Category: Healthcare Politics

For those somehow unfamiliar with the term, The Kobayashi Maru is from the Star Trek universe and is an exam giving to Star Fleet Academy cadets. It exposes the cadets to a no-win scenario to test their problem solving under pressure. This no-win scenario is precisely what has become of healthcare in the United States.

The numbers on this should be reasonably familiar to anyone who is paying attention at all. Like this graph from The Commonwealth Fund showing that US Healthcare is 17.1% of our (very large) Gross Domestic Product (GDP – the total value of all goods and services produced in a country over the course of a year) compared to an average of 10.6% for other “developed” countries.

But, with all that spending, we must be getting something really great, right? Maybe it’s because we have so many doctors, or we go to see the doctors so often. Nope, that’s not it.

The same study shows (above) that the US has among the fewest practicing physicians per 1,000 people of population and a fairly low number of physician visits per year.

Well, maybe our health care is so expensive because we have more hospital beds or more hospitalized patients. Again, no.

As you can see, we are again below average in the number of hospital beds and the number of hospital discharges.

OK, it must be the doctors. The doctors are really raking it in and that’s our high cost of health care in the US, right. And again, nope.

This graph, from Forbes in 2013 is especially interesting. It appears, from the first column, that US physicians are quite overpaid in comparison to other developed countries, averaging almost twice the pay. But, as the article points out, that’s not an “apples to apples” comparison. The US has about 30% primary care physicians and about 70% specialty physicians, a ratio that is almost opposite all of the other countries surveyed. Specialists earn, on average, more than primary care docs, so the concentration of higher earning specialists in the US skews the overall averages. Column 2 is the ratio of earnings of specialists to GDP per capita and it is still above other countries, but not as much as the combined specialists and primary care docs. Column 3 compares the earnings of specialist physicians to “high earners”. The article explains: “the more relevant comparison is not to the average worker but to members of the talent pool from which American physicians are recruited. When specialty earnings are compared to those of high earners—i.e., those in the 95-99% of the earnings distribution—it turns out that physicians in nearly all other countries, not just the U.S., are paid reasonably well“. By this same comparison, US primary care docs are slightly underpaid, but not grossly so.

OK, we don’t have more doctors or visits to the doctor. We don’t have more hospital beds or patients in the hospital. Our doctors are not really grossly overpaid and certainly not to the extent to explain our wildly out of line health care costs. It must be that we’re just getting better care, right? Sadly, this is not true either.

This chart from a Forbes article (reporting on The Commonwealth Fund‘s article) shows that US healthcare ranks 11th out of the 11 countries surveyed. Most worrisome, at least to me, are the last three measures; Efficiency, Equity, and Healthy Lives, where we rate dead last. Efficiency scored poorly because: “The U.S. has poor performance on measures of national health expenditures and administrative costs as well as on measures of administrative hassles, avoidable emergency room use, and duplicative medical testing.” We are last on equity because: “Americans with below-average incomes were much more likely than their counterparts in other countries to report not visiting a physician when sick; not getting a recommended test, treatment, or follow-up care; or not filling a prescription or skipping doses when needed because of costs. On each of these indicators, one-third or more lower-income adults in the U.S. said they went without needed care because of costs in the past year”. And we rated last on Healthy Lives because: “The U.S. ranks last overall with poor scores on all three indicators of healthy lives—mortality amenable to medical care, infant mortality, and healthy life expectancy at age 60″.

Note that the actual cost of services isn’t really discussed. But, as reported by PBS, the prices for many common procedures is higher in the United States compared to other countries. But, like with physician pay, the magnitude here is not enough to explain the huge discrepancy. So what is going on? How did our health care costs get so out of line and why, if we pay so much, so we get such poor care and leave so many people without care? The answer, I believe, is two-fold. First, the simple answer is profit. Second, we’ve lost sight of our priorities.

Let’s look at profit, first. Many of the countries named thus far, besides the US, have nationalized health care. That is to say that all citizens of those countries receive health care as a part of the rights they have for being citizens. Of course it is funded through taxation and many countries offer additional perks for those with the money to buy them. But everyone gets healthcare. The United States health care system is, of course, based upon profit. Physicians have been given an incentive to do more because doing more means getting paid more. Hospitals were given incentive to provide more services because they were able to make more money. It was not some evil conspiracy that created this, it’s just the way our system evolved. On the flip side, we have evolved private insurance companies who are given incentive to provide as little care as possible for those that buy their insurance because doing so maximizes the profit for the shareholders of the companies. And make no mistake, if you’re looking for the biggest hoard of money in medicine, look no further than health care companies. The revenue of the top 5 insurance companies in the US for 2014 is illustrated below. That’s about $350,000,000,000.

That represents a lot of profit. And don’t think that just because you live in a state like Minnesota (like I do) where health care insurance is mandated to be provided by not-for-profit companies that they aren’t raking in the money. The St. Paul Pioneer Press reported that in 2012 the HMOs in Minnesota had cash reserves of $1,900,000,000. Yes, that’s 1.9 billion dollars. With cash reserves of $1.9 billion I have a heard time understanding why health insurance premiums in Minnesota rose, in 2014, 19% when the cost of living increased less than 3%. Did the cash reserves need to get bigger? And out of Minnesota, if United Health Care is earning around $5,000,000,000 in profit each year, why do their health insurance premiums keep going up? The answer is that UnitedHealth is not in the business of taking care of patients, it’s in the business of making money for it’s shareholders. And it’s all about profit.

