Why Healthcare Reform is Needed

Healthcare reform is needed due to fear, morality, and costs, but there are so many opinions out there, things get buried. In fact, it seems the fear of change is perhaps the biggest fear of all. By the same token, for some, they really do percieve no need to change, at least at the current time. Ultimately though, change will happen, if not by planning, it will occur by market forces, well beyond the control of any specific group. The current model is not long term sustainable.

Reform needed due to fear

Folks fear loosing their job, or their employer or insurance company going bankrupt, if they have any medical issues, and even those who dont… if they find out they cant cover the costs of Cobra, and then have a medical problem, there are hosed.

In the back of their mind, many know their insurance is a facade, that if they really need it, it wont be there. Ie if they get cancer, they know their fellow worker who did, ended up having to declare bankruptcy. Of the fellow workers having fund raiser after fundraiser to provide support for their ill child.

Each year, coverage amounts and procedures are reduced, and/or co pays are increased by their employer. This will be an even bigger deal come the end of the year when insurance contracts are up for negotiation.

Riches to rags stories are coming to light, and more and more folks are seeing it can happen to them. It doesnt take much, and even $1 million in savings, if paid at the uninsured rates wont last very long in the case of serious injury or illness. The fellow with a net worth of only $200K is even more at risk.

Domestic abuse stories are coming to light, where in economics and the lost of medical coverage keep far too many in the horrors of an abusive relationship.

Reform needed due to morality sort of

Most people of faith, and many of those who do not ascribe to any particular faith hold that human life should be valued, as should the quality of said life. The concept of accelerating death, euthanasia, and/or leaving an injured person to die are anathama… at least in most states. Ie, many but not all have good Samaritan laws, and also fund Hospice care via medicaid, such that folks are not simply thrown outside to die.

By the same token, morality is tempered by self interest. Ie, its fine to uphold life as of great value, until it will personally cost me, especially if I dont know the person. We had this discussion in aviation some time back, as concerns regulations and cost, and the stats bore out this elephant in the room pretty clearly. Its the same in most state govt transit departments, and in business, where in costs are assigned to human life, and the costs of resulting litigation as a method of managing resources.

  • The proverbial X number of deaths/serious injuries are needed to foster design changes in manufacturing or traffic lights are needed at an intersection in road design.
  • Health insurance premiums would be too high, if risk pools were to include the chronically ill, lifetime payouts were removed, out patient therapy was based upon patient need, the patients needs put first etc.
  • In state governement, political fiefdoms and key programs would be shafted, if the needs of the disabled and chronically ill came first. Case in point MN and CA budget cuts. Those folks dont have lobbyists and are small in number, and its easier to cut them, than other areas.

Reform needed due to cost:

Reform is needed as costs are increasing at a greater rate than wages, even more so since we are starting to enter the era of wage deflation in some areas, and sectors.

Medicare Reimbursement is a joke. A fellow posted on Minn post a few days ago, he had a colonoscopy, and was billed for $1560. The physicians medicare reimbursement for such a procedure is far under $500, some sources suggest as low as $340.

Those in the industry, are well aware of the insane markups..  Ie, if something is sold to the medical market, the sales price is 5-10X what it would be if sold into another market. QA, regulatory, and liability do play a role in this of course, but charging what the market will bare is the primary factor… and the reason for that, 1. the end user is unaware of prices, until its too late to do anything about it, and 2.  its easy to shift said costs to them.

Malpractice liability insurance is insane… I remember working with pacers folks years ago. The professional liability premiums, if they were available, often times were multiples of gross sales. Thus, most independent professionals either go bare or shelter assets. Most manufacturers have to vertically integrate low volume processes, and the use of readily available low cost commercial off the shelf technology is prohibited, thus further increasing costs.

Hospitals, even well run ones are finding unless they put the needs of their infrastructure above the needs of their patient, they can’t keep their doors open. Even Mayo, with its super cool patients first model admits its not long term sustainable practice without reform.

Its not needed for all…

Some folks are blessed with Cadillac plans at reasonable costs. I know, I was one of those folks years ago. The thing is, as time passes, the Cadillac is morphing more and more toward a Geo in most but not all sectors. Ie, congress is excluded, as are some government employees, and a few in the public sector. In other cases, the morphing is pretty well hidden. Ie, John’s kid had cancer years ago, and the insurance was wonderful, but since then, system costs are pretty nominal, and as such, no one really knows how good, or not good the company plan is. Ultimately, if the company is prospering, they can keep up a good plan for quite some time, if not… it might be shrinking over the years, but few are aware of it.

