I am not in favor of messing with the insurance system for this purpose but have argued for a more direct approach. Under what I call a “no-give, no-take” rule if you are not willing to sign your organ donor card you go to the bottom of the list should you one day need an organ. Israel recently introduced a version of no-give, no take which gives those who previously signed their organ donor cards points pushing them up the list should they need an organ transplant–as a result, tens of thousands of people rushed to sign their organ donor cards.

• American’s over-use of high-cost/high-tech services owing to some American’s being over-insured.
• High administrative costs (mostly in the health insurance area)
• Higher prices paid by Americans for healthcare services and products

On this latter point – higher prices – he points to an imbalance of power between the buyers (and payers) vs. the suppliers of healthcare.

[...]higher prices are the product of a deliberate strategy, hashed out in our political bazaars between the supply side of health care and state and federal legislators, always to keep the payment side of our health system fragmented and relatively weak vis à vis the supply side of health care.

He also notes how difficult it is for patients to do price comparisons – “price opacity” he calls it. He saves his strongest reaction to the system of price discrimination found in healthcare today. Providers charge (and are paid) differently depending on who pays the bill. Insurance companies demand substantial discounts from hospitals, and Medicare reimbursements are significantly lower than provider costs.

Reinhardt warns providers to prepare for an era of increasing price information and comparisons, along with other purchasing initiatives.

To add my own commentary: Our public discourse on complex problems often veers towards finding the villain – the “bad guy.” Once identified that villain gets all of our intention, and if the political stars are aligned government legislation and regulation results. If healthcare costs are an inflated balloon, then pushing in on one portion will only cause the balloon to bulge out elsewhere. It would be a mistake to assume that our healthcare challenge would be fixed by just getting providers to reduce their prices.

More open price comparisons and a more straightforward pricing mechanism are two important elements in successful healthcare reform. With only some exceptions, providers (physicians, hospitals, drug companies, tech companies) are not looking for ways to extract more money from patients. They are taking steps to survive in a broken marketplace. Changing public attitudes about appropriate care, changing insurance to give patients more exposure to their decisions and choices, giving providers incentives to prescribe cost effective care, opening scope of practice laws to let well-trained but less expensive professionals provide some care, and maintaining vigilance over abuse of the patent and malpractice systems are all important steps to take.

Consultants saw patients quickly, and generally called me to discuss their findings and advice. And very often there would also be a letter in the mail: “Thank you for referring this delightful patient to me.”

How things have changed! Now a doctor gets the phone menu, just as the patients do, and it often ends in voice mail. It might be a few days before a staff member calls back—usually with the news that “we are not accepting any new Medicare patients.” At best, my patient might be offered an appointment in several months.

One very fine gentleman, who had recently moved to a rural area, found it easier to fly to Tucson to see me than to get in to see a local internist. That was in 2009. Recently, he has become unable to travel, so I needed to find him a local doctor.

I tried to expedite matters by ordering him an immediate diagnostic test: an abdominal CT scan. I don’t think anyone could argue that it wasn’t indicated under the circumstances. One little problem: I am not enrolled in Medicare and don’t have the proper government-issued number to enter into the computer. A license to practice medicine is not enough. This National Provider Identifier (NPI) is supposed to protect the system against being defrauded. Without that number, the imaging facility could not get paid by Medicare.

“Why not use the radiologist’s number?” I asked. After all, he was the one who would get paid. Nope, a referral was required. How about a self-referral from the patient? Nope, we can’t allow patients to decide what tests they need. “The patient is willing to pay for his own test,” I said. Nope, if he’s on Medicare, they aren’t allowed to take his money.

They gave the patient 24 hours to find a properly enumerated doctor to countersign my order. Fortunately, he found a specialist willing to do so, and assume potential criminal liability for committing “waste, fraud, and abuse” by ordering a “medically unnecessary” study. (Fortunately for the patient, he turned out not to have cancer, but that could be bad news for the doctor.)

So this is the status of retired Americans. They can’t just walk into a facility and request a medical test, and pay for it with their very own money.

A man may be qualified to pilot a 747 across the Pacific, but once he’s on Medicare, he is unfit to make an unsupervised decision about his own medical care.

