2009-07-07

Healthcare Reform 03: Follow up to the plan

Considering the depth of some of the comments I saw to my Monday post, I thought it would be good idea to respond to them in their own post.

As I respond to the comments below (and thank you very much for making them) I am not trying to dispute things. I am, however, using them as a jumping off point to further explore my thoughts on a topic and it's related ones.

When it comes to health care (and many other issues) I tend to be a radical moderate. Which means each time I think I have an answer to a question, it simply leads to 5 more questions.

I guess I'm trying to devise a system that is fair, compassionate, competitive, efficient, and effective.

The proposal I layed out a couple days ago is not intended to be the answer but it is intended to be an improvement. It won't solve all the problems for all people. But it may solve many of the problems for many people.

Sandy said...

Wow...I was with ya on the first half of your article. I think it's a terrible that the US, the most civilized country in the world does not provide for it's own. I do agree we currently have (though most would disagree) socialized medicine. The welfare system provides care for those who abuse the ER, which costs us all dearly and provides bad medical care management...but the working poor have zilch. They don't have care and thats wrong on so many levels.

Having worked in the medical field for 22 years, I can say Insurance Companies and the Medical field need to change. Doctors are paid far more than a decent wage, and so are Insurance companies. Drug companies have tremendous waste. Their employees are highly paid, and have lots of perks. Some of the fat from these 3 entities needs to happen. I have no problem with people who are working hard making a good living, I do have a problem with the rich getting richer, and the poor getting poorer.

We need Doctors, Insurance Companies, and Drug Companies to be more accountable. And employers who pay their Executives far more than they're worth, but cheat their regular employees ought to spend some time in their shoes. I do not think the burden they have of insurance is what you describe. I do know many companies who alter hours, and conditions of employment to get around the duty and responsibility of providing insurance for their employees. Firing employees, then hiring them as temps for example. Cutting their hours just a few hours a week to keep them under the radar on legally needed to pay for their insurance. This is wrong, and very unjust. These same companies provide private jet service to the management people for trips that are not business related, vacation homes, expensive cars etc. etc.

I say trim the fat, there's plenty of it, and then providing medical insurance would be a piece of cake.

I might also add, I have 2 family members who work in the insurance industry, and 1 for a drug company...this just isn't my opinion, but opinion based on personal information and experinces.

Sandy
Everytime we treat someone in the ER for the flu or a cold, or sore throat prices go through the roof. And everytime someone ends up having emergency surgery for soething that might have been caught had they been able to visit a family doctor...same thing. Current system is way too costly, both in lives and in $$
I appreciate the detail here. I'm not sure I would go so far as to say doctors are overpaid (though I may be reading too much into your comments). Theoretically, people are paid just enough to get them to keep doing the job. With doctor in private practice it gets more complicated because they are not necesarily salaried like many workers are.

And we want to draw the best people to the profession. That's one reason the system can produce such high-quality care. But obviously, salaries at all levels of the care system contribute the rising costs.

While I don't believe you are calling for salary caps for highly paid medical professionals, it is an idea that may merit some discussion. I think it makes more sense to discuss salary caps in a broader discussion of tort reform. Generally, I am not a supporter of legislative limits to pain and suffering award or punative damages for medical malpractice. While there have been some outlandish awards, I don't think they are representative of the broader malpractice issues.

However, if we were to impose limits on those awards through tort reform, then we also need to limit compensation for professionals shielded by those limits. It's about balancing the high-risk=high-reward equation.

Outside of that, when we talk about cutting pay and perks, do we risk driving professionals into other fields? Or discourage the next generation from pursuing those professions?

The broader picture of executive compensation merits a closer look. Although those highly paid executives are paid that way because that's what the company owners (the shareholders) want to pay them. The trick is to align highly paid executive pay more closely with both short and long term company performance.

It's interesting that you cite the cutting of employee hours as immoral while also citing profligate waste within the organization. I think most would agree that paying more for a product than it should cost is a form of waste. We see that in stories of aspirin and other things that cost pennies at retail and dollars in a hospital. Overpaying is typically regarded as a bad thing.

If a company is overpaying someone that means a couple things. First, they could get the same work done by someone else for less money. Second, the value that person brings the compnay does not exceed that person's cost to the company.

Reducing the number of overpaid people is cutting waste. When that standard applies to executives, people cheer. When that same standard applies to the lower ranks, people protest.

