In Portland, Oregon a citywide electronic medical records project financially supported in part by the business community cannot be implemented because one of the primary savings it would facilitate, a major reduction in duplicate medical tests, is a significant source of hospital income. Hospitals do not want to lose the income they collect from performing those tests.
Throughout the nation private equity groups, not traded on stock exchanges and therefore not subject to mandatory public reporting of their activities, are buying nursing homes. Two consequences often result from such consolidations: The new owners cut costs, largely staff costs, with an almost inevitable decline in quality of care; they also organize themselves into such complex structures that it becomes almost impossible to identify and hold accountable the entities responsible for the injuries and deaths that often result from such cost-cutting, whether through regulation or litigation.
In Los Angeles and Orange counties nearly two dozen hospitals, including one of Orange County's three trauma centers and representing 15 per cent of the area's hospital beds, are in severe financial crisis, possibly facing bankruptcy. There are several reasons for this situation. Public facilities have closed in recent years, causing Medicaid recipients and uninsured people to go to private hospitals seeking care; the number of uninsured patients visiting private hospitals has increased by one third since 2002. Moreover California's Medicaid reimbursements are among the lowest in the country. A few large facilities attract an increasing number of physicians and insured patients at the expense of smaller community hospitals. At the same time those large facilities have greater negotiating power with insurance companies. Consequently, the same facilities with the most insured patients also collect more money from those patients. And desirable regulation, such as requirements to increase nurse-patient ratios and to retrofit hospitals to better withstand earthquakes, add costs to financially weak hospitals.
Each of these examples, which could be multiplied endlessly, illustrates why current health care delivery reform proposals that address only providing affordable insurance to US residents will not remedy the disaster that is our current "health care system". Only in Los Angeles does the insurance non-system contribute to the problem, and there it is only one contributing factor. A major common factor in all these situations are the fact that each participant in the entire system operates in his, her or its individual interest, an interest that has no necessary relation to the broad public interest in safe, reasonably priced, reasonably convenient and effective health care.
In the Portland example, its hospitals, all of which are nominally non-profit, torpedoed an initiative that, at the very least, would have reduced the performance of unnecessary and possibly dangerous medical procedures on patients. No provision of current proposals for universal insurance would address this kind of problem.
The nursing home situation illustrates the consequences of leaving health care services to the "free market". Facilities are consolidated into massive conglomerates, not even subject to the minimal controls on their activities provided by public reports on their activities. "Competition" is eliminated in favor of a massive and general reduction in standards of care aimed at increasing their financial return. Patients or those who assume responsibility for arranging their care cannot evaluate the quality of care in advance. The facilities themselves are insulated from any adverse consequences of the inferior care they provide.
LA/Orange County is a microcosm of many problems afflicting the nation. In this case, some of the crisis can be attributed to a lack of insurance. But much of it results from disparities, both between private insurance and Medicaid payments and among private insurance payments to different hospitals. Another problem is the lack of any mechanism, economic incentive, government regulation or both, to assure that health care facilities and providers remain in locations that give reasonable access to all rather than closing or moving to a few central locations.
A multiple payer, private insurance based system, as outlined in the plans of the major Democratic candidates could address these and other problems. But to do so such a plan would have to acknowledge and address the fact that our current health care "system" suffers many destabilising problems that have little or nothing to do with insurance in isolation. None of the plans yet presented does so.