Some of you may have joined my blog to follow my Philippine adventure and a long extended blog on Health Care Reform is not your cup of tea, please feel free to skip over this submission.
I promise you as I process the past 7 weeks I spent in Manila I've got plenty of material and pictures to share. They will be forthcoming. Enjoy, comments as always are welcome, just keep it civil, Be well! Lynn
How is the American health care system working for you? Your answer depends on your social status, political views and personal health experiences. Based on Gallup Poll’s series of November 2011 health and health care polls, 6 of 10 are satisfied with their health care costs, while only 2 of 10 are satisfied with the cost of health care nationwide (Newport, 2011). When polled for the most pressing health issue facing Americans, non-disease issues of access and cost replaced illnesses such as AIDS, Cancer or heart disease (Newport, 2011). For some the American health care system is inequitable, unethical and unjust and these poll results come as no surprise. Others struggle with the judgment, but would agree the health care they are paying for does not result in satisfying health outcomes. An additional data point is in the U.S. per capita health care costs out pace any other developed country almost 2 to 1 (Kaiser, 2011). Older Americans and the insured, whether employer or government funded, express the highest levels of satisfaction, 6 of 10. Americans below 50 years express the least satisfaction 5 of 10. There is a majority consensus as 72% agree “our society should ensure universal access to health care, and 60 percent consider it to be a moral…issue” (Levine, et. al., 2007). Exactly how and what is to be done is taking time in our democratic society. The first of the following three sections discusses the current state of health care in regards to cost, an outdated system and justice. The second section provides a philosophic foundation to address equitable, ethical and just health care. Included are some basic suggestions for revising the public funding system. Finally, the third section talks about the ultimate goals and performance outcomes of the recommendations.
Time for Change?Health care costs grew to 17.6% of our Gross Domestic Product (GDP) in 2009. That same year 54.2% of federal revenues went to health care. The following year uninsured Americans climbed to 50+ million people or 16.7% of the population (Galewitz & Villegas, 2010). While expenditures on health care rise, those able to access are declining. The issues of justice and financial sustainability demand a change. How is it, unlike other consumer categories, cost containment of health care eludes us. Why do impoverished segments of the population go untreated until a major health crisis occurs resulting in more costly hospital services? Who ultimately pays for those services?
The Unsustainable Cost of Health Care
In building a case to restructure health care delivery, it is helpful to start with a simple but brain-numbing review of the numbers. U.S. health care spending, on a slowing trend for this decade, reached almost $2.5 trillion in 2009. Projected spending by the end of 2011 is $2.7 trillion (CHF, 2011). By way of comparison Germany’s total GDP in 2010 was 2.9 trillion (Nationmaster.com, 2010). In 2006, almost ½ of health care dollars went to a mere 5% of the population with expenses at or above $14,601 per person per year (Kaiser, 2009). Medicaid reflects this as 57% of the spending is for 5% of the Medicaid population. Spending is also age determinant, those over 64 averaged $8,776 per person representing 43% of the average spending per person. This is almost twice as much as the 45 to 64 age group and 6 to 7 times as much as the children’s age groups (Kaiser, 2009). Of the nonelderly age group, 40% are on either Medicaid or uninsured and employers or private arrangements cover the remaining 60% (Kaiser, 2010). Interesting to note hospital and physician services received ½ of all health care dollars are spent (Kaiser, 2009). The remaining is spread somewhat equally between pharmaceuticals, dental, vision, administrative, and home care and nursing home care (Eadie, 2004). No easy fixes exist in an industry the size of Germany’s economy or structured to favor a cottage industry status quo (Swensen, et al, 2010). In the words of a Washington D.C. policy man, “Anything would be better than what we are doing now” (Ketch, 2011).
