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Six Dirty Little Health Care Secrets

Oct
19
2006

With no lurid sex scandal this week and apparently little public interest or Congressional caring about what’s going on overseas, ABC News and USA Today have turned to the health care system to fill some air time and column inches. As you may have heard, ABC’s even been wise enough to ask a couple of bloggers – yes, I’m one of them – to chime in on the debate.

They were asking for solutions to the health care crisis. But asking for that’s pretty much a waste of time. Americans may hate their health care system, but they apparently like their health care providers and even think that their costs are OK. Or at least that’s what one survey said. But suveys don’t tell the whole story – they serve as a kind of cover for the real reasons it’s so hard to change the system we live under.

Even though Americans want universal coverage (well not all, but 3/4 or so have historically been in favor), if you tell them that they’ll have to sacrifice choice of doctors or access to certain procedures, then half of that support fades away. Now a wise health care pundit would tell people that the U.S. is the only country in the world that actually restricts choice of doctors, at least for those in managed care plans like health maintenance organizations (HMOs) and preferred provider organizations (PPOs) which is about everyone. And a cynic might notice that many people, particularly those without insurance can’t get access now to many of those procedures that might be “rationed” under a universal system. And both pundits and cynics know that the only people who get carte blanche access to basically any doctor they like and any procedure they (or their doctor) want are those already in America’s universal health insurance system – that’s those over 65 who are in the Medicare program. But then pundits and cynics weren’t the ones surveyed

So we have Dirty Little Secret No. 1: Most Americans view change as something that needs to happen to someone else, until their own situation gets much worse.

The California Health Care Foundation put out a report this week suggesting three ways to cover the uninsured. But it didn’t dare broach the most obvious approach that every other country uses – a tax-based single payer system as a solution. Instead, their default option is to imitate the Massachusetts system which basically creates an unaffordable and unenforceable individual mandate. Meanwhile in the industry, everyone’s discussing transparency (i.e. telling consumers what things are priced at, and maybe even what they cost) and “pay for performance” as the ultimate answers. Which brings us to Dirty Little Secret No. 2: The really expensive care is delivered to people who are too sick to be able to have a meaningful discussion about what they “want” and that in general people that ill (and usually that old) often want someone else to be taking care of that decision for them.

The only realistic version of “transparency” involves the people paying the bills – that is employers and the government – sitting down and seriously looking at all the data for providers regionally and nationally, and figuring out who’s doing a good job (or not). Then they need to channel their patients to the stars and and beat up on the bad performers (that’s the “pay for performance” part). The problem with that process is that patients in general don’t realize that their doctors are bad performers, and won’t be happy when they’re told that they can’t go to nice Dr. Smith and have to drive across town instead. So they’ll revolt – the poor performers will encourage them to do so, of course – and the employers nerve will crack. And next year, they’ll fold on price and let all the bad guys back into the network, which is Dirty Little Secret No. 3.

That’s exactly what happened under the “Managed Care Revolution” in the 1990s. Because the government didn’t put the regulatory mechanisms in place to support health plans and employers in their (very weak) demands for more cost-effective care, providers – doctors, hospitals, labs – were able to sidestep the cost control efforts. Patients complained, and employers gave up. To be fair some things are slightly different now. For one, costs are much higher and a few consumers and even employers are becoming slightly more intelligent “purchasers”. But both of those trends are very slow incremental changes, and the industry is discussing moving to transparency and pay for performance as if the 1990s provider and patient revolt had never happened. Furthermore, even the most optimistic industry insiders think that this is a ten year process.

But the remorseless rise of costs, the collapse in employer-based insurance plus the aging of the boomers into the decade and half before Medicare cuts in at age 65 – when health insurance gets really expensive and hard to get – means that Dirty Little Secret No. 4 (the converse of DLS No. 1) is bearing down upon us: It’s very likely that some major finance reform will become politically unavoidable in the next decade or so. That is, enough Americans will get to the point that they become the people who need the change–we’ve seen the enemy and it is us. And at that point it’s likely that whatever transparency and financing mechanisms the health care industry is playing with at the edges with now will be washed away, and we’ll end up with some mandated single payer arrangement with price controls that looks much like Medicare does now – only with rationing of procedures and limits on choice of providers. So, there you have it, Dirty Little Secret No. 5.

If that doesn’t happen, we’ll eventually end up with a health care system like Brazil’s where you can have anything you want if you’re rich, and most of the rest of you can die in the slums. And Dirty Little Not-so Secret No. 6 is that plenty of Americans in the Grover Norquist school think that that’s just fine.

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