco, your fare included an edible meal. Then the fare went up. That was not cost-shifting. But when the airline took away the meal and made you buy it yourself or go hungry, the airline cost-shifted dollars you paid for your meal to its bottom line.

In health care, it's a bit more difficult to understand. If you incur a hospital bill and your payer has to pay more for the same services than another payer, part of the costs of hospitalization have been shifted to your insurer (and probably to you if you have a copayment requirement). If the government doesn't pay the full beneficiary bill, based on fancy higher-mathematical calculations (read - "guesses") to justify paying a lower amount, the government has shifted costs to your insurer and to you. If your HMO says that you have to leave the hospital on the second day after hospitalization, when you still are pretty sick and can't take care of yourself, and your family has to stay home from work to take care of you, the HMO has shifted costs from itself to you and your family and perhaps your employers. And if the uninsured in the emergency room can't pay their bills, you and your insurer and the government will have to subsidize their care. Neat, huh?

Now, let's take it a step further. If you work for a small employer and have several co-workers who have incurred high health care costs, the premium for health insurance at renewal time may go up disproportionately, making your employer look somewhere else for coverage. Not only has the initial insurer rid itself of what it considers an adverse actuarial risk, but if another insurer takes on your company, the first insurer may have moved an adverse risk to a competitor. A number of years ago, when an aggressive national HMO took on bartenders (and, if my memory is correct, grave-diggers) in one city, its competitors were joyful: they knew their insurance experience with those occupational groups was awful and were glad to get rid of them to the new competitor in town. Incidentally, the HMO eventually went into bankruptcy. Apply the same way of thinking to the decisions of hospitals to move from high-cost low-reimbursement areas (center city) to low-cost higher reimbursement areas.

So, in health care, cost shifting is a way to increase profits, move costs to someone else's pocket, disadvantage your competitor and game the system. Cost-shifting is a monetary concept, not a quality-related one.

Tuesday, March 25, 2008

Health Insurers, HMOs and Automotive History

After World War II, a Democratic presidential economic advisor observed that mergers and acquisitions in the auto industry left concentrated power in fewer companies (GM, Ford and Chrysler) which made them much easier for the government to control. Government controlled and regulated them, competitors have appeared, and the big three are struggling to survive.

We have seen merger and acquisition after merger and acquisition in the health insurance industry with relatively few major players still standing. Well-paid industry executives and advisors forgot to study industrial history, and their own vulnerability, when they reduced the number of viable insurers and HMOs. As they hungrily gobbled each other up, they did not recognize they were committing industrial suicide. If the election in November of 2008 results in a Democratic victory, the health insurance industry is ripe, as never before, for much tougher government control and regulation. And who is going to speak in behalf of the health insurance industry? Certainly not employers and unions who have seen unfilled promises of cost control and more appropriate provision of health care to their employees. Certainly not religious organizations and small governmental entities which are struggling to provide care to the uninsured and poor. Certainly not the public which readily expresses its anger and skepticism (go to a movie and hear the audience snicker when the "HMO" is used disparagingly). Not the physicians and other health care providers who have seen the quality of the service that they are paid to provide slide under the financial pressure of health insurers which cost-shift their way out paying for reasonably expected and necessary health services.

The industry insurance/ppo industry has set itself up for control by government on government's terms (regulators do not make fancy salaries and are not particularly sympathetic to those who do) and has, through its expression of greed, has made itself as vulnerable - as GM, Ford and Chrysler were in post-war America. Oh, if they had only paid attention to history!

Thursday, March 20, 2008

Not A Collaborative Articulation of Shared Purposes

As I sat through the second day of a continuing medical education course, I was confronted by a hypothetical in which a 59 year old Mexican-American man presented with high blood pressure, obesity, diabetes, and abnormal blood fats. The instructor emphasized that this man was at very high risk of a heart attack or stroke. The instructor and audience carefuly considered the diagnostic and treatment program needed to reduce this man's very high risks of death and disability related to diabetes, arteriosclerosis, heart and blood vessel disease and high blood pressure.

As I listened to the expert instructor's exquisite analysis, it struck me that the wrong questions were being asked. This man was approaching the end of his disease shortened lifespan because when he was 19 years old, no one was interested in intervening and preventing or ameliorating the diseases he was genetically programmed to develop. Why not?

Our health care system's insurers, PPOs and HMOs, had no incentive to spend a significant amount of money on a man who would likely be the customer of a competitor when he finally developed expensive serious sickness. In previous blogs, I have described the practice of employers to frequently shift insurers, PPOs and HMOs to save money. Perhaps Kaiser, which works hard to retain members, might have a long-term interest in its members' health. But most of the country's health care is not provided through Kaiser. For the working population it is provided through relatively few insurers, PPOs and HMOs which focus on short term profits and yearly executive bonuses rather than long term health of clients. And it is left to Medicare to pick up the costs of caring for the disabled and elderly who may have been victims of systemic neglect early in their lives, when intervention might have made a big difference.

