Sunday, June 07, 2009

Steps towards universal health coverage

Finally, straight talk on health care reform. I mentioned earlier that the President's proposal to increase access, preserve consumer choice, and control costs -- while responsive to what people say they are concerned about in polls -- does not hang together.

Today the New York Times says the same thing:

For Congress and the administration to keep the promise of comprehensive health care reform, they will have to find the political will to pay for universal coverage and other investments that are needed right away but will not produce quick savings.

And see my comments below on the concept of "accountable care organizations." How is that compatible with consumer choice? Perhaps the Times can address that one in their next editorial. People in the Massachusetts State House and in DC are not yet doing so.

I say, focus on access first. Change the national insurance laws to do what MA did years ago, things that made it possible to achieve the expanded access provided by Chapter 58 of the Acts of 2006. Get rid of provisions that allow insurers to use pre-existing medical conditions and other such factors to turn down patients. Go beyond this, perhaps by using a model like that of the Netherlands:

All people are required to have insurance and can purchase it from any of a number of private insurance companies. Some of these companies are for-profit and some are non-profit. . . . No company can refuse to provide coverage to any person. . . . The government subsidizes the cost of insurance to people with low incomes. The insurance covers the full range of medical diagnostic and treatment services. You can also buy supplemental insurance to cover things like single rooms in the hospitals, cosmetic surgery, and the like.

Beyond this program of "cure" insurance, there is a separate government program for "care". This covers long-term care and other parts of the medical care spectrum that are essentially uninsurable.

Further, I would hold off creating a new public insurance plan for basic care until we see how this system works. Public policy works best when changes are made incrementally. There are always unintended consequences. Best to take it a step at a time and build in opportunities for mid-course corrections.

You cannot quickly revise the structure of an industry that has evolved over half a century. Perturb it in the direction you want to go. The first step is to get people covered by insurance.


Anonymous said...

I would also re-emphasize that there are three separate issues to be considered when modifying the healthcare system:

1. Are we delivering the right care? This could be the strategic issue of how to split resources between acute and chronic care. It could be narrow issues like your various disease management quality improvements.

2. Is the care cost appropriate? Again, there can be large strategic allocations like pre-authorization vs doctor's responsibility and small issues of cost reduction through better inventory management.

3. How is it paid for? This gets to issues of personal insurance, government insurance, direct payment, etc.

The three interact, but it is much easier to explain and understand change when you categorize the nature of changes and the nature of interactions.

The Massachusetts change concentrated on 3., and experience with it reveals a major problem in 1. Massachusetts plans are an improvement. The free-rider problem was greatly reduced, and the change to formal insurance coverage clarified use patterns while solving many access concerns.

It made it clear that the public wants much more primary doctor care, but that current re-imbursement and educational patterns reward specialists and penalize primary care. This needs to be addressed next, but with some care and caution so as not to break things.

It also has shown that the public is not uniform. There is clearly a large portion that wants and likes the impersonal, fast, and low cost clinic. It is just as clear that these clinics are loathed by another significant portion of the public. And it is clear that the causes of non-compliance and non-participation are not the simplistic class or economic categories of the publicists. Other than rejecting the approach of a uniform single solution I'm not sure what this means for policy.

Anonymous said...

Just for the sake of argument, I disagree. I think the payment system should be reformed first, incrementally or not. The major players - insurance companies (even though I am against traditional "insurance", see comment on post below), doctors and hospitals all need to see that things really are going to change drastically, whether they like it or not. Get that hard part over with first, then address access.
Otherwise you risk costs going way out of control and the whole plan losing political support - then back to square one with everybody angry.
I am saying this after my own insurance premiums on my HSA/high deductible plan just went up 22% in one shot, after years of previous increases. We have GOT to get control of costs first. Sorry, I know a hospital CEO doesn't want to hear this.


lincoln williams said...

Real health care reform can never be implemented incrementally. Administrations change. Political will waxes and wanes. One big push to increase access and it will be time to move on to the "next big thing" - green house emissions, saving the auto industry, inflation etc.
Unless cost and access are solved together reform will bankrupt whomever is paying for it. At that point the only solution left will be a return to the free market with services available only to those who can afford them

Barbara Bix said...

I agree with the ""Access first" priority--and incrementalism. Nevertheless, I'd like to see the focus on prevention, public health measures and catastrophic coverage. I don't think we need insurance for single rooms, cosmetic surgery, etc. I'd also like to see us add dental to the definition of medical

Anonymous said...


How do you propose to solve the cost problem?


What kind of payment reform? In MA, they are talking about establishing a global payment per patient, i.e., capitation. Was that your idea, or another? Fairhavenhorn seems to be suggesting a tilt towards primary care doctors and away from specialists. Is that what you mean?


