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Unaffordable Health Care

Do we want a world in which medical care is in chaos?

Copyright © 2003 Dorian Scott Cole

Update: One approach to providing health care.

This commentary is about unaffordable health care in a system that is spinning out of control.

How does our world work? Some things, like the US medical system, often look like an incomprehensible mystery. If there were injustice in it, how would you identify the cause without vilifying the entire system? Fiction writers write about injustice and the problems that people have, but typically do so on a micro level, creating human interest stories about individuals. Stories about the impact on individuals are much more interesting. Seeing the "macro" picture is much more difficult, but is just as important. Journalists often have a larger responsibility for stories that address the macro level. The US medical system is a good example of macro level problems and how difficult these are to understand and address.

One of the interesting debates going on now is the debate about drug prices. Many drug companies claim that they aren't making money. New drug prices are always beyond the reach of many, and prices for existing drugs are skyrocketing so that many US citizens can no longer afford to buy them - so they do without them.*1 They suffer. Some die. Many people are ordering drugs from Canada, where prices are much less expensive. In retaliation, one drug company is threatening to withdraw the availability of its drugs from Canada, if Canadian pharmacies continue exporting them. With the failure of Congress to do anything constructive about pharmaceuticals, many individual states are fighting back. Maine just won a Supreme Court decision over their new state statute that allows the state to negotiate prices with drug companies, and the decision will impact all other states.

What did the argument before the Supreme Court, center on? Commerce. Money. People over 60 give up necessities for medication, or suffer and die without it, and we argue about money. Is there injustice in this, or is this the life that we elect to have by supporting and promoting our capitalist system? Or is this simply about corporate greed or corporate survival? Will the companies raise prices even higher to compensate, and will the discount even help? The Maine negotiated discount is expected to be around 25%, but I know that even at this level, many people with chronic problems will still be unable to afford their medication, especially the elderly on fixed incomes.

Congress has been trying to put together a prescription drug plan for the elderly for a few years, but it was defeated in the last session in bipartisan voting. People over 60 give up necessities for medication, or suffer and die without it, and we argue about partisan politics and ideologies, unable to cooperate with each other for the sake of the common good. Is there injustice in this, or is this the life that we elect to have by supporting and promoting our democratic system? Or does this just reflect the quality of the politicians that we elect?

If you have ever been served a medication in a hospital, you know that there is no comparison between the drug companies skyrocketing prices and the hospital's astronomical prices. I purchase 100 enteric-coated aspirin for $2.30 in a store. In the hospital, you will pay several dollars for just one aspirin. Is this a rip-off? What is the dirt on hospitals? A sneak peak under the covers is very revealing. Look underneath the equipment (coolers, processing equipment, etc.) in any hospital and you will likely find dust that has been there since the equipment was installed, plus an assortment of used syringes, test tubes, broken glass, rubber gloves, spilled biological fluids, dead mice and bugs, and just about anything else you can think of. Most of us would not allow this in our own homes past the seasonal cleaning that is typical of most of us.

The above paragraph was written to get your attention, but, as an eyewitness in hundreds of hospitals, it is the truth for many (not all) hospitals. This picture is symbolic of disparate systems that place hospitals under strain for resources. Many hospitals lack the will to police themselves and set adequate benchmarks regarding fundamental standards, until forced to do so by some "accident." Hospitals as a group, are leading venues for bacterial and viral infections, including killer respiratory infections like pneumonia. Even mundane things like hospital shower heads carry infections and spread disease.

Dirt and disease aren't even the worst problem. Excellent methods have been employed for many years in many hospitals to prevent the accidental misidentification of lab reports and body parts which cause accidental amputations of healthy organs and limbs. Yet in some hospitals it is still happening.

Is it the hospital's fault? Maybe it is the physicians who work there? Physicians decry the rapidly rising cost of malpractice insurance which is squeezing them out of business and running up the costs to patients. Yet mistakes continue to happen and so do law suits. Medical boards within hospitals and states have proven over many years to be very hesitant to monitor and address physician's bad behavior. They are often little more than a smoke screen to prevent others from seeing what is really going on, while limiting the damage from law suits. Physicians, who operate independently in a good-old-boy club, simply refuse (collectively, not individually) to be overseen or adequately regulated.

