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Beginning to sound like a broken record, the newly elected Alabama Republican state representatives are once again demonstrating their “market” credibility. They are quoted in the paper today as  identifying the state funded teachers health insurance as the place to insert needed market reforms. The legislators and the governor are quoted as having this as a priority:

Starting health savings accounts for teachers and state agency employees. An employee and the state could put money into a person’s account, which would belong to the employee and could be used to pay medical costs. Together with the accounts, the state would offer high-deductible health insurance, which would save the state money.

  Such a plan, which Bentley championed on the campaign trail, could cut the number of insurance claims paid by the state because people, in theory, would be less likely to seek medical care that wasn’t absolutely necessary if they had to pay more of their own money for it, said William Ashmore, chief executive of the State Employees’ Insurance Board.

As I have discussed before, HSAs are good theory but haven’t been shown to improve health or reduce risk taking behavior.  This was looked at more in-depth here and here (subscription required) with the following observations from the literature.

  • Cost savings for a care event have never been documented. For the most part the health costs seem lower because healthier people tend to use HSAs and spend their health care dollars on things such as dental work, vision care such as lasik, braces, cosmetic procedures, and maternity care.
  • Chronic illness care costs more in these types of plans and the “catastrophic” coverage often doesn’t kick in leaving people to make “hard decisions” regarding life saving treatments
  • People using these types of plans tend to disregard preventive recommendations leading to fewer immunizations, PAP smears, and mammograms and more late stage and preventable illness
  • People tended to make poor decisions about seeking care for serious symptoms (such as chest pain)

So why does this idea not die? Possibly because it is consistent with the  constant message from groups like the Heritage Foundation denying the benefit of all government oversight and extolling market solutions (regardless of the supporting evidence). For the most part I think it has traction because it seems intuitive that if people have “skin in the game” when it comes to their health purchases they will make better decisions. We would all like to believe that humans will make rational decisions, in particular when in comes to health, as no one wants to lose one’s health. Unfortunately, as my friend Josh Freeman has pointed out, most people use very little health care so have little opportunity to make decisions and influence the market. When folks need it, however, they really need it:

Seniors, because they are also more likely to have multiple chronic health problems that require multiple hospitalizations, and because they are more likely to have cancer, which costs a lot to treat, are also disproportionately represented in the high cost group. However, they are still the minority of that group. These high-cost users are the “outliers”, and also include other people with cancer, people with trauma, as from auto accidents, requiring multiple surgeries, and premature and sick babies requiring incredibly expensive care in neonatal intensive care units.

What HSAs do is encourage those people who are low utilizers to spend more on things that provide a marginal benefit, thus raising healthcare costs. A better way would be to work within the confines of the Affordable Care Act to create efficiencies within our state (as is being done in other states). If we are lucky our legislators will come to this conclusion as well before the HSA lobbyists sell them a new policy for the teachers and folks like me are left to clean up the mess.

A note for clarification: Apparently, state employees already can opt into an HSA. Someone should probably brief the Governor-elect on the existing options.

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I’m back in Mobile from the Alabama Academy of Family Physicians meeting in Sandestin Florida (why an Alabama meeting is in Florida is a story for another day) and I was struck by three separate observations. The first was the participation of students in the meeting. The Alabama Academy Foundation has recently begun sponsoring students at the meeting and this year there were 20 students who had enough of an interest in primary care and Family Medicine to come to the meeting. You might say “So what, how tough can a trip to Sandestin be.”  I can assure you that Dr Coleman made sure these students were at more meetings than beaches. They all seemed engaged and eager to learn about and participate in the delivery of primary care upon graduation. Here’s hoping we get the payment structure improved before the students graduate so they will not be actively discouraged from going into primary care due to income potential.

The second observation was regarding the visit of gubernatorial candidate Robert Bentley. These meetings do not usually take on the tone of a political rally, but because Dr Bentley is a physician I suppose it was felt by the leadership to be okay. Dr Bentley stated that having a physician in the governor’s mansion would help Family Physicians to succeed (because we all have medical school in common). He then outlined his platform of fighting against “certain provisions” of the Patient Protection and Affordability act throughout his governorship. His belief is that we can delay long enough to allow the Obama administration and the Democratic Congress to be replaced, then the entire bill can be repealed. He favors replacing the coverage provision with Health Savings Accounts, tort reform, tax breaks, and the traditional doctor goodwill. It will be this goodwill that physicians draw upon when asked to see an uninsured patient. I would like for Dr Bentley to come and speak to some of the specialists in Mobile who seem to have lost the goodwill aspect of their practice and let’s see if we can create a more collegial atmosphere down here. In particular, I would like to draw his attention to the dermatology situation.

The last observation is regarding the update from the Academy. Every year the national Academy sends a representative to fill in the membership on the ongoing activities and upcoming plans. The update this year included the details of the Patient Protection and Affordability Act. In particular, it included information regarding the Medicare Pilot Programs. The law requires that these programs be developed, evaluated by CMS (not by Congress), and if shown to save money be rapidly replicated. The Accountable Care Organization (2012) and Bundling Payments (2013) are going to be rapidly piloted, evaluated, and replicated. It is clear that this will happen because CMS wants to be out of the business of paying for fee-for-service medicine and sees this as a huge opportunity.

