Thursday, June 25, 2009

Health Care Thursday

This Kristof column is important, because it corrects an article of "conventional wisdom."
Kristof: The Prescription From Obama’s Own Doctor

As a society, we trust doctors to be more concerned with the pulse of their patients than the pulse of commerce. Yet the American Medical Association is using that trust to try to block a robust public insurance option as part of health reform.

In fact the A.M.A. now represents only 19 percent of practicing physicians (that’s my calculation, which the A.M.A. neither confirms nor contests). Its membership has declined in part because of its embarrassing historical record: the A.M.A. supported segregation, opposed President Harry Truman’s plans for national health insurance, backed tobacco, denounced Medicare and opposed President Bill Clinton’s health reform plan.

So I hope President Obama tunes out the A.M.A. and reaches out instead to somebody to whom he’s turned often for medical advice. That’s Dr. David Scheiner, a Chicago internist who was Mr. Obama’s doctor for more than two decades, until he moved into the White House this year.

“They’ve always been on the wrong side of things,” Dr. Scheiner told me, speaking of the A.M.A. “They may be protecting their interests, but they’re not protecting the interests of the American public.

“In the past, physicians have risked their lives to take care of patients. The patient’s health was the bottom line, not the checkbook. Today, it’s just immoral what’s going on. It’s abominable, all these people without health care.”

Dr. Scheiner, 70, favors the public insurance option and would love to go further and see Medicare for all. He greatly admires Mr. Obama but worries that his health reforms won’t go far enough.

Dr. J. James Rohack, the president of the A.M.A., insisted to me that his group is committed to making health insurance accessible for all Americans, and that its paramount concern is patient health.

“When you don’t have health insurance, you live sicker and you die younger,” he said. “And that’s not something we’re proud of as Americans.”

He added that the A.M.A. is not necessarily opposed to a public option, and I have the impression that it might accept a pallid one built on co-ops. Dr. Rohack wouldn’t repudiate his association’s letter to the Senate Finance Committee warning against a new public plan. That letter declared: “The introduction of a new public plan threatens to restrict patient choice by driving out private insurers.”

I don’t mind the A.M.A. lobbying on behalf of doctors in the many areas where physicians and patients have common interests. The association is dead right, for example, in calling for curbs on lawsuits, which raise medical costs for everyone.

An excellent study published in 2006 in The New England Journal of Medicine found that for every dollar paid in compensation as a result of lawsuits against doctors, 54 cents goes to legal and administrative costs.

That’s an absurd waste of money. Moreover, aggressive law leads to defensive medicine, in the form of extra medical tests that waste everybody’s money. Tort reform should be a part of health reform.

Yet when the A.M.A. uses its lobbying muscle to oppose major health reform — yet again! — that feels like a betrayal. Doctors work hard to keep us healthy when we’re in their offices, and that’s why they win our trust and admiration — yet the A.M.A.’s lobbying has sometimes undermined the health of the very patients whom the doctors have sworn to uphold.

I might expect the American Association of Used Car Dealers to focus exclusively on wallet-fattening, but we expect better of physicians.

In fairness, most physicians expect better as well, which is why the A.M.A. is on the decline.

“It’s what has led to the decline of the A.M.A. over the last half century,” said Dr. David Himmelstein, a Massachusetts physician who also teaches at Harvard Medical School. “At this point only one in five practicing doctors are in the A.M.A., and even among its members about half disagree with its policies.” To back that last point, Dr. Himmelstein pointed to surveys showing a surprising number of A.M.A. members who support a single-payer system.

For his part, Dr. Himmelstein co-founded Physicians for a National Health Program, which now has more than 16,000 members. The far larger American College of Physicians, which is composed of internists and is the second-largest organization of doctors, is also open to a single-payer system and a public insurance option. It also quite rightly calls for emphasizing primary care.

The American Medical Student Association has issued a sharp statement disagreeing with the A.M.A.

The student association declared that it "not only supports but insists upon a public health insurance option."

Look, a public option is no panacea, and it won’t automatically set right the many shortcomings in our health system. But if that option is killed in gestation, then we’re back to Square 1 and there’s little hope of progress in solving the vast challenges confronting us.

So, President Obama, don’t listen to the A.M.A. on this issue. Instead, for starters, call your doctor!
Anne Laurie: Anybody Else Watch ABC’s “Prescription for Health Care”?

