Ten Key Questions Framing the Health Care Debate

Operation how to downsize medicare

Operation how to downsize medicare

“The burqa is not welcome in French territory,” French President Nicolas Sarkozy said in a June 22nd speech at Versailles.  He was referring to the head-to-toe garment worn by some Muslim women which covers their faces.  It is banned in French schools.

What does that have to do with health care reform?  Well, maybe a lot.

Can you imagine any form of dress being banned in America?  Think of President Obama in the Rose Garden announcing that “sagging pants are not welcome in America.”

If you tell an 87 year old Frenchman that he’s going to have to live with a 98% blockage of his left anterior descending coronary artery, he’s going to shrug and say “C’est la vie.”

Say that to an American, and he’ll say “The hell I am.”  And if he’s had a stroke, and can’t talk, his solicitous California relative, who hasn’t visited Pops in a decade, will say “The hell he will.”

And yet if we don’t change the medical entitlements of aging Americans, we’re almost certainly going to bankrupt Medicare within a decade–long before we bankrupt Social Security.

This is not just my opinion.  It is the stated opinion of Mr. Obama, the Congressional Budget Office, Rush Limbaugh, John McCain, Nancy Pelosi, The New Yorker, the New York Times, and The Wall Street Journal.

Here are the ten most important question to ask about health care in America:

1. Is American health care among the best or the worst of the First World?

It’s the best in the world if you have decent insurance, and among the best if you don’t.  Nobody is denied care in America.  Show up in the emergency room uninsured or undocumented, having just wrapped yourself around a light pole while operating a motorcycle drunk and exercising your constitutional right not to wear a helmet, and you’re in line for a million bucks of state-of-the-art free care paid for by the shrinking number of citizens still paying taxes.  Nobody denies that.  What they point to is a mediocre life expectancy, and a relatively high infant mortality.  The first is due to slovenly lifestyles (36% of our Medicare costs, and 48% of Medicaid, are directed to the treatment and complications of obesity), and the second to a decadent underclass which refuses to act responsibly in the face of pregnancy.  By the way, don’t forget that the vast majority of technological and pharmaceutical innovations in the world are provided and paid for by Americans.  See Nobel, Alfred, Prize thereof.  Don’t forget, either, that there are few queues in this country, except for organ transplants.

2. Why do most Americans say they want health care reform?

Because we are a truly empathetic people, and we feel sorry for responsible people with hard-earned assets who lose their insurance with their job and can’t afford to replace it.  Or even for people who are healthy, choose to not purchase coverage, get sick, and are denied coverage.  We can put ourselves in their shoes, and it worries us.

3. Why do most Americans fear health care reform?

Because despite all the weeping and wailing in the media, we’re pretty happy with our own coverage.  It’s like with politics: people hate Congress, but love their congressperson.  We know and trust our personal physician, we worship with the nurses from the local hospital, we play softball with insurance company employees who are decent people.  It could be worse, and we’re afraid it will be.  So we can be spooked easily by demagogues on both ends of the philosophical and political spectrum.

4. Is a crisis coming?

Almost certainly.  Theodore Dalrymple observes that financial collapse has been threatened since Medicare was first introduced, and it hasn’t happened yet.  Nevertheless, the graph plotting percentage of GDP consumed by health care rises inexorably, excepting the mid-1990s (more about that later).  Health care inflation far exceeds salary inflation, and with the Baby Boomers just entering Medicare it is hard to avoid the conclusion that we are facing a demographic apocalypse.  If it doesn’t bankrupt the country, it certainly will sap our competitiveness vis-à-vis the lean and hungry barbarians in the East.

5. So– how do we reduce costs?

There‘s the rub.  Let’s break it down.  Who has the authority to reduce costs, how do they do it, and how do we like it when they do?  There are four options: government, doctors, insurance companies, and patients (that is, us).

5a.  How does the government reduce costs?

