THURSDAY NIGHT IS HEALTH CARE CHANGE NIGHT, a weekly Daily Kos Health Care Series. That's right, sharpen your comment pencils, I'm outing myself as a member of the health insurance industry. I don’t work for an insurer directly, though. I work for a healthcare policy non-profit that works to improve the quality of both the clinical healthcare and the service insurers provide. I’m not naming the organization, because I am not speaking in an official capacity here, but rather as someone who has spent a nearly 20-year career working in the industry.
I know that our healthcare system is broken and needs a major overhaul. I've been grappling with the industry’s problems for 2 decades. But I will admit to a lot of frustration at the "death by spreadsheet" meme that heaps the most, if not all, of the blame on health insurers. Not only do I find this line of reasoning an insult to people at insurers who are working to make the system better, but I believe it is a grotesque oversimplification of the myriad issues facing that system.
So, if you dare, join me below the fold for my ideas on the real issues we face, and on how to overhaul the system and achieve the goal of healthcare for all.
Like most of you who are lucky enough to have health insurance, I will admit to hating my insurance company on a pretty regular basis. It is an inefficient, annoying and sometimes idiotic organization that seems, at times, to exist only to frustrate. I will never forget the day a customer service operator actually said "Just because a drug is on our 'Not Covered' list does not mean it's not covered." WTF?! What does it mean then? But I also understand that a lot of the problems with health insurance companies exist because these companies are trying to work within a "system" that is really a rapidly fraying patchwork of benefits, laws and social policies. Below I list what I see are the top five causes of problems with the healthcare system, and what I think are the most important steps to fixing the mess.
1. Healthcare cannot be "insured." Traditional insurance, like life or auto or home, is basically a bet. You bet the insurance company some bad thing will happen to you, and the insurance company bets that it won't. The system works, and is profitable for the insurer, because the bad event is rare - the vast majority of policy holders do not have anything bad happen to them, and are therefore simply sources of cash to the insurer.
The healthcare insurance bet is completely different. The need for healthcare is universal, and experts teach that even the healthiest human being should be visiting the doctor at least once each year. Illness and accidents are a given for a large percentage of the population, and much of that illness is chronic. Therefore the insurer cannot bet that healthcare will be rarely needed; rather the insurer must bet that the total cost of that needed care will be less than the total cost of the premiums they take in. One short term solution to this dilemna is for insurers to simply deny care, which is what a lot of healthcare reform activists claim is happening routinely. But this method fails in the long term, because denied and delayed care turns into costlier problems later, and the insurer cannot avoid the costs forever. What most insurers endeavor to do, and this leads to a lot of frustration by their members, is manage care - to ensure that care is given in a way that is cost-effective. That means care that finds problems early or prevents them all together, thereby keeping members healthier and required fewer healthcare resources. Much of the field of Disease Management, in which insurers or their vendors attempt to coordinate care for members with chronic conditions that must be monitored and controlled to prevent more serious healthcare problems, is based on this idea. The ability for insurers to truly manage this type of care, though, is limited by the data availability issues and quality of care problems I discuss below.
2. Healthcare Financing through employers is a non-starter. The other way that healthcare insurance differs from traditional insurance is that the risk pool for healthcare is more limited. In life or auto or home insurance, your policy is part of a pool that includes all the other people insured by that company. Any costs from bad events are spread among all the other policy holders. In healthcare, other than Medicare or Medicaid, your risk pool is basically the other employees in your company, and/or their dependents. Most large employers are "self-insured" - that is, they company does not buy insurance at all. Rather, they pay the insurance company a fee to administer a healthcare benefit, but pay directly for the care their employees based on the insurer's fee schedule. It is cheaper for these large employers because so many of their employees are basically healthy, so the costs of the few with significant medical costs are spread among all their other employees. Smaller employers buy traditional insurance, but their risk pool is still their employee base, and the premiums each employer pays must be equal to or greater than the cost of the care their employees receive. Thus one premature birth or serious car accident among a small employer group can raise the subsequent healthcare premiums for that employer to rates that are impossible to pay, so the employer drops coverage.
The other problem with this financing system is that there is no minimum package of insurance benefits employers are required to purchase. Employers can and do buy policies for their companies that do not cover preventive care, for instance, or have very low lifetime coverage limitations that can leave employees with no coverage at all. Many of the diaries I see on this site decrying evil insurers describe incidents that likely were caused by the employer buying a crappy plan with few or miserly benefits, and then leaving it to the healthcare insurer to play the bad guy and deny care.
