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8 Problems with Our Health Care System (Recap)
8 Things I Learned from Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
Showing posts with label Sick. Show all posts
Showing posts with label Sick. Show all posts
Friday, March 27, 2009
Diabetes
8 Problems with Our Health Care System #8
A person who has been afflicted with a chronic disease has a disease that will not go away. These diseases, including cancer and heart disease, account for 70% of the deaths in the United States. Care for chronic disease is the most common and costly of all our health care expenses. This makes sense when you consider that around half of all Americans have a chronic condition. One of the most common and the most costly is diabetes.
A person who has been afflicted with a chronic disease has a disease that will not go away. These diseases, including cancer and heart disease, account for 70% of the deaths in the United States. Care for chronic disease is the most common and costly of all our health care expenses. This makes sense when you consider that around half of all Americans have a chronic condition. One of the most common and the most costly is diabetes.
Diabetes is a disease that affects the bodies ability to process sugar. There was a time when a diabetes diagnosis meant almost certain death. Through a combination of lifestyle changes and the right drugs, most diabetics can lead normal, mostly healthy lives. It will not, however, be cheap for those afflicted or for their insurance companies.
Out of every ten dollars spent on health care in our country, one of those dollars can be attributed to diabetes. An individual diabetic will spend thousands of dollar year on prescription drugs, medical equipment to monitor blood sugar, frequent doctors visits, and the inevitable long term medical problems that will result from the disease.
Insurance companies don't like covering diabetics. While paying the costs of insulin and the other supplies needed for maintenance of the disease will result in long term savings, most people will change jobs and insurance companies so the benefits will likely be reaped by a competitor. Insurance companies will do everything in their power to avoid paying for diabetes. Most individuals cannot afford to pay for their diabetic medical care on their own and many will be forced to seek out charity where available. Unfortunately, many other diabetics will simply go without treatment to avoid the costs. This will result in even greater long term heath costs.
We do not spend enough money teaching the proper lifestyle and nutritional choices that will help people avoid diabetes. We do not help enough diabetics get the proper care they need to control their disease. We spend far too much on the inevitable complications that arrive from untreated diabetes. Diabetic care is yet another area where our health care system is not adequate.
Medicaid and the Plight of the Poor
8 Problems with Our Health Care System #7
At no point in the history of our health care system have the poor received adequate care. The common misconception is that health care is available for everyone. It's simply not true. When you consider that the poor are less likely to have a nutritious diet and more likely to face conditions hazardous to their health in the work place or at home, you see that this the fact that this is true is to our great shame.
The poor, of course, missed out on the post World War II boom in private health insurance as provided by employers. What little health care they could receive, typically only for an emergency, was available at the large public hospitals and some charitable hospitals. Today, charity hospitals are run little different from their for-profit brethren, so they are an increasingly minor option for the poor.
In the 60s, health care for the poor was improved through the creation of Medicaid by the federal government. Medicaid, an entitlement program run by the states and largely funded by the federal government, would extend health care to more people than ever before. Unfortunately, this would lead to runaway costs.
Medical spending exploded under Medicaid. Congress would take it upon themselves to limit eligibility in order to control costs. Suddenly, large groups of people were once again without health insurance. Worse yet, many of the working poor who had insurance would see their companies drop their insurance plans or reduce coverage to a level that would do little to alleviate the financial burden of sickness. In 1982, President Reagan would cut Medicaid spending forcing many more out of the system. Many states would unleash managed care on their Medicaid programs and the poor would suffer from the same problems caused by HMOs as everyone else.
Medicaid was an ambitious plan that fell far short of its goal. At this point, is a particularly unpopular government program thanks to demonization by conservatives not for its inefficiencies, but for the very idea. How can a country this vast and this rich not take care of the least among us?
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
At no point in the history of our health care system have the poor received adequate care. The common misconception is that health care is available for everyone. It's simply not true. When you consider that the poor are less likely to have a nutritious diet and more likely to face conditions hazardous to their health in the work place or at home, you see that this the fact that this is true is to our great shame.
The poor, of course, missed out on the post World War II boom in private health insurance as provided by employers. What little health care they could receive, typically only for an emergency, was available at the large public hospitals and some charitable hospitals. Today, charity hospitals are run little different from their for-profit brethren, so they are an increasingly minor option for the poor.
In the 60s, health care for the poor was improved through the creation of Medicaid by the federal government. Medicaid, an entitlement program run by the states and largely funded by the federal government, would extend health care to more people than ever before. Unfortunately, this would lead to runaway costs.
