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POLICY/HEALTH PLANS: Has George changed his tune?

Found this Interview with KP CEO George Halvorson put out in January. Here he is talking about single payer

PwC: Are there other practices you see overseas that you think are importable?George Halvorson: One of the nice things about almost every other country, particularly the ones with single-payer systems, is that they focus very heavily on primary care. Most health-care costs come from a very small number of people: 1% of the population represent 40% of the costs; 10% of the people represent 80% of the costs, etc. So the largest potential you have for changing the total cost of health care is to focus on that small group of people and take care of them appropriately. And the only really effective way to focus on those people is with primary care. You need to intervene medically with those people before diseases progress to the point where they’re extremely expensive. And that requires a primary-care model.Countries with single-payer systems all have put in place extensive primary care, and employ much less expensive specialty, secondary and tertiary care. That’s actually not a bad model, because what you end up with is fewer people needing a heart transplant. If you need a heart transplant, you may be less likely to get it in those other countries. But if you have really good primary care, you’re much less likely to actually need the heart treatment.PwC: Does that mean there are trade-offs regarding care?George Halvorson: Only if you have to decide where you’re going to invest. If you decide to invest in the primary care part of the equation, then you eliminate the need for some of those very expensive treatments. On the other hand, if you don’t invest in the prevention part of the agenda, then you have to invest much more heavily on the tertiary side of the equation. It’s a cost trade-off for the system. For the patient, think of the quality-of-life perspective: Would you rather have a massive heart attack, or would you rather be treated by a primary care doctor? It makes more sense to focus on early prevention and not on the tertiary care rescue model.

It’s a sensible and pretty accurate description. But that’s not exactly the terms he was using about single payer more recently at the Commonwealth Club when his description of single payer used the terms “rationing”, “Canadians coming to the US” and he alluded to single payer being like the prison health care system. I wonder what changed his tune? Was his body invaded a la Harry Potter movies by Sally Pipes?

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jdPeterAndy WilliamsonBarry Carol Recent comment authors
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Barry Carol
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Barry Carol

Peter, I don’t think there is any question that people who have to pay at least some of the cost of their healthcare, either through a deductible, a co-pay or both will be more cost conscious than those who don’t. If total healthcare costs continue to rise at unacceptable rates anyway, it is quite likely that the problem would be even worse if there were no out-of-pocket exposure. I was thinking recently about medical events that result in very high costs. While we sometimes argue about rationing – via price, supply restrictions, QALY metrics, etc., I was wondering if you… Read more »

Peter
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Peter

Barry, I’m trying to understand the psychology of deductibles that you say will hold down costs. Certainly getting money from people’s pockets rather than insurance/taxes will keep any program from spending more. But will it lower overall costs for healthcare and will it provide better health? We have an insurance system now with deductibles and co-pays (do you want co-pays in your system as well?), it doesn’t seem to be keeping costs low. It does increase profits for insurance companies though. I think people aren’t really concerned about how they spend their deductible since the insurance kicks in after it… Read more »

Barry Carol
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Barry Carol

jd, I agree with your comments related to the relatively small impact consumption of primary care, asking about generic drugs, and price shopping for MRI’s, etc. will have on healthcare spending. I also think the wellness programs are fine, and I support high taxes on cigarettes as well as sensible carbon taxes to reduce air and water pollution. I’m not as sure about taxing unhealthy food because of the difficulty in designing, administering and collecting such a tax. Regarding people who are overweight, they are not always overweight because of a lack of discipline or effort. Sometimes there is a… Read more »

jd
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jd

By the way, barry, I take these comments about wellness to be consonant with your initial remarks in this thread (“Even with great primary care, individual behavior and lifestyle can be a critically important driver of disease development and associated costs,” etc.)
There is no question that this is true. In your last set of comments defending high-deductibles, you focused on behaviors in a clinical setting. But the majority of change really needs to occur before that point to prevent people from getting chronic diseases.

