Jonathan Weiner, Professor of Health Policy and Management at Johns Hopkins, tells it like it is in a great interview at Managed Care magazine. It’s so good I’ve extracted several real zingers. I particularly love the last one about “getting the government out of the way of the market.” Here’s a selection:
“Other developed countries have come to two realizations that we have not come to. One is that it is immoral — or at best, amoral — not to provide health care to everybody if we believe that basic health care is a sign of a developed country.”
“The second realization is that other countries acknowledge that the collective — social insurance programs like the sickness funds of Germany, government agencies, or third parties that look very much like our insurance or managed care companies — cannot provide everything for everybody.”
“When managed care plans, working mainly as agents for employers and government, tried to make some necessary changes and do the right thing, nobody would let them. We shot the messenger. We’re lousy at doing what’s necessary in our health care system. Tightly controlled managed care as envisioned in the ’90’s in the Clinton reform plan is not managed care today. I’m a big supporter of good forward-thinking managed care on the part of executives and clinicians, and I definitely support the appropriate role of the market and consumerism. But we can’t lose sight of population-based care and public policy issues that don’t come naturally to managed care organizations facing pressure every quarter to make a profit and keep investors happy.”
“Within a generation or two, we’ll see the positive side of health information technology. Health care will actually get more humane, with more human interaction and more communication, because the technical side of what doctors do now will be handled by the electronic box. Things like figuring out what tests should be ordered, what drugs should be used, looking at an EKG and comparing it to the evidence will all be done better by electronic systems, using algorithms developed by doctors at places like Cleveland Clinic and Johns Hopkins. Doctors will need to be communicators, facilitators, coordinators, and coaches. I believe that model will favor women doctors, because they happen to be better at those skills.”
“Every advanced HIT system I’ve studied — the British, Hong Kong, Kaiser Permanente, and Geisinger Health System in the U.S. — has a centralized rational entity that looks at the big picture and sees itself as being in this for the long haul.”
“Our health care system is the most expensive in the world by a factor of two, and the most inefficient probably by a factor of three. Yes, we pay our doctors and administrators more and patients who get care get a lot more, but a lot of the cost difference is due to waste. We need clinical research of the type funded by NIH, and we need more operational population-based research. The Agency for Health Care Research and Quality is terribly underfunded now, and once genomics come more fully on line, research into cost effectiveness will become even more important”
“I serve on the Medicare Coverage Advisory Committee, an academic group, and I can tell you that Medicare has nowhere close to the authority it needs. There’s a lot of good people at CMS trying to do a good job, but their hands are tied by legislation. In most cases, they are not allowed to look at cost-benefit issues.”
“Q: Who’s persuading Congress to maintain the status quo? WEINER: Device manufacturers, pharmaceutical companies, everybody and their mother. God bless Big Pharma for keeping the new technology coming out. We may all need it one day, but it doesn’t all work equally well, and it certainly isn’t all cost effective. We cannot as a society pay for everything for everybody. That is absolutely impossible and totally unethical as long as we have 18,000 people a year dying — the equivalent of fifty 747’s going down — because they lack health insurance. My tone and tune will change once we have basic health care for all. We are a rich country and we absolutely can afford it, as long as we operate within a budget.”
“When a young doctor or medical school dean tells me that in this country the market does what the market should do, and government should keep out of it, I tell them that’s fine, as long as they’re willing to return the million and a half dollars in federal and state subsidies for each doctor trained. A plastic surgeon practicing in the fanciest suburb in any city gets more of a subsidy than the family doctor practicing in an inner city or rural area, and that’s not right. Moreover, the plastic surgeon can make a half million dollars a year, while the inner city doctor is making a hundred thousand.”
Tom, thanks for your comments.
>”you are on your way to reproducing Alain Enthoven’s ideas.”
Actually not but I have no problem combining and merging where the outcome is better than either alone. One difference we have is Enthoven envisions “large” groups as approaching 1 million. I think that is still too small. From what I have been able to learn of his approach, which may have recent changes I don’t know about, he still seems to accept “employer financing” and the continuation of government health programs. This still excludes people, places unequal burdens on companies, and complicates the financing and administration part of the process more than I think healthy. He also maintains multiple competing insurance plans which complicates the administration part of the process, as we have it today.
