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Proposal for a THCB Healthcare Reform Effort

THCB regular reader Deron Schriver wants THCB readers to suggest plans to reform the health care system. Here’s his appeal:

I enjoy many of the discussions on THCB.  Intelligent people from all vantage points of the health care system congregate to engage in conversations about the most important issues out there. What if there was a way to translate those discussions into treatment plans for the ailments of our health care system?

Meaningful, sustainable reform can only come from a collection of people from the various stakeholder positions (physicians, patients, insurance companies, employers, etc.) who see what’s working and what isn’t on a daily basis. Politicians do not have the exposure to the system that is needed to prescribe effective solutions. However, they are in a good position to assist in the implementation of well-designed solutions.

We need to approach reform much like a physician approaches an ill patient. That involves obtaining some history, examining the system, and then prescribing a treatment plan. It would require a progress note, similar to what a physician uses, in order to document our work. After all, “if it wasn’t documented, it wasn’t done”.  All problems considered should be discussed by all stakeholders until solutions are developed that 1) are thorough, 2) treat the problem and not the symptoms, and 3) are not zero sum. We need to follow the system all the way from the time the patient enrolls in an insurance plan, to the time she is treated by her physician, to the time the claim is paid (or not paid).

If you have experience with our health care system in some way, whether
it is as a patient or physician, employer or insurance broker, my plea
is this: Let’s continue engaging in thoughtful discussions about
reform, but let’s do so with an end game in mind. What if the
discussion got past the “What caused it?” and “Who’s to blame?”, and
progressed to the “How are we going to fix it?” and “Who is going to
help?”  With all stakeholders involved, it’s easier to ensure that all
angles are covered. 

As I said, I do not believe that our government is capable of devising
the solution we need. However, the government will prove useful in
implementing a solution because it’s likely that certain aspects of any
meaningful solution will involve elements that must be enacted into
law. 

Other reform efforts have produced proposals that do not
completely address the multidimensional nature of the problem, or do
not provide practical ideas for implementation. Our deliverable will
be a non-partisan solution that can be presented to our elected
officials, medical societies, and all other necessary entities to
obtain buy-in and plans for implementation. We have a duty as citizens
to contribute to the well-being of our society and our democracy.

While it seems like an overwhelming task, we really have nothing to
lose because we’re already talking about these things. If Matthew and
Sarah are willing to provide the medium, why don’t we have some fun
with it and see what happens?            

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22 replies »

  1. Sorry I got away from this thread and am slow to respond. One solution to Mike’s question about for-profit insurers, is the idea of the “Federal Health Board” that would provide some oversight (similar to the Federal Reserve) for health care. Now, there are pluses and minuses to this (as there are with any proposal) but I think it is worth taking a serious look.
    A discussion about this is going to take place in March when the Medical Banking Project and Mayo Clinic Health Policy Center host a panel at the Medical Banking Institute. More information can be seen here: http://www.mbproject.org/mbtv/archive05/pr_11-2008_7mbi.html .

  2. Mike, you might want to look at Blue Cross/Blue Shield. They are “non-profit” and operate in many aspects worse than the for profits. Much of their “profits” go to bonuses and compensation. They don’t operate for the patient any more than the for profits – believe me, I’m an ex BCBS insured. They operate under the shield of non-profit just like many hospitals, in a way that no one can tell the difference.

  3. Great points. I like the idea of a systems approach. Too many people are looking for a quick fix these days. The approach you described would be more methodical and easier to measure the results of specific actions.
    If you don’t mind, I’d like to mention your post in my blog. I don’t have the exposure of THCB, but I’m slowly working on getting discussions started about reform. When I hear or see good ideas, I like to build on them.

  4. I agree 100% that change must happen. Because of the complex economic issues at play, I strongly believe that the most reasonable first step is drastic overhaul of the insurers. One of the big problems with system change is that it is so complex you cannot measure the effect of multiple changes easily. As in systems engineering I would advocate a gradual introduction of change – change one variable at a time and measure effect. Nobody really believes that for profit insurance really brings much added value to our health care system. Therefore start with leveling playing field by regulating or making the insurers non profit. You would get the support of providers, hospitals and patients.