3. Healthcare quality is bad, but we still pay for it In the mid-nineties, the Institute of Medicine began a series of reports looking at the quality of care (IOM Quality of Care Reports). Their findings have been frightening:
- Between 44,000-98,000 Americans die from medical errors annually (Institute of Medicine, 2000; Thomas et al., 2000; Thomas et al., 1999)
- Only 55% of patients in a recent random sample of adults received recommended care (McGlynn et al., 2003)
- The lag between the discovery of more effective forms of treatment and their incorporation into routine patient care averages 17 years (Balas, 2001; Institute of Medicine, 2003b)
- Medical errors kill more people per year than breast cancer, AIDS, or motor vehicle accidents (Institute of Medicine, 2000; Centers for Disease Control and Prevention; National Center for Health Statistics: Preliminary Data for 1998, 1999)
These quality problems do not exist because of insurance companies, but because of the way we handle medical care in this country. Physicians are human beings, but we expect perfection from them in their chosen field. This is what I call the Little House on the Prarie system of medical care, where kindly Doc Baker has the medical records of all 300 townspeople in his head, and everyone just assumes he will do the right thing all the time.
Compare physicians to airline pilots, who are also highly trained and skilled professionals who make life-or-death decisions on a daily basis. We do not expect pilots to remember everything they learned; rather we expect them to follow checklist after checklist - to actually touch each dial and read each display to ensure the airplane is proper operating condition before they attempt a take-off. Pilots also have to undergo training updates at least annually. Physicians are expected to remember everything they learned in medical school, and to keep up with rapid advances in medical technology, without any real requirement for continual training. There are state licensing and board certification standards that require physicians attain a minimum of continuing education credits, but those can vary and there is no requirement physicians attain board certification.
Physicians make mistakes, it is inevitable. But contrary to any other industry we actually reimburse them for making those mistake, and then pay them again if they have to perform more procecdures to fix the problem. Do you pay your garage for an additional repair if they failed to fix the problem the first time?
4. Information flow in healthcare is pathetic I travel 50 - 75% of my time for my work. In any city in this country I can use my ATM card and get money. On a bad day it might take 30 seconds for my bank to know I've made a withdrawl. Compare this to a relatively minor surgery I had a few years ago. The surgeon actually shared office space with my primary care doctor; although they practiced in the office on different days, they shared staff. My primary care doctor actually had to ask me if I'd been discharged from the surgeon's care - he hadn't even bothered to drop a not in my medical record to tell my primary care doctor. And communication among healthcare professionals actually gets worse when you are dealing with separate offices.
Physicians may be the most technologically phobic group of professionals I've ever met. Although I understand younger doctors are much better about technology, the information systems in healthcare suffer greatly when physicians rely on paper medical records. Add to this the cottage nature of the healthcare industry - with physicians operating alone or in small groups with relative autonomy and independance with almost no oversight - and you have a recipe for disaster. I have physicians complaining to me all the time about lack of information - whether their patients have gotten necessary tests or followed up on recommended referrals. Lack of information leads to redundant care being provided in some instance; in others care is just missed. Physicians cannot determine what medications their patients are on or whether adding another one will cause significant medical problems. The more phsyicians involved with a patient, the worse the information problems get, and older people in the Medicare programs see, on average, seven different physicians.
5. We drive past the gym to eat at McDonald's Our country has the most bizarre relationship to healthcare. We want the latest and greatest innovation in care, at a moment's notice, but then resist when we get commonsense advice to exercise more and eat right. We have a culture that worships the automobile and the fast food joint, and we've created an infrastructure that basically requires you to drive everywhere, unless you live in one of the major Eastern urban center. As our society ages, the health problems of our poor lifestyles are only going to get worse.
That's all the bad news - so what do we do?
Many on this site are in favor of a single-payer system, which I don't support. Although these systems can work pretty well, in European countries for instance, those countries tend to be relative homogenous, and are far smaller in population than the US. Our country has vast diversity, not just in population but in geography and local habits. What works to keep people healthy and meet their needs in Boston is likely to be a very different system than that will work in the rural areas of Wyoming. In addition, any governmental control of healthcare delivery means a bureaucracy as bad, if not worse, than what we face in a private insurer. However, private organizations have the added benefit of flexibility to meet local needs that the government does not; a standard benefit package also would make administration that much easier.
