Why the Republican Healthcare Plan Won't Save You Any Money

None of the Republican proposals for healthcare include a single cost or quality requirement for payment to doctors, hospitals, or even insurers, which will add rocket fuel to the fee-for-service payment system which is the bane of U.S. healthcare. This payment method, which originated with the founding of Medicare in the sixties, is one of the main reasons why the price for health services is so much higher in the U.S. than any other country. Essentially, there is no budget and all healthcare providers are paid on volume, with the exception of some primary care folks.  You have undoubtedly read the stories of patients being charged for services by surgeons who didn’t even perform the surgery, which reflects the factory mentality of the surgical suite and the outsized incentive to make more money. The delivery of health services or improved health to the patient is often a bi-product. Tom Price is the Trump Administration appointee for Secretary of Health and Human Services, which oversees all policy making for healthcare, any efforts to assess and improve quality, most funding for medical research, and patient safety programs for the country. He is on record questioning the value of Medicare’s Demonstration Projects, whose sole purpose is to find ways to improve health and reduce costs as clinically appropriate. Without the requirements of the Affordable Care Act, for price reporting transparency for medical device companies and other suppliers, as well as mandating that insurers participating in government funded programs spend at least 85% of funds collected on program benefits for enrollees, there will be no incentive for any of these health sector profit-takers to lower their costs or improve quality. Will the Republicans also axe the successful Accountable Care Organization incentives for systems which demonstrate they are delivering high quality health care?

CMS-the Only Agency with Enough Price, Quality, and Enforcement Power to Fix Healthcare

The Centers for Medicare and Medicaid is the only agency with enough regulatory power to enforce both price and performance standards for the national healthcare system. Dr. Tom Price wants to neutralize CMS and loosen oversight for the healthcare industry. As I illustrated in my 2013 book, Unraveling U.S. Healthcare (Winter R. E., 2013), national healthcare when viewed by outcomes is not better here, just more expensive. According to 2017 data from the Henry J. Kaiser Family Foundation, the U.S. now spends $9,451 per capita for health care. (Cox, 2017) Most of Europe spends half of that per person per year. And I am not talking about insurance premiums, but the total, all-in cost of health care. Only three countries spent more than $6,000 in this time-frame, the wealthy triumvirate of Norway, Switzerland, and Luxembourg. How can the U.S. still claim that covering everyone for health care is too expensive when all the industrialized countries are doing that and spending much less?

American Health Is Declining

According to a recent analysis by the Kaiser Foundation, the U.S. is at the bottom of all industrialized countries for life expectancy and we spend 50% more than most of these countries. (Sawyer, 2017) People live the longest in Japan with an average life expectancy of 83.7 years, followed by Switzerland at 83.3 years, and then France at 82.8. The U.S. comes in at 78.8, this despite spending 50% more on health care. In fact, life expectancies are going down in the U.S., which is still one of the richest countries in the world. This should raise alarm bells, yet the ill-informed Republican Congress apparently believe that reducing access to health care by gutting Medicaid, removing basic benefits like maternity care (U.S. also has one of the highest maternal death rates in the developed world), and of course, gutting mental health services will improve the situation. I remember when smoking die-ins were de rigueur, perhaps we need to stage a national die-in to demonstrate the impact of the latest Republican effort to gut healthcare.

Systemic Overcharging Contributes to the High Cost of Healthcare

Why is overcharging tolerated in healthcare? People aren’t willing to spend 50% more for their houses or their autos? Americans are not getting comparatively better health for this 50% higher healthcare spend, but many companies are getting very rich because of it. In 2013, I posted an article on orthopedic surgery for a hip replacement in Belgium, which cost $16,000 versus $60,000 in the U.S. and the entrepreneurial American who chose to fly to Belgium for his uninsured treatment because he still saved money. (Winter, 2013)

Why Increased Private Sector Involvement and Reduced Regulation Won’t Work

As a participant in the Lown Institute’s Right Care Conference this month[1], which focused on educating clinicians and the public about cost effective treatments which improve health, I had the pleasure of listening to Jeffrey Sachs, professor of Health Policy and Economics at Columbia and a United Nations Adviser, the day the Republicans came out with their plan to defund Medicaid. Dr. Sachs has studied microeconomics and unequivocally stated, “Pure market economics in healthcare does not exist. Corporations are not the guardian of public health.” Consequently, the expectation that more uncontrolled private sector involvement will generate a better more efficient healthcare system is ludicrous. The U.S. healthcare system was created for profit maximization not maximum efficiency or efficacy. The idea that market economies are the solution to all public services has been proven false time and again, for national security, the interstate highway system, regulation of drugs and medical treatments, and the safety of our food supply. The scariest weapons in the world are not the missiles of North Korea but chemical weapons, whose carnage the world witnessed in Syria, and even worse, the biological ones. Trump, the anti-globalist doesn’t seem to understand that the World Health Organization provides surveillance and communication of disease and public health epidemics to aid in curtailment. His Budget Director’s proposed 20% cut to Health and Human Services would impact our health safety. Our survival as a species and a planet depend on our cooperation, funding, and heeding the advice from organizations which are providing this front-line work.