  5. To be honest, I’d like to see a compromise. I’m not pushing for single-pay healthcare, but something has to change with our current health insurance situation. I wouldn’t mind seeing all health insurers being not for profit entities with limits on executive compensation. That would limit the amount of money leaving the healthcare system in irresponsible ways.
    Even more importantly, the complexity of our health insurance system has to be reduced. I would like to see medical policy and coverage standards across all payers to reduce the unnecessary complexity. We still have remnants of managed care hanging around that have to be done away with. Managed care 2.0 should involve managing actual care, not administrative processes.

  6. For Deron and Jane
    How do the academic and policy experts perceive the role of For Profit Insurance in the future? Will a singer payer allow these parasites on the health care system to whither away or will they be running the show as surrogates for the government? To not openly challenge the role of for profit health care and focus on EHR, physician malfeasance, and promoting wellness is foolhardy. The insurance industry has the biggest lobbying efforts and unless grassroots efforts take place they will have the biggest say at the end of the day. Insurance reform more than malpractice reform or any other variable will improve affordability and access.
    Physician reimbursements have been

  7. “It’s the excessive multi-million $$ judgements where the patient ends up getting rich off an honest mistake. It’s absurd and it needs to stop.”
    Mostly mythe to think unharmed people run away with million$. If this is the case then docs should get better lawyers. The cost to get these to court is very expensive for lawyers but these have very little impact on overall health costs. This issue is mostly an annoyance issue for docs – I think. But if we had single-pay then that would at least cover the medical bills from mistakes/malpractice, and take that off the legal plate. The issue then would only be income loss and quality of life. This is not a huge issue in Canada with single-pay. I think you’ll find though that the 80/20 rule works for malpractice, that is, 20% of the docs account for 80% of these cases. This then is really an issue for the medical guilds.
    In closing we’ll still need a “big stick” institution to get reform – that will be government, not industry.

  8. Jane – I will be in touch because that is a great strategy. It’s time we consolidate reform efforts in this country, because reform is just as fragmented as the healthcare system itself at the present time.
    Peter – Couple quick answers:
    “Bankrupt? Malpractice insurance? Now look at it from the patients side, who pays them for your “mistake”? Do docs get a free ride while patients are left holding the medical bills?” Very good and very important question. The patient shouldn’t be stuck with medical bills resulting from a physician’s mistake. That’s not the issue because malpractice insurance is usually sufficient to cover that. It’s the excessive multi-million $$ judgements where the patient ends up getting rich off an honest mistake. It’s absurd and it needs to stop.
    “So how do we get the “greed” out of the other practices?” We give more “teeth” to the Stark and Anti-kickback rules for starters. Payers also need to track utilization ratios and factor that into fee schedule negotiations in subsequent years.
    “I’m also not sure if what you do violates your BC/BS contract?” Our discounts don’t violate our BC/BS contract. We are only limited by our Medicare contract. We cannot offer discounts to anyone that would cause them to pay less than what Medicare would pay for the same service. The only exception would be in the case of documented financial hardship.
    Your entire last paragraph is filled with great points. There are definitely things we can do to promote healthy lifestyles. We’ll just have to chip away at it over a period of time.
    I wish there was a more efficient medium to continue conversations like this!