Who knows?  They’ve never done it.  Medicare is under complete control of the government, and Medicare inflation has been galloping right toward the edge of a cliff.  Furthermore, virtually all private insurance now hitches the stagecoach of physician reimbursement to Medicare-determined Relative Value Units.  Those passengers are headed toward the same cliff.  Furthermore, those RVU decisions have so inflated the salaries of procedural specialists relative to generalists over the past 15 years that medical students won’t choose primary care, which means there aren’t enough internists and family physicians to care for those 47 million uninsured Americans.  Furthermore, every year at the stroke of midnight Congress caves under pressure and authorizes additional Medicare expenditures.  Furthermore, Medicare is already cost-shifting a large percentage of its real expenditures onto private insurers and citizens, who make up for the share of hospital operating costs which Medicare won’t pay.  Oh–and those taxpaying citizens, from janitors to rocket scientists, pay 2.9% of every dollar they earn to support Medicare.  That’s the government record to date.  What do you think?  Want more of the same?  Do you believe in miracles?

5b. How do private insurers reduce costs?

Who knows?  They’ve never done it.  When they try to squeeze physician reimbursement, the best physicians won’t sign contracts; they can afford to be selective, because they‘ve got more patients than they need already.  So cut-rate insurers end up with the dregs of the medical profession, and that doesn’t turn out to be a sustainable business model.  They can attempt to fix prices with other insurers, but that risks antitrust prosecution.  They can sell policies which honestly exclude certain expensive conditions or treatments, and patients will scream to the politically appointed or elected insurance commissioner when those conditions hit; that results in embarrassing publicity.  They can “reinterpret” contract provisions to the detriment of patients, expand pre-existing conditions, drop coverage when the disease gets expensive, refuse to cover “experimental” treatments, or cherry-pick healthy patients–more public black eyes.

5c. How do physicians reduce costs?

At least this is not a theoretical question.  Those disappearing primary care physicians brought health care inflation to a halt in the 1990s.  It was called “managed care,” and the physicians were called “gatekeepers.”  They were guarding the gate to the Money Tree through mandatory referrals for procedures, consultations, hospitalizations, and lab tests, and had incentives to do a good job.  The strongest incentive was called “full capitation.”  The insurer gave the gatekeeper all the premium money, less administrative fees; withheld a percentage from the gatekeeper’s reimbursement; and if the gatekeeper didn’t spend it all he got his “withhold” back at the end of the year, plus a cut of the leftovers.  Pretty soon lawyers figured this out, and began making this arrangement known to malpractice juries.  That stopped that.  Then the insurers tried a weaker, more subtle incentive: bonus payments based on total managed expenditures, with the payments partially disguised by percentile groupings and “quality” measures to confuse the juries.  Ultimately, though, when patients realized that the interests of their physician diverged from the interests of themselves, this arrangement was doomed.  Massachusetts, faced with bankruptcy due to its heroic experiment insuring all citizens, is flirting with the resurrection of full capitation.  This time they think it will work, because electronic medical records will enable high-school graduates working for the state to monitor the daily medical decisions of physicians.  It’s like, you know, the triumph of hope over experience.

5d. How do patients reduce costs?

This hasn’t been tried for a long, long time–since payment for medical services switched to Other Peoples’ Money in the 1940s–so we have no recent data to help us.  Proponents of Health Savings Accounts believe that if every American were given money to manage, they would make medical purchasing decisions as shrewdly as they make automobile purchasing decisions.  Opponents of HSAs point to the complexity of those decisions, the lack of pricing information, and the impossibility of deliberate choice at the point of sale in an emergency.  Proponents respond that insurance policies could be simplified and standardized, sold across state lines to increase price competition, and that the vast majority of medical decisions, anyway, are made under non-emergency conditions.  And those glowing reports of great primary care in every other industrialized nation?  Well, you could buy all of my services as a family physician– including obstetrics, office lab and x-rays, laceration repair and skin biopsies, physicals, treadmills, and 24/7 on-call coverage–for a family of six for $100 per month.   I’d make more money than I do now, because my billing cost would drop to zero.  (With the Democrats controlling the government, this option is not on the table; and we don’t have enough primary care physicians, anyway, having converted them into colonoscopists.)