Medical spending exploded under Medicaid. Congress would take it upon themselves to limit eligibility in order to control costs. Suddenly, large groups of people were once again without health insurance. Worse yet, many of the working poor who had insurance would see their companies drop their insurance plans or reduce coverage to a level that would do little to alleviate the financial burden of sickness. In 1982, President Reagan would cut Medicaid spending forcing many more out of the system. Many states would unleash managed care on their Medicaid programs and the poor would suffer from the same problems caused by HMOs as everyone else.
Medicaid was an ambitious plan that fell far short of its goal. At this point, is a particularly unpopular government program thanks to demonization by conservatives not for its inefficiencies, but for the very idea. How can a country this vast and this rich not take care of the least among us?
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
Thursday, March 26, 2009
The Mental Health Hole
8 Problems with Our Health Care System #6
Fortunately for the mentally ill, humans have become more enlightened over the years. As recently as the 17th century, the mentally ill will regularly burned at the stake. They would later be confined to almshouses or jails where they could be kept separate from the rest of society. Eventually, reform efforts would lead to the creation of publicly funded mental health institutions. Ultimately, these too would be undermined when states would begin locking up criminals and any other deviant in the same institutions. To say that mental illness carried a stigma would be an understatement.
In the 20th century, the medical profession would gain a better understanding on mental illness and things would begin to approve. The Works Progress Administration (WPA) during the New Deal would build an unprecedented number of new mental health hospitals, where the mentally ill would be treated. As doctors gained more knowledge of the illnesses, there would be a surge in the growth of outpatient facilities. The mentally ill would begin to integrate with society. Psychiatry and psychology had become accepted medical practices. At the behest of employers, insurance companies began providing benefits for treatment.
Ultimately though, the cost of mental health care was problematic. Therapy and drugs are expensive. Even though most insurance programs cover mental health treatment, they do so with higher co-payments and a lower overall limit on payment amount. It didn't help that many mental health care facilities began to game the system by recommending hospitalization for people who did not need it. Something would have to be done.
The insurance companies would take it upon themselves to reform insurance for mental health care since their customers, large employers, insisted that the benefits remain. The biggest change was the application of managed care, a dubious idea when each individual and their treatment is somewhat unique. Beneficiaries were now forced into small networks of doctors and therapists. The insurance companies began denying claims at a rate far higher than for other medical areas. Payments were further limited. The ranges of treatment options were further limited. The number of days that an insurance company would pay for hospitalization was dramatically reduced. Rather than attack those that were gaming the system, the insurance companies went after mental health in its entirety.
Now, an individual with severe mental health problems faces a high likelihood of financial ruin. They are just another group that has been let down by the current system.
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
Fortunately for the mentally ill, humans have become more enlightened over the years. As recently as the 17th century, the mentally ill will regularly burned at the stake. They would later be confined to almshouses or jails where they could be kept separate from the rest of society. Eventually, reform efforts would lead to the creation of publicly funded mental health institutions. Ultimately, these too would be undermined when states would begin locking up criminals and any other deviant in the same institutions. To say that mental illness carried a stigma would be an understatement.
In the 20th century, the medical profession would gain a better understanding on mental illness and things would begin to approve. The Works Progress Administration (WPA) during the New Deal would build an unprecedented number of new mental health hospitals, where the mentally ill would be treated. As doctors gained more knowledge of the illnesses, there would be a surge in the growth of outpatient facilities. The mentally ill would begin to integrate with society. Psychiatry and psychology had become accepted medical practices. At the behest of employers, insurance companies began providing benefits for treatment.
Ultimately though, the cost of mental health care was problematic. Therapy and drugs are expensive. Even though most insurance programs cover mental health treatment, they do so with higher co-payments and a lower overall limit on payment amount. It didn't help that many mental health care facilities began to game the system by recommending hospitalization for people who did not need it. Something would have to be done.
The insurance companies would take it upon themselves to reform insurance for mental health care since their customers, large employers, insisted that the benefits remain. The biggest change was the application of managed care, a dubious idea when each individual and their treatment is somewhat unique. Beneficiaries were now forced into small networks of doctors and therapists. The insurance companies began denying claims at a rate far higher than for other medical areas. Payments were further limited. The ranges of treatment options were further limited. The number of days that an insurance company would pay for hospitalization was dramatically reduced. Rather than attack those that were gaming the system, the insurance companies went after mental health in its entirety.
Now, an individual with severe mental health problems faces a high likelihood of financial ruin. They are just another group that has been let down by the current system.