>”How costs are to be kept in check. What exactly you think the competing insurers are competing to provide”
I suggest one single plan for each coverage area (high-deductible, well care, low deductible, child coverage, etc.) with defined deductibles, co-pays, reimbursement formulas rather than the crazy-quilt as exists today in the multitude of overlapping plans. I suggest insurers compete on price, ie. lowest premium. Each has its own underwriters and actuaries, its own cost centers, its overhead, and profit expectation so there will be different bids from each insurer.
The pressure of “lowest bid” will influence how many bidders there are. Over time, both required performance statistics and the number of bidders will indicate to great extent how costly the services provided are. Required reporting will reveal efficient and excessive charges for various procedures and thereby show us what is realistic and possible industrywide. This will influence the periodic revision of reimbursement formulas, and therefore the actual charges of providers.
>” I think there is no difference whatever between a government mandate to buy something and a tax.”
Exactly how each person’s coverage is paid for is an open discussion. I suggested one way. Government-funded basic coverage plus add-ons paid for by individuals is another way. Whatever mechanism is administratively less complex, and which somehow still involves people at some level so they have some personal concept of how much their medical coverage costs is OK with me.
>”Medically-underserved areas are usually rural, and are avoided by physicians primarily on lifestyle grounds. I think you’re wrong to think that this will change under your proposal.”
You might be right but it’s an unknown at this time. I actually said: “I can’t say this proposal will absolutely alleviate the problem but it may be of some value.”
I think you have not told us:
1) How costs are to be kept in check, or
2) What exactly you think the competing insurers are competing to provide. “Coverage” is a non-answer.
You are unrealistic about the need for subsidies.
Medically-underserved areas are usually rural, and are avoided by physicians primarily on lifestyle grounds. I think you’re wrong to think that this will change under your proposal.
I think there is no difference whatever between a government mandate to buy something and a tax. Therefore, the premiums could be paid to the competing insurers by the government with no deadweight loss and most likely an economic gain through further reductions in administrative overhead.
But keep up the good work — you are on your way to reproducing Alain Enthoven’s ideas.
Everyone speaks of the need for health care reform, of rising health insurance costs and of the 46 million Americans uninsured. One major contributor to all of these problems is the way our health insurance industry functions.
Let me illustrate the state of our health insurance “system” with the following analogy:
You own a very competitive widget sales business. Every customer wants a slightly different widget. You accomodate many of these wishes by offering lots of variety and different pricing for each. Every customer wants a discount, which you provide based on a wide variety of characteristics of that customer, including where he lives, his age, where he works, his interests, etc. You also have a very, very active customer service department that fields questions and complaints about your widgets. Because of the variety of widgets, pricing and conditions you offer, these complaint people are very skilled and highly trained. and sometimes difficult to keep, so training is a constant problem. And, by the way, you only distribute the widgets, not manufacture them, but you also set the prices for these various widgets, so you are in the middle between the complaints of your customers and the manufacturers. And you need to please them all becuase your competition is tough and doing the same thing. One of the problems you have is figuring out a balance between what you are willing to charge for these many widgets, what level of complaint to accept, how to be fair to your suppliers and your customers and how to keep them, how you let each of them know that you are being fair across the board (if in fact you really are), and complying with all the various laws in all the jurisdictions where you do business. And although you would like to greatly increase your customer base, you can’t for many reasons, including the cost of the variety of widgets that many of them want, the variety of widgets you are making available, the outlets where they can get their widgets, etc.
Our health insurance “system” is much like this and the effect this has on the health delivery “system” is highly negative.
Now, it seems clear that the unsuccessful attempts over the past twenty years both by governments and private industry to bring health insurance coverage in the United States to everyone while at the same time maintaining private competition is proof that tinkering at parts of the “system” is the wrong way to attack the problem. Like today’s IRS Tax Code, it’s more complicated than most people can deal with. And, truly, it is impossible to understand the full effects of proposed modifications to one or another of its parts.
Health insurance coverage is a highly fractured and inefficient system. Covered groups vary in size from a few dozen to thousands, each with different coverages, different deductibles, different premium structures, different exclusions, and these hundreds of policies are split and fractionalized among dozens of competing companies and systems, etc.