6. What about rationing?

Yes, the issue is rationing– and it’s about time we started this national discussion.  It has started badly, with the New York Times trotting out Dr. Peter Singer to examine the topic from the view of a secular utililitarian.  He really did an excellent job of presenting the choices; alas, his comments elsewhere regarding the advisability of terminating human defectives age two or less, and pulling the plug on Granny, instantly set conservatives on the scent at full bay.  Mr. Obama, having risked a personal example in the form of his centenarian grandmother (who received a hip replacement while dying of cancer) was immediately equated with the Butcher of Baghdad, if not Nero reincarnate.  It is in fact possible (see 4 above) that at some point we may, as a society, be forced to make our present sub rosa system of rationing explicit.  This might be in the form of Wise Latina Women making decisions about how much we can afford to pay for Quality Adjusted Life Years, as in Great Britain, or some other system applying medical evidence to the budget.  Whatever we do, it is not going to involve wise people like Mengele or Eichmann.  That is a statement of faith on my part, but I’d bet my income on it.  Most people are unaware that these sorts of judgments have been applied for a long time.  I remember when mammography was developing in the 1970s, the question among physicians was how much it would cost to save a life through early detection.  The answer was, “little enough that we can afford it,” and the point is that we were not Nazis in the 1970s, and we are not Nazis now.  But we do live in a world of finite resources, and at some point choices have to be made between what is possible and what is the best use of available dollars until the Money Tree is rediscovered.  This conversation should be rational, as opposed to emotional.  Can we afford quadruple bypass surgery on 89 year old citizens?  Can we afford chemotherapy which, on average, offers two months of extended life for $80,000?  It’s a hard conversation, but necessary.

7. Didn’t the Democrats try to slip euthanasia counseling into the mix in the dark of night?

I really hate to defend Democrats.  I really do.  It causes me heartburn.  But they were carrying water for my colleagues, who weren’t getting paid to spend time talking with old folks about their choices at the end of life.  So they tried to make sure they didn’t do it gratis. Politically, in hindsight, it was stupid.  However, a number of my decisions, in hindsight, have also looked stupid, though they seemed like a good idea at the time.  So I’m inclined to give them a pass.  Could we have an adult conversation about this, too?  As a Christian, I am dead-set opposed to abortion, infanticide, and euthanasia.  For me, and St. Paul, “to live is Christ, and to die is gain.”  I want to fight the good fight, to finish the race.  I’m so radical on this subject that I consider retirement to be an un-Christian accommodation to a secular culture—one which should be abandoned.  I want to be useful, in some fashion, to my last breath; to die, so to speak, with my boots on.  For those of you in the audience who don’t share my religious views, I would assert that among every other tradition, including that of atheists, there can be found advocates of a similar conviction.  When I get to the point where I can’t spoon my own soup, God spare me a relative who advocates another round of chemotherapy.  I don’t consider that a species of euthanasia.

8. Is there a systemic way to discourage sloth and gluttony?

There is good evidence that carefully structured incentives and disincentives can nudge people toward healthier choices.  HSAs are the easy way to do it; the effects of diet and exercise save money for the person doing the work.  Moreover, such a system would derail a coming, and ugly, scenario in which overweight people will be persecuted like smokers are now.  But smokers have it easy–after all, they aren’t smoking all the time, whereas fat people are fat 24 hours a day.  When government or insurance companies are paying, it takes a Rube Goldberg arrangement to get the goads in the right place.  But it can be done, as Safeway and Whole Foods have demonstrated recently.

9. President Obama says that electronic medical records will save a lot of money.  Is that true?

There is no evidence to back up this assertion, and plenty to refute it.  EMRs have some value in the delivery of efficient medical care, at some risk to our privacy.  But they won’t save any money, and may reduce productivity.  However, there is one certainty: searchable electronic records will make it easier for Big Government or Big Insurance to decide whether you need the care your physician is prescribing.  Whether this is a good deal depends on your view of 1984 or Brave New World.  That’s heaven for some people, hell for others.