  9. Peter:
    You raise so many good points, and I don’t think there are any “here is the exact answer” answers at this point in the discussion.
    Clearly, if the payment system (both public and private) is changed to reward providers for value (better outcomes, safety and service) there will be an immense cost savings — and an incentive for the delivery system to change as well. We currently have in Medicare a system that pays the most to areas of the country that have the worst outcomes. The data that shows this already exists. Check the Dartmouth Atlas — in their study of Medicare patients, the areas of the country (and the providers) who are reimbursed at some of the lowest amounts also have some of the best outcomes.
    We would propose taking a look at the many different providers who are already delivering good outcomes at lower costs and figuring out how to spread it throughout the country. Will there be a single way to do this? Of course not. But there are many ideas that can be translated to improve quality, safety and service.
    Another area that can achieve tremendous savings is the management of chronic conditions. Over a lifetime, it is less expensive to manage the care of a diabetic patient and keep him/her healthy than to pay for episodes of care that occur only when a patient becomes very ill. We need to shift from looking at episodes of care to a view that looks at care over time and reward providers who can help people manage their health.
    These are just two broad ideas — there is still much work to be done to drill down to details. But, I think, the good news is that it is already happening in parts of our country — the challenge is to figure out how to spread better practices and reward them.
    Deron:
    I was in a planning session for our Health Policy Center yesterday, and one of the topics that came up was getting together with other groups who have health care reform campaigns underway and figuring out what our common points are. Please feel free to get in touch with us.

  10. “We are in a high risk specialty where a simple mistake could bankrupt any one of our physicians. Imagine if you made a mistake at work that could bankrupt you. It’s frightening and it’s unfortunate.”
    Bankrupt? Malpractice insurance? Now look at it from the patients side, who pays them for your “mistake”? Do docs get a free ride while patients are left holding the medical bills?
    “I can tell you in all honesty that none of our over-utilization is the result of greed. Not every practice can say that.”
    So how do we get the “greed” out of the other practices?
    I assume then your practice gives the same price to uninsured as you would get as reimbursement from BC/BS, correct? If that is the case then you are doing more than most practices – even better than our own state hospital system (NC). But giving BC/BS rates for hospital care to uninsured will still not help them much. I’m also not sure if what you do violates your BC/BS contract? But judgeing from the fact that you still have to offer time payments (interest?)and incurr some bad debts, that does not seem to be enough – not that you need to do more given the present situation. But just think if you could provide care to everyone with less paperwork, one set of rules, and not have to offer time payments AND have NO bad debts. Single-pay would give you all of that. You would also only need to negotiate with one insurerer with one set of rules; the government.
    “I will absolutely not be in favor of giving coverage to anyone, unless they are prepared to take responsibility for their health and their lives and do whatever is humanly possible to improve their situation. Anything less is a harmful disincentive.”
    How will you be able to judge that? Will you set up a board to give people heath vouchers based on their level of life/culture/health improvement efforts? I agree that this nation needs to get better food and better fit and healthier, but that can be addressed with tax and other policies. Shift food subsidies from corn/soybeans/meat to fresh fruit and vegetables, hopefully organic. Get tougher on polluters, smokers and toxins/carcinogens, tax fast food and use that money to encourage exercise, bike trails, what ever, that gets people off their duffs. But it is unrealistic to continue with the same political policies and then expect the population to just get healthy on its own. Didn’t work for finance, won’t work with health.

