Archive for December 11th, 2009

Health Care Reality

As the House and Senate race towards an elusive goal of finding a compromise that can get some kind of health care reform in place, I think we need a sense of reality about where this is going.

Whatever gets passed will be significantly altered over time.   Right now the goal is to get some kind of structure in place so that a new system is born.   Once in place it will be all but impossible to eliminate.  However, the kinds of compromises being made will create imbalances that will require change and generate political heat.

The current Medicare buy in plan will be a problem from the start.   Hospitals are already reimbursed far too little under Medicare, and expanding this will mean dramatic cuts to hospitals across the country.   Many small rural hospitals might face existential crises if this plan is passed, especially those in areas of relative poverty and high median ages.

Alas, both the Democrats and Republicans are afraid of the political consequences of acknowledging reality.

The Republicans are most off base when they assert that the system works well as it is, that we’re messing with a good thing, and try to make claims that others ‘flock to the US’ for quality care and that we are the “envy of the world.”   They are wrong on two counts: a) few come to the US, and those who do are almost wealthy because we have a system that gives the best care to those with the most money; and b) the system is in a state of implosion right now, with insurance premiums set to rise dramatically in coming years, often pricing businesses out of being able to offer insurance, or at the very least dramatically increasing employee contribution rates.   This means that more money will be sucked into the health care system even as people earn less and deal with an ongoing recession.  The problem gets worse as the boomers retire.

Meanwhile Medicare and Medicaid patients are receiving unbelievable amounts of prescription drug care, far beyond what is reasonable.   The power of pharmaceuticals in our economy can make even the Mexican drug cartels jealous.    Simply, we have a health care system in a state of severe crisis, the worst of which is yet to come.   If we do nothing, it won’t be like post-1994 when the failure of health care simply led to the status quo continuing and only those tens of millions who lack coverage (and usually don’t vote) truly hurting.   This time, within a few years, the clamor for change will grow as insurance costs skyrocket.  Our system cannot survive as it is.

The Democrats, on the other hand, are wrong in saying that we can change things in a painless manner.    Health care costs have to be brought down dramatically, and that means decreasing costs and making tough decisions about what to cover.   Does an overweight 75 year old really deserve an expensive hip replacement?   Right now health care is rationed by the market, meaning that if you have money you get better care than if you don’t.   Yet we see the signs of even that tattering.   People are getting claims denied for all sorts of trivial reasons, often things that won’t stand up if seriously challenged.   They know people can’t afford to fight, and often they can find technicalities to deny coverage.  This means even people who think they are covered are increasingly finding that the profit driven insurance industry doesn’t care about health care, they care about profits.   Innocent mistakes or bits of ignorance about arcane rules can lead to a ‘gotcha’ game of coverage denial.

The only way to cut costs is to decrease the number of procedures, stop covering ‘vanity’ procedures, cut the amount of prescriptions written, decrease hospital costs by reducing the level of service (four bed rooms or more, shared equipment, etc.), and reduce pay to physicians and hospitals, meaning a downsizing of the health care industry.

If the Democrats came out and said that, they’d have no chance of passing health care reform.

So, as is typical in our post-modern political system, the two parties ignore reality, compose their own narratives to support their positions, and push the real problems off.   The Democrats realize something has to be done so they are trying to get something passed, knowing that the current system is untenable.    You can always tweak or alter the system later.    The Republicans concerned with health care reform raise good points too.  Senator Snowe is right that the current bill would be devastating to many hospitals, and the moderates who question given plans often have good reason.

Yet many of the moderates and the opponents are either in denial of the reality that no matter what is done costs will skyrocket, or they are enmeshed with trivialities.   It is surreal to see people who insist the private sector does everything better now say that the private sector can’t compete with any public option.    But it’s absurd to think that a public option will magically reduce costs without people noticing any change in service.

Health care costs are rising at an unsustainable level.    The current system will not survive the next decade, no matter what is done.    The only way to reduce costs and make programs like Medicare sustainable in the long run is for a major restructuring in how care is provided and paid for.    Since this restructuring involves cutting costs, it will be unpopular, and will deny people a level of care they have been used to.   It will mean cutting physician pay (especially specialists), cutting overhead costs that now go to insurance companies (not just cutting insurance company profits, but the cost of administrating the system), cutting profits to pharmaceuticals and giving Americans more limited options.

Neither party will say this.  They’ll either deny the reality with platitudes like “we have the best health care” or point to “savings by ending fraud and inefficiency” as the way out of the mess.   A vast majority of the cost of health care is spent in the last ten years of life.   As the boomers age, the strain on the system will grow proportionally.   As we learned from the advent of this economic crisis,  reality ultimately cannot be denied.   The reality of health care in America is that something drastic will have to be done sooner or later — and the politicians on all sides of the debate aren’t giving us the full story.

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