10. What are the unintended consequences of proposed reforms?

Aside from cost explosion and civil war, let’s consider what would happen if the government immediately or eventually takes over responsibility for our health.  I’m going to ignore the status quo (government + insurers), a return to physician control, or the advent of HSAs, which appears remote.  I’m also going to stipulate that Death Panels are not in our future.  OK– the government has to control costs, and the choices are:

10a. Eliminate all profits from Big Pharma by dictating prices, like the Europeans do.  This will save 2% of the national health bill the first year (from 10% to 8% for drugs), and more later, as all pharmaceuticals eventually go generic.  Of course, there would be no more new drugs, so that’s the unintended but inevitable consequence.  Maybe the National Institutes of Health could do the research, as well as fund it; and maybe the executive branch can run General Motors, too.

10b. Nationalize the doctors, and put them on salary.  This would almost certainly reduce costs, because as Mr. Obama has pointed out, if a surgeon isn’t paid more to cut off your foot, he might not.  It would also increase waiting lists, because if the surgeons aren’t paid more to cut off good feet, they also aren’t paid more to cut off bad feet, and so you can bet they’ll be figuring out how to spend more time on the golf course and less in the foot clinic.

10c. Set up the American equivalent of the NICE commission to decide which treatments are cost-effective, and which aren’t.  This is not a bad idea, because some treatments really aren’t cost-effective.  Two problems: first, we don’t know for sure which are and which aren’t (in medical school I was taught that half the stuff I was memorizing was wrong, but the professors didn’t know which half); and second, having decided that drug XYZ is not cost effective for glycogen storage disease type 75b, sure as God made little green apples Senator Blowhard’s daughter will be stricken with– you guessed it, 75b.  Now we’re asking the Senator to number himself among the angels, and avoid interfering in the funding or operations of the Very NICE commission.  Chances?

10d.  I spent five pretty happy years working on salary for the world’s largest HMO, the US Army.  We didn’t have enough resources to do everything we needed, so we practiced “triage by attrition”.  When I arrived for a 6 p.m. shift in the emergency room, 75 people would be waiting.  If I worked hard, I might be able to see 50 in 12 hours, but 50 more would show up by 11 pm.  Nevertheless, by 4 a.m. I could usually take a nap.  What happened?  By ones and twos, the less sick drifted out as the evening wore on.  That’s the way the rest of the world works.  It’s not so bad.  Some people die unnecessarily, but some people die in our country now because they can’t afford care.  The main effect is wasted time and prolonged pain.  And that brings me to:

10e. My mother ran the business office at St. Luke’s Hospital in Kansas City for many years.  As the reputation of the Mid-America Heart Institute grew, more and more business came from wealthy foreigners who decided to jump the queue in their countries by flying to America.  What would happen if America became one of them?  A recent survey by Russia’s Ministry of the Interior found, without irony or outrage, that the average bribe had tripled in the past year.  That’s one way to jump the queue, well known in queue-tolerant nations.  The rich, the well-connected, the governmental employees who set up the system–they’d get their surgeries, one way or another.  And the rest of us?  I mean, the rest of you–I’m setting up an ambulatory surgery center in the Caymens.  No lines.  Cash on the barrelhead.  Round-trip airfare from Miami included.

See why I prefer patients to make the choices with HSAs?

I have two porches on the log cabin I built with my own two hands.  As a Republican sitting on either, I see my beloved Kansas woods, where one day my ashes will be scattered.  I work hard every day, doing my honest best to do a good job, contribute constructively to the betterment of my neighbors, and return home to my beloved wife, my beloved dogs, and a cat which I could probably do without.  I think every American wants, and deserves, competent and compassionate health care from a physician who knows them and, in his or her own way, loves them.  I do not think every American deserves, or perhaps even wants, every test, procedure, and intervention which could possibly, under even the extremes of age or disability, be applied to the life left in their vessel of clay.  For those who do: you have my pity, but not my agreement.

How we handle this disagreement, as a nation, is critical.  Sarah Palin (“Obama Death Squads”) and her fellow-travelers have so whipped up the pack that even conservatives are feeling hot breath at town halls.  Writing to physicians several years ago, I predicted that any attempt to impose rationing from above would produce blood in the streets.  We’re getting close, now.  To my mind, only self-rationing– in the form of HSAs, or something similar– could fix health care in a way that acknowledges the unique American character and experience.  Here’s to you, President Sarkozy.

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