Without Price Transparency Patients Are Not Empowered

As the American healthcare system includes a healthy private sector contribution, there is an expectation of a competitive environment, but in healthcare this does not exist. For example, an oversupply of high tech medical technology increases the cost of care and does not lower insurance premiums or hospital charges. The burden of paying for duplicitous equipment is born throughout the health system by the premium payers for insurance and those who use the health services. A healthy marketplace requires symmetrical information, meaning there is equal access to price and quality information for all participants. In the U.S. insurance price information is available, but consumers must go to a lot of work to assess reliable scientific health care quality data. Specious clinical results which do not improve population health are published all the time by drug companies, hospitals, and medical suppliers through direct-to-consumer-advertising. Hospital services are dominated by a handful of huge corporations as is the insurance industry. The profit motive is so enticing in healthcare that the nonprofit Blue Cross Blue Shield entities became for-profit cash machines years ago. This decision did not lower the cost of your health insurance or your health services. Equal access to information, meaning, the healthcare purchasers have access to actual price and quality information is impeded by organizations which are not required to provide this information. At least the Obama Administration required companies to report wholesale and retail price information, as the start toward building a database for price transparency in U.S. healthcare.  Cardiac device companies have successfully fought to prevent the public from learning how much we are overpaying for their heart valves. This phenomenon is very different in other countries, like France and Australia where price lists must be posted. In the U.S. if you ask for the cost of your scheduled procedure and hospital charges, providers will typically not be willing to give you that information. Insurance companies would seem to be in the best position to communicate to their customers what they can expect to pay for a procedure at a facility, because they negotiate price with all their contracted providers. Private sector companies are investing in price detection but their services are not readily available to the public on a national scale. The mega healthcare conglomerates, including medical device, pharmaceutical, and skilled nursing facilities are by and large for-profit entities and they have no interest in delivering unprofitable care. Dr. Sachs also stated, “Anti-retroviral drugs to fight HV cost $25,000 in the U.S. and $160 everywhere else in the world.” Drug distribution and patents are based strictly on profit maximization, not getting the most benefit for the health system.

This Country Is Making You Sick

The U.S. has the highest income inequality in the developed world, which means there is a decreasing middle-class and growing poverty class. About 14% of all people in the U.S. live in poverty, but 25% of all children do. Yet the Trump administration wants to cut school lunch programs, Head Start, public school funding, and access to health care for these children, while the top 5% expands its wealth exponentially.  This worrisome trend is reflected in the ill health of our people as evidenced by the epidemic of suicides and opioid addictions. As I write this column within the past week two teenage boys chose death-by-cop as their suicide method, because in this country, you can have a fake gun, have committed no crime, and still be reasonably certain you will be murdered by the police. In the 1990’s Congress reduced funding for gun violence research, cutting 2.6 million from the Centers for Disease Control and Prevention’s budget. Congress also passed a ban on any research which would advocate or promote gun control, because of alarm over a 1993 study which analyzed risks of keeping a firearm in the home versus the benefit for personal safety. (Sudermann, 2017) Now, gun violence in the U.S. kills as many people as sepsis infections. We treat infections, yet our elected officials lack the backbone to enforce strict licensing and distribution of firearms to protect the public. Under the Trump Administration we can look forward to ever more mentally ill persons obtaining Uzis and the ensuing destruction. Peggy Noonan asserts that societal ills would go away if parents only loved their children more. I can assure you, Ms. Noonan, poor people love their children and it is a herculean struggle for them to make ends meet every day. It should also be noted that the wealthy are just as rife to suicide and drug addiction, so perhaps love isn’t the answer, and informed health and welfare policy making is the solution.

And this is the healthpolicymaven signing off wishing you fully informed consent, and remember, as Dr.  Rosenthal, author of An American Sickness-How Healthcare Became Big Business and How You Can Take It Back (Rosenthal, 2017) recommends, don’t sign generic hospital release forms and do add a codicil which states, “I agree to be responsible for charges for in-network providers.”

This column is completely independent of corporate support and has been since 2007. Roberta Winter is an independent journalist and healthcare writer. She is the author of Unraveling U.S. Healthcare-A Personal Guide, a guidebook to the U.S. healthcare system written expressly for consumers.

References

Cox, C. (2017). How Does Healthcare Spending In the U.S. Compare to Other Countries. Henry J. Kaiser Family Foundation. Retrieved May 21, 2017, from http://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/?_sf_s=health+spending#item-start

Rosenthal, D. E. (2017). An American Sickness-How Healthcare Became Big Business and How you Can Take It Back. New York, New York, USA: Penguin Press. Retrieved from http://www.nyjournalofbooks.com/book-review/sickness

Sawyer, S. G. (2017). How Does Life Expectancy Compare to Other Countries. Kaiser Family Foundation. Peterson-Kaiser Health Systems Tracker. Retrieved May 21, 2017, from http://www.healthsystemtracker.org/chart-collection/u-s-life-expectancy-compare-countries/?_sf_s=life#item-start

Sudermann, H. (2017, March 1). Prevention Revisited-A Harborview-based Center Looks for Ways to Prevent Injuries and Violence. Columns-The University of Washington Alumni Magazine, pp. 38-39.

Winter, R. (2013, August 6). Save Money On Your Health Care By Going To Europe. Retrieved from Straight Talk on Healthcare, healthpolicymaven: http://healthpolicymaven.blogspot.com/2013/08/save-money-on-your-health-care-by-going.html

Winter, R. E. (2013). Unraveling U.S. Healthcare-A Personal Guide. In R. E. Winter, Unraveling U.S. Healthcare-A Personal Guide (pp. 3-15, 31-38). Lanham, MD: Rowman and Littlefield.

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[1] https://conference.lowninstitute.org/