It will take more than what have been feeble attempts to rein in costs as explained by Harvard Business School Economist Dr. Michael Porter. “Cost shifting and reduction methods historically have failed significantly, influencing health care spending levels, and jeopardize the future health of the public” (2008). Dr. Porter warns that these techniques only shift the cost of care to later when poorer health outcomes for the public require greater expenditures down the road (2008). Two realities that exacerbate rising costs are the lack of equity in health care and the failure to provide universal coverage. Inequity is exemplified by those paying taxes to cover the health care of previous workers yet go uninsured themselves (Levine et al, 2007). Lack of societal awareness of who comprises the uninsured sustains inequity. Three quarters of the uninsured are in working families, 54% are ages 26 to 54, 61% are above the federal poverty level, and 61% of uninsured families have one or more full time workers. The lack of universal coverage results in costly inefficiencies such as cross subsidies, those paying for health services additionally cover the cost of the uninsured. A second resulting inefficiency is failure to provide timely care in cost effective settings. Residents of a local family shelter in Gresham, Oregon often use costly emergency room services for abscessed tooth extraction or their children’s earaches because of limited access to preventive dental care or primary care services (MFH, 2011).
Financing the current structure of health care is not sustainable. First is the unaddressed issue of health insurance. It is not true insurance but rather a combination of classic risk protection insurance, and prepaid health care for preventive care office visits and preexisting conditions. Second financing is not sustainable because arbitrary designations inform the fee for services reimbursement system and impedes innovation. Reimbursements fail to reward positive health outcomes and result in cost sharing, cross subsidies, and inflated health costs (Porter, 2008).
Outdated Service System
An acute care, cottage industry service model continues to drive U.S. health care (Swensen, et. al., 2010). In spite of 100 years of public health and the more recent discussions of prevention, the health services model remains firmly in a physician/hospital centric model. Dr. Porter’s critique of the current health care system is how the practice of medicine is organized, managed, measured and paid for. He maintains that as long as the basic structure of delivery stays the same, any attempts at cost containment will only cost shift to the health care consumer. In addition, restricted access to preventive services shifts costs to services that are more expensive. He calls the current health care market a zero-sum competition between players that serve to divide value rather than improve it. By way of illustration, when you have one pie and several who want to eat it, cutting different sizes only changes the amounts each gets, it does not increase value beyond what the one pie can deliver. Health care zero-sum competition is when hospitals buy primary practices, or health plans bargain for better prices, or cost shift to patients thus dividing value as it pits the various participants against each other to capture more revenue. To make matters worse for the patient consumer “today’s competition in health care does not equate with value for the patient because financial success for system participants does not equate with success for the patient” (Porter, 2008).
“Value [is] defined as the health outcome achieved per the dollar spent” (Porter, 2008). The current systems of measuring health costs and reimbursement programs do not capture both the direct and indirect costs as a patient navigates the system for a specific illness or co-occurring diseases. Dr. Porter argues the full cost for care related to the individual’s illness or preventative services is required to assess value. Otherwise, cost containment, improved efficiencies, or patient empowerment is not possible without knowing the actual cost of care from beginning to end. Currently the health care system is demanding more cash via greater employer and patient expenditures (steady rise of the GDP to the current 17%) and universal coverage. In the current delivery system, universal coverage will only extract more dollars and feed a system that is currently not accountable for the value delivered for the cost. Other competitive services in the American economy are accountable via competitive business practices that empower the consumer to choose the best value for their dollar, not so with health care.
Health Care Injustice
For the purposes of discussing justice in health care, four designated social groups as related to health care follow. First, the health care independent has financial resources for coverage. They can seek alternatives to U.S. health care services including medical tourism. They can afford to pursue good preventative care. Second, the health care dependent, qualifies for Medicaid and Medicare. Currently Medicaid covers children and pregnant women at 133% of the federal poverty level, the disabled and long-term care (individual states can increase coverage). Medicare provides care for those over 65 and is an entitlement program funded by those currently working. Third is the health care indigent, those who do not qualify for Medicaid or Medicare and live below the federal poverty level. They are dependent on community non-profit charity services. Finally, the majority of the population, the health care vulnerable. They are the working, recently unemployed or early retired. They depend on and co-finance employers provided coverage or are uninsured. They are vulnerable in the current system because of the threat of losing coverage or financial ruin due to unexpected health care costs.
