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10/24/2006 How Doctors Are Yielding Their Profession To The CEOs By Jack E. Lohman The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com . Eleven facts about our health care crisis, why doctors should care, and what will save the profession Strong opinions are offered on the health care crisis. On one side are those employed in health care and currently benefit from its high cost, and on the other side are the consumers and employers that bear these high costs. While they have different motives, let’s look at some facts: Fact 1: It absolutely does not matter how we alter the system, whatever the final costs they will filter back down to the public. If we do nothing, employers will continue adding their health care to the price of their product and the public will pay at the cash register. We’ll pay in deductibles and co-pays and the higher costs that result when cost-shifting results from caring for the uninsured. And we’ll pay as the burdens of bankruptcies resulting from catastrophic sicknesses are passed on to the public. And we’ll pay as Health Savings Accounts are misused as tax shelters for the wealthy, thus draining tax revenues that will have to be made up by the rest of us. And we will also pay by continuing to send jobs overseas because of our broken system. If we have full taxpayer funded health care, the public will also still pay. That’s the way it will be no matter what. But we’ll pay 40% less. Fact 2: The public is losing, the doctors are losing and the corporate executives are winning as this once professional and humanitarian service is turned into a business venture lead by for-profit executives for the benefit of shareholders. Doctors and patients are sitting ducks. As doctors battle to keep the government out and patients battle to get at least some government in, the health care executives are slowly building their so-called “free market” models, all to the detriment of the two other factions. What is it about “he who has the gold, rules” that people do not understand? Physicians are for the moment being placated because they fit into the overall plan. But business leaders will no longer tolerate the exorbitant health care costs and the already-forming consortiums will start creating their own health care systems to mitigate expensive and profitable services. Most doctors will ultimately have to become employed by the corporations, because they currently control employee health care contracts. One thing can be said about free-market executives: they believe in profit as long as it is they who are making it and their vendors are not. Get used to it. That’s the way business works. Those businesses that are self-insured are already outsourcing expensive medical procedures to India and splitting the savings with the employee. HMOs will soon start doing the same thing. This once professional service has turned into a commercial commodity hijacked by the MBAs. Doctor profits will go down no matter what. Physicians must decide whether they prefer Medicare or CEOs calling the shots. Medicare is responsive to Congress and the voters; CEOs to their shareholders. Fact 3: We can choose Medicare-for-all, like that in Canada but with proper funding and fair reimbursements, or an HMO-for-all system run by the corporate consortiums. One is beholden to shareholders and the other to patients. If I were a doctor I’d bet my future on a properly run Medicare-for-all solution, and as a current Medicare patient I also prefer this system. But right now the executives are trying to rally each of the sitting ducks into believing that the free-market approach is best for them. Follow the dominoes; think ahead. Though it may take time, there cannot be any other final outcome than that described here. Fact 4: We have the young and healthy who say they shouldn’t have to pay as much, and the patients (often their parents) who require more care as they age. The young sometimes don’t feel that they’ll ever be in the latter group, but the evidence shows that they’ll live even longer and consume even more. Right now they are healthy and on High Street, and tomorrow is not in their sights. Their parents and grandparents are the consumers of today. Does it really make more sense to pay on the basis of consumption, or instead to level the obligation so the sick and elderly are not eaten alive because they are the larger consumers? Should we tax only the homeowner’s house that burns down, or should firefighting and police safety be a public service? Shouldn’t health care also be? Fact 5: The free-market approach is failing. It started a decade ago and the results are not pretty. The World Health Organization ranks the U.S. as 27th in the world in terms of overall efficiency and effectiveness. In every other industrialized country health care is a universal service, sometimes socialized with all doctors and hospital personnel working for the government, and others that provide only a single payer and leave the doctors and hospitals as private contractors. The first is equivalent to our VA and armed forces hospitals – which provide some of the best care in the country – and the second is equivalent to our single-payer Medicare system, which uses the same hospitals and doctors that all other insurance companies use. Britain has socialized medicine and Canada has