  11. Thanks for the opportunity to communicate regarding Health Care reform. As a physician, I have been increasingly concerned that the biggest problem facing physicians regardless of specialty is not Medicare, malpractice or Justice Department reform efforts. It is Private Health Insurance Corporations. Our citizenry do not realize that We are the only major nation state with a predominant for profit health care insurance system. More than any other variable, this explains the disparity in access and perceived lack of value in our system versus other developed nations. In good times and bad their profits are predictably excessive and achieved at our patients’ and our personal expense. The playing field needs to be leveled. I feel very strongly that the industry needs to be reformed into a non profit system or very tightly regulated.
    I think that economic meltdown will increase focus on health care reforms vice distracting from reform. To not consider reforming/ regulating heathcare insurers is to ignore the elephant in the parlour. Interestingly, healthcare insurance is the only type of insurance not regulated in regards to profits. Auto insurance costs are controlled by states as is fire insurance etc. Life insurance products are restricted to a 10% profit by California . However, Any attempt to regulate healthcare insurance has to be be formulated at a federal level because ERISA prevents any regulation at state level. Hence, Schwarzewnegger’s attempt at health care reform in CA which included capping profit and overhead at 15% was acceptable to the insurers because they did not have to comply anyways.
    Now that the elections are over there may well be movement on the healthcare issue. I like the idea of focusing on the insurance companies because cutting their profits will a) not cost the taxpayers much, b) directly improve cashflows in virtually all US corporations (other than the insurance entities) because they will pay less for the insurance and c) does not offend many other than the lobbyists for health care insurance.
    Focusing on Insurance reform will appeal to the populist sentiments as well as the new sense of “fairness”…Getting front and center on this would be in all parties interest. I also believe that this fits with concerns over American competitiveness. The Auto makers in particular would welcome such efforts given that the biggest concern are health care trusts for retirees. Major health care insurance reform is a huge step to improving health care.
    Interestingly the Baucus plan just released decries the high overhead of US >22% vs Swiss 5.5% healthcare but fails to note that the main reason is that non- profit regulated insurance products are the norm in Switzerland. As a frame of reference, Medicare overhead rates are 4%.

  12. Peter – Judging by your tone, it seems like you think you caught me off guard with your questions. These are things I’ve been thinking about for years. I think your questions are all fair and this is the type of conversation that needs to happen more often. All practices should have to answer these questions.
    “How will your medical group cut overutilization, and unnessessary intervention and treatment? Will your group accept less billings?” We do fairly well and we monitor it through chart reviews, but I would be lying if I said there was no over-utilization in our practice. Until there is responsible tort reform and an evidence based reference database there will be over-utilization. We are in a high risk specialty where a simple mistake could bankrupt any one of our physicians. Imagine if you made a mistake at work that could bankrupt you. It’s frightening and it’s unfortunate. I can tell you in all honesty that none of our over-utilization is the result of greed. Not every practice can say that. If our revenue drops because we completely do away with over-utilization, I’m ok with that. Much of it will be offset by lower malpractice premiums and lower health insurance costs for the plan we offer to employees.
    “How does your group now handle uninsured patients, do they get discounts? How much? Who decides?” We offer uninsured patients a discount equal to the discounts from our BC/BS contract. That was my decision and it was supported by all of our physicians. We also offer very flexible payment plans, and we often get burnt because the physician bill is always the last to be paid when someone is in a jam. It evens falls behind cell phone bills and I-Pods. It’s really a shame how people manage their money, often at the expense of physicians.
    “Will your group invest in universal IT, or do you just expect the government to pay for all of this?” We’ve already invested a significant amount in an EMR/eRx system. We actually got a significant contribution from none other than, brace yourself, an insurance company to help with the investment. If we have to move to a universal system, we will accept that and do so. However, we will not bear all of the cost because the savings would accrue to the entire healthcare system, therefore all stakeholders will need to chip in.
    “What is your group willing to spend on “social solidarity”?” That is a tough question, and I cannot speak for my docs on that (although they are extremely generous people). Speaking for myself, I am only prepared to address the sources of the high cost in the system. Once we drive costs down, the uninsured population will drop. I am not in favor of throwing money at the uninsured problem right out of the box. At the same time, I acknowledge that driving down the costs will take quite some time. I suppose we could temporarily increase the Medicaid limits to buy some time. I will absolutely not be in favor of giving coverage to anyone, unless they are prepared to take responsibility for their health and their lives and do whatever is humanly possible to improve their situation. Anything less is a harmful disincentive.
    “Have you discussed your thoughts on this blog with the docs in your group?” I have expressed many of my views to some of my docs, and I would not have a problem if they read this blog or my own blog. I have done a lot for them and they acknowledge it often.
    Thanks for the great questions! I want to give you time to digest my answers, then I would like to ask some questions of you if you don’t mind, assuming you are willing to represent the patient stakeholder position.