Cutting hours to reduce the number of full time employees and the need to pay for insurance is a way for a company to reduce waste. If they can get the same work product done at lower cost, that is a good thing for the owners.

While the ideal of living wage and full benefits is important to society overall, providing it, for many companies, is a form of waste.

I like the idea of trimming the fat, and I agree there is a lot of it, but defining the fat is where we get into trouble.

The costs and support structure in the industry need to come down somehow. It's not only a tremendous outlay of money, but the more people we have in the healthcare industry means there are fewer available to other industries.

One more note on the idea of wasted money: the money isn't being burned or destroyed. And getting even bigger than health care reform brings us to the broader issues facing the economy. Money wasted in healthcare isn't really wasted, as long as it gets spent elsewhere. The extra people employed there, or overpaid there, can spend their money in other aspects of the economy.

I certainly don't have all the answers, and my views are sometimes self-contradictory on this matter. That's one of the reasons I'm throwing these ideas out there.


Sharkbytes said...
It's all pretty broken, and those of us with just enough money to be poor but not destitute are left out in the cold.
That's the problem our modern welfare system faces, that need-based college financial aid faces, and that many programs that help the poor face. Programs that help the poor often do nothing to help those who are teetering on the edge. With a little help, perhaps fewer people would teeter off into serious problems and get past their current struggles. But when faced with limited resources, the general choice is to hlep the person that is starving today, and not the person who has been just a hair away from starving for the past few months.

And those who are struggling, and haven't given in to collapse, are the ones that we should be supporting more. The challege is to build social safety nets that don't encourage failure.



Mike Golch said...
the thing that worries me is will the plan become as bloated with ripoffs atrists like medicare has become.some of the reinbursements that are paid out of medicare are just gross.
My plan isn't the best solution out there. There are definite flaws; it's goal is to make the situation better, not to make it perfect.

There will always bee some ripoffs. The question is how much is too much? What is an "acceptable" percentage of fraud in a program? 2%? 5%? 10%?

In order to design a truly fraud proof plan, you will spend more money preventing fraud than you would have lost to fraud to begin with. And that makes no financial sense. The other option is to put such rigorous controls in place to prevent fraud that you end up making the program too difficult to be used by those it was orginally designed to benefit.

I'm not giving fraudsters a free pass. Inded, they should be vigorously prosecuted. But there comes a point where it's just not worth it. Right now, I'm thinking a 5% fraud rate is acceptable. But that's not set in stone.


grayspirit said...
I think the concept is a reasonable one, but my concern is that there is really nothing in place to manage the cost of healthcare. As long as the government provides reimbursements for healthcare, the industry tends to keep costs high because there really is no competitive pressure to bring prices down. Just my opinion. :)
And figuring out how to limit the costs without getting in the way of proper care is the challenge. HMOs are designed to do exacly that, and yet they are often considered one of the most evil aspects of the health care industry.

Time and again, we hear that bureaucrats should not be interfering in decisions between doctors and patients, and yet, that's exactly what limiting costs will require. Someone with the purse strings has to be able to say, "No." But that is not something most people want to see incorporated in the law.

I think the same problem faces colleges and universities today. Tuition and fee increases have exceeded the rate of inflation for well over a decade. One reason for this may be the proliferation of financial aide. If the government cut back the college financial aid programs by 75% or so, would we see a comparable drop in the number of students? Or would we see a much smaller drop in students and a larger drop in college costs?

College costs can rise as high as they have because the taxpayers are willing to give them more money through the financial aid system.


Pricilla said...
You forget in your plan people who are sick with chronic conditions or who have pre existing conditions. They (ie: ME) cannot get private insurance in the marketplace for any price. No insurer wants the risk. So my husband HAS to work. I am disabled and medicare does not begin to cover my medical costs.

Until there are viable options for sick people in the marketplace the system will not be viable. There are a lot of people with minor pre existing conditions that get them bumped from insurance plans. Major problems like what I have really cause issues.

The system is broken and needs serious fixing. I think you are right about corporate America though since they are paying for it now and basically paying for congress..

This is part of the problem with the idea of even offering health insurance. And here I am going to choose my words carefully. While there should be a way to cover those with preexisting conditions, it shouldn't be insurance.

Insurance exists on the basis of a gamble. People purchase insurance gambling that they will receive more in benefits than the pay in premiums. Insurance companies offer insurance gambling that they will collect more in premiums (and interest) than they pay out in benefits.