Let’s take a minute to look at priorities. Obviously, the priorities for profit is a problem, but it’s not the only problem. Back to those that actually provide care to people, doctors and hospitals. First, they still get paid, to a large extent, by what and how much they do. There is a movement to slowly change the system to pay for outcomes (i.e. pay for keeping people healthy), but it will take a very long time for this to become the norm. A large amount of the payment that doctors and hospitals receive is also based upon “patient satisfaction” or HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems). But does anyone see the fundamental flaw in asking patients about their experience of care? What if the care you received was first rate, but it wasn’t what you wanted to hear? Who rates their experience of finding out they have cancer, heart disease, diabetes, or any other serious disease as good? And if your doctor came to your bedside and told you that you had bad heart disease and you needed to immediate adopt a low fat vegan diet if you wanted to live, would this be a good experience for you? What if you had successful triple bypass surgery? That might be good, but it hasn’t addressed the issues that clogged your vessels in the first place and it won’t really extend your life, but you feel like something good has happened and will probably relate that as a good experience. And now you’re just as much a part of the problem.

So what can be done to fix this depressing health care mess? Honestly, I don’t know. All I can do is take care of myself as best as possible. For me, that means a vegan diet. Actually, for most people that means a vegan diet, but I can’t make you eat right any more than I could get you to exercise regularly, quit smoking, quit drinking to excess or any of the other lifestyle choices that make such a difference. But I do know that if we don’t figure out a way to rein in our health care costs, it will be nothing but trouble in the future.

As a rule, I try to stay away from political discussions. As the saying goes, opinions are like assholes, everyone’s got one and they’re generally not pretty. More to the point, quoting Despair.com, politicians are like diapers; they need to be changed often and for the same reason. But every once in a while I hear something that just makes me shake my head. Last week it was the “I was vegan for a month” article. Yesterday it was this doozy. “I’m planning to vote for Trump because Obamacare has made my health insurance too expensive”. Ugh. Really? I get that I have a little more time on my hands than most, but this is such a lazy and untrue thing to say, that I feel I have to share my 3 minutes of Google results.

When you first Google this, one of the leading political numbskulls of all time (mortifyingly from my own state), Michelle Bachmann, shows up prominently blaming President Obama:

We are seeing huge increases in these premiums, not only in the Obamacare exchanges, but in the private market. Because remember, a lot of times it’s the private market where we are getting health care through our employers. It’s the private market that has to offset government programs, whether its Medicaid or whatever government program. So the costs are going through the roof.

Not surprisingly, this is from a Fox News show. (Disclaimer, I copied and pasted the transcript. I can’t stand to listen to her talk, it makes my head throb.) It should go without saying that watching Fox News demonstrably makes you less knowledgeable about the world, but that’s not the point. The point is that Ms. Bachmann and her ilk can and do make these claims and most people are too lazy to do minimal fact checking.

Let’s back it up a bit. In 2009, the year that President Obama was inaugurated for the first time, this article ran in Time magazine, showing that health insurance premiums during the Bush administration had increased 131%. For those a little rusty on the math, if your health insurance cost you $2000 a year when President George W. Bush took office, it cost you $4620 when he left. To be sure, that’s setting the bar pretty high for President Obama. The same article noted that premiums were expected to increase 166% in the next decade.

But in 2015, right around the time Ms. Bachmann was spouting her inanity on Fox, this embarrassing piece was published by the insurance industry no less, showing just a 3.2% increase in health care premiums for 2015, the lowest increase in over 20 years. That doesn’t mean that insurance companies are taking that lightly, though. For an industry that is used to hiking rates 10% every year, a down year like 2015 where they just got a cost of living increase must seem like a disaster. And so, yes, health insurance companies are seeking huge premium increases for 2016, as reported in the New York Times. But let’s be clear, this is, pure and simple, corporate greed. It is not the Patient Protection and Affordable Care Act that raises premiums at all. It’s the companies that sell health insurance and who, for the most part, are accountable to their shareholders and not to their customers. The boom in profitability for health insurance companies is well documented here, here, here, and here.

So, as insurance companies charge more and make more, you pay more. I’m not really seeing the role of government in that sentence except as a barrier to keep the insurance companies from raising premiums too quickly. Prior to the ACA (“Obamacare”) health insurance companies were entitled to made as much profit as they could. The ACA capped that amount to 20% effective January 1, 2011. Other developed countries deliver their health care far more efficiently than the United States and have much lower administrative costs.

It is true that many people do have to pay much more out of pocket for health care than they used to. This is primarily due to the increasing popularity of high deductible health care plans that are associated with healthcare savings accounts (HSAs). But, again, making people more accountable for their health care spending decisions, while not a terrible idea, isn’t really a particularly Democratic solution, nor does it sound like a part of the Affordable Care Act! It does have a decidedly Republican ring to it and, lo and behold, the HSAs were legislated by President George W. Bush in 2003.

So, what have we learned?

1. health care insurance costs were going up at least 10% every year during the last Republican administration
2. health care insurance costs have gone up much less since the passage of the Affordable Care Act
3. a large majority are paying more “out of pocket” money for health care
4. health insurance companies are making more profit than ever before

Three finals thoughts on the Affordable Care Act.

First, we should all be immediately suspect when someone blames something on “Obamacare”. It’s an easy scapegoat because so very few people actually know what the legislation does. I’ve found the best response to be “what, in particular, is there about the Affordable Care Act that you find offensive?”. I have yet to find a single person who claims to “hate Obamacare” that can elucidate a single part of the legislation that they don’t like. Most, in fact, like most of the changes that have been made, if you ask directly.

Second, for those who are interested but don’t want to read the entire legislation, which is daunting, I’d strongly recommend Inside National Health Reform by John E. McDonough. Entertaining, readable, and will give you great insight into the Affordable Care Act and how it was passed.

Lastly, for those who never knew or have forgotten, most of the key aspects of the Affordable Care Act are nicely summarized here. Might be worth 2 minutes to scroll through. Hell, it might just change your mind.