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
The Medicare Drug Benefit Debacle
8 Problems with Our Health Care System #5
It was one of those rare occasions where those on the left and those on the right agreed that something needed to be done. The elderly were in desperate need of help. The cost of prescription drugs was destroying the financial well being of far too many people. The government would have to add a prescription drug plan to Medicare. What form would the program take?
Well, with the Republicans in charge of the Presidency and the Congress, it was clear that the conservatives would be designing the plan. Because of their unfailing belief in the market and in glory and greatness of private industry, the conservatives designed a plan that would ultimately make a lot of money for the insurance companies. Rather than the government providing the benefit directly, private insurance companies would offer competing plans from which seniors could choose. In 2003, President Bush signed the plan into law.
There were myriad problems.
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
It was one of those rare occasions where those on the left and those on the right agreed that something needed to be done. The elderly were in desperate need of help. The cost of prescription drugs was destroying the financial well being of far too many people. The government would have to add a prescription drug plan to Medicare. What form would the program take?
Well, with the Republicans in charge of the Presidency and the Congress, it was clear that the conservatives would be designing the plan. Because of their unfailing belief in the market and in glory and greatness of private industry, the conservatives designed a plan that would ultimately make a lot of money for the insurance companies. Rather than the government providing the benefit directly, private insurance companies would offer competing plans from which seniors could choose. In 2003, President Bush signed the plan into law.
There were myriad problems.
- Different plans covered different drugs at different rates.
- Finding out which drugs were covered was not easy, and for the newer drugs, it would involve a phone call to the company.
- Insurers were given the right to drop coverage at any time, but seniors could only change their plan once per year.
- The roll out did not go smoothly and many seniors were without their drugs for a period of time.
- The government was specifically forbidden to negotiate for better prices with the pharmaceutical companies.
- To keep the insurance companies happy and to encourage them to continue providing the drug benefit plans, they were granted significant tax breaks and subsidies.
The Medicare drug benefit is the perfect example of why Republicans shouldn't be allowed to create and run government programs. They don't believe government can work, and they prove it every time they get a chance to run things. Yes, the plan has helped many seniors, but at what cost? The benefit is ridiculously expensive.
It seems that, in the long run, this is what the Republicans want. By turning the program into a budgetary nightmare, they hope they can turn people against any government provided solution. We can't allow it to work. It is within the power of government to provide a prescription drug benefit to our seniors, and it is in their power to do it more efficiently than a private company.
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
Wednesday, March 25, 2009
The Elderly
8 Problems with Our Health Care System #4
The elderly are a special problem within our health care system. In the early days of health care insurance, the companies wouldn't allow most retirees to keep their benefits. Because they needed more care, they had more problems buying insurance. If they could get it, it was expensive and wouldn't cover much. The problem was so bad that in 1961, only 7% of the cost of medical care for the elderly was covered by insurance.
The solution was Medicare and it was a success for seniors right from the start. The standard of living for many seniors was raised instantly. There were problems as many medical professionals and hospitals raised their rates and cashed in. Reformers would eventually implement price controls which contained the cost. In fact, Medicare would soon deliver health care more efficiently than most private insurers. Needless to say, most of the elderly were happy with the benefit.
Over the years though, Medicare would fall behind the times in the types of coverage offered. In particular, Medicare lacked outpatient care and prescription drugs. Over the years, more and more seniors began spending more out of pocket for their medical needs. Still, there was no major expansion of Medicare, excepting a brief flirtation with catastrophic coverage that was abandoned after less than a year. During this time, doctors were prescribing more and more drugs and almost every senior became dependent upon at least one prescription.
For those few seniors who were fortunate enough to get Medicare supplementary insurance thanks to their former employers (and the unions who bargained for the care), they would also get bad news. Company after company would abandon their commitment to provide insurance for their retirees. As a result, many seniors began to go without medical care. Some would even give up their homes so they could keep try and keep their medical care. Once again, there was a crisis with health care for the elderly. Would the country step up to the plate?
The first attempt at help, the Medicare Drug Benefit introduced in 2003, requires a post of its own.
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
The elderly are a special problem within our health care system. In the early days of health care insurance, the companies wouldn't allow most retirees to keep their benefits. Because they needed more care, they had more problems buying insurance. If they could get it, it was expensive and wouldn't cover much. The problem was so bad that in 1961, only 7% of the cost of medical care for the elderly was covered by insurance.
The solution was Medicare and it was a success for seniors right from the start. The standard of living for many seniors was raised instantly. There were problems as many medical professionals and hospitals raised their rates and cashed in. Reformers would eventually implement price controls which contained the cost. In fact, Medicare would soon deliver health care more efficiently than most private insurers. Needless to say, most of the elderly were happy with the benefit.