Yes, "political will waxes and wanes", but that is probably a good thing, as political will is a reflection of public demand for changes.

Brendon from Minnesota said...

Leave it to a hospital administrator from one of the highest cost cities in the country to advocate for universal access first and cost-control later. We've heard the news about the numbers of bankruptcies caused by health problems among people _with_ insurance; and the nation is going broke trying to factor in healthcare expenses on both the public and private sides.

To "non-local's" point--payment reform needs to move us down the spectrum from the fragmented FFS payment mechanism in place today toward some form of captiated payment. It can be risk-adjusted, with stop-loss provisions and gain-sharing. Surely we've learned something from the capitation fiascoes of the 1990s. But really, some form of modulated capitation answers many of the the cost conundrum difficulties we face.

Implication: consolidation of the medical industry. Welcome to the 21st Century. It is incredible that the healthcare industry soaks up so many resources and is so complex, yet is basically run by a cottage industry of small groups (of docs). Forming accountable care organizations is a step away from this Medieval organizing structure, whether they manifest themselves as a set of cost and revenue-sharing agreements among the provider groups or as outright ownership consolidation.

Implication: Lower reimbursements to ACOs and more internal controls on physician practice decisions. Yep. Not everyone with chest pain is going to get a cath.

Implication: decreased consumer choice. I don't see how the dots connect on this issue. Okay, consolidation will mean that you'll only have six (integrated) care providers in Boston, instead of the current overabundance. Is that too few?

Thanks for such an enging discussion!

Brendon in Minneapolis.

Anonymous said...


Please be careful about painting me with the broad brush of people not interested in reducing waste and cost in the system. Check some of my other posts on that front.

See below on ACOs. I guess you favor consolidation in this industry. Please explain who will decide how this happens. Or perhaps you favor the market-driven consolidation that we saw in fields like financial services.

On capitation, when you say, "It can be risk-adjusted, with stop-loss provisions and gain-sharing," you raise the issue of what role insurance companies would have in that new environment. Do they get to decide on their own how much of the actuarial risk to continue to bear, or does some regulatory agency?

You have skimmed over the issue of consumer choice. If someone is in one ACO but wants a referral to a doctor in another ACO, who gets to say yes or no? Who is going to design the insurance product and sell it when it limits choice in this way? We've seen no interest on the part of employers and consumers here for this limitation.

Finally, there is the issue of state versus federal jurisdiction in these matters. If it is advantageous to do this, in terms of costs and regional competitiveness and the like, why haven't the states taken it on?

So, the summary of what you say is that larger health systems should get larger, that insurance companies will bear less and less risk, and that consumers will have less choice. Compare this with the President's goals -- access, choice, and cost savings. Whose costs are saved in your model? Whose choices are preserved?

Anonymous said...


I know you are challenging all of us commenters on details, but the truth is, that in order to provide these details, we would have to sit down and study the entire issue in an evidence-based fashion unavailable to me, at least. There are many others such as posters on the Health Care Blog, for instance, with far more knowledge and good ideas. However, for the record, here's what I think in general terms:
1. bundled DRG's for all providers for inpatients. Only sharing the $$ risk will force providers to work together to reduce costs.
2. some $$ incentive to align outpatient providers into groups offering value-based care (value defined as patient outcome per dollar spent, as Porter defines it)
3. Some basic change in the mechanism of 3rd party payment such that the patient bears more of the $$ in the decision to see a doctor for a hangnail, or demand an antibiotic for a viral infection.
4. Some thinking outside the box on the role of "insurance" companies. They should be required to do more of the legwork in finding the best value care for their patients, not just sit and pay out as little money as possible. They need some incentives to add quality and value, too. I am not yet clear on the details of this thought, but their basic role must change.

Those were just 1 minute thoughts. The important point is that all we citizens put our heads together and come up with a way to do this instead of our old methods of lobby for our interests, shoot down the other guy's interests.


Anonymous said...

Good points all. A residual question is whether so many of these issues should require federal, rather than state, action. I like to joke that federal action provides the opportunity to do something the wrong way for the whole country -- whereas state action produces a portfolio of approaches, some of which will be helpful over time in showing the way for other states.

Mother Jones RN said...

Paul, this debate is something that I'm trying to wrap my head around. There is so much disinformation out there to sift through. I'm sure about one thing. For profit insurance companies don't want ANYTHING to screw up their bottom line.

You raise an excellent point about pre-existing medical conditions. As an aging baby boomer, I worry that I will not be able to get health insurance if I'm unable to work. I support the concept of Universal Healthcare if insurance companies are going to be allowed to cherry pick their customers.