Change is inevitable

If the current model continues to run unchecked, healthcare will grow, until a vast number of people can no longer afford insurance, housing, or food, and then difficult, and potentially damaging changes will be forced upon them. The proverbial medicine or food scenario will become more and more real to many. At that point, change must occur, and most likely it wont be pleasant, ie major care rationing, lack of resources, overworked med staff, and the patient looses big time in contrast with even today. The question is, whether there is enough will to make a change, or if we all go down as captains of our own ships.

Posted on

Skin is Wrong, the Problem with Healthcare

The problem with healthcare solutions, is that they dont address the problem at its most basic level, and that is the skin is in the wrong place. Ie, skin = whos finances are at stake. Insurance companies dictate to Dr’s, and balk at paying, or covering specific items as doing so makes them more money. Patients have no clue if there insurance is fake, poor, or great, as very few use it beyond the trivial things, and many really use it for trivial matters, as they dont directly pay. Many Doctors have no clue what procedures actually cost, and some practice proactive malpractice, which may protect them, but run roughshod over the patients financials. Hospitals and clinics force Dr’s to work on volume, and proactively find ways to maximize revenue, and when they get revenue, they expand, such that they can always whine for more. Malpractice carriers  advice physicians to focus on procedures which may not be the best for the patients finances, but minimize their, and their clients financial risks. Govt gets yanked around by lobbyists, at the whims of who can pay the most for revenue enhancement. Med schools charge outrageous sums, knowing that med students can get loans, irrespective of whether they really can pay them back or not. Each sector wants the best for itself, and let the others hang out to dry… and usually, that means the patient, as they have the smallest voice, and no lobbyist. And lastly, no one wants to admit there is an elephant in the room, who has been there nearly forever, known as health care rationing.

Is the free market a solution?

Some say, the freemarket is the solution… but lets think a bit. The public expects a certain level of care. Would it be cool, for an insurance company, to pull a credit card trick, and say just when you needed surgery, they decided it was only covered at 50% instead of 80%? Or to use contracts of adhesion and slight of hand to change coverage limits under the table? Sure, the free market would correct, but it might take a few quarters, all the while windfall profits could be made. Or what about far out concepts, like coverage up to $5000 would be local, and liberal. For anything more than that, it goes out for bids, anywhere in the world. Perhaps the best deal can be found in startup hospital powered by generators in a tent half way around the world. Again, the free market will correct, but how many folks are affected in the mean time. Or what about docs, and hospitals like those in McAllen TX, where profit motivation results in some of the highest care costs and use of tests/procedures in the world. Left unchecked, McAllen would probably become the richest area of the country…. but at what cost to the rest of the nation?

Is Government a solution?

Is the government the solution…. do you want to argue with a beancounter over some form, while your appendix is freaking out, and your doc is sitting worried to death it could blow at any moment? Or, what if the govt decides the one and only drug for your condition is not medically warranted. A generic is all you need, besides the FDA says there are identical… and of course, the binding agents and alternative processes that are used react, rendering it ineffective for you, and perhaps 50 others, but 1000000 folks do fine with it. Remember lobbyists are in the game, and whoever has the greatest pull gets the best deal… and that means the patient will loose. Look at Medicare part D for example, of how to win huge in the insurance business, yet the patient, doc, hospital pharmacy, and govt get hung out to dry. Of course, the exception is congress…. lobbyists dont have much pull when it comes to the governments own.

Is the current system a solution?

Is the current system a solution…. well, for many, who have rarely used it, or find it works well for trivial matters, its a perfect thing. For others, on plans similar to what congress has, it works very well, whether for trivial, or major things. On the other hand, for those in a major car crash, or with a serious diseases, far too often, they find out the hard way, their “great” insurance turned out to be only great for a few months, and then its a disaster. For others, they hit the limit, ie healthcare is rationed typically to 1-2 million dollars, after that, you are cancelled, and left to fend for yourself. And for others, say those in a early stage startup who can’t provide insurance… well their employees have to buy it out right, with after tax money. Why should such employees, many of whom put in 100 hour weeks have to subsidize all those in the F1000, who get it tax free. Otoh, mear mention of taxing health benefits, and folks scream… yet, they are the ones living off the work of others already. Go figure.

Nope… none of the above in and of themselves are solutions, they dont address the root cause(s), which lead to lack of coverage, overuse, high costs, and low value. I’ve read partly through 1015 pages of the proposed legislation… it doesnt address the root causes either, albeit it does dance around them a bit.

Posted on