For the health care independent care, quality options exist. The U.S. is touted a premier health service provider, medical tourism allows those with means to access care globally and at lower costs. The adage “It takes money to save money” surely applies. For those over 65 Medicare funds their U.S. care and does on the backs of the younger workers who may not have health care coverage. This group may represent the attitudes discovered in recent research led by Dr. Sussman Oakman. Research revealed that seniors and partisan groups, powerful political influencers, failed to understand the access issues of those at the other end of the experiential system (2010). While those at or below poverty level are suffering, most have access to basic health care from the federal/state safety net. What is troubling is the plight of those just above poverty level, up to and including middle class citizens especially in the 20 to 50--age range. They are funding health care for the poor, retired and disabled yet are unable to afford health care for themselves and their families. Where is the justice in that?
Justice and Value for All
System change will be both incremental with possible sudden adjustments all in the context of our political, legal and financial systems. The political system is better for incremental change, while the free-market system reinvents itself regularly to stay viable. Government bureaucracies are slow to adapt, as regulations already in place put restraints on the health care industry that free market proponents say impeded innovation (Cannon, 2009). What motivates the industry as in all business is financial sustainability; therefore, cost of care and outmoded systems are of constant concern. Three health care system challenges addressed above: the cost of health; an outdated delivery system; and injustice in health care access are central to revitalizing and stabilizing the health care system. The following suggests Values-based health care to revitalize health care services and universal access as the philosophical driver of financing care.
Before discussing changes to the current system, the following gives a brief overview of a suggested philosophical foundation for health care, each of these are a topic for extensive discussion in and of themselves.
1. Ethical: There is a social responsibility to provide access to basic health care and prevention screening for all Americans. The employed that pay income and Medicare taxes, at the very least should have basic care, as they are funding access for the retired and poor (Levine, et.al., 2007).
2. Fiscal: For health insurance to be sustainable, it cannot be selective- insuring only the chronically ill. At the least all American’s should have catastrophic coverage for unexpected health events. Requiring or providing all with insurance will not solve all health care woes, but sets a fiscal foundation for access (AAA, 2008).
3. Political: Medicaid and Medicare should be block grants that allow local programs to insure or provide services to the uninsured/underinsured, unemployed, retired and disabled (Cannon, 2009). Congress should incentivize wellness program promotion by private industry and protect the poor and working taxpayer with health care access (Kennedy, 2011).
4. Public Health Policy: Shift resources from technology industry subsidies to research and programs for preventive care screening and early treatment of chronic conditions.
5. Delivery structure: Personalized care from a medical home in primary and preventive care practices and Integrated Practice Units in specialty clinics. Reimbursement based on the service providers’ pre-established scope of practice. Established guidelines for management of full cycle of disease are basis to reimburse practices. Reimbursement rewarded based on outcomes adjusted for condition status at point of entry (Kaplan and Porter, 2011).
Financial Sustainability in Value Based Delivery
Value based delivery will require reform at the practitioner level and increased responsibility from the patient. Continuity of care whether primary-prevention, chronic disease management, acute care or long-term care focused requires a transparent provider system and full patient participation. There is no longer room for physician authoritarianism; health care must be collaborative. Value based delivery from a provider-patient partnership is defined as “the health outcomes achieved per dollar spent” (Kaplan and Porter, 2011). How the practice of medicine is organized, managed, measured and billed for is the responsibility of the service provider, physicians and facility. Disease management and payment is the patient’s responsibility. Managing costs require collaboration between fully informed providers, patients and payers. Value-based care has four defining principles: 1) the goal of care is value; 2) care is organized around medical conditions; (Porter, 2008); 3) measure for patient outcomes; and 4) align reimbursement with value creation (Porter, 2008).