I have never begrudged some professions the salaries that they make. Many require many years of expensive and difficult college, extensive training, continuous education, and long and exhaustive hours. Physician is one of those jobs. Yet there is a large disparity in salaries for physicians that has a major impact on medical costs. For example, the average annual salary for physicians (GP, FP, IM), who have to know everything and many of whom are as effective as many specialists, is around a well earned $150,000.00. Surgeons make $300 to 500,000.00 a year. Why $500K?

Specialists make $160 to 300,000.00 per year. Why $300K? And what I least understand is that anesthesiologists and radiologists make $250 to 300,000.00 per year. This is a substantial portion of every hospital bill for surgery. I wouldn't want to have surgery without anesthetic, but why $250K? Does it take this much money to attract and maintain sufficiently talented anesthesiologists? The numbers don't make sense and describe a system that is out of control. I suggest putting some of that money into attracting RNs - they are desperately needed.

What the consumer has to demand is standardization, accountability, and response to market pressure. But what assurance system would achieve these goals in a medical treatment system composed of thousands of completely independent hospitals, each with its own oversight board, with hundreds of independent physicians and other medical professionals practicing in the hospital?

We certainly don't need another FDA - government red tape is already out of control in the medical community. For example, RNs spend most of their time in CYA paperwork and supervising, leaving the actual nursing work to others. I believe in self-regulation, but effective self-regulation obviously won't happen without pressure. Insurance companies apply pressure, but to my mind, their interest is not in favor of the patient. Recently, I discovered that one good local heart hospital was no longer on the list of one insurance companies approved hospitals, so patients couldn't go there. Why? The insurance company had negotiated an exclusive contract with a different hospital. This was purely an economic (money) decision.

So what system will work to assure quality medical practice? The ISO system is a good model to use as an example. ISO is a standards setting body that takes all views into account, such as, manufacturers, vendors, users, consumer groups, testing laboratories, government, engineering, and research. The need for a standard is suggested from within the marketplace, anywhere from manufacturer to user. An ISO working group reaches a consensus on needed standards and subject experts define the scope and set international standards. The standards are continuously reviewed and modified as technology and other factors change.

Manufacturers don't have to subscribe to ISO procedures, but many other businesses won't do business with them unless they do. It is effective use of market pressure to assure product efficacy, quality, and safety through control over procedures. The medical community would do well to implement its own international (or national) standards organization.

Bad practices by hospitals and physicians are one of the major reasons why health care costs are spiraling out of control. Are we creating a world in which our medical costs will continue to spiral upward because the medical field is collectively unable to police itself? Can market pressure (we, the consumer) stimulate the creation of a medical standards body that will assure quality medical practice? We should ask ourselves, "What kind of world are we creating for ourselves?"

Bad gets ugly to prompt a cure

Everyone in the medical industry is hurting right now. Registered nurses are being squeezed out of the profession by low pay and requirements that keep them doing paperwork instead of seeing patients. Hospitals claim they can't make money and keep personnel. Physicians are having difficulty maintaining their medical practices, the cost of processing required insurance paperwork is high, sometimes physicians are leaving states because of malpractice insurance costs, and they have rebelled against a number of cost squeezing practices that are badly hurting them. Insurance companies are having major impact on medical practice. Insurance companies limit physicians' selection of drugs that they can prescribe to patients on insurance.

Drug companies claim that they are not making money. Employers can't afford to offer medical insurance, with existing employers transferring rising medical plan costs to employees, and new companies simply not offering coverage. The government claims that just providing pharmacological (medicine) coverage is too costly for the system, so we can guess the cost of providing medical insurance for all who need it, as many politicians and groups have proposed over several elections. And yet, according to a March 2003 AARP Bulletin article, Bruised and Broken: US Health System, the US spends more of its Gross Domestic Product (GDP) on healthcare than nations like Canada and Germany, which insure all of their citizens. What is wrong with this picture? Medical costs continue rising at an astronomical rate - far outpacing people's ability to pay.

There are a number of things wrong:

    The US medical system has slowly changed in the last 50 years from one that was primarily driven by compassion, often supported by charitable, community (government), and religious groups, to one that is profit oriented by private groups. The claim was that the privatization approach would put hospitals on sound financial footing. Was this a wise move? In today's era when politicians recommend charitable actions by individuals and charitable (religious) groups in place of government programs, the medical system is one good test case. If you think that compassion, not money, is still the driving force, try and get medical treatment without bringing your wallet and insurance card. You may get a rude awakening.

