By JOHN MAA, MD

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.