We have a dysfunctional expensive and wasteful health care system in which the principal players have disparate goals and in which the intention is not to further the health of our nation but to game the system, maximize profits and leave it to others to pick up the shattered lives of unhealthy Americans when they are - for example - 59. Let's all agree that we must take care of our young people, when that intervention can make a major difference in their lives, their health, their contribution to our nation and its economy, and our common good.

Sunday, March 16, 2008

Are Commercial Sex and Health Care Commodities?

Former New York governor, Spitzer, purchase sexual services to meet his needs. From the available reports, he treated sex as a high-priced commodity, to be obtained as and when he wanted it, from relatively anonymous sources. There are some parallels with health care which is increasingly being treated as a commodity, available from commercial sources through relatively anonymous providers.

Brief encounters with physicians who have no previous meaningful experience with their patients and who does not expect to encounter these patients again, represents poor health care. Despite the current hype, no electronic medical record can replace the nuanced interaction between patient and physician (or other health care provider) which profoundly affects the care given for that event and future events. The paper or electronic record, no matter how complete, is a dry recitation of a limited number of facts - a current complaint, history, drug allergies, physical findings, laboratory tests, diagnosis and treatment plan. It does not evoke the expression on the patient's face as she describes problems at home, does not describe a daughter's interest in having her mother continue to drive her children home from school, notwithstanding mother's progressive dementia, or detail the brief encounter's actual conversation between physician and patient.

When health insurance was a side-line business, undertaken so that the insurer could do more important and lucrative business with employers, physicians rendered "usual and customary" care and were paid for it. The payers paid, and physicians rendered care. In the early 1980s, interest rates skyrocketed and insurers suddenly discovered that they could take advantage of the float on their accounts payable. And suddenly, a commercial revolution in health insurance occurred. Then HMOs appeared, facilitated by President Nixon's legislation fostering their development. Initially the HMOs were non-profit, with community rates, and provided appropriate care while, with physicians and other health care providers, they explored methods of providing more efficient care. But the dollar flow and profits to be made led to conversion of almost every not-for-profit HMO into a for-profit operation. The service that the HMOs provided was not high quality health care: it was system development, which meant that they provided an easy way for employers to purchase health insurance, development of networks of physicians, hospitals and other providers, and the generation of substantial profits. PPOs, the next stage in health care insurance coverage, tagged on after HMOs, enjoying the benefits of the more efficient services physicians and others were providing without paying the development costs. Health care became a commodity and ownership of a network of providers became a valued asset which allowed enterprises to generate enormous capitalized values. The relationship between patient and his or her provider became almost irrelevant: the employer would choose one insurer, HMO or PPO one year and leave it and its network of providers for another the next year. Health care became an almost anonymous uninformed commercial transaction. Which brings us back to Mr. Spitzer and raises the question why the public isn't as outraged about the health care it receives as it is about his conduct?

Thursday, March 13, 2008

Why Draw Lots For Health Care?

A provocative headline "Drawing Lots for Health Care" in the NY Times (p. A12 03/13/2008) leads the reader into a depressing description of the woes of uninsured Oregonians, whose number and plight have been worsened by our recession. My quick check of Kaiser Foundation's state health statistics site (http://statehealthfacts.org/) showed no great disparity between the demographics and insurance status of Oregonians and other state residents, although historically (going back to the 1980s, there were notable differences, including a rapidly aging population and a lack of industry which retained young insurable individuals in Oregon). The NY Times article noted that Oregon's health insurance lottery ". . . is intended for low-income adults who lack private insurance and do not qualify for Medicaid or Medicare." Oregon's budget cuts have reduced the number of people served from about 100,000 four years ago to about 17,000 now.

Perhaps I am unrealistic, but I consider it unethical to provide insured health care only to the few who are fortunate enough to win a state lottery. Oregon and Oregonians are victims of an economic cycle which was caused by failure of the federal government to responsibly tax and spend. Our government has been radical in its abandonment of sensible economic policies. Oregonians are the canaries in the coal mines: their distress is a clear indicator that it is time for the United States to take responsibility for providing an ethical and moral system of care for all of its residents. Profits of the military-industrial complex must yield to the basic need of Americans for health care.

Wednesday, March 5, 2008

Is A "Surge" The Cure For A Massive Disaster?