    Medical care isn't a commodity or luxury - it is as basic a necessity as there is. Compassion needs to be brought back as the main driving force behind medical care.

    The medical coverage system is based on industry (employers) providing coverage for its employees, often as a result of collective bargaining (unions). The nature of every single industry in the US has changed from this 19th. to mid-20th. Century approach. Collective bargaining affects a minority of today's employees at best - we are in a market driven employment era in which negotiable items are often off the table and unaffordable. Many companies are simply failing to offer medical coverage at all. Small businesses make up the bulk of US employment, and small business simply can't afford to provide healthcare coverage. Employer sponsored plans aren't portable, so when people leave or lose their employment (they do so at least every four years) they lose their coverage. As much as I like the Dick Gephardt (Dem., MO) push for healthcare legislation, his plan to tie it to industry is built on an employment demographic illusion and shifting sand. To make it successful, he needs to tie it to something more stable. (More on this later in this article.)

    The power brokers in the US medical system form an exclusive triangle that maintains medical prices at a level that many can never afford. The suppliers, care givers, and insurers (physicians, hospitals, pharmaceutical companies, and insurance companies) negotiate prices, to the exclusion of the interests of the uninsured. The uninsured aren't represented or given consideration. The entire medical system is meant for insured people. The way things are going, there are going to be very few insured people. To resolve this, price increases need to slow to a crawl, much slower than wages. There needs to be some form of blanket coverage.

    The US is a competition focused nation. Competition theoretically should bring prices down. What it is doing is just the opposite. Prices in the medical industry are going up. Competition over prices for goods and services outside of the medical industry is causing marginal profits in companies, and thus creating the inability of companies to provide medical coverage. Business competition is not a cure-all for all of the world's ills. We need to avoid being ideologists and get very discriminating about the proper use of competition, or eventually indiscriminate competition will squeeze us all to nothing.

    Tailored services. We need to stop throwing bureaucracies at mole hills. For example, emergency rooms are being used as substitutes for doctors and substitutes for insurance. When someone visits an emergency room today for a relatively minor health problem, the entire financial overhead of the emergency room and hospital is applied to the patient's care. If the person cut his finger, and this injury could have been taken care of by a smaller care facility, the patient and insurance company are billed unnecessarily for enormous medical overhead. Often the person doesn't care because the insurance is covering it. Many people who have medical coverage that doesn't include physician office coverage, use the emergency room for illnesses just to get the bill covered. The hospital doesn't care because it gets the money. The rest of us are paying higher insurance bills because of these things.

I don't think that any part of the medical system is especially at fault, and there is no silver bullet that will fix everything. There are several things that I believe can help stabilize the industry and make coverage available to all.

    Compassion needs to be brought back as the driving force behind medical care. Profit interests need to be reduced. I have met literally hundreds of physicians, nurses, and researchers (medical and pharmaceutical) in the medical field over twenty years, and fortunately I have only run into a couple that I didn't feel genuinely cared about their patients and work. They care. Many of them even ignore the business aspects of their field. Careers in the medical field need to be emphasized as care and compassion fields (as the nursing promotion on TV does).

    Create blanket medical coverage that brings everyone into the medical triangle, through taxes that apply to everyone. The second benefit of this is that most of the paperwork can be done away with, substantially lowering costs. Tie the cost of medical coverage to something more stable than employment. Employment's main characteristics are instability and the financial inability to provide or maintain coverage. Consumer goods sales and fuel sales are relatively stable and spread the cost to everyone - not just segments of the population or industry.

    Most of the people currently with medical coverage can afford the one to three physicians office visits that they have each year, and the accompanying one time medication. It is low income people, those with chronic conditions that require continuous medication, and elderly people with a very large number of visits and medications, who can't. These facts need to be very influential considerations in providing insurance (and I don't mean a factor for eliminating people from insurance as it currently is, which is a disgrace).

    Long range, we need to make sure that competition in all areas doesn't drive down the well-being of our citizens.