I do not think that healthcare coverage itself should be subject to the whims of the market; I believe in univeral healthcare access and coverage. In fact, far from believing healthcare is a right, I believe it is a public good like the environment or civil defense. We all benefit if we have a healthy productive workforce, that is how our economy grows. But I do agree with President-Elect Obama that we have an existing infrastructure we should not scrap as we work to improve healthcare. Here is a broad outline of how I think healthcare should be changed.
Universal financing of healthcare We must separate healthcare coverage from employment. The costs of healthcare represent a huge liability for our employers, and may actually serve as a negative if we're trying to attract jobs back to the mainland US. I firmly believe, given per capita spending on healthcare, that we have more than enough money to finance a universal program, if you add the federal costs for Medicare and Medicaid, along with state spending on Medicaid and private spending on commercial insurance premiums.
I don't envision a single payer system, but I don't see how you cover all Americans without having the federal government (or potentially the state governments within an overall federal framework) manage the financing. What is currently spent on insurance premiums can be converted to a payroll tax to finance healthcare. By doing that, it actually spreads the cost over all employees and employers, rather than those who choose to provide health benefits, and should be cheaper on a per capita basis.
The federal government would be responsible, though, for setting a minimum level of benefits - a standard package. Consumers could purchase additional benefits, but never get any fewer.
Require all insurers and healthcare providers to be non-profit I do not believe anyone should be trying to satisfy shareholder's income expectations on the backs of sick people. Healthcare provision and improvement require a long-term view, which is exactly opposite the pressures of the stock market.
I envision healthcare "insurers" transformed into healthcare administrators. The federal financing system would function like a large self-insured population - the administrative organizations would receive a fee for processing claims, managing care and building and maintaining provider networks. However, their payments would be supplemented by bonuses based not on financial results, but on objective measures of quality (covering both preventive and chronic care services) and satisfaction of members choosing those administrators. Just like open enrollment season now, all citizens would have the responsibility to choose an administrator each fall for the next year. These administrators would also be laboratories for different ways to reimburse physicians and other providers to promote quality care and to energize consumers to self-management; there would also be administrators who would take on the greater challenges of inner-city populations, or the seriously and persistently mentally ill for higher administrative rates.
Radically restructure the delivery of care We need to restructure healthcare in three major ways - training, choice of professionals and settings of care. Currently medical schools, and to a lesser extent other healthcare professional training programs, are too expensive and too exclusive. Unlike any other professional training, medical school requires full-time study, with the subsequent high cost that leads to extensive student loans and the need to make significant money when training is over.
The federal government should take the lead in creating a military-style public service program to allow physicians and other professionals to receive free training in return for 4 - 5 years of service in underserved areas and to underserved populations. Training should be open to those who can afford full-time study and those who prefer a part-time process.
We also need to stop relying on physicians to such a great extent. Basic primary care can be effectively and efficiently delivered by nurse practitioners and/or physician assistants, with appropriate training on when/how to triage cases to physicians when more complicated care is needed. This may require, however, changes in licensing and training requirements for these provider types.
The final leg of restructuring is to move from the doctor's office setting to more comprehensive and convenient settings. We must change the cottage nature of the healthcare industry to reflect the way that people work and live today. In urban areas, this likely means more urgent care centers and large group practices, where primary and specialty care practice in the same setting, that are open during evenings and weekends. This makes healthcare more accessible to the average consumer, and ensures better care by not requiring multiple visits to see mulitple providers. For instance, a diabetic patient would be able to get laboratory tests, nutritional counseling, foot examinations, and other needed care all at one place, during one visit. Rural areas would likely need mobile providers - like the old circuit judges of the 1800s.
I.T. I.T. I.T. I.T. I.T. The final step I think is vital to our healthcare industry is a massive investment in IT. It is not enough for physicians and other providers to embrace electronic medical records, we must ensure those electronic systems are intraoperable, and can communicate with one another quickly and efficiently. Real-time data on patient care is vital for ensuring patient safety and reducing redundant care. Systems must be adapated (e.g., hand-held devices for physicians) to actual patient care and secured for patient protection.
I am in no way proposing that my solutions are a complete roadmap to healthcare reform, nor would they instantaneously and miraculously improve healthcare. There are many other reforms necessary, for instance handling undocumented workers and improvements in public health systems to deal with issues like obesity, in order to reduce strains on the system. But I do believe tackling the issues of IT, coordination of care, and delivery of care must be addressed no matter what national system we put into place.
We also have to understand that there is no "magic bullet" for healthcare. Any system we implement will have deficiencies and create frustrations and will need continual monitoring and improvement over time.