a Medicare-for-all system, and both countries enjoy a higher ranking by WHO than does the United States. The US has some of the best doctors and best medical technology in the world, but the worst delivery system. There are too many fingers in the pie. Over 1500 health insurance plans easily consume 30% of our total costs and limit patient treatments where they shouldn’t. And they have sales and marketing agents that get a piece of every dollar spent. For-profit HMOs and hospitals are by law required to put profits and shareholders above all else, and the CEOs like that just fine. But the first to suffer is quantity and quality of staffing, and the next is fewer tests and fewer hospital days. The result is poorer care. Detractors will complain about Canada’s wait times, and while they do exist for elective procedures, they have the same wait times we do for urgent care. None. They do push their system to its limits, but by increasing their spending by just 10% (to 11% of GDP), they could eliminate their waits and still serve 100% of the population. The US spends 15% of GDP on health care, covers only 85% of the public, and still lags other countries in overall care. The for-profit interests in Canada prefer the 15% of GDP we have and are striving to break their system as well. Fact 6: The for-profit health care interests claim that single-payer will result in lower quality, and the consumer side claims the opposite; that better quality will result. The facts favor the consumer’s claim of Medicare superiority. Canada has a 2-year longer life expectancy and 35% lower infant mortality rate than the U.S., all while spending 50% less on her Medicare-for-all system than we spend on our market driven system. Over 90% of Canadians prefer their system to ours, but that will erode as their for-profit interests succeed in forcing cutbacks in funding. In the meantime the politicians are welcoming US health care corporations into their system. Fact 7: Medicare-for-all is not socialized medicine. While it wouldn’t be bad even if it were, as the VA and armed forces patients will attest, it is not a British-style system. Both doctors and hospitals remain as independent contractors. It would, however, displace some of the work the 1500 insurance companies provide. They’d remain but only as providers of Gap insurance, and some of their displaced administrative personnel would need to retrain, perhaps to help fill the void in higher-paid nursing and medical technician positions. Reduced staff in physician offices would also free people for retraining. Currently hospitals are experiencing a 10% bad debt ratio which would be eliminated under a universal health care system. But the VA model is not at all bad. Socialized medicine would provide a system whereby the doctors are salaried and do not receive a piece of the profits generated by the tests they order or surgeries they perform, so they do not over-order as in the Medicare-for-all system. That ensures that the doctor's decision on a particular treatment regimen is in the patient's best interest rather than his own, and unnecessary testing for profit purposes are not an issue. The current VA costs are about $4000 per patient, but that would likely be reduced if healthy non-veterans were also allowed to opt into the system. The VA enjoys a higher patient acceptance rate than does private medicine. But any socialized system would have to guarantee high-end salaries to attract and retain the best people into the medical profession. Fact 8: Medicare-for-all will not harm health care competitiveness. That’s because competitiveness does not exist now and cannot be built into the health care system as it is in other market-based services. Right now the only competition is between hospitals and their doctors who want to move expensive and profitable testing into their clinics, and that virtually always increases utilization and never reduces price. As well, adding more testing and surgical sites dilutes the quality of care rather than increases it. Fact 9: The current system does great harm to national competitiveness. Our market-based health care system is driving market-based manufacturers and jobs out of the country, as a brief look at GM and Ford will attest. The United States and South Africa are the only two industrialized countries in the world that do not provide a universal health care system, thus U.S. manufacturers are opting to send their jobs to other countries. The Big Three now make more automobiles in Ontario than they do in Detroit because their per-employee cost in Canada is $800 per year versus $6500 in the U.S. Under the current or a market-based system more industries will head north or to other countries. By U.S. law corporate CEOs and directors have a fiduciary responsibility to put their shareholders and profits ahead of the public interest, and they are doing that daily. In time they will have far fewer U.S. employees with effective health care packages and this will have a negative impact on the health care industry. But the CEOs in the health care industry will do okay, as salaries and perks exceeding $70 million per year are often reported, and one health care CEO just received a $1.1 billion stock package. It makes absolutely no sense to burden US employers with the high cost of medicine and drive them and their jobs to countries that do not add