Charlie Gibson sure does love him some old-fashioned “President Obama, when will you stop beating your wife for-profit insurance companies?” repetition, doesn’t he?

On the other hand, I think Obama did an excellent job of going right over the heads of Gibson and such hostile questioners as the head of the AMA and the insurance lobbyists, hammering the fact that nobody considers our current system viable, that even people who are satisfied with their personal health plans today won’t stay satisfied as premium costs continue to rise 9% a year, and that (at a conservative estimate) some 30% of current health spending is simply wasted.

Atul Gawande’s recent New Yorker article The Cost Conundrum has become a very Hot Topic, according to the media. I’ve been reading Gawande’s books, COMPLICATIONS and BETTER: A SURGEON’S NOTES ON PERFORMANCE, and trying to write a review more coherent than “Read these! Damn fine!” Large chunks of both books originally appeared in the New Yorker, but reading or re-reading essays on everything from surgical training at one of America’s best hospitals, to the fieldwork behind the attempt to eliminate polio, to the amazing advances (and failures) in trauma medicine during our latest military adventures in Iraq & Afghanistan really provides a new perspective.

  • from the comments:

    mr. whipple

    Anybody Else Watch ABC’s “Prescription for Health Care

    Yup. Quite possibly, the worst thing i’ve ever seen on teevee.

    Every question is asked by people who are ‘THE HAVES’.

    Drs, insurance people, etc.

    Not a single person who is a ‘NOT HAVE’, and none of the ‘HAVES’ are willing to give one inch, one iota, one speck, even tho at the outset when Obama asked them, everyone in the room agreed the system is broken.

    Not a single person who is uninsured, or gone bankrupt, or has been denied, or has gotten rescinded or otherwise fucked over, until 3 minutes left in a 1 1/2 hour show.

    And every question asked by Gibson in the most biased, vile way possible.

Ezra Klein: A Crisis of Legitimacy

In response to yesterday's post about the high levels of satisfaction people report for their personal insurance coverage, reader Akshai wrote in:

People with chronic illnesses will poll different (presumably) from people who have been healthy their entire insured lives. They should not be pooled together into one big poll, as healthy individuals haven't actually necessarily needed to "use" their insurance. Or put another way, their individual insurance has not been put to a stress test.

That's correct. Maybe not as a matter of politics -- the people who are satisfied when they're healthy don't necessarily know they'll be unsatisfied when they're sick -- but as a conceptual frame.

It's not, of course, the case that everyone who gets sick learns to loathe his or her insurers. Part of the reason health care is so expensive in this country is that, for all their unpopularity, insurers don't say no to all that much. But as yesterday's testimony from Wendell Potter demonstrated, when they do say no, they lack legitimacy for the decision. You don't trust a used-car salesman to accurately evaluate the quality of his automobiles for the same reason you don't trust an insurer to honestly consider the merits of your case. Their incentives and your incentives are not aligned. They make money by saying no. You get better, in theory, by them saying yes. And that makes private insurers particularly poorly placed to control costs in the system. They don't have the legitimacy to make hard decisions.

That's not to say the government is much trusted either. I'm of the opinion that only doctors have the moral authority to say no in a manner that patients trust, and so the key to cost control is giving them more incentives to do so.

ChrisinParis: Take a guess who ripped off consumers/patients for billions?
You better sit down for this because it's shocking. I could hardly believe it myself because I always thought they were such fine, upstanding members of society. I believed them when they blamed all of the problems of high costs on those nasty lawyers and expensive lawsuits. I feel so lost right now after reading this news.
Health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released today by the staff of the Senate Commerce Committee.

The report is part of multi-pronged assault today on the trustworthiness of private insurers by Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.). It comes at a time when the insurance industry is battling efforts to offer consumers a public alternative to private health plans.

At a hearing this afternoon, Rockefeller's panel is slated to air allegations by a former industry insider that insurers have put profits before people's health.

The report released this morning alleges that insurers have systematically underpaid for so-called out-of-network care. The issue has been brought to light in past litigation and investigations, including a probe by New York Attorney General Andrew Cuomo.
Say it ain't so! My whole world is upside down! Darn you Andrew Cuomo. Darn you! Next thing you know they're going to tell me that family values politicians don't practice what they preach.
Ezra Klein: The Truth About the Insurance Industry

Insurers often complain that their critics don't understand their business practices. It would be hard to say that about Wendell Potter. Potter, whose name sounds like that of a character in a Frank Capra movie, worked in the health insurance industry for more than 20 years. He rose to be a senior executive at Cigna. He was on their calls, at their board meetings, in their books. And today, at a hearing before Sen. Jay Rockefeller's Commerce Committee, he testified against them.