Anonymous said...

Dear Mother Jones,

Correct, but you do not go far enough. NOBODY wants anything to mess up their bottom line, for-profit insurance companies, non-profit insurance companies, for-profit hospitals, non-profit hospitals, and doctors.

Rule #1 in DC, "One person's costs are another person's income."

lincoln williams said...

Solving the cost problem....

As noted in the recent New Yorker article by Atul Gawande, there is no one in health care who is accountable. The first issue to be addressed is accountability. Capitation was a step in that direction, single payer is a step in that direction. We need a system where an entity (insuror, doctor, government, patient) is responsible for what gets ordered/what gets paid - not just over the short run, but over the long run as well.

The second issue relates to choices. The new health reality must be that choices are limited. Not every plan will have access to every doctor or even every hospital. Patients must accept that mail order drugs are just as good as "pick-up at the pharmacy" drugs." Doctors must realize that that there are bounds to what they can order and that where "evidence based protocols" exist they ought to be followed.

Just for starters.....

Anonymous said...

Thanks for being so honest on these points. I trust you see that both of your points conflict with the President's commitment to permitting consumer choice. That's why I have said you can get two out of three of his policy goals:

lincoln williams said...

There is patient choice and there is patient choice. The old HMO model allowed for very limited choice. The new model could and should allow for some kind of opt-out provision whereby the patient could make a choice for an out-of network service and at the same time pay a steep copay/coinsurance. This might suggest a two tier system of care. Is that so bad so long as the first tier was comprehensive and high quality? A hard choice but one of those necessary choices that need to be made.We can't have it all.

For my money, this is a reasonable trade off so long as it assures universal access, high quality and controlled cost.

Anonymous said...

I'm recommending a combination of kaizen in all three areas, clear measurement of results effectiveness, and gradual larger changes based on root cause analysis and the measurement results.

The BIMD efforts are a good example of kaizen in all three areas that drive costs. I've seen this work well at other hospital and clinic facilities as well. It does need to be done carefully. I've also seen the central command-control micromanagement approach (e.g., some P4P efforts) sold as kaizen. The micromanagement approach works very poorly. Kaizen needs to be driven by decisions made with the involvement of those directly affected.

The first larger structural change that I see needed is the change to primary care. There have been endless rounds of theoretical pontification. Actual MA experience showed that many people wanted and tried to shift from using the ER to using a personal physician. There were not enough such physicians available, in large part because of years of payment policy decisions. It's almost an act of charity to select primary care and many primary care doctors are struggling financially.

I would make these changes gradually, and also start examining the cost structure of primary care very carefully. It tends to be some of the worst run businesses. Doctors run the business with no more than high school level education in management, and no other experience or training. There are routinely severe personality clashes between the business manager and the doctor in practices that have both. The high costs are partially the result of this, rather than of payment problems.

I am also concerned by the increasing evidence that access to health care per se does not substantially change health outcomes. This needs to be much better understood. There is an assumption that ready access to care will improve health and lower costs. This assumption is not well supported by evidence. If it is wrong in some aspects of care, then this must be understood because it impacts policy a lot.

Anonymous said...


I would check carefully the underlying system costs. Take your example of drugs. I get my long term prescriptions at Costco, and I know that many of the patients at my doctor's practice are also switching to Costco and Walmart. The underlying mechanics of motion of drugs, motion of patient, convenience to patient, etc. are higher for mail order. This means that the underlying costs are higher.

The $10 for 3 month supply from these pharmacies is lower cost and superior service to mail order. In a sense, the insurance companies are lowering their costs by making the routine prescription service so terrible that customers prefer to avoid using insurance at all. Walmart, Costco, et al have figured out how to provide "pick-up" service at a profit. They also provide a good customer service, unlike the mail order providers. The insurers are merely unwilling to participate.

David Harlow - HealthBlawg said...

I would agree that the current discussion in Washington is tending more towards the let's-fix-everything-all-at-once end of the spectrum, which is untenable; incrementalism, baby .... Massachusetts started with coverage, which is as good a place as any. I would observe, though, that the starting point, and a variety of other characteristics of the Massachusetts approach, are idiosyncratic and a product of the political wrangling/horsetrading that went on in order to get all stakeholders into the big tent. Another (larger) playing field, and different (more) players are likely to yield a different set of compromises. And that's OK, as long as the ball get moved a bit further down the field (to mix a few metaphors). I thought Obama's earlier approach ("you know what I'm looking for, guys; send me a bill I can sign") was politically brilliant; getting down and dirty on the details should be left to the operatives, so that Chuck Grassley doesn't get to score points by tweeting about Obama sightseeing in Europe over the weekend. I thought Obama better appreciated the need for results in this arena vs. taking the opportunity to do a little grandstanding.

