Big Picture Healthcare Articles

The article "Cover Yourself!" by Jack Lewin, MD, CEO of the California Medical Association, and Ronald A Williams, President of Aetna, printed in Aug 19th, 2005 Wall Street Journal Opinion Page advocates that we should require individuals to purchase health insurance coverage. They advocate purchase of high deductible plan coverage to cut the rising cost of health insurance. The Business-Healthcare Contrarian believes this is not a prescription for healthcare success. It feels more like the insurance industry wants to cover its tail, than to create a realistic solution to health care cost crisis.

The healthcare industry has caused its own crisis with its own poor practices. The AMA protects the 8% of MDs who are incompetent (who run up 80% of malpractice claims) by refusing to pull their licenses. (In corporate America, they would have been downsized long ago). While every other industry in the country has eliminated middle management positions, healthcare has added hundreds of thousands of them over the past 20 years (case managers). Healthcare treatment includes drugs and vaccines known to produce side effects in sufficient numbers (2.00-3.00% on average) that the overall cost of healthcare rises significantly over time. Insurers want patients to make cost-effective decisions, yet consumer-directed behavior is hampered by lack of objective information. Pharmaceutical advertising is everywhere, but unlike automotive companies (which also advertise highly), the Physicians Desk Reference is hardly Consumer Reports or Vehix.com.

Less costly treatments with almost no side effects (such as chiropractic, acupuncture or physical therapy, for example, where 0.001% side effect is considered high) are discredited with disdain, burdened with coverage limits and even barriers to access. We have created three parallel medical systems, with huge overlap: our regular health insurance, workman's comp insurance and accident coverage from required auto insurance. And now Dr. Lewin and Mr. Williams want to FORCE us all to pay for their mismanagement? Hmmm. Does not sound right to me.

Forgetting this for a minute, it does not even address their issue!

There are 280 million people in the US (plus or minus). 82 million have health coverage provided by the US government: Medicare for the elderly, Medicaid for the economically struggling, and government health care coverage for employees, past employees, and past elected officials. Another 135 million have coverage through their jobs. These 135 million include the highest paid workers and executives from the top companies. That leaves about 43 million uninsured Americans, most of whom are middle aged and middle class. They include part time workers, workers who are just getting by, outsourced and downsized workers and entrepreneurs. Many are considered a "higher" claims risk by the insurers because when a person has any health condition, even a well managed one, they pay extra for their extra risk. This sounds right, but it usually means double what everyone else pays. DOUBLE. The actual cost difference is considerably lower. But insurers are risk-averse. It is their job.

Consider the Smith Family: Mr. Smith is a 45 year old entrepreneur, his wife is 42 and helps part time with the business. Their kids are 9 and 15. Dad has a beer belly and takes Lipitor to control his cholesterol. Mom has occasional migraines. Both kids are active, and healthy. Their medical expenses (including prescriptions) without insurance last year were about $5,000 including an emergency room visit for their son's sports-related sprained ankle.

Health insurance should cost them $1,000 a month, with a $1000 deductible, but because they are self employed and because of their "higher" health risk, they will be charged $2,000 a month and will have a $2,000 deductible. That comes to $26,000 a year. For the Smiths, who make $60,000, that is over half their take home pay for health coverage. With health costs like that, who can afford a mortgage, let alone $2.79 a gallon for gasoline?

These are the types of working middle class families and entrepreneurs who Dr. Lewin and Mr. Williams would like to participate in the mandated, high deductible insurance plans. If the Smiths buy "high deductible" coverage with a family deductible of $5,000, their cost is "only" $1,000 a month for insurance. Their insurance will not reimburse them for ANY costs since their medical bills were "only" $5,000 last year. They end up paying $18,000 per year for healthcare. Still more than 35% of their take home pay. Meanwhile, companies who buy coverage for their employees are paying an average of $9,000 per year for families, $3,000 for individuals because risks are averaged, and large employers negotiate for discounts. (If the Smiths were charged the same $9,000 for a $1,000 deductible policy, it would be a more reasonable 20% of their pay after tax.)

High deductible coverage is NOT a solution for preventing emergency room use. High deductible coverage is good for insurers, but creates the same tendency to avoid spending for care as with no insurance. People who might be tempted to avoid doctor visits, because payment is an issue, still have to pay for the full doctor bill, until bills reach the deductible limit. High deductible health plans guarantee that 95% of those covered will submit no claims at all (like auto or homeowners insurance). Requiring middle class workers to purchase insurance will result in fewer middle class homeowners, more middle class bankruptcies and more stress related disease among these families. It will not impact emergency room usage by these families at all.

What would work? How could we encourage more people to participate, and people to make better healthcare choices? Here are some consumer-directed healthcare ideas which promote choice, not mandates:

Any of these ideas will reduce healthcare costs. Combined, they can reduce costs by as much as 30% in two years.

The US is the world's cheerleader for democracy. Our health system is more about control than choice. We have mandated vaccines, known to cause death and neurological damage in a percentage of cases. If we reject customary treatments as dangerous, we risk the treatment being forced upon us (or our children) against our will. We have mandated doctor visits. We have managed care gatekeepers designed to prevent access. We talk about compliance instead of partnership. In the process, we have created the most costly healthcare system in the world.

This is the United States of America. Democracy works. It is not neat, but it works. Control is neater, but it tends to be expensive, inefficient and demoralizing.

Do we REALLY want to advocate a US MANDATE for people to purchase health insurance?

Hmmmm. That does not sound right to me. I prefer democracy in my healthcare. I expect democracy in this country.