So my advice to the students (and folks already in Family Medicine) is this: The wave of payment reform is going to happen. Primary care in general and Family Medicine specifically is being positioned to be in the driver’s seat of a changed healthcare system. The battle to keep government out of health care delivery was lost 60 years ago. Rather than working to negate the law, I encourage all of us to work to make advanced primary care techniques a part our practice and to work to make our medical neighborhood a place where safe, effective, and efficient medicine takes place. Rather than wait to see if another wave comes along, I would suggest we paddle as hard as we can to get in front of this one.

My resident admitted a patient with abdominal pain last night. This morning the local paper carried an op-ed piece by George Will outlining the Republican vision for health care.  It is clear that there are many different ways that this debate could go. After reading George Will and reflecting on how things might change given what might happen in the next couple of years. The Republican vision (as articulated by George Will) is that my patient would be given a $5700 tax credit for a “family plan”. He would then be on their own to purchase insurance that presumably would cost that or more if he chooses  more coverage.

My patients don’t make very much money. I have to assume that this gentleman comes from a household that makes less than $31,000 per year (median household income in Mobile) and so will likely choose not to spend additional household income on health care coverage as I suspect Mr Will would choose to do. Since currently the average person in Alabama is spending $5000 per capita (or $15,000 per family), my patient’s family will probably need to select an “insurance plan” that will be 50% cheaper than what they are getting from their employer now. Ah, you say, my patient will become an informed consumer and will then drive down costs by purchasing quality health insurance.

My patient lives in Mobile. He got his abdominal pain in Mobile and came to a Mobile hospital. My patient has had previous abdominal surgery. If he purchased the wrong insurance from “Fly-by-night” Insurance company with headquarters in Delaware, will there be a clause that says “must be accepted by hospitals in Mobile Alabama?” One of the problems with the current system and with the “proposed” system is patients who think their insurance was “good” at their nearby hospital but when illness strikes  in the middle of the night they find themselves without coverage. Neither Mr Will nor Tom Price (author of HR34oo) offer a solution to this problem. The bill in conference would not allow this.

My patient had previous abdominal surgery. It is likely that due to this pre-existing condition, he would be unable to get inexpensive health coverage in an actuarial based system. He would be required to make the choice to carry more expensive health coverage, to lie (and risk getting caught and having all claims denied), or to go without coverage (a choice many make today). HR 3400 does not address this issue. The bill in conference does.

My patient is ill due to no fault of his own. His illness came over him suddenly. He works at a job which probably provides as much utility as the hedge fund managers who were rescued with our tax dollars. The security given by access to quality healthcare is important to keeping his (and people like him) life together. I don’t think a tax credit is going to do the job.

I am teaching a class tomorrow entitled “Health Care Reform” to the first year medical students. I pulled out my slides from last year (January, had just come back from DC, was convinced that we would have something on the President’s desk by July) and made some changes. The good news was that I only had to add a couple of pieces of information to the talk. The bad news is that we don’t have change yet, but it may be closer than we think.

Why don’t we yet have health care reform? There was an article in the New Yorker  several years back that did a very nice job of describing the concept of moral hazard and why there is a policy dispute about health care as a social good. Gladwell points out that many feel (most fall on the “conservative” end of the spectrum although not all) that the uninsured who pay cash rarely have no health care expenses and  the very wealthy spend a lot on health care. In a market system those paying cash are paying closest to the true  value so it must be that those who are wealthy view health care as a luxury item. It would not be morally right to give all Americans access to this luxury.

The RAND corporation performed an experiment in the 1990s to see whether this would be the case. They found:

In general, the reduction in services induced by cost sharing had no adverse effect on participants’ health. However, there were exceptions. The poorest and sickest 6 percent of the sample at the start of the experiment had better outcomes under the free plan for 4 of the 30 conditions measured. Specifically,

  • Free care improved the control of hypertension. The poorest patients in the free care group who entered the experiment with hypertension saw greater reductions in blood pressure than did their counterparts with cost sharing. The projected effect was about a 10 percent reduction in mortality for those with hypertension.
  • Free care marginally improved vision for the poorest patients.
  • Free care also increased the likelihood among the poorest patients of receiving needed dental care.
  • Serious symptoms were less prevalent for poorer people on the free plan.
  • Cost sharing also had some beneficial effects. Participants in cost sharing plans worried less about their health and had fewer restricted-activity days (including time spent in seeking medical care).

In addition,  the experiment examined whether shouldering more of their own health care costs leads people to take better care of themselves. It did not. Risky behaviors were not affected — rates of smoking and obesity, for instance, did not change.