A headline, by Dorsey Griffith, in March 2, 2008's Sacramento Bee , stated that "In a massive disaster, care will be scarce." The Bee's headline continued "State guidelines lay framework for deliberately letting some people die." The article noted that there is a broad State of California plan which abandons traditional means of providing care to its communities in a profound emergency.

The CDC Public Health Law News, Wednesday, March 5, 2008, devoted significant attention to the new California guidelines. Its release stated: "The California Department of Public Health (DPH) recently issued groundbreaking guidance for health care and emergency responders in the event of a disaster. The guidance document comprises 1,900 pages and focuses on the need to suspend or flex established laws and to ration health care during catastrophes. “I don’t know of any state that has taken it to this level of detail in outlining a surge plan for everyone who needs to respond to an emergency of this magnitude,” said Jeff Levi, executive director of Trust for America’s Health. The guidelines go against the ingrained instincts of professionals who are trained to save lives at almost any cost, according to Betsey Lyman, deputy director for public health emergency preparedness at DPH. “This is, ‘OK, we have limited resources. How do we best save the greatest number of lives?’” Lyman said. For instance, to minimize red tape, hospitals will not be required to report births, deaths, infectious disease outbreaks, medication errors, or suspected child or elder abuse. Also, unlicensed or retired health care providers with lapsed licenses will be recruited to provide emergency care during a health care surge. The guidance suggests that medical treatment go first to people who are more likely to survive with immediate intervention rather than to those who are most critically ill. “Everybody will have to think differently,” said Duane Dauner, president of the California Hospital Association."

Many physicians and other health care providers may not be aware of the revolutionary "surge" since, rather than the usual method of openly soliciting broad public opinion, the project appears to come out of a Sacramento office. If you would like to read the plan for yourself, see: http://bepreparedcalifornia.ca.gov/EPO/CDPHPrograms/PublicHealthPrograms/EmergencyPreparednessOffice/EPOProgramsServices/Surge/SurgeStandardsGuidelines/. Although you may find that some elements of the guidelines may be reasonable, you may not sleep well after reading it.

Monday, March 3, 2008

Health Care - Who Works Where?

Health care-related articles appeared in the New York Times on March 2 and March 3, 2008. The Times focused on the Presidential candidates' positions (for a useful summary of these positions see: Kaiser's "health08.org" ) and looked at the causes of high cost health care and the tools available for cutting health care costs. The articles quoted an authority as saying that "spending on unneeded procedures, medical errors and hospital infections is a more dire problem than the cost of calling for the uninsured, and that waste accounts for a much larger share of the country's $2.1 trillion health care bill."

In 2006, the U.S. civilian workforce was about 144 million, of which about 14 million were employed in health care. In 2000, the figures were about 137 million and 12 million, respectively. In the last eight years, health care has absorbed and increasing proportion of the workforce. Physicians and dentists have shown an approximately 8% increase in the percentage of employment, hospitals have decreased from 42.6% in 2000 to 39.8% in 2006. Health care is a major U.S. employer and most of the employment occurs in hospitals. Perhaps the first place to look for efficiency in the expensive world of health care is in hospitals, or in the insurers who control the gateway to hospitals and shift costs from their insured, to other payors such as government, the self-insured, employers, and taxpayers. The largest portion of "waste" may not be unneeded procedures, medical errors or hospital infections, but in the enormous administrative overhead of commercial insurers who provide no true health services in exchange for the expensive administrative overhead wrung out of billions in premium dollars.

Saturday, March 1, 2008

The Federal OCR has proposed new administrative rules. Its summary says:

"The proposed regulation addresses the listing and operation of PSOs, the privilege and confidentiality protection for patient safety work product, the disclosure permissions for patient safety work product, and the enforcement of the confidentiality protection.

"OCR’s enforcement responsibility includes the imposition of a civil money penalty for a knowing or reckless impermissible disclosure of patient safety work product. A civil money penalty may be imposed in an amount up to $10,000 for each violation. In addition, a principal may be separately liable for a civil money penalty based on a violation by its agent.

"The Patient Safety Act recognizes certain provisions of the HIPAA Privacy Rule are implicated by covered entity providers seeking the protections of the Patient Safety Act. The proposed regulation addresses how the HIPAA Privacy Rule disclosure permissions operate in conjunction with the proposed patient safety disclosure permissions.

"You may review the proposed regulation in the Federal Register (http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E8-2375.pdf) or at the Regulations.gov web portal (http://www.regulations.gov/fdmspublic/component/main?main=DocumentDetail&o=09000064803acce8). If you wish to comment on the proposed regulation, you may do so through the Regulations.gov web portal or by mail or hand delivery of comments to AHRQ as specified in the preamble."

Because this is an important issue, I suggest that you check the referenced URL.