My uncle’s tale illustrates the fundamentally American tragedy of experiencing financial and medical catastrophes simultaneously, and having to choose between rationing one’s own care or depleting precious financial resources for potentially lifesaving treatment that could as well be futile.

From my perspective as a surgeon, an additional tragedy is that my uncle never got the chance to know his cause of death with certainty. There is a small chance (approximately 5 percent) that his jaundice arose from a benign or treatable condition such as lymphoma, an autoimmune process, or another noncancerous condition, and that if he had received full treatment he would be alive and well today. But a diagnostic surgery would likely have added $100,000 to his final medical costs. Thus my uncle weighed the odds and rationed his own care to preserve his daughters’ inheritance for their future benefit.

To answer the question I posed at the end of the previous article, I do not believe that my uncle was treated fairly by the system. Sadly, he was just a few years too young to receive Medicare benefits, despite having paid into the system for decades. I was especially struck by the feedback about my uncle’s story from readers in France, Poland, Canada, Cyprus, and other countries with universal health care who were stunned to read of the dreadful timing in this desperate situation.

 

The Problem:

Only in the American employment-linked health insurance system does the loss of job also bring with it a loss in access to health care. The special irony is that my uncle had actually just become employed as an independent contractor a few weeks before falling ill. He thus had not felt the need to purchase COBRA as he hoped to soon receive health benefits. His charity care application had been denied as he was employed when he fell ill and had truthfully reported his future inheritance from his mother (even though he would not have access to it for over a year). Given these assets, he likely would not have qualified for Medicaid either.

In 2000, the WHO rated health systems worldwide. The most interesting aspect of this report was the methodology. One fourth of the ranking was dependent on the concept of “financial fairness”, with the ideal that the system be progressive, wherein wealthier people would pay a higher percentage of their income for healthcare than poorer people. Instead, the way Americans pay for healthcare is actually the opposite of the ideal championed by the WHO. The underinsured and poor pay a higher proportion of their household income for health insurance and are particularly vulnerable to bankruptcy from medical illnesses, while wealthier people are more likely to receive tax free complete health coverage as a benefit of employment.

Except for patients who require dialysis or develop certain disabilities, Medicare is generally an all or nothing proposition, with the magic threshold at 65 years of age. According to the Medicare website, “Generally, you are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment and you are 65 years or older and a citizen or permanent resident of the United States.”

Between joining the workforce at age 25 and retiring at age 65, many Americans will make Medicare payments for many years beyond the mandatory 10- year requirement. No credit is given to people like my uncle, who pay into the system for decades but fall ill before the age of 65, whereas pitfalls and loopholes in the current Medicare system cover others who never paid into the system at all.

I observed one such loophole during my time working as a general surgeon at a county medical facility serving the indigent population in California. Not infrequently, I witnessed “medical travelers” with kidney failure who came to the United States from other countries, where dialysis was no longer offered to them cost-free after the age of 65, thereby requiring them to pay out of pocket. These patients would apply for “emergency” Medicare in the U.S. to continue life-saving dialysis that they could not afford in their own countries. In other instances, patients actually possess sizable financial assets but conceal them by giving these away to their children or not reporting these truthfully (unlike my uncle) to qualify for charity care or meet Medicare eligibility requirements.

It is hardly news that the existing Medicare scheme already includes an element of rationing by limiting the number of Medicare inpatient and long-term care days a person can receive. Our nation has yet to meaningfully discuss end of life care and the potential solutions by setting a budget to overall spending, but starting this discussion will inevitably become necessary.

In 2010, Medicare had 47 million beneficiaries or 15.3% of the total population. In 1965, there were 19 million enrollees (9% of the total US population). This increase is partly due to the significantly greater life expectancy (age 70 in 1965 to age 79 in 2011) achieved by the successes of the American health care delivery system. This more than doubling of the number of recipients is a contributory factor to the looming insolvency of Medicare.

