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August 14, 2009

THE HEALTH CARE STEAMROLLER IN A NUTSHELL - THE HMO FROM HELL

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The Health Care Steamroller in a Nutshell:

The HMO From Hell

 

[Full text of the House Bill in pdf is at this LINK: http://energycommerce.house.gov/Press_111/20090714/aahca.pdf ]

 

The pending administration-backed proposals, all twelve hundred pages, including the mostly cosmetic changes proposed in the senate, can be summarized as follows:

 

a. All health care consumers are to be herded, over time, into a rigged market for insurance that ultimately is designed to leave us with the one default choice, the government plan. [Private plans are taxed, not subsidized, forced to conform to the general outline and virtually forbidden to change terms; when their terms are materially changed, their subscribers are forced into the government ‘option’.  I estimate that within 6 years 90% of us will have been herded into the government plan.]

 

b. That government ‘option’ depends for its economic viability on a comprehensive system of taxes and fees AND top-down cost controls.  [Historically, top-down cost controls only have worked crudely by delaying care or otherwise denying access to ‘socially unnecessary’ procedures.]

 

c. These cost savings are to be achieved several ways:

 

(1) Physicians will be paid not more than the current Medicare schedule, i.e., at cut rates. [The result is a sort of ‘Medicare Lite’ for all, representing a deterioration in the quality of coverage for the 80% in order to benefit the remaining 20%.]

(2) Access to specialists is curtailed.  This is accomplished by limiting the compensation of specialists to that of the currently overworked non-specialist physicians, which has the effect of dramatically reducing the number of specialists available in the system. [Take a number and hope.]

(3) Cost-benefit analysis is substituted for the Hippocratic Oath such that physicians will be ‘encouraged’ to limit access to expensive procedures based on your actuarial viability.  [Statistical analysis is replaced a personal physician judgment.]

 

The current health care system is chaotic and uneven.  But it does meet the needs of about 80% of us.  The biggest failing of the present system is that our emergency rooms are crowded by people who are using them for basic health care, exploiting the rule (understandably, given their circumstances) that no one can be turned away without being seen.  The second biggest failing is the fact that the large risk pools (insured groups, mostly of employees, retirees and professional associations) are not widely available to outsiders, leaving a core group of people financially able to buy insurance but who are rejected because of preexisting health conditions. There are reasonable solutions to each of these problems, some of which have been worked out on the state level, and which operate without degrading the heath care delivery of the rest of us.

 

Many of us already have been herded into the HMO delivery model.  This is the system that ties you to a single hospital and group of doctors.  You are entitled to see a typically overscheduled ‘primary care physician’ who operates mostly as a gatekeeper for other services.  In the beginning, the HMO was touted as a brilliant path to preventive care, thus reducing the stress on hospitals and specialists.  Few people dare make that claim now.  As funding is squeezed (and it always is in any bureaucratic health care delivery system), access to specialists is more and more difficult.  Physicians begin to opt out.  Longer and longer waits become the norm.  This (sadly predictable) outcome was the result of bureaucratic, top-down cost management.

 

The new government health care ‘option’ will be the HMO from hell.  Given a real choice, you would never select it.

 

Our president has said: “If there's a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that's going to make you well?”

The pending government plan is the poison pill.

 

LINKS:

http://www.jaygaskill.com/blog1/

http://www.jaygaskill.com/HeathCareTrainWreck.htm

http://online.wsj.com/article/SB10001424052970203946904574300482236378974.html

 

My Earlier Article:

 

BLUE DOG CARE – REASON OR CAPITULATION?
THE HEALTH CARE DARE: BETTER, NOT PERFECT
By Jay B. Gaskill
THE PRESIDENTIAL CHALLENGE
 
On June 10, the president challenged, “To those who criticize our efforts, I ask them, ‘What's the alternative?’”
 
A SANE RESPONSE

 
Health care partisans are disturbed by that irritating, in-house truth teller, the Congressional Budget Office, whose cost numbers are chillingly honest.  There is no realistic scenario in which the pending utopian plans, however the costs are disguised, do not come with a huge tax burden.   
 
Top-down, bureaucratic cost containment has a clear history:  It always fails.  The repeated attempts of government bureaucracies to imitate market-driven efficiencies are like drunken Cossacks plodding their way through a ballet.  Subsidies prop up prices.  Bureaucrats are clueless when asked to produce real efficiencies, but they do know how to reduce performance.  The inevitable budget cutbacks are always felt in delayed diagnosis and treatment. The current, crisis-driven hard sell is like pushing bypass surgery on someone who just needs cholesterol reducing meds and daily aspirin.  Worse still, the bypass that is proposed will actually starve the heart, eventually requiring a new one.  By that time, the only option will be a crude mechanical pump, one size-fits-all. The country is on the precipice of a legislatively enabled led health care catastrophe, one that risks permanent damage to the system.
 
A massive new set of entitlements would be foolish to undertake in the best of times.  During a recession it is flat out insanity.  Fortunately, a growing number of my fellow Blue Dog Democrats are beginning to balk. Almost any alternative would be better than the poison-pill entitlement scheme currently at the prow of the “reform” juggernaut.  If moderates and conservatives take up the president’s challenge, we might be able to make some progress without killing the patient.
 
REFORM GUIDELINES:
 
1. Incremental reform.  We are living through an economic crisis, not a heath care crisis.  Global, top down “reform” proposals have failed in better times, and they deserve even more to fail now when the consequences of making bad policy are amplified tenfold.
2. Better portability and access.  The proposal is for “better” not perfect. 
3. No new unfunded (or under-funded) entitlements
4. Incremental, testable progress.  By addressing the real problems realistically and gradually, there will be an opportunity for a progress metric, allowