Lock-In Locked-Out by Medicare

Last week, the Wall Street Journal reported that the acting administrator of Medicare's Center for Medicare and Medicaid Services predicted that new regulations will "reduce what [patients] pay at the pharmacy counter."

Under the new regulation, the calculation of when a patient reaches the donut hole will use the actual amount paid by the insurer to the pharmacy, not what the insurer pays to the benefits manager, which includes a potential profit for the benefits manager.

As one might expect, a benefits manager complained, using the stalking horse of less competitive plan design choices. My interpretation is that the complaint reflects the benefits' manager's concern about its profits and no real concern about patients who reach the donut hole.

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.

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.

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?

Who Owns Your Health Information?

You may have noticed recent articles concerning Microsoft's and Google's interests in data banking health information. Each of these companies (and many others) must deal with this issue: who will own the health data contained in their data banks? Microsoft, Google, and most of the other commercial interests are not health care providers or partners of health care providers, and will not be subject to existing federal and many state health care privacy restrictions. So whom do you, the reader, believe will own your electronic data? What controls would you expect to be placed on the profits to be obtained from exploiting the ownership of your data (and should you share in those profits)? And what limits should be placed on the use of your data?

Do You Receive Adequate Quality Health Care?

If you are a young man or woman, and see your doctor infrequently because you know you are in good health, the insurers want you. The young healthy nonuser of health care is what keeps insurers and HMOs not just solvent, but profitable. So there you are, making money for your health care insurer or HMO, going to see your doctor every few years - probably for a bad cold. When you see your doctor, what is the quality of the care you get? Do you know how to assess quality, other than by the time you have to wait to see the doctor and the age of the magazines in the waiting room?

Does anyone check your skin for melanoma? Does anyone check your neck for a thyroid nodule? Does the doctor (or other health care professional) check a young man's testicles for a mass? Does the doctor check the woman's breasts or instruct her on self examination? How about checking lymph nodes? Does the doctor listen to your heart and lungs through three or four layers of fabric because there isn't enough time (or professional interest) to have you take off your garments. Is the doctor (or other health care professional) sufficiently skilled in physical examination to be able to recognize an abnormality or is his or her professional continuing education dictated by the programs which insurers and pharmaceutical companies offer? Or does the doctor or other health care professional ignore the role of history and physical examination and believe that the only way to find disease is by lots of lab tests?

If no one looks, no one finds treatable pathology. If no one finds treatable pathology, the patient will probably change jobs, move to another insurer, and the first insurer or HMO will not be burdened with the costs of diagnosis and treatment. As the insured, you have fulfilled your duty of providing profit for the insurer or HMO and allowed the health care provider to see his or her allotted number of patients.

You may know a lot about football or baseball. In both sports there are rules and umpires. What are the rules governing the care you should be receiving and who is enforcing the rules? If you don't know the rules, you may be the loser.