The ACP Advocate Blog

by Bob Doherty

Monday, October 5, 2009

The interconnectedness of health reform

One of the problems with reforming the health care system is it's so darn complicated. Critics have made a point of the House bill being over 1000 pages in length, and polls show that the public continues to be confused about key details.

It would be nice if there was a simple way of fixing the health care system that would take only a few pages of legislation and could readily be explained to the public. The reality, though, is that health care itself is so complicated that there are no simple fixes or easy explanations, and any effort to fix one part of the system will create multiple connections to other issues.

Remember the children's rhyme - "the toe bone connected to the foot bone, and the foot bone connected to the ankle bone, and the ankle bone connected to the leg bone ..." - well, the health care system is something like that. A policy that deals with one particular aspect will almost always be linked to another.

Take the popular idea of prohibiting insurance companies from excluding people with pre-existing conditions. It is hard to see such a requirement working though, without a requirement that people buy coverage (otherwise known as an insurance mandate). Otherwise, some people would just decide to go without insurance coverage until they get sick, knowing that insurance companies could no longer turn them down. This would screw up the whole concept of pooling risk. If you are in favor of requiring insurance companies to accept people with pre-existing conditions, you pretty much have to support a requirement that people buy coverage, because one won't work without the other. Yet many of those who support a ban on pre-existing condition exclusion are opposed to an individual mandate.

Similarly, take the idea of requiring large employers to provide coverage to their employees. Many of conservative critics who object to an employer mandate oppose expansion of government-funded health care. But when a company that can afford to provide coverage, but chooses not to, their employees will likely end up getting coverage from ... you guessed it ... Medicare, the SCHIP program, or private coverage subsidized by taxpayers. So the best way to limit the number of people covered under taxpayer-funded public or private plans, if that is your goal, is to link it to a requirement that large employers provide coverage to their employees.

Or, take the idea of expanding Medicaid to the poor. The Washington Post reports today that the governors of many states are concerned that the federal government will not provide them with enough money to pay for enrolling up to 11 million people in Medicaid. Also, the article notes that any expansion of Medicaid may not ensure access to care if the payment rates are so low that physicians refuse to treat Medicaid enrollees. The House bill has a provision to raise Medicaid rates for primary care until they equal the applicable Medicare rates but the Senate Finance bill lacks such a provision. Unless Congress provides states with the money needed to increase payments to physicians at the same time as it demands expanded coverage, the likely result will be that many of the newly covered won't be able to find a physician.

It is because of these many linkages that ACP has taken the view that incremental reforms that deal with only one part of the puzzle won't be effective. If we are going to subsidize coverage for the poor through Medicaid, then we will need to increase Medicaid payments to physicians. If we are going to prohibit insurers from excluding people with pre-existing conditions, then we will need to require people to buy coverage. If taxpayers are going to subsidize coverage for those who can't otherwise afford it, then we need to require that large employers - if they can afford it - provide coverage to their employees, or pay back taxpayers for shifting the cost onto the rest of us. And if we are going to provide everyone with access to an affordable health insurance plan, then we also need policies to ensure that there are enough physicians, particularly primary care doctors, to take care of them.

Today's questions: Do you agree that a ban on pre-existing condition exclusions needs to be linked to an individual mandate to buy coverage? That subsidies to help people afford coverage need to be linked to a requirement that large employers provide coverage? That expansion of Medicaid and other health insurance programs needs to be linked to increased payments to primary care physicians?

4 Comments :

Blogger PCP said...

I think we ought to stop advocating for the Insurance companies, they are quite capable of advocating for themselves, and have turned us into the greater fools in the past 30 yrs in case one has not noticed.
Bob, I understand your desire to be "fair" but when you say some thing like this:

"Take the popular idea of prohibiting insurance companies from excluding people with pre-existing conditions. It is hard to see such a requirement working though, without a requirement that people buy coverage (otherwise known as an insurance mandate). Otherwise, some people would just decide to go without insurance coverage until they get sick, knowing that insurance companies could no longer turn them down. This would screw up the whole concept of pooling risk."

That is the exact way I feel at 2am each morning when I have to take indigent call at the local hospital, for patients who I have never seen, probably won't get paid for, are often the hardest to care for(as nothing has been done for them previously) and in all likeliness will not follow up either. Why exactly is that fair when that burden falls on a Private practitioner, who is simply expected to do that as a social obligation, but for an Insurance company it is an inordinate burden?
I am quite frankly puzzled by that!

Much of this goes back to people taking personal responsibility. The current reforms have very little by way of provisions to push, cajole or otherwise entice people into healthy behaviors. On the contrary it wants to spread the costs. To a point that is fine, but when people begin to feel it to be an entitlement, that is the point at which things start to go awry in the system. I fear we are at that tipping point of no return. We all see that behavior with Medicare Patients and the skepticism is mostly around taking that national. We quite simply cannot afford that as a country.
Reform must include provisions for personal responsibilities. Perhaps rebates for good behaviors, and penalties for bad ones. Otherwise we will witness a race to the bottom.