jd
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jd

Barry, I think that high deductibles could have an impact in each of the areas you mention, but I don’t see how the impact of these things is more than a few percent of total health spending. Office visits for colds and other ephemeral or phantom illnesses that go away on their own has got to be a very small percentage of total spending. Is it 1%? 3%? These visits are also inexpensive enough, and some people are anxiety-prone enough, that even with high deductibles most people who aren’t poor and make these visits now will continue to do so.… Read more »

Barry Carol
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Barry Carol

Peter, In the context of high deductible health insurance, I think cost consciousness would happen in the following ways: (1) A patient has a cough, sore throat, cold, mild fever, etc. Rather than run to the doc immediately, see if some rest and drinking a lot fluids, etc. will resolve the problem. If it doesn’t resolve itself in a couple of days, see the doctor then. (2) If the doctor prescribes a brand name drug, the patient makes it a point to ask if there is a generic that will work just as well. (3) The doctor recommends an expensive… Read more »

Peter
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Peter

jd, I agree that taxpayer dissatisfaction on assessing the usefulness of the taxes they pay is an important driver of support for any program. But that certainly is not the case for most parts of any tax system I’ve seen. Rarely do taxpayers get any first hand experience with being able to relate what they pay with what they get, other than maybe garbage collection as everybody gets that. One problem is taxes go into the general fund and are used as political power and control by politicians who get to divide them up. I have become a strong advocate… Read more »

Barry Carol
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Barry Carol

Peter and jd, The two assumptions that underlie my support for high deductible plans, which you and others disagree with, are: (1) high deductibles will save money by making people more cost conscious and judicious in their use of healthcare resources and (2) personal responsibility should count for something. The poor and near poor could easily be given means tested help to cover all or at least a good part of a high deductible while the middle class, upper middle class and wealthy, should pay these costs themselves. People should not need to be completely insulated from paying for routine… Read more »

jd
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jd

Peter, You wrote “So who cares if it keeps taxpayers happy with access to day-to-day treatment.” The short answer: taxpayers care if they’re happy, and taxpayers, when sufficiently motivated, vote to get the system they want. Barry’s point about why primary care is given great weight in a single-payer system makes some sense, though I’m not sure why a similar argument can’t be made for why primary care should be emphasized in commercial insurance as well. I certainly think that part of why commercial insurance in the US is so reviled is that it doesn’t focus enough on primary care… Read more »

Peter
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Peter

“I think single payer systems are structured to emphasize primary care not because they result in less expensive healthcare for the society (though they may) but rather to insure that as many voters as possible receive tangible benefits for the health taxes that they pay.” Barry, you advocate high deductibles as a way to keep costs low (for the taxpayer/insurance company) but you don’t seem to consider that lack of access due to that leads to a minor or beginning condition getting worse and requiring higher cost intervention. Certainly the uninsured already have this system in place. The fact that… Read more »

Andy Williamson
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Andy Williamson

So much about how single payer would work is still an unknown. How would it be implemented, and how will we transition? Will there be middlemen, and if so, to what extent? Who will those middlemen be? George Halvorson’s thoughts on single payer could be an insight into how Kaiser Permanente is seeing the situation evolving. If (when?) single payer happens, it would (will?) have a profound impact on insurers and health plans especially, and it would (will?) mean a seachange for the providers wrapped up in the managed care and integrated delivery systems. Nobody likes change, especially if it… Read more »

Barry Carol
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Barry Carol

If you need a heart transplant, you may be less likely to get it in those other countries. I think this is an important aspect of single payer systems that advocates prefer to downplay or ignore completely. Not surprisingly, my take on this issue is different from Halvorson’s. Even with great primary care, individual behavior and lifestyle can be a critically important driver of disease development and associated costs. In the case of cancer, for example, we know that lung cancer is much more prevalent among smokers. People who work in dangerous environments like coal mines, steel mills, etc. are… Read more »