If I was guaranteed I would never need to file a claim, I would be an idiot to purchase insurance.

Likewise, if an insurance company sees a situation where they are guaranteed to pay out more than they are likely to collect in premiums than they would be idiots to offer that coverage.

Which make insurance a poor model for providing healthcare coverage to those with preexisitng conditions.

Once insurance is not a viable option, the question becomes who should pay? If the costs are outlandish, the person with the condition can't reasonably be expected to pay so someone else has to. Should that person be the tax payer? In many cases, the answer is likely,"yes," due to lack of alternatives.

This raises another issue then. (Note: I am not saying this has anything to do with your conditions.) The issue is one of lifestyle choices.

As a taxpayer, maybe it makes sense for me to pay for the medical care of someone who can't pay if they are sticken with cancer. But what if that person is a smoker? Should I now have to pay for the care of someone who has lung cancer when that person caused the disease themselves?

What about someone who is obese and suffers from diabetes or heart disease? Should I have to pay for that person's care when the reason they require care is because of poor life style choices?

If I get injured in a car accident that's not my fault, can I expect the tax payers to cover that cost? Maybe. But what it 90% of the costs are because I wasn't wearing as seatbelt? It is still fair?

What about child birth? Should I as a tax payer have to pay for pre-natal care and the birth process someone choose to undergo in what, again, is a lifestyle decision?

These are questions we will need to struggle with in any program that ultimatley gets implemented. Do we cover everything regardless of cause?


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6 comments:

Laura said...

Thanks for these pieces. I'm still digesting them and have lots of ideas but it's late (1 am) and I need to get to sleep.

Keep up the thinking though - you're stimulating a lot of us to do the same.

Laura

Sandy said...

Cutting hours to reduce the number of full time employees and the need to pay for insurance is a way for a company to reduce waste. If they can get the same work product done at lower cost, that is a good thing for the owners

I don't agree that companies paying for insurance is a waste. They aren't cutting the hours to reduce waste, they're simply cutting hours to avoid their responsibilities in paying insurance. I even know of situations where once hours are cut enough not to legally have to pay insurance, the employee is still required to work the hours, but it's not considered their normal work schedule and therefore the company is, in my opinion being derelict in their duties to their employees.

And I would also disagree after working in the medical profession for 22 that doctors are overpaid.

Hard working people deserve health insurance, and the number who can't afford it on their own is costly to us all. If people had coverage, went to the doctor, small problems would be less likely to turn into huge expensive problems.

I work with people who've never had health insurance, but have worked their entire life. I'm fast approaching 60, and they're my age, so they are the working poor and have struggled with this problem a very long time.

It's not a problem easily solved, but one that truly needs to be solved.

Sandy

Sharkbytes (TM) said...

I consider insurance a legalized scam. You pay for years, and then when you need it to cover something, all too often they say that you can't be covered for some surprise reason. Of course it doesn't matter what I think because we don't have any now. My health plan is "we hope I don't get sick or hurt till I'm 65." How's that for a plan?

Pricilla said...

I agree that lifestyle choices often create serious health problems - my mother died from smoking caused cancer. My problems were congenital and not at all due to anything I could have done or changed.

But as a society we are the largest nation without adequate healthcare for our people.

I agree with some of your points regarding lifestyle choices but are you really going to sit there and watch someone die, care-less, when they could be helped all the while saying, "well you shouldn't have had that last Big Mac?" I know my mother committed a slow suicide but did she not deserve a comfortable end? And should HER choice have bankrupted my father with her care? And thereby hurt the family even worse?

It is not an easy topic and it has no easy solution. I have seen both sides. I have watched two parents die from cancer. I suffer a chronic, progressive problem through no fault of my own - discovered in my 30ies and impacting my life now and forcing my husband's hand for the rest of his life.

I paid A LOT of money into the insurance system before I got sick and I am one of their losing propositions. Trust me, I truly wish I wasn't.

aldon @ orient lodge said...

I stumbled across this post today after putting up a blog post about what is going on with the insurance industry in Connecticut. Anthem has just asked for a 22-30% increase in rates. Meanwhile, they've increased the money they spend on lobbying by 40%. They're spending our money to try and prevent us from having choices.

Read more at The True Cost of Health Care.

Jenera said...

This is a great post that brings many things to the forefront. Honestly, the talk of health care reform leaves my head spinning. You bring up very good questions and some answers.