Anonymous said...

I would have a problem with a mandated insurance system. I have Crohn's Disease and used to live overseas where my employer had a contract with a for-profit insurer that stipulated the insurer was required to provide coverage for every employee. Thinking my problems were solved, I sent them my medical history and they sent me their offer: 80% coverage after co-pay and $10,000 premium I would have to pay monthly, which was 200% of what I was earning at the time. Let's not be naive.

Brendon from Minnesota said...

Paul, thanks for your gentle response to my broadside!
Consolidation. It is remarkable that an industry as large as healthcare is not more consolidated; in other industries consolidation has been associated with efficiency and better value for the paying customer. So yes, I would favor market-driven consolidation for reasons of efficiency. I think Congress can structure this to some degree by modifying the payment structure to move it away from FFS. Bundled payments for episodes of care that cross the inpatient/outpatient divide and cross specialty divisions are the way to go. This would drive consolidation in ways that are meaningful for improved care for patients.
Capitation. Your question was, Who decides where to draw the line as to how much risk provider groups manage, and how much is managed by insurance companies? I am no expert in insurance matters, but my basic approach would be to regulate it to protect the provider groups. Meaning full disclosure of expected versus actual expenses....
Consumer choice. Yes, people’s choices will continue to be constrained after this reform. The current system with pockets of unencumbered choice is too costly to continue. So yes, patients (with their primary care providers) will have to make harder choices, and out-of-plan costs to consumers will be a factor. Not too different from today’s PPO and HMO models, actually. We’re not too far from a nationally-defined healthcare benefit set, perhaps approved by MedPAC, with input from AHRQ and other source of comparative effectiveness research. Within the benefit set things have to be covered; outside of it ACOs need to figure out what will give their patients the best results.
Federal jurisdiction. From my vantage in Minnesota, I see the states as playing a weak hand by virtue of the fact that their regulatory authority does not extend to a large enough share of the market to effect pervasive healthcare financing reform. Minnesota has pushed hard to make all state programs and health plans sold in the state to adopt characteristics of bundling (called “baskets of care” here) and the medical home (called the “health-care home” here), but they hit only 30% of the state’s covered lives. Medicare, ERISA, and the need for CMS approval for the Medicaid portion are significant areas that the states cannot affect.
Health insurance needs to be regulated at the federal level, I think, and this means dismantling the old law that gave that authority to state insurance boards. This is a national problem, and as much as I appreciate the states’ roles in experimenting with reform, I think it is time for us to generate a national solution.


Anonymous said...

Anonymous: MA dealt with that issue by requiring that all plans be open to anyone without regard to prior medical conditions. This seems to have worked. I checked the available public plans and found that they were similar in coverage and cost to my employer based plan.

Part of why it will work is that enrollment is mandatory for the young and healthy. Instead of creating narrowly tailored plans per person, insurers are motivated to create broadly attractive plans to pull in enough healthy people to keep the overall pool financially sound.

Engineer on Medicare said...

On the question of whether to solve the probelem incrementally or do it all at once: I suggest that the large providers such as BIDMC should start with what they can affect directly. Start with increasing efficiency and reducing total cost for what you do.

If payment for a particular diagnosis/treatment is the same for all hospitals in the Boston area then your margins will be greater than those of the hospital that has higher costs. Eventally the payers will determine an appropriate cost and the high-cost providers will lose money or stop providing that service.

Tax-supported subsidies for inefficient providers should be eliminated in areas where there are enough providers of capacity. I suspect the Boston metro area has enough hospital capacity even if Caritas (mentioned in the recent item on SEIU) were to limit their service to what they could provide efficiently.

Anonymous said...

It is notable in this discussion to date that the bulk of the proposals has to do with cost shifting, efficiencies, cure vs. care, and other dynamics within the financial/healthcare systems in which the wealthy and middle class live and blog. What choices do we have? How are we to access them? Will there be limits? Who decides?

The voice that is missing in this comes from that part of the population which essentially has no choices already; those whose environments are essentially unhealthy. Those who live in violent neighborhoods, polluted neighborhoods, in poorly maintained housing or with no housing, with no access to healthy food choices, with access to primary care only through chronically struggling clinics. For many of these people the debate here may be seen as rearranging deck chairs.

In energy the cheapest solutions and most effective lie in conservation, outside of the global financial/energy markets. In healthcare, the cheapest and most effective solutions may lie outside of the financial/healthcare markets. A true debate about "fixing" the healthcare problem will need to include these areas as well. Figuring out how to get people state of the art treatment only back to unhealthy living is no solution.