Sunday, January 3, 2010

Health Care Bills/Law

The Senate's passage of the the first major overhaul of the US health insurance patchwork in over four decades is significant. I have spent the past dozen years learning how we came to have the crazy quilt patchwork we have. I have also read many journal articles about what the states have experimented with to work around it. A minor point, but I have concluded that health insurance is misnamed, and we would be better served to call it Injury and Illness insurance, because that identified the conditions that activate the coverage, like fire insurance covers in case of fire, flood insurance in case of floods, and so on.

First, some history. Unlike all the other national healthcare systems one hears about in other countries, the US tangle is 86% private insurance. And will remain so. This comes from the historical incident—and accident—of health insurance starting to circumvent limitations on salaries imposed by Congress during WW II. Large employers wanted to lure top talent with health insurance and other benefits. They began as an enticement. The Supreme Court gave it's blessings and soon the unions understood this could be something they could negotiate for their members, and well, the race was off and running.

Besides the money at stake (taxes, all the medical professionals, insurance and pharmaceutical companies' profits, the tax deductability of premiums, etc.) working folks like you and I have expressed strong preferences for the comforts of our current arrangement. The overwhelming majority of people with employer-based insurance like what they are able to get now. Polls and political commentary show that we want to keep our current health professionals, we want to have a lot of choice and access to specialists, we want to brag about having the latest techno gizmo used on us even if not exactly medically necessary.

There is also a curious lack of care about costs built into the current patchwork. Sure, at the aggregate levels everyone can see the costs of health services and insurance rising and rising. But savings won't happen in the aggregate on most things: physicians in particular has thought of themselves as businesses for decades and many are motivated by the profit motive. Insurance companies love having all that money to play with. So the savings will have to happen at the point of service.

Just recently, I had an eye exam and needed to get my prescription lenses updated. I went to several brick and mortar frames and lenses stores. At each I was asked if I had insurance as a first question. I said I was self-insured and using my flex plan. The lowest bidder for just two lenses in existing frames was $240. The highest was close to $600 for just the lenses. Online, frames with the lenses go for less than $50. The price where insurance was expected to pay is close to 5 times higher!

Another quick example, when doctors order tests to "rule out"conditions of illnesses of very low probability the cash still flows into their pockets and to every along the testing and reporting back chain.

The Massachusetts Example

When MA set the bar in 2006 for what can be enacted into law to reduce the number of uninsured people, it accepted that most people receive health insurance from their employers. They also accepted that people without insurance do get the emergency care they need when the circumstance are dire enough: accidents, drug or alcohol overdose, sever physical symptoms, etc. That care costs someone something. The prime motives in the legislation was to reduce the number of MA citizens without insurance and to get more people in for care at an earlier stage of their injury or illness.

Several things happened in MA that failed to happen in Congress. First, the opening salvo in that state was the Roadmap to Coverage (R2C) white paper jointly sponsored by Blue Cross and Blue Shield. In a tightly reasoned and carefully calculated document, the R2C laid out the current costs being borne in MA for health care services to people who had no insurance.

So the R2C said, look, it costs so much to provide this care now. How is this being paid for? it asked. Here's how: uncompensated services from healthcare professionals, write-offs by hospitals, various subsidies, lost time at work, etc. Then the R2C took a clever rhetorical turn. It made a series of proposals for insuring more people, and with each proposal it showed how many people the suggestion would cover and how much it would save or transfer from elsewhere in the medical care patchwork.

To encourage preventive and regular care (from the Western medical model point of view), it proposed people with publicly supported insurance have a "medical home," that is, a designated clinic or doctor where they would go to receive care. To sweep in the last few people not caught by its other strategies, the R2C proposed subsidized premiums and as a last resort, a tax penalty on anyone without insurance who did not qualify for a waiver. If, the R2C said, MA put these ideas into place virtually everyone would have coverage.

Congress seems to be stumbling towards what MA has demonstrated without the benefit of something like the R2C proposal in front of opinion leaders and the media.

From reading blogs and talking to people it seems everyone will find something to be unhappy with in the final bill and law that will ultimately get passed. Maybe that's as it should be, as we're all in this together and everyone should be required to do their part.

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