these costs to their products. Since we are paying for the cost of health care anyway, in product prices and etc, we should eliminate the middlemen and pay for the service up front, as taxpayers, just as we do fire and police and national defense. Fact 10: HSAs are Trojan Horses and will drain health care resources and increase disease. HSAs divert funds from the services provided to the majority, in favor of a savings account for the young, at least until they become old. They are also used as a tax shelter for the wealthy, which increases taxes elsewhere. But as well, the high deductibles will deter care in the early stages of disease, when it is easiest to cure. Women are at highest risk when they delay potential cancer evaluations and treatments. But children will also suffer. While some patients might consider their skills in second-guessing the physician to be quite good, most patients will continue taking the advice of their physician. Few will opt for the lowest bidder when it comes to their health or that of a loved one. So-called outcome-based transparency will backfire as it discourages physicians and hospitals from taking on the more difficult patients, and price transparency could instead drive patients to the more expensive providers with the belief that they’ll receive better care. Not an unreasonable assumption since the better doctors with more referrals will charge more, and the lesser-skilled doctors will charge less. Nonetheless, a health care system run by patients instead of trained physicians can have serious consequences. And excuse my cynicism, but it appears to me that HSAs are a stop-gap measure created by a scared insurance industry trying to retain control of the system and delay its conversion to a universal health care system. And by a banking industry with dollar signs in its eye. I believe HSAs will ultimately fail, but only after the treasury has been drained. Fact 11: Pay-for-performance (P4P) plans will backfire on the public, universal IT is better P4P is an insult to the better physicians. Do they really need a cash incentive to do what they are required to do already? Will they need to tip the nurses that helped them do a good job, as waitresses tip busboys? At the least hospitals and physicians will turn away the most difficult patients that will affect their stats, and they'll quickly learn how to game the system by carefully reporting results. Perhaps worse, P4P will significantly increase the unnecessary testing that has represented 30% of health care costs in recent years. Better is an national IT solution: a universal medical records system that lets patients opt out or limit access to only their physician, or to all physicians in emergencies. It should start with a patient questionnaire, add physician comments and treatments, keep a database of past drug interactions and current drug therapy, and give warnings to the physician when a maverick drug is about to be prescribed. It could track practice variations between physicians and list the patient's possible diseases and rank how other physicians have dealt with the problem and their successes. Given the patient's complaints it could even help diagnose and recommend tests and treatments. In time it will even alert physicians to dangerous treatments and could save hundreds of thousands of lives per year. A good start would be the VA's VistA software which is free and open source, but getting "free market competitors" to support such a system will be difficult. They'd rather duplicate efforts, do their own thing, and freeze out their competitors. Much of the VA's lower costs can be attributed to virtually no patient billing nightmare in favor of an IT system that instead benefits the patient. See How VA Hospitals became the best, which points to the cost difference between Medicare ($6,500) and VA ($4,000) patients. Given the elderly and more costly make-up of these two programs, integrating the nations' general population into either of these two more-efficient systems would be an effective move. Conclusion: A properly run Medicare-for-all system will strengthen the country and benefit everybody; physicians and the public especially. The profit-seeking health care executives will have to find other sources of income, but they should not get rich on the backs of physicians and our public. Clearly a socialized system like the VA's or armed forces systems would not be bad for the public, but will be strongly opposed by the private sector and right-wingers. At a cost of $4000 per patient per year compared to our current $6000-$10,000 costs, it would be a bargain. But under no circumstance should health care be a business expense; it should be paid for by the taxpayers as it is in other countries. Deductibles can help control frivolous consumption, and medical vouchers earned by the needy performing community services can reduce frivolous consumption among the poor. There may be other means-tested solutions as well. Of course, fixing the system is the last thing those who are benefiting from its high costs (and profits) want to see, and their campaign contributions to the Republican Party will drive today's decisions. -- Lohman is a retired business owner from Colgate and founder of http://www.ThrowTheRascalsOut.org. He can be reached at jlohman@execpc.com. |
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