For the purpose of this discussion, the role of Integrated Practice Units (IPU) promoted by economist Dr. Michael Porter and medical homes illustrate values based delivery. As a patient centric system, an IPU’s goal of service is value added as opposed to cost containment, maximizing revenue or providing full scope of services. Optimized care over the complete cycle of care requires organizing a practice around a medical condition or co-occurring conditions. IPUs recognize and manage the intervention of one physician as impacted by interventions earlier or later in the cycle (Porter, 2008). Utilizing electronic record keeping updated to track the services provided for the patients total care (to include indirect costs of facilities) allow for measuring complete cost of care. Measuring value-based care along the full continuum of care allows the system to adjust for waste, inefficiencies and protects against redundancies. IPU provider teams that have the advantage of scale and experience maximize efficiency from clinic volume, shared equipment and teamwork thus influencing health care costs. Most notable of an IPU benefit is for those with co-occurring conditions. The IPU will provide all related physician and care services. In rare co-occurrences, another IPU provides care, but from the patient perspective, they would have only one point of contact for each IPU (Porter, 2008).
Medical homes practiced in federally qualified community health centers (FQCHC) are an example of an IPU at a primary and prevention care practice. The health team shares management of the patient’s continuum of care. Value-based care influences the cost of care by raising value. Efficiency of health care is a step to improve access by better managing resources rather than entire sub groups being restricted from access.
Financing suggestions. Coverage in the form of catastrophic insurance, primary & preventive care services and chronic disease management should be the primary aspects of universal access. Working within the current funding structure of health care public aid, Medicaid expansion would cover primary and acute care expenses of all at or below the poverty level regardless of age or work status. Medicare funded by payroll taxes would expand to include those qualifying for unemployment, the uninsured or underinsured workers above the federal poverty level, and those of retirement age adjusted up to 70. States using private payer systems reimburse to Integrated Practice Units and/or medical homes models funded by Medicaid block grants. Private payer systems use capitated complete cost of disease care models to refund from Medicare block grants. Larger businesses have continued or increased tax incentives to provide catastrophic health insurance for their employees and family members (broadened to non-boarding residents). Additional tax incentives are available for business sponsored wellness programs with the option of employing a prevention/primary care IPU medical staff, with employee/management oversight to protect patient rights. Health Savings Accounts are available for anyone wanting to save tax-free money to cover health care premiums or costs.
Equity, Justice and Compassion: Access for all
Access defined here based on the Hasting Center Report by Levine et al is “an adequate level of protection from illness and avoidable pain and suffering related to health problems” (2007). It does not mean access to all possible medical alternatives or useful services. Access is interrelated with cost and quality. To provide universal access quality of service is necessary in managing costs. A sustainable system that is equitable controls cost by improving efficiency, not restricting access (Levine et al, 2007). The harsh reality of competing needs for limited resources demands that ethical health services minimize waste and improve efficiency. Providers are not alone in responsibility, patients have an ethical responsibility in how they demand and utilize care. Achieving universal access must acknowledge the ripple effect of using limited resources to increase access and how that will affect the quality of care for all. When societal perceptions of quality are full-unrestricted choices in care, increasing access is cost prohibitive without improving efficiency. Those who are currently benefiting from societal resources whether social services or entitlement programs do so on the backs of the workers taxes who often are unable to afford care for themselves or their families. Reflecting on the 72 percent of Americans who “think our society should ensure universal access to health care, and 60 percent (who) consider it to be a moral rather than a strictly political or economic issue” and “it is inequitable for the uninsured to subsidize those with coverage” (Levine et al, 2007).
Spending for Health
Five strategies. The previous sections support the following suggested strategies to reach these goals. The first four are policy strategies that would require congress to change laws that regulate Medicare and Medicaid.
1) Medicare extended to part time or minimum wageworker or temporarily unemployed who are above the poverty level and uninsured.
2) Put a freeze on current employer provided health care to prevent employers from dumping health care plans, shifting their employees to Medicare.
3) Expand Medicaid to include all at the federal poverty level.
4) Raise the poverty level to reflect the actual cost of food, rent, and utilities for individuals and families.
The final strategy would incentivize expanding the Public Health work force and volunteer service. Several action items that would also require legislative action follow.
5) Reduce future health care demands from the general population by increasing primary care access points and funding prevention programs.