Reforming Medicare:

An alternate construct might be for individuals to accumulate a budget of health care benefits for personal use that varies according to the contributions they made into the Medicare system over their lifetime, and is available regardless of the age at which they would like to make withdrawals. Perhaps this individual allocation could be supplemented by a fixed baseline contribution from the government, which we could place in the range of $20,000. In this alternate world, medical prices and costs would be completely transparent, and the patient (or decision-maker if the patient is incapacitated) could choose from a menu of options for how aggressively to spend this allocation, recognizing that if they exceed the budget is exceeded then he or she must pay the balance on their own. Luxuries and optional care will either deplete the budget, or be paid for out of pocket. The concept of personal responsibility and taking care of one’s health will be reinforced in this scheme, though an adjustment must be made for those who fall ill to diseases that are the result of bad luck and circumstances beyond their control. Perhaps an individual can even choose to opt out of the program (as my uncle would have done), to be able to save some fraction of the remaining balance as an inheritance for his or her descendants.

Equally important, this mechanism may drive health care prices down, as purchasers will be motivated to be frugal and educated, rather than ignorant, of the true costs of care, while providers, hospitals and manufacturers will need to lower prices as they compete for business.

I discovered the Costs of Care essay competition while researching the key difference between the “costs of care”, and the “price of care”. The two are quite distinct, and have been fundamentally misunderstood in the health reform debate. In addition to “bending the cost curve”, our nation should seek to “bend the price curve” through a deeper understanding and transparency into how the health care industry sets the prices of medical care in America.

Ultimately, my goal in writing this essay is to assist in reframing the national dialogue about health reform. The debate about rationing of health care should not simply be about the extremes of either denying access to all care, or allowing unlimited access to full treatment. Instead the time has arrived for our nation to intelligently explore the full range of possible solutions in between.

Epilogue:

I celebrated the two year anniversary of my uncle’s passing by visiting the long term care facility where he spent his final days. I was impressed by several visible changes for the better (new services, a higher occupancy, social programs, and a refurbished lounge for residents). It gave me hope that progress is possible. My uncle’s younger daughter will begin college in Pennsylvania this fall. His elder daughter graduated with honors from college in May 2011 and will begin work in Manhattan over the summer. At her commencement, a video was played from freshman week four years earlier, and footage of my uncle that our family had never seen before was displayed to all of the graduating seniors. Despite making the ultimate sacrifice, my uncle’s presence was palpable at the celebration, and his intent fulfilled.

John Maa, MD, is Assistant Professor of Surgery at the University of California, San Francisco. This post is a follow-up to his original story, The Ultimate Sacrifice.

Costs of Care (Twitter: @CostsOfCare), where this post was originally published, is a Boston-based nonprofit organization that collects anecdotes from doctors and patients. We feel these stories are poignant because they put a face on some of the known shortcomings of our system, and also because they unveil how commonplace and pervasive these types of stories happen.

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6 Responses for “Lessons Learned from my Uncle’s Sacrifice”

  1. Nate Ogden says:

    “Only in the American employment-linked health insurance system does the loss of job also bring with it a loss in access to health care.”

    Doc you contradict yourself the next line admitting he had COBRA available and decided not to take it. T=You are also ignoring the individual market that is not linked to employement.

    “I was especially struck by the feedback about my uncle’s story from readers in France, Poland, Canada, Cyprus, and other countries with universal health care who were stunned to read of the dreadful timing in this desperate situation.”

    In these other countries he would have had universal healthcare but we wouldn’t have had the large sum of money to pass on to his daughters. To me it still reads like you want to have it all, medical bills paid and cash in the bank. Its either or, or neither quit frequently.

  2. steve says:

    Matt Welch wrote at Reason about the difficulties he had faced changing jobs and losing insurance for the 90 day waiting period even though he was going to be insured by the same insurance company. Since your uncle had a family, I would assume he would want insurance for his family. COBRA for a family can easily take up the majority of one’s unemployment insurance. For people without significant savings, this is an issue.

    ” but we wouldn’t have had the large sum of money to pass on to his daughters.”

    http://www.smithgcb.demon.co.uk/pp_inher.htm

    Of course, he might still be alive also.

    Steve

  3. Barry Carol says:

    Family coverage under COBRA probably ranges from $1,000 – $1,500 per month. Even with zero income beyond unemployment benefits, many people could afford to pay for health insurance out of savings but choose not to. In effect, they prefer to roll the dice in the hope and expectation that they won’t get sick before they can find a new job and secure employer provided health insurance again. The consequences of losing that bet can be severe as was the case here. While many people cannot afford to take up COBRA insurance, the writer’s uncle could have but, unfortunately, didn’t.