Over the years though, Medicare would fall behind the times in the types of coverage offered. In particular, Medicare lacked outpatient care and prescription drugs. Over the years, more and more seniors began spending more out of pocket for their medical needs. Still, there was no major expansion of Medicare, excepting a brief flirtation with catastrophic coverage that was abandoned after less than a year. During this time, doctors were prescribing more and more drugs and almost every senior became dependent upon at least one prescription.
For those few seniors who were fortunate enough to get Medicare supplementary insurance thanks to their former employers (and the unions who bargained for the care), they would also get bad news. Company after company would abandon their commitment to provide insurance for their retirees. As a result, many seniors began to go without medical care. Some would even give up their homes so they could keep try and keep their medical care. Once again, there was a crisis with health care for the elderly. Would the country step up to the plate?
The first attempt at help, the Medicare Drug Benefit introduced in 2003, requires a post of its own.
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
Managed Care and the HMO
8 Problems with Our Health Care System #3
Managed Care began with the most idealistic of origins. It was seen as a way to reduce the cost of health care while simultaneously increasing the quality of the health care delivered. It was to be accomplished by the formation of the group practice. Doctors would join the practice and would be paid a salary. Rather than pay a fee for each service, the customers would pay a regular fixed fee for health care whenever they needed it. Despite the opposition of many doctors, group practices became successful where implemented. Certainly the customers loved the practices and the managed care provided.
A prominent advocate for group practices was a California doctor named Paul Ellwood. He believed that patients at a group practice received better preventive care and that when sick, they were treated more effectively. He believed that managed care was a perfect market based system that would save our health care system and mitigate calls for universal health insurance from the government. He found willing ears in the Nixon Administration and rechristened his the group practice as a Health Maintenance Organization (HMO). The HMO Act of 1973 was passed allowing for the creation of HMOs.
Unfortunately, the Republicans decided to monkey with the details and the HMOs, which would rise to prominence in the 1980s and explode in the 1990s, would have little resemblance to the group practices upon which they were based. As created by for-profit insurance companies, the HMO would not consist of true group practices with doctors under one roof. Instead, they would still practice managed care, but they would form networks of independent doctors.
Insurance companies measure something they call their "Medical Loss Ratio". It is the percentage of revenue spent on health care versus their overhead, marketing and profits. The "loss" is the health care. Under the old style group practices the ratio was between 85 and 90 percent. Under the new HMOs, the margin dropped to between 70 and 80 percent. Quality of care was no longer a focus.
Under a group practice, if a doctor ordered a procedure or a test, you knew it would be covered. The medical decisions were in the hands of the doctor. Under an HMO, a doctor often needs permission from the insurance company to perform a procedure. At a group practice, a doctor worked on salary and the only incentive was to deliver quality health care at an affordable cost. HMOs reward the doctors in their networks for keeping costs down. The emphasis is keeping costs low, not on delivering quality health care. Needless to say, many, many people hate their HMOs.
Managed care is yet another good idea that has been screwed up by greedy corporations.
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
Managed Care began with the most idealistic of origins. It was seen as a way to reduce the cost of health care while simultaneously increasing the quality of the health care delivered. It was to be accomplished by the formation of the group practice. Doctors would join the practice and would be paid a salary. Rather than pay a fee for each service, the customers would pay a regular fixed fee for health care whenever they needed it. Despite the opposition of many doctors, group practices became successful where implemented. Certainly the customers loved the practices and the managed care provided.
A prominent advocate for group practices was a California doctor named Paul Ellwood. He believed that patients at a group practice received better preventive care and that when sick, they were treated more effectively. He believed that managed care was a perfect market based system that would save our health care system and mitigate calls for universal health insurance from the government. He found willing ears in the Nixon Administration and rechristened his the group practice as a Health Maintenance Organization (HMO). The HMO Act of 1973 was passed allowing for the creation of HMOs.
Unfortunately, the Republicans decided to monkey with the details and the HMOs, which would rise to prominence in the 1980s and explode in the 1990s, would have little resemblance to the group practices upon which they were based. As created by for-profit insurance companies, the HMO would not consist of true group practices with doctors under one roof. Instead, they would still practice managed care, but they would form networks of independent doctors.
Insurance companies measure something they call their "Medical Loss Ratio". It is the percentage of revenue spent on health care versus their overhead, marketing and profits. The "loss" is the health care. Under the old style group practices the ratio was between 85 and 90 percent. Under the new HMOs, the margin dropped to between 70 and 80 percent. Quality of care was no longer a focus.