    Drug prices are set by an antiquated market driven model that literally has nothing to do with the cost of research and manufacture of the drug. Many drugs are unavailable and unprescribed simply because insurance companies won't cover them. This drives up costs of individual drugs because pharmaceutical companies have to jack up the price of the drugs that do sell to make money. Physicians hands are tied. They typically prescribe the drug that is more familiar to them, and is covered by insurance - so the insurance companies are among the primary determinants (next to efficacy and safety) of which drugs get prescribed. We need to understand the dynamics of this industry and get them corrected so that all beneficial drugs are available, and at reasonable prices. And I might add that for the first time in recent history, drug company mergers have made one company large enough to have 7% of the total market (in the past no company has had much more than 5%). This in itself will change some market dynamics. Consolidation in any market usually leads to a more powerful presence, tighter control, and higher prices.

    Require standards for medical care. When standards are high, a major cause of malpractice costs will simply go away, lowering prices for all of us. Setting high standards changes the focus from cheap, to quality at reasonable prices.

    State Insurance Commissioners and Attorneys General, need to stop allowing insurance companies with exclusionary risk policies, to sell insurance. The end result of competition in the insurance field has been to encourage companies to prevent those people from being insured, through exclusions, high prices, or dumping them, who have even a hint of a medical problem, who have frequent claims, or who are in a group that is unprofitable. Everyone lives in fear that insurers will begin doing genetic testing and prevent even more people from getting insurance who have genetic risks. The reason for insurance, that is, to spread the risk among many so that medical conditions have less financial impact, is no longer a consideration for many insurers. Insurance companies should be required to either insure people, or stay out, not come in and pick only the best fruit. They get to do these things because we permit and even encourage them.

    Set reasonable pay for medical workers to attract excellent people to the field. It is a disgrace, and dangerous for patients, that RNs are paid so little and have such nonsense responsibilities instead of patient care. It is a disgrace that some physicians are paid so much compared to their peers.

    There is a philosophical question that should be needling us. We all like to get the most for our money. But in our quest to make everything profit oriented and competitive, and get the cheapest price, what are we discovering? In the end, is it not each of us who is the provider (manufacturer, wage earner), the consumer (buyer), and the investor (stock market, IRA, and pension plans) in this large economic system. When we squeeze at any place in the system, demanding the most for the least money, we only squeeze ourselves. Should money be the dominant goal of the medical system? Should money be demoted to a lesser god?

A personal note: we recently admitted an aging parent, who had fallen, to a skilled nursing facility in Marietta, Georgia, which was recommended by a local hospital. The facility failed to get the medications she was on from the hospital, for the entire weekend. On her first morning, she awoke around six and asked to go to the bathroom. The aid told her to just hold it, it wasn't time to get up yet. Other aids, when asked for help, simply disappeared and never returned. Meals were served very late. Her blood sugar levels (diabetic) were very high on Monday (to be expected from physical trauma), but the doctor said the level was "OK," and then on Tuesday they were very low, making her feel weak and dizzy (dangerous for diabetics). Again the attending physician thought they were "OK," and did nothing. Obviously no one cared about anything at that place, not even about competence. We found the quality of care unacceptable, and frightening. We tried to get her out as soon as possible. Her discharge forms had errors on nearly every entry, and when requested by another facility, they couldn't even figure out how to fax her records. We transferred her to a skilled nursing facility in Illinois. The difference was night and day. Compassion and care was abundant in the Illinois facility. (No inferences are intended about the states - I have had good and bad care in both.) In the other facility it was sadly lacking - obviously money was the only reason for working there.

What kind of a world do we want? One in which profit is the dominant motive, and we slowly lose access through the very cheapest system we can devise? Or one in which compassion and other values are our motives, and we make a profit providing them. For example, do we want a world in which insurance companies dictate which drugs we can get, which doctors we can see, which hospitals we can go to, and which few people can be insured? and then indirectly, which incompetent and money grubbing people work in the medical field? Do we want a system in which we pay exorbitantly for drugs? How about a system in which prices rise so quickly that individuals and companies are forced to limit or drop medical coverage? A system with no standards, in which medical accidents and hospital borne contagious diseases kill or harm thousands every year? If these characteristics identify the system we want, then we're set, because this is exactly our current system. Is this the hallmark of the US free enterprise system and competition? Or can we do considerably better?

- Scott

1. According to Congressional testimony, prescription drug prices have increased at a double-digit rate every year for the last five years, typically in the 11 to 19% annual range.

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