(PIKESVILLE – October 12, 2017) – The great health care debate continues. But two key structural problems are never mentioned. Instead of looking at the big picture, the discussion so far is an exercise in re-arranging the deck chairs on the Titanic.
Employment and health insurance are linked but should be separated. The current system burdens both employers and employees. How did this come about? During World War II, wages were frozen, and so modest benefits got added to compensation. One of these was health care, and that decision spawned the health care insurance industrial complex. Now we think it’s written in stone that having health insurance must be connected to employment; it shouldn’t be.
I have personal experience with this, building and running a medical group practice. It started with just me and grew to over 90 doctors with 120 employees, and we bought health insurance for everyone. First, it was a challenge trying to figure out exactly what benefit plan would work for employees of different ages, different medical needs, and different family circumstances. Then we had to consider what the business could afford. I was the one who signed the $50,000-plus monthly premium check based on rates that started small but grew every year. I knew that 5 percent was paid to our insurance agent. Another 15 percent to 20 percent went to administrative costs and profits for the insurance company. Because our practice billed insurance companies for medical services, I knew that another 10 percent was spent on our billing and collections fees. In other words, a third of our premium dollars were not spent on actual medical services.
Our purpose was delivering health care, not buying health insurance. We were fortunate to have some inside knowledge of the process. I learned from other business people that they were facing the same challenges. Their primary task was running the business they were in, but too much time, effort, and money was spent deciphering health insurance.
As rates increased, companies began reducing benefits and shifting costs to employees in the form of deductibles and co-pays. Plans became limited; they might cover the needs of some employees and their families but not do well by others.
People stayed in jobs they didn’t like in order to keep their insurance. Others would have liked to become self-employed entrepreneurs but couldn’t risk losing their health benefits. When I’d hear that a friend just got hired, my first question was not if he or she wanted the job, saw an opportunity for personal growth or liked their colleagues. Instead, I’d ask if health benefits were provided.
All of the above hurts productivity and wastes time and money.
What’s the solution? The whole concept of insurance is to share costs and risks. The more people in an insurance pool, the greater the spread. But because our system segregates people into different groups, incentives become perverse. Insurance companies want to insure healthy people and not those with illnesses, especially chronic ones. So, why not have a pool that includes everyone?
There are several ways to do this. One way would be to create a Medicare-for-all system. Another way would be to create a widely available health insurance program that could have various tiers of coverage, with the lowest tier offering basic services available to anyone. More coverage would come at individual expense. Insurance companies would play a service role, connecting service to payment. But they would no longer make more money by denying care.
No matter what insurance or payment scheme is created, there will never be enough money for health care without focusing on the primary clinical cost drivers. Emergency departments typically discharge 80 percent of the patients seen. But the 20 percent who are admitted account for 50 percent to 90 percent of the patients in the hospital. So if you want to know what’s feeding the hospital system, just take a look at the emergency department.
As an emergency medicine physician for over 40 years, I know that a few basic clinical conditions drive the vast bulk of hospital visits and admissions. Anyone on the front lines of patient care knows this whether they are a nurse, physician, paramedic or other staff member. Unfortunately their clinical perspectives are rarely included in our national discussions.
Until these clinical drivers are addressed, no system of health care reform or financial adjustment will save money or improve overall health. Yet each one of these clinical drivers is amenable to cost-effective solutions, and these could readily be implemented if we had the will do so.
• The Chronically ill: Five percent of patients account for 60 percent of health care spending. Studies show that the key to managing these patients is to provide carefully developed personal care plans. When that happens, hospital admissions drop, expenses are reduced and the patients obtain a higher quality of life. These patients fall into a variety of insurance plans, but obviously we all pay for this one way or another. Tailoring care for this group should be an indispensable part of any health care plan.
• End-of-life care: With the aging of the population and advances in medical care, people are living longer and more productive lives. But the end comes for all. Studies show that only about 35 percent of Americans have completed advance directives (free forms, legal in every state) and that this rate is especially low among non-whites. Increasing the rate of completion of advance directives and engaging hospice and palliative care earlier will result in more satisfactory end-of-life care experiences. This gain is achieved by respecting individual and family values, and it will lead to significant reductions in unneeded and unwanted health care services.
• Addictions to illegal drugs, especially narcotics, cocaine and methamphetamine: These are responsible for the majority of violent crime, HIV, hepatitis and homelessness in both urban and rural areas. Studies show that up to 80 percent of patients who come to emergency departments without insurance are there for substance abuse issues. The current system of addiction treatment is fragmented and lacks accountability. This is a public health crisis, yet we have treated it primarily as a criminal justice issue. Making treatment readily available will decompress a wide variety of problems.
• Legal addictions (alcohol and tobacco): These are still major causes of disease. Studies prove that investment in addiction treatment programs — for both legal and illegal substances — is highly cost effective and saves money and lives. The statement that “an ounce of prevention is worth a pound of cure” is especially true here.
• Mental Health: According to the NIH, “mental disorders are common throughout the United States, affecting tens of millions of people each year, and that only a fraction of those affected receive treatment.” Mental illness is costly to treat, but the societal costs — to patients, families and communities — of not treating are far greater. A holistic coordinated approach is needed to be sure as many people as possible can get these much needed services.
• Prevention and Innovation: This includes everything from preventing falls by safety proofing the homes of at-risk seniors to encouraging fitness for all ages to investment in basic scientific research that will reap dividends in improved health and economic development. This is the wrong time to cut funding that could lead to new treatments and cures.
Until these key issues are addressed, no meaningful progress will be made. (Reprinted from Baltimore Sun, July 14, 2017)
Dr. Dan K. Morhaim is a physician and Democrat representing Baltimore County in the Maryland House of Delegates. His email is firstname.lastname@example.org.