October 5, 2009 at 7:31 PM  
Blogger Rich Neubauer MD said...

Granted, it was a simpler time, but when Medicare was established in 1965 it paid fee-for-service and fully reimbursed physicians their asking rate. It was only after that resulted in dramatic upticks in utilization and massive cost overruns that it was realized that something else had to be done. To a certain degree, the politicians who put Medicare into existence instituted a program that was naïve at the time but has proved durable and even popular (witness “keep the government out of my Medicare”). Who knows what the health care world would look like if we didn't have Medicare.

At the same time, we now also see Medicare as dysfunctional. It has contributed to a toxic payment environment for primary care, it has been ineffectual at controlling overall costs and is on the brink of being insolvent, and part D was instituted in a way that leaves much to be desired. The SGR formula is a distraction that needed to go away a long time ago. Part of the problem is that we’ve tweaked Medicare incrementally rather than in a comprehensive manner. This has resulted in decisions that have not taken into account unintended consequences, or even ones that might be easily anticipated.

So, to answer your questions – we know much more now about the dynamics of health care delivery system than we did in 1965. The connections that you draw are logical and it is pretty obvious that we do need to design such features into the “uniquely American” solution that appears to be emerging from the debate. Even with care, the complexity of the systems we are discussing make it likely that there will be unanticipated consequences of whatever is done and thus a need for careful ongoing reassessment. This does not even take into account “the elephant in the room” of cost control which is in itself incredibly complex and not really being seriously discussed at the moment – at least not in any comprehensive manner.

I think this is a time when basic principles matter. What I hope emerges from Congress is a bill that enunciates the basic principle of universality and tries to achieve it. I hope there is recognition that we need a robust primary care system and that the bill makes inroads on achieving it. Finally, I hope the reform effort at least lays the groundwork for how we can allocate health care based on reasonable assessment of resources and goals in an ethically sound manner. I’ve been most pleased that throughout the debate, ACP has maintained a patient centric stance that seems to me to be consistent with these principles.

October 5, 2009 at 8:55 PM  
Blogger Arvind said...

Do you agree that a ban on pre-existing condition exclusions needs to be linked to an individual mandate to buy coverage? --Yes, but with a different twist. Every individual that has a paycheck/salary that is mandated to buy insurance should be allowed full deduction on his/her income tax. Make health insurance purchase have the same value for individuals as it is for corporations. This will make it attractive for most average folks.

That subsidies to help people afford coverage need to be linked to a requirement that large employers provide coverage?--No, this is sure way of making more Americans unemployed and more companies to outshore/outsource their jobs. It is really naive to think that all those who do not get their health coverage from their employer will end up on public plans (not sure where you get such ideas, Bob). If individuals and families get 100% tax deduction for health insurance premiums, they will not depend on their employers and will shop around for the plan that best meets their needs (not the need of their employer). Elimination of pre-existing condition clause will help this process.

That expansion of Medicaid and other health insurance programs needs to be linked to increased payments to primary care physicians?--Yes, with an addendum. Most physicians that do not deal with Medicaid do so not only because of reimbursement rates, but also because of hassles of dealing with Medicaid bureaucracy and the endless limitations/restrictions. Here in PA, Medicaid even required us to change the HCFA1500 form format in order to submit claims. Why would I want to do that for the worst paying plan?

If the ACP really wants to help its physician-members, it will fight for the right of every physician to have a level playing field when dealing with any payer - to have an honest chance to negotiate rates fairly in open market, based on supply and demand. Once price-fixing is officially eliminated, we will have cost control and higher quality. In a price-fixed market, there is no value for high quality and no punishment for poor quality. Get rid of rigid CPT codes and let common sense prevail. Let the users of care decide what they are willing to pay for a particular medical service; allow transparency and an open market-based solution to emerge. Reforming the process is not as convoluted as you policy wonks make it out to be. If it were made too simple, unfortunately the coding-billing industry would collapse. We could not let that happen, could we?

October 5, 2009 at 10:03 PM  
Blogger Steve Lucas said...

I have a somewhat different perspective. All of the above solutions require third party payors and the involvement of government agencies in providing care. Why not change the business model?

Any number of practice models now use a cash only system for office visits where patients have a direct connection between care and cost. This cuts overhead dramatically and provides a smoother cash flow for the practice.

Allow insurance companies to write catastrophic policies across state lines. Currently insurance is state controlled, and every state has its own list of mandates. Mental health coverage or substance abuse are very important issues, but do they need to be in every policy?

I would also like to see single price transparency by service providers. A MRI cost me, you, and the guy down the street the same, and so on. Let those without insurance know what the cost of a procedure is before they enter the hospital. This will eliminate questions about billing, and create some level of competition between institutions.

My personal concern is we are only playing at the edges of our current system and not really creating the change we need to sustain a viable medical system. There are also many other issues not even on the table such as tort reform, DTC ads, and other issues that also contribute greatly to our current cost structure.

Steve Lucas

October 6, 2009 at 8:58 AM  

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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