I did find my patient a doctor. None of the internists within a 150-mile radius who “take Medicare” are willing to take on a new Medicare patient. But through the website of the Association of American Physicians and Surgeons (www.aapsonline.org), I found a link to the Medicare carrier’s list of opted out physicians. They don’t “take Medicare,” but many are pleased to see older patients, for a reasonable fee. There was one internist on the list, 150 miles from my patient. She has a courteous and helpful assistant who actually answers the phone, and told me the charge for a new patient visit: $300.
Things could be worse—and already are much worse in Canada. The “soul-destroying search for a family doctor” is described in the Globe and Mail on Aug 21. The Ontario government’s program called Health Care Connect manages to link only 60 percent of patients with a doctor—although you might find a concierge doctor for $3,000 a year.

That’s the cost of medicine when it’s “free”—if you can find it at all. If ObamaCare is implemented, all Americans will be in the same boat. And guess who will get thrown overboard first.

The United Kingdom, where, on average, people live longer than in the U.S., spends only about 9 percent of gross domestic product on medicine, compared with our 18 percent. The British control costs in part by having the will to empower a hard-nosed agency, the National Institute for Health and Clinical Excellence, to study treatments and declare some ineffective. Some hope the United States will create a similar agency, but I fear it would be hopelessly politicized and declawed.

My solution: admit we are cost-control wimps, and outsource our treatment evaluation to the U.K. Pass a simple law saying Medicare (and Medicaid) won’t cover treatments considered but not positively appraised by the Britain’s national health institute.

Even better, use clinical evidence evaluations of the British Medical Journal. They’ve classified more than 3,000 treatments as either unknown effectiveness (51 percent), beneficial (11 percent), likely to be beneficial (23 percent), trade-off between benefits and harms (7 percent), unlikely to be beneficial (5 percent) and likely to be ineffective or harmful (3 percent). Let’s at least stop paying for these last two categories of treatments! And to put pressure on doctors to collect evidence, let’s stop paying for “unknown effectiveness” treatments after 10 years of use.

Yet that’s how it is with medical care. I would be unable to find out, for example, the cost of an echocardiogram from the hospital where I did my residency. The price is different for different people.  The government instituted this ridiculous situation, in 1965, with Medicare and Medicaid. There is a lot of mythology about these programs, but few people understand them like the physicians who are on the front lines actually seeing the patients. For some of them, it has been a gravy train. They game the system. For others, it has been a disaster to go through medical school and residency, and come out a de facto servant to government programs, but of
course, without “benefits” or retirement. If you are scrupulously honest, these programs will bankrupt you—even while turning you into Public Enemy #1.

Senators Ron Wyden and Charles Grassley have put forth the Medicare Data Access for Transparency and Accountability Act (the DATA Act) to open a database so that everyone can see how much money Medicare has sent to any physician enrolled in it. Regardless of the cost to provide medical services, the price the taxpayers are forced by the government to pay for other people’s medical care has gone down and down per procedure, per diagnosis, per office visit.

The public won’t see that, but it will hear about some isolated cases; for example, an Oregon neurosurgeon who allegedly performed multiple spine surgeries on the same patient, or a Florida physician accused of $3 million dollars in Medicare fraud.

Gaming the system is fraud. But the biggest fraud is the one perpetrated on the working people of this nation who are forced to pay for other people’s medical problems. When Medicare was first instituted, Americans were reassured that it would never cost the taxpayers more than $9 billion a year. It is more like $500 billion a year now.

Patients learn to game the system too. Workers must pay through their taxes for even the most trivial complaint when someone on Medicare makes an appointment for it—; say for a cosmetic skin lesion that has been present for 30 years without causing any problem. Working people are also forced to pay for the consequences of other people’s smoking, excess drinking, or risky lifestyle choices. That’s fraud, perpetrated by the government on taxpayers. It’s hidden behind political smoke and mirrors.

Amazingly, we managed somehow for 189 years after 1776 without Medicare and Medicaid, and things were getting better and better —until Lyndon Johnson came up with a good fraudulent vote-buying scheme, and then a lot of people decided there was money to be made off medical problems with the taxpayers the losers.

So, Wyden and Grassley, open your database. But include a list of all the procedures and diagnoses, and what Medicare and Medicaid actually send the physicians as “reimbursement” so people can see that physicians— who spent years of their life in training while incurring tremendous debt—are paid about the same as auto mechanics. And also account for where the rest (about 80%) of the
$500 billion goes.

That would be a good start for medical price transparency. And a good precedent for another database, one detailing just how much value politicians give taxpayers who pay their salaries.

About the Author:

Dr. Tamzin Rosenwasser earned her MD from Washington University in St Louis.  She is board-certified in Internal Medicine and Dermatology and has practiced Emergency Medicine and Dermatology.  Dr. Rosenwasser served as President of the Association of American Physicians and Surgeons (AAPS) in 2007-2008 and is currently on the Board of Directors.  She also serves as the chair of the Research Advisory Committee of the Newfoundland Club of America.  As a life-long dog lover and trainer, she realizes that her dogs have better access to medical care and more medical privacy than she has, and her veterinarians are paid more than physicians in the United States for exactly the same types of surgery.