What drove Potter from the health insurance business was, well, the health insurance business. The industry, Potter says, is driven by "two key figures: earnings per share and the medical-loss ratio, or medical-benefit ratio, as the industry now terms it. That is the ratio between what the company actually pays out in claims and what it has left over to cover sales, marketing, underwriting and other administrative expenses and, of course, profits."

Think about that term for a moment: The industry literally has a term for how much money it "loses" paying for health care.

The best way to drive down "medical-loss," explains Potter, is to stop insuring unhealthy people. You won't, after all, have to spend very much of a healthy person's dollar on medical care because he or she won't need much medical care. And the insurance industry accomplishes this through two main policies. "One is policy rescission," says Potter. "They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment."

And don't be fooled: rescission is important to the business model. Last week, at a hearing before the House Subcommittee on Oversight and Investigation, Rep. Bart Stupak, the committee chairman, asked three insurance industry executives if they would commit to ending rescission except in cases of intentional fraud. "No," they each said.

Potter also emphasized the practice known as "purging." This is where insurers rid themselves of unprofitable accounts by slapping them with "intentionally unrealistic rate increases." One famous example came when Cigna decided to drive the Entertainment Industry Group Insurance Trust in California and New Jersey off of its books. It hit them with a rate increase that would have left some family plans costing more than $44,000 a year, and it gave them three months to come up with the cash.

The issue isn't that insurance companies are evil. It's that they need to be profitable. They have a fiduciary responsibility to maximize profit for shareholders. And as Potter explains, he's watched an insurer's stock price fall by more than 20 percent in a single day because the first-quarter medical-loss ratio had increased from 77.9 percent to 79.4 percent.

The reason we generally like markets is that the profit incentive spurs useful innovations. But in some markets, that's not the case. We don't allow a bustling market in heroin, for instance, because we don't want a lot of innovation in heroin creation, packaging and advertising. Are we really sure we want a bustling market in how to cleverly revoke the insurance of people who prove to be sickly?

If you'd like to read Potter's testimony in full, I've uploaded it Potter Commerce Committee written testimony - 20090624- FINAL.pdf.

Yglesias: My Health Reform Provision

Yesterday, Ezra Klein offered his prediction for health care reform:

In 2006, it would have been a great deal. But as the legislation winds its way through the Senate, there will be unpleasant compromises, and unconscionable omissions, and the constant knowledge that though this is progress, it is not sufficient, and the people who stand in the way of a better bill are frequently incoherent or disingenuous. And that will be terribly frustrating for supports of the effort. The result will probably be a historic win when compared to the status quo, but I doubt it’s going to feel like that for supporters of the initiative.

This is a pretty good generic description of how congress works, but I think it may be wrong. I think the dynamics of the health care issue—particularly the financial dynamics—lend themselves to a strongly bivalent outcome. That’s because to the extent you crack down on private sector interests (progressive!) you free up money that can be used for subsidies and Medicaid expansion and the like, which is also progressive. And if it looks like a comprehensive health reform is likely to pass, I think two or three or six Republicans will want to hop on board, since there’s no use getting on the wrong side of history. At the same time, if you lose the momentum I think the coalition for reform could very quickly start rolling downhill. If Republicans think there’s any chance of blocking anything from passing, then their interest in a compromise will dry up instantly. If you have a weak-or-nonexistent public plan, then you can’t afford to provide much in the way of new benefits to people. And if you have a plan that doesn’t provide dramatic new benefits, but does piss off union leaders and Democrats from high-cost states (this is the Dianne Feinstein issue), then suddenly it’s not clear who the constituency for your bill is. The piranas will circle, and the whole thing can collapse.

Consequently, my take is that we’ll either get a very strong progressive bill or we’ll get a real legislative train wreck. Ezra’s analogy was to the stimulus bill, but my analogy would be to comprehensive immigration reform—tons of moving pieces mean you can lurch from dramatic change to hopeless coalition breakdown and back again very rapidly.

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