    As for financing health insurance with progressive taxation, I don’t think it’s a good idea. The reason is that health insurance lends itself to precise pricing unlike, say, defense spending, law enforcement or environmental protection and cleanup. Why should someone making $1 million a year pay $150,000, assuming a 15% health insurance tax rate, to pay for family coverage worth $15,000 at most? Germany, which uses a payroll tax to fund its health insurance coverage, applies a 15% tax (employer and employee combined) but it’s capped at €43,000 of wages or about $62,000 at current exchange rates. I don’t have a problem with progressive taxation generally, up to a point, but I don’t think it’s an appropriate way to pay for health insurance.

  4. “An alternate construct might be for individuals to accumulate a budget of health care benefits for personal use that varies according to the contributions they made into the Medicare system over their lifetime, …… Perhaps this individual allocation could be supplemented by a fixed baseline contribution from the government, which we could place in the range of $20,000…….. The concept of personal responsibility and taking care of one’s health will be reinforced in this scheme, though an adjustment must be made for those who fall ill to diseases that are the result of bad luck and circumstances beyond their control.”

    I see… Something like variable rate vouchers, with a piddly fixed floor that has no relation to actual costs.
    And if you are fortunate enough to not get sick or if you are rich, you just take your money out of the pool. Very progressive.
    Just privatize the whole thing with exceptions made exclusively for the certified virtuous poor, of course….

    Wonder what those “readers in France, Poland, Canada, Cyprus, and other countries” would say about this nifty solution…..

  5. Khudoyor says:

    Every state will be slightly idfferent, but I’ll give you the proverbial swine slap across the face about why Medicare is generally the worst thing invented by modern liberalism in this nation, in only ONE word: Access.In my state, there are 1,127 primary care Medical Doctors, and 130 Osteopaths in family practice. That’s 1,257 doctors that handle routine care (non-emergency care, not otherwise in a named specialty).Of that 1,257, less than 11% accept Medicare assignment. CMS provides these figures, so my point is irrefutable. As others have noted, Medicare pays a fraction of an already deep discounted rate that is substantially below what providers call usual and customary (a fancy phrase for retail prices ).When a doctor refuses to sign up for Medicare assignment, they still get paid for treating Medicare patients, but they get EVEN LESS than the already bottom dollar (read: guaranteed loss) reimbursements of the doctors that willingly accept Medicare assignment. This is not my opinion. This is verifiable, irrefutable fact, and the source is CMS. Nobody knows better how bad Medicare is than Medicare itself.Of the several hundred doctors I advise in my practice, more than 95% go out of their way to refuse Medicare patients. Some go as far as sending out birthday letters prior to age 65 politely asking the patient to find another doctor (if you schedule an appointment after age 65, they aren’t always so polite some instruct their staff to refer Medicare patients to CMS for the very short list of doctors willing to work for the absolute lowest wage a doctor can possibly earn).What this means to you is this: More than 89% of primary care doctors do NOT want Medicare patients, because they are guaranteed to lose money on those patients.What this also means to you is this: Private insurance subsidizes Medicare in an off the books fashion, via cost-shifting. Take away private insurance, and not only would Medicare go broke virtually overnight, providers would vanish faster than a modern liberal can fail at math (and they fail 100% of the time faster than any other group).Doctors aren’t going to work for free. Neither will nurses, and other support staff (and you can’t force them outside of a chattel slavery system of forced labor). They will all seek other ways to earn a living. This will lower access even further from the abysmal point it is now, and lower access ALWAYS equals higher costs, lower quality, and more early deaths among those modern liberals who failed at math so fast.Other points of interest: Largest and fastest growing form of crime in the USA is identity theft. Among that large group of crimes, the single fastest growing aspect is medical Identity theft. A Medicare card has a street value of $500 to $700 ten times that of a stolen credit or debit card.The second most profitable crime in America today? Medicare fraud. The source for that is the same government that built the failed collectivist system. The smart criminals are leaving the drug trade and turning to Medicare fraud. The numbers are staggering. A mid-level drug trafficker might make $300,000 a year, taking extraordinary risks. The same crook can make $30,000,000 stealing from Medicare, and never get shot at.Talent and capital go where it is rewarded, and stay where it is well treated. This axiom applies to the talent that goes into medicine, and it also applies to talent when it comes to criminals seeking to profit from the system that has ZERO financial incentive to fight fraud (ONLY a for-profit enterprise will root out the thieves, and find ways to detect them before they cause real damage the government just asks for more funding to replace what was stolen).

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