Our health insurance “system” is further fragmented by state, by region within state, by group membership which crosses geographic boundaries, by size of group, as well as student coverage and individual coverage. There is a multiplicity of plans, eligibility requirements, pricing formulas, restrictions… you name it. Performance statistics (underwriting data) overlap incompletely so that it is difficult to cull out meaningful numbers. Group underwriting varies considerably by insurance company, location, size, etc. All of these introduce complexity, with its consequent inefficiencies and inability to identify problems, let alone pinpoint significant high-cost health care providers and services.
Medical providers spend thousands of wasted hours and millions of wasted dollars just filing the myriad forms, and then correcting them when this chaotic “system” produces so many filing errors and the need for explanations and re-explanations. Diagnoses often vary according to the coverage of the patient. Why? Because most physicians really are kind people and they don’t want their patients to bankrupt themselves as a result of uncovered medical care. On top of this is Medicare and Medicaid with similar complexities and inefficiencies.
By simplifying the insurance part of our health care system we can save millions, cover more individuals, and produce more efficiency and, therefore, better results.
I offer the following medical coverage program, different from current AARP discussions, the solutions in the National Coalition on Health Care report, the Massachessetts program, and most programs offering to “adjust” Medicare, and Medicaid. It addresses all the major concerns expressed by virtually everyone, which no other program I have seen does (possibly with the exception of the PNHP plan):
Maintains private competition
Keeps costs in check
Maintains effective oversight
While I describe a nationwide solution, it is possible to adapt this program to individual states until such time as the problem is taken up in Washington.
(1) EVERYONE IS COVERED
Several population-equal geographic health districts of the country will be defined, based on the official U.S. census, and redefined after every new census, as required. Everyone will be a group member… no exceptions.
This is key because today’s multiplicity of thousands of groups, each with their own policy details and pricing, leaves many people ineligible and without coverage, and makes analysis of health and cost statistics and policy coverage pricing impossibly complex and inherently unfair.
The creation of this limited number of large groups allows the law of large numbers to function. No longer will there be groups of 500 or 100 or even as few as 10, which we find today. Why is this important? It’s because the larger the group the more valid the statistics on mortality, morbidity, medical services used, and medical service costs.
Moreover, since everyone is covered and each group is so large, there is no possibility of adverse selection skewing the group’s statistics even though everyone will be free to choose the plan they feel has the greatest cost/benefit to them.
(2) ALL INSURANCE IS PRIVATE
Everyone will be a member of a health district based on their official home residence, so that group underwriting and group rates will apply. In other words, there will be no individual coverage since ALL coverage will be group coverage.
All premiums will be privately paid, whether paid for by employers, organizations or by individuals, with but one exception.
Premiums for those certified as earning below the poverty line will be paid for by the government.
There must be no free ride – persons not registering for and paying their premiums, who can afford the premiums, will have their Social Security Accounts or their Income Tax Bill pay for this coverage.
Several coverage packages, government defined, will be offered as consumer-chosen options:
High deductable – no well-care, no prescription drugs
Low deductible – no well-care, no prescription drugs
Well care Plus high Deductible, no prescription drugs
Well care Plus medium deductible, no prescription drugs
Catastrophic Only (separate or add-on coverage)
An HMO may be selected as one’s service provider, with premiums matching the winning bid in its health district for “Well care plus medium deductible with no prescription drugs”
Prescription Drugs (add-on coverage)
Separate packages in the above categories will be defined for children and adults
Individuals are free to add their own private supplemental coverage to any of these packages.
(3) COMPETITION IS RETAINED
Each insurance company which chooses to bid in a given health district must bid on every one of the coverage packages. Winning (lowest premium) bidders of each package will have a three year contract (5 or 10 years may be arguably better).
The winning bidder may subcontract out administrative functions to losing bidders but will retain ultimate responsibility for performance. Subcontractors may be removed by the contractor for cause.
Should there be no bidder in a given health district, the government will be the bidder of last resort, with its bids (the premiums) for each package defined as the average of the winning bids in all adjoining health districts.
This accomplishes three things:
* No district will remain without coverage;
* the government will need to perform its own statistical analyses, which will give it the capability of reviewing all bids for reasonableness; and
* government last-resort bids will be in line with cost-efficient bids in other districts.
(4) BOTH GOVERNMENT AND PUBLIC OVERSIGHT IS MAINTAINED
Prospective bidders will make application to the government to be on a bid list
Government will approve members of a bid list and publicly disclose their reasons for rejecting any application
The final bid position (not the bid itself) of each bidder in each category will be made public.