(An article in this week’s New England Journal of Medicine finds that increased cost sharing on the outpatient side in Medicare patients leads to delayed care and more hospital care as well. People tend to be penny wise and pound foolish when it comes to their health. A lesson learned in the 1930s and one of the reason that a group of physicians founded Blue Cross)

Mr Gladwell points out that the real objection to universal coverage, from a policy standpoint, is that some people (those with disease) will consume more resources than they will have been predicted to pay for. In other words, the objection is that resources are redistributed  from those who are healthy to those who are unhealthy. Susan Channick expanded this in an article on why we will never have a single payer system in this country. She lists the reasons as inertia, path dependence, the expense of the Medicare program, the American belief in looking to the private sector for solutions to even large social problems, the fear of big government coupled with the belief that government is the problem rather than the solution, the political preference for incrementalism over fundamental change, and cultural beliefs such as the belief that while all Americans enjoy equality of opportunity, only those able to capitalize on the opportunity are entitled to enjoy its fruits. This last one is the most profound, as the implication is that we Americans who are healthy deserve to be healthy and owe nothing to our unhealthy neighbors.

In an article in the New England Journal, Thomas Murray points out that the Judeo-Christian tradition as articulated in the Bible includes the concept of “stewardship.”  He says that “Landowners are instructed in Leviticus: “When you reap the harvest of your land, you shall not reap to the very edges of your field, or gather the gleanings of your harvest; you shall leave them for the poor and the alien.” The obligation is not limitless: the landowner does not have to prepare a meal for the “poor and the alien,” does not have to surrender the entire crop, and should protect the land to ensure that it remains productive. But when food is more than sufficient to feed all, allowing some people to starve is indecent and represents a failure to live up to universal moral duties.” Lets all try to live up to that standard.

Cartoon20090812As I watch the post speech debate on what “health insurance reform” really means, I am reminded of the “Sultans of Swing” lyric by the group Dire Straits.  On the one hand, “the most interesting health care consultant in the world”, a Canadian PhD named Steven Lewis, has posted a very watchable video which points out flaws in the comparison of the Canadian system to the US system and makes a strong care for the advantages of “single payor”. I guess as a fan of Dan Aykroyd and Michael J Fox it shouldn’t surprise me that Canadians could be funny and serious.

In this country, however, the competition in the marketplace of ideas is not coming from the Canadians. It is coming from the Republicans as illustrated by the March on Washington yesterday organized by a group called FreedomWorks. Led by Dick Armey,  near as I can tell they are against lawyers (who isn’t  unless you need ’em) and for allowing “competition across state lines”. Not being a particular fan of the company responsible for 90% of the commercial policies in the state of Alabama, I thought this last idea might have some merit, until I looked into it further.

John McCain brought up the idea of competition across state lines in the 2008 presidential election.  I have to admit, it kind-of appealed to me. Since he didn’t win, I hadn’t thought too much more about it until now. It seems simple (why not let Mississippi Blue Cross into Alabama), American (companies should compete), and would seem on the face of it to produce lower costs.

The New America Foundation did not think any of those things would come to pass if “reform” took this guise. A non-partisan group, they looked into this policy change in October 2008. What they speculate would happen given the current state of regulation would be a race to the bottom. States that do not mandate such “luxuries” as emergency care, maternity care and pediatric immunization and prevention would quickly become the home state for many insurance companies so employer based policies would become less comprehensive. There would be even less types of policy choice under such a system. Integrated systems that we are striving to emulate such as Intermountain Health Care, Group Health Cooperative, and the Mayo would have their survival threatened as employers raced to the bottom. If employer coverage were not encouraged through tax policy, the number of uninsured would rise as insurers developed means to exclude high risk individuals and risk pools would become prohibitively expensive.

On the other hand, the foundation feels it could function with guaranteed issue (you get a policy no matter what your risk history is) and federal regulation of health insurance (back with the Stalin pictures), reforms such as are proposed for the “health care cooperatives”. Dick Armey has made his position clear on these addendum to his conservative policy position

“The only thing ‘guaranteed issue’ guarantees is more expensive health insurance and more government involvement. Imagine if they did this to restaurants—if restaurants had to serve dinner to everyone who wanted it (guaranteed issue) from a longer menu (to qualify for the national exchange) at the same price (community rating). The feast would be great—except that all the restaurants would close shop before I got dessert.”

What it comes down to is this: do we as a country see ourselves as having an obligation to provide for basic health care for our citizens? Do we see health care as a privilege along the lines of a restaurant meal? If it is a privilege, are we willing to allow the consequences of denial of care that we know would improve the well being of a fellow citizen because they have not had the good fortune of working for a company that supplies health insurance? Are we willing to do that while we gorge on excessive medical tests, medications for erectile dysfunction, and allow our physicians to make over $1,000,000 annually as they reassure us that America has the best health care in the world?


A very good article in the Atlantic about the economics of healthcare. This reinforces what I have been saying for years, either we need much more regulation or a completely different approach to healthcare delivery. The more I think about it, the more I think an HSA, catastrophic insurance back-up, and vouchers for evidence based preventive care are the way to go. Having said that, don’t know what would happen to those folks with chronic, debilitating illnesses or folks that make poor health choices…

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