Action items to implement the fifth strategy. 1) Increase capital funding to federally qualified community health centers (FQCHC). 2) Staff FQCHC with medical interns/residents and health care grads enrolled in the U.S. Public Health Service (USPHS) who commit to serve for loan forgiveness or because of federally funded grants they received for their education. 3) The USPHS corps functions as medical home teams or IPUs. 4) Create a volunteer Corps or Reserve Corps of retired Health care providers to mentor health teams and provide health education. 5) Incentivize those receiving federal or state funded health care to attend classes focused on prevention messages and personal health responsibility.
Performance elements. The economic impact of funding a USPHS corps could bolster the medical training facilities and lowering the overall cost of training. These graduates will staff FQCHC providing prevention based primary care. Marketing the corps to minority students who will receive loan forgiveness packages when they work in the public health/primary care facilities will have a positive impact on minority health care. Current medical home model or IPU clinics and practices can receive Medicare/Medicaid reimbursement as long as they incorporate the following into their practices:
1. Electronic record keeping that:
a. Measures cost of complete continuum of care provided to patient
b. Easily transfers patient records to the patient and the specialty IPU if acute condition occurs.
2. Transparency of records and costs to patients and payers
3. Medical home or IPU practice principles
Funding in part is by Medicaid/Medicare from state block grants funded by employment taxes. Those companies that fund their own health care programs will be exempt from employer health care taxes. Exemption prevents double funding and incentivizes the private sector to participate in providing health care for their employees.
By increasing access to primary care, teaching health classes, screening for disease and early intervention the health of the public will improve and lower the cost of acute care services. This too will drive the health care market to invest in primary care, early intervention and prevention services in the private and public sectors.
No system change will be without drawbacks. The current stratification of classes accessing different levels of care will continue, but resolution should be a priority once the majority of citizens have basic health care and values-based competition controls cost of care. Another drawback, limiting access to some forms of care, is a reality of medicine funded by taxes. Particularly challenging are those currently receiving services. A grandfather clause of completing care begun, but no longer offering services to new patients is a compassionate alternative.
Additional considerations. Yet to address is the uneasy relationship of health care with technological development of medical devices and pharmaceuticals. Along with long term care of the aged and disabled, they represent the bulk of health care cost increases. Yet research has borne out their worth (Cutler and McClellan, 2001). A recent TED Talks participant, Mick Ebeling inspires with his story of technologists combining their efforts to address a need that insurance caps and government programs could not address. Ebeling created a dream team of computer wizards and technology geeks to build a writing device for a former graffiti artist TEMPT, immobilized by ALS, Lou Gehrig’s disease. Over time, they invented an eyeglass laser device that allows TEMPT to create art (Ebeling, 2011). This story illustrates that it will take more than government policy, finance reform or provider and patient responsibility to meet the challenges of health care reform, it will take the compassionate and innovative actions of all Americans to support those less fortunate.
Some Personal Thoughts As a middle class member of American society who has had our financial nest egg wiped out by repeated economic meltdowns of the past 10 years the current state of health care financing is very personal, 1/5 of our monthly take home finances our health care premium. We cannot afford the primary care we need due to the $2,500 deductible for each of us. We are in a high-risk pool due to health care reform law provision. We cannot easily apply for new individual coverage due to our age and preexisting conditions. Three of our young adult children have access to lower cost coverage, but we cannot drop them from our coverage without reapplying for a new plan. Nevertheless, we stay in the system, slowly bleeding out financially because at least we have coverage in case of an unexpected disease event. We have witnessed several industry market corrections, the dot com, followed by the communications industry, followed by the financial services industry. It seems only a matter of time before the health care services industry experiences a market correction of its own. It would be preferable to be proactive with health care reform, rather than reactive. The current stalemate in Washington DC is holding us hostage to a broken system that is draining dry those who finance health care, the patient and taxpayer. Health care is a symbiotic system between provider and patient, when the patient cannot afford the primary and preventive care the system benefits with higher payments for acute care. What is honorable or compassionate about a system that funds itself off the preventable acute diseases of its clients?
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 Humorous blog entry “Healthcare” vs. “Health Care”: The Definitive Word(s) by M. Millenson.
 Medical home models provide accessible, continuous, coordinated and comprehensive patient centered care, and are managed centrally by a primary care physician with the active involvement of non-physician practice staff (Mathematica, 2008)