Basic cost and performance statistics will be made public toward the end of each contract period for each category in each district
SO, WHAT GETS ACCOMPLISHED?
With this proposal the flaws, inconsistencies, and complexities of the current health insurance “system” are eliminated. The goal of fair, efficient, simple universal health insurance coverage without intrusive government interference and control is achieved.
Because of the effective use of the law of large numbers and the periodic bidding process, government will have no need to mandate or “suggest” treatment plans and will not need to legislate unreasonable reimbursement levels.
EVERYONE IS COVERED,
ALL INSURANCE IS PRIVATE,
COMPETITION IS RETAINED
WHILE BOTH GOVERNMENT AND PUBLIC OVERSIGHT IS MAINTAINED.
Plan coverages can be changed to coincide with the expiration of the contract. Members can change their plan at the same time.
A FINAL PROBLEM TO BE ADDRESSED
There is one other problem that this plan may help to alleviate. The current “system” is doing nothing to alleviate the problem of poor health care in areas of the country with monopoly or near-monopoly providers. There’s no evidence that traditional health insurance coverage has in any way been a directing force in dealing with the negative aspects of non-competitive markets. I can’t say this proposal will absolutely alleviate the problem but it may be of some value.
Because most medical care payments to providers will, under this proposal, be operating under a different and, hopefully, more geographically equitable system, perhaps that will have a positive effect on the distribution of health care providers. With some confidence I can project that under this proposal the situation is extremely unlikely to become worse than it would be under current conditions. Some other mechanism than breadth of insurance coverage and insurance reimbursement is more likely to be necessary to fully address this problem.
Certainly there are details to be worked out, such as how to maintain the presence and viability of multiple insurance carriers in a region so that they are able to be bidders in a later bid period. Perhaps AARP, American Enterprise Institute and other concerned organizations can offer thoughts about this problem – once the basic principle is accepted of having a single non-government system that covers everyone, maintains private insurance as the primary coverage, maintains competition among carriers (with its positive effect of reining in costs), and keeps government in the loop through its oversight role.
In summary: the current system is broken and can’t be fixed. Medicare, Medicaid and the current system of private health insurance no longer meet today’s needs. Any proposal for replacement of the current system must be truly comprehensive and address ALL of the public concerns while keeping administration relatively simple.
In closing, the PNHP plan is probably the best plan thus far proposed, but it may not be the best possible. My plan offers certain advantages over the PNHP plan. Perhaps a combined plan can be developed that is a significant step forward beyond their current proposal.
Significantly, I have offered this proposal to a number of members of Congress, all governors, and a variety of concerned organizations. With the exception of a question posed to me by the California public employees union, the response has been a deafening silence. What do you think?
He’s not a medical doctor, he’s a professor of “health policy” aka one of the middle men who adds no value to the system at all but would love to make money as a “consultant”
he complaisn but he doctor is satisfied with the status quo
the doctor is not an agent for change
“Our health care system is the most expensive in the world by a factor of two, and the most inefficient probably by a factor of three”
“Yes, we pay our doctors and administrators more and patients who get care get a lot more, but…”
“God bless Big Pharma for keeping the new technology coming out”
“My tone and tune will change once we have basic health care for all. We are a rich country and we absolutely can afford it, as long as we operate within a budget.”
“The managed care industry could follow the lead of other countries and set up a not-for-profit research institute. It would be at arm’s length from health plans while representing their interests to academics and government. It would be guided by population-based principles of budgeting and benefits.”
But they won’t…and they’ll use Blue Health Intelligence for collective underwriting and marketing purposes.
Of course there are no negative consequences arrising from having 40M+ uninsured Americans.
Aren’t the uninsured, in fact, the best example of people operating in a free-market healthcare system?
That guy is an absolute liberal loon. HE’s an outsider who understands NOTHING about medicine trying to get his grubby fingers into the pie. He wants to be “in charge” of a new system so he can feel important. He obviously loves to make healthcare decisions for everybody else, because we’re “too stupid” to figure it out on our own.
God help us if he ever gets a real job in healthcare besides his ivory tower philosophy gig.
P.S. I want single payor socialized medicine, but that doenst change the fact that this “professor” is an idiot.
Yes, 18,000 death certificates per year list cause of death as “No health insurance.”
No one – NO ONE – can be denied care at a medical facility. If they are, that is a crime.
I’m glad he wasn’t my professor.