I find the sentiments in the quoted passage objectionable for two reasons. First, preventative health care is not ‘everyone’s business’. Individual adults have primary responsibility for their own preventative health care because no-one is better able to exercise that responsibility than they are. Individuals who are persuaded that preventative health care is a collective responsibility could be expected to look increasingly to the various levels of government, non-government organisations, health professionals and practitioners, communities and families – everyone except themselves – to accept responsibility for what they eat, drink and inhale.

Second, the goal of making Australia the healthiest country by 2020 is being put forward as though it is self-evidently desirable collective good that should be pursued by any and every means available to everyone. The goal is not self-evidently desirable. Individual health is not a collective good. And the end does not justify the means that are being proposed to pursue it.

If you delve behind the spin about making Australia the healthiest country by 2020, the underlying goal seems to be to raise average life expectancy in Australia to the highest level in the world by reducing the incidence of chronic disease. What does this entail? It would be hard to object to the goal of enabling individual Australians to reduce their risk of chronic disease. The problem is that the government’s strategy is more about achieving national goals than providing better opportunities for individuals – more about behaviour modification than about ‘enabling’ individuals to reduce their health risks.

The government claims that analysis of ‘the drivers of preventable chronic disease demonstrates that a small number of modifiable risk factors are responsible for the greatest share of the burden’. The behavioural risk factors led by obesity, tobacco and alcohol apparently account for nearly one-third of Australia’s total burden of disease and injury. The chronic conditions for which some of these factors are implicated include heart disease, stroke, kidney disease, arthritis, osteoporosis, lung cancer, colorectal cancer, depression and oral health problems.

Since these risk factors stem from individual lifestyles it is obviously desirable for individuals to be aware of them. There may be a role for governments in provision of this information. Perhaps governments should also be involved in helping people in various ways to live more healthy lifestyles. It is questionable how far governments should go down this path, but it is difficult to object to modest efforts by governments to improve opportunities for people to live healthier lifestyles.

However, rather than helping people to help themselves the federal government has chosen the path of Skinnerian behaviour modification. It has chosen to drive changes in behaviour through what it describes as the ‘world’s strongest tobacco crackdown’. (This is one instance when I hope the government doesn’t actually mean what it says – some people in Bhutan have apparently been jailed recently for possession of more than small amounts of tobacco products.) The government’s strategy also involves ‘changing the culture of binge drinking’ and ‘tackling obesity’, but in this post I will focus on smoking.

Some of the tactics being used in the tobacco crackdown involve information and persuasion but there is also an element of punishment involved. The tobacco excise has been increased to over $10 for a packet of 30 cigarettes and legislation is proposed to require cigarettes to be sold in plain packaging. It seems to me that this amounts to persecution of smokers and their families. It will reduce the amount of household budgets available to be spent on other products and encourage some to avoid excise by obtaining tobacco from illegal sources.

As a former smoker, I am probably more strongly against smoking than most people who have never smoked. I encourage other people to quit smoking and discourage young people from taking up the habit. But having given up smoking several times, I know how hard this can be. Governments have no basis on which to judge that people are not in their right mind if they consider that the pleasures they might obtain from additional years of life are not worth the pain of giving up smoking.

In my view this question of whether smokers are capable of judging what is in their own best interests is at the crux of the matter. The politicians and bureaucrats who seek to modify the behaviour of smokers may see themselves as enhancing the capability of these people to have lives that they ‘have reason to value’, in accordance with well-being criteria proposed by Amartya Sen. If so, their attitudes highlight a major problem with Sen’s approach. Governments have no business deciding what kinds of lives individuals have reason to value.

Enrolling into a drug rehab program can be the hardest thing to do but it can save a life.

Putting aside, for the moment, the details of the Ryan plan, what many voters refuse to understand is the unpleasant choice they inevitably face. Either cost-control by the consumers or cost-control (aka rationing) by the State. The issue is stark.

Either consumers directly or indirectly will communicate to healthcare providers the need to economize or the State will put limits on what people can get. The thing is Americans don’t want to have to do the former nor allow the latter to happen. The “advantage” of State limits is that they feed fantasies Americans may still have about State magic. Stones into bread, and all that. We can all get the best care regardless of cost. (Keep in mind I want the best care regardless of cost too!)