Under a group practice, if a doctor ordered a procedure or a test, you knew it would be covered. The medical decisions were in the hands of the doctor. Under an HMO, a doctor often needs permission from the insurance company to perform a procedure. At a group practice, a doctor worked on salary and the only incentive was to deliver quality health care at an affordable cost. HMOs reward the doctors in their networks for keeping costs down. The emphasis is keeping costs low, not on delivering quality health care. Needless to say, many, many people hate their HMOs.
Managed care is yet another good idea that has been screwed up by greedy corporations.
Source - Sick: The Untold Story of America's Health Care Crisis --- and the People Who Pay the Price by Jonathan Cohn
Tuesday, March 24, 2009
The Self Employed
8 Problems with Our Health Care System #2
How does a country that supposedly lionizes the entrepreneur make it so difficult for him --- or ... her --- to buy health coverage?The economics of health care worked by using an economy of scale. Insurance companies would sign up large employers and would use what is known as a community rate to determine the premiums. Essentially, everyone would pay the same rate, regardless of their medical history. In other words, those who used their insurance the least would subsidize those who needed it the most. The key to keeping the premiums low for everyone was to spread out the policy over as many people as possible.
Now, for obvious reasons, the self employed paid more for health insurance. Administrative costs for employees of a company were low because responsibilities could be shared with a company's HR department. Additionally, the insurance company only had to market to the employer. Each self employed individual has to have their insurance managed individually. Still, when the self employed were community rated, the only real difference in their premiums were in additional administrative fees.
Now, most companies provided their employees with health insurance and even if it were optional, most employees would sign up. This kept the risk pool large. For the self employed, there is no such guarantee. The risk is certainly greater for the insurance companies. Additionally, not every self employed individual is going to try and get health insurance. In fact, those who are most likely to have a lot of medical expenses are more likely to sign up for insurance. This is known as adverse selection and it is the major issue for insurance companies.
Now, keep in mind that a commercial insurer is like any other business in a capitalist economy. They are not looking to serve the public interest; they are looking to make money. Their solution to adverse selection is experience rating. Unlike community rating, under experience rating your premium is based on your potential need for insurance. If you have a history of sickness, or you have a chronic condition like diabetes or hypertension, then you will pay a higher premium. Perhaps, even, a much higher premium. That is, if you can even get insurance. Under experience rating, an insurance company has no reason to insure anyone except the healthy.
Yes, even when the employer provided insurance system was working, the self employed were left out in the cold. They're still there today.
The Erosion of Employer Provided Insurance
8 Problems with Our Health Care System #1
For decades, it was a solution that was supported by employees and employers. It was a period of shared prosperity across our country, and employer provided health insurance had become the backbone of the American Health Care system. You went to work for a company and your company supplied you with health care insurance. Simple.
It was a time of tight labor markets, and employers looked for any edge they could get to attract employees. They looked for any item that would increase the loyalty of their employees. Of course, the tax incentives provided by the federal government didn't hurt. (Health benefits were essentially tax free.) Employers were happy to provide the benefit for their employees.
For decades, it was a solution that was supported by employees and employers. It was a period of shared prosperity across our country, and employer provided health insurance had become the backbone of the American Health Care system. You went to work for a company and your company supplied you with health care insurance. Simple.
It was a time of tight labor markets, and employers looked for any edge they could get to attract employees. They looked for any item that would increase the loyalty of their employees. Of course, the tax incentives provided by the federal government didn't hurt. (Health benefits were essentially tax free.) Employers were happy to provide the benefit for their employees.
The employees were happy as well. Year after year their health benefits would get better and better. The National Labor Relations Board made health benefits negotiable. Naturally, this led to the unions supporting employer backed health care, and they would press for further improvements as well. Any attempt to create government supplied universal health care was met with a simple question: why? Things were fine as far as all parties were concerned, and then 1980 came, and things started to go wrong.
Globalization was causing an explosion in world wide cheap labor. The pressure was on American companies to keep costs down. At the same time, health care premiums were exploding. Employers began to look for ways to deny health insurance to their employees, including reclassifying employees as "contractors" and using more part time employees. Other companies, like Wal-Mart, simply didn't provide insurance to the majority of their employees. Additionally, the quality of the benefits provided was falling.
The system was breaking down. Worst yet, there was nothing to step in and fill the void. The number of uninsured was increasing. I'm typing this in the past tense as if the problem has been solved, but it has not. It continues to this day.
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