  13. Jane, I went to the web site, good points all, but who will carry the big stick to get it all done. Many of the improvements and changes you list are also concerns in Canada’s single pay system, but even there difficult to enact and get co-operation from all caregivers. As for your, “Provide Health Insurance For All” that would be possible IF the government just agreed to pay providers the same returns and price increases they are getting now as in the MA plan. As I have said “Don’t mandate me into a grossly over priced and failing system”. Who do you propose take the financial hits to get costs down? How will your plan LOWER costs so that the cost for providing care to the unisured, who can’t afford insurnace, will not cost the rest of us too much money, especially now when we’re expected to bailout dishonest and incompetent corporations? How much of a family’s income do you see going to healthcare? Where will the income cutoff come for government assistance? How do you see insurance companies attracting investors if they cannot make the necessary decisions to maximize profits under your plan, IF it includes cost cuts to insurance premiums? Or does it?
    Deron, how will your medical group cut overutilization, and unnessessary intervention and treatment? Will your group accept less billings? How does your group now handle uninsured patients, do they get discounts? How much? Who decides? Will your group invest in universal IT, or do you just expect the government to pay for all of this? What is your group willing to spend on “social solidarity”? Have you discussed your thoughts on this blog with the docs in your group?
    Just some reality checks.

  14. Jane – I will definitely check out your website. If you’re involving all stakeholders, then you’re already off to the right start.
    There are some good reform efforts underway. I would like to see some consolidation of the efforts, so that the duplication of resources is reduced. My goal is to contact reform leaders and try to bring people together. I have a feeling that the Mayo Clinic effort will be high on that list.

  15. Deron:
    Thanks for opening up a great discussion. I wanted to respond, in particular, to Peter’s post regarding convening stakeholders to come up with solutions.
    In the interest of full disclosure, I work for the Mayo Clinic Health Policy Center (HPC). Over the past two years, the HPC has gathered more than 2,000 leaders in health care including patients and patient advocates, health care providers, insurers, large and small employers, government representatives, member of academia and representatives from medical and pharmaceutical industry. The goal was to reach consensus about priorities for patient-centered health care reform.
    These groups have agree to four basic cornerstones of reform: insurance for all, coordination of care, payment reform, and value (paying for better quality, safety and service). We have also defined action steps and responsibilities for each sector. The full detail can be viewed at: http://www.mayoclinic.org/healthpolicycenter/recommendations.html .
    In addition, Mayo Clinic, Intermountain Healthcare and Kaiser Permanente published a white paper on Delivery System Reform last week. It outlines specific steps that can be taken to change the way health care is delivered, and what it will take to make the change happen. The full paper can be viewed at: http://www.mayoclinic.org/healthpolicycenter/pdfs/delivery-system-reform.pdf .
    Every sector is going to have to give a little and agree to work together to solve this problem. I am confident we can make progress.

  16. Deron:
    I’ve posed the “most favored nations” question to several special interest representatives including the health plan and hospital communities with a deafening silence.
    Why shouldn’t the arguably 45 to 47 million Americans be “pool-able” into such group purchasing plan arrangements and therefore scale eligible for the dramatic discounting already present in the market?
    Most hospitals, and even medical groups do offer cash discounting but generally in the 20% to 30% range at best, though usually not proactively offered. Yet, even after such consideration the uninsured patient is paying a substantial premium over the price concessions Aetna, United, the Blues, or even Medicare via their private proxies.
    A disorganized population without an advocate, even a very large one at that, can be ignored as long as it flies below the political radar screen. That may change with the election, but it remains to seen what incremental tinkering is permissible in health care reform when the economy is contracting to the degree we are currently witnessing.

  17. Peter – I am a medical group administrator for a physician group. You asked earlier if I’ve ever gotten an EOB and if I understand EOBs. I’ve seen hundreds of EOBs from hundreds of different payers. They are all different, as are the underlying policies. That is part of the problem, a lack of medical/reimbursement policy standards. If we follow this process along, that is something that would no doubt be highlighted and addressed.
    Gregg – Interesting points. I know some providers and hospitals give discounts to the uninsured, but it’s definitely not across the board. There’s no reason that the uninsured shouldn’t have access to the same discounts as the insured. I also like the concept of the government providing catastrophic coverage. I’m not looking for single payer, other than the big ticket items.

  18. kinda simple, but here it goes……
    1. allow uninsured to join clubs (e.g., discount medical plans, not insured vehicles per se) to leverage the power of group purchasing power into hospital and physician pricing methodologies, for this under served and under represented constituency, including the growing ranks of the under-insured or HDHP crowd.
    2. hospitals, physicians and other institutional and professional health care practitioners extend “most favored nations” terms to all club members, for material discounts contractually honored at the point of service.
    NOTE: There is NO relationships between costs and charges in health care, other than accounting journal entries. Why reference a charge basis for anything? Real provider compensation is based on fractional cents on the dollar. Why stick the anyone with the acute pain of retail medicine?
    3. participating “providers” as above, also agree to “member friendly terms”, meaning: (a) waiver of all upfront fees, deductibles, etc., with the (b) creation of member friendly and budget realistic automated time payment plans that are fully integrated with electronic funds transfer or auto-debit from member accounts.
    4. tie/credit contractual discounts to “community benefit” for tax exempt organizations.
    5. all others get to feel better knowing they are doing the right thing.
    There is more particularly with limited benefit or so called wrap around plans that can create additional levels of coverage and/or reinsurance for catastrophic or out of area service needs.

  19. Peter – I commented on my submission only because I wanted to show everyone where I was going with this. It’s a bit different from most discussions, in that it has an end game in mind.
    Your anger at the system is evident in your comment and all of your other comments. I’m sorry you feel that way, but you’re not doing anyone any favors. I work in the healthcare system, but I am also a concerned citizen trying to do my duty, regardless of the likelihood of success. What exactly is your approach?

  20. Deron, why are you commenting on your own submission?
    You are living in a fantasy world if you think that just somehow the same stakeholders that got us here will just come together in a group hug and solve OUR problems by cutting their OWN profit arteries. Why don’t you convene a summit. Maybe it will work out like the financial crisis, where “stakeholders” who saw “what was working and what wasn’t” came together to find a solution that didn’t involve government.
    “We need to approach reform much like a physician approaches an ill patient. That involves obtaining some history, examining the system, and then prescribing a treatment plan.”
    We know what the problems are, we just don’t have the political backbone to implement a treatment plan that will step on toes. Everyone wants a solution that doesn’t hurt anyone – not possible.
    “the doctor would seemingly pull a figure out of his head and we would pay it. Boy have times changed.”
    Times have changed? Why because we have the transparency system in place that we understand the number now. Ever get an EOB Deron – understand it? How about the number pulled out of the heads of hospitals when billing uninsured patients, anyone understand that.

  21. Physicians know that obtaining a history of the patient’s health and of the present illness provides valuable information to assist in arriving at the diagnosis. It might be tempting to skip the history step and move right to developing a solution, but doing so risks things being missed and treatment plans being incomplete. That’s where many come up short.
    So what is our history? In 1970, our per capita health spending in the U.S. was $352 according to Kaiser Family Foundation. In 2003, it was $5,711. Out of pocket spending represented 33% of total health spending in 1970. That figure was 12% in 2006.
    Managed care came along many years ago as an attempt to rein in costs. Many felt that the goals were good, but the means for achieving them were not so good. Creating administrative requirements to be followed did not prove to be an effective way to “manage” a patient’s care.
    I remember as a kid going to the doctor with my parents. The doctor would come in the room, work some magic, and the visit was over. When my parents would ask: “How much do we owe you?”, the doctor would seemingly pull a figure out of his head and we would pay it. Boy have times changed.
    I would be curious to hear other accounts of the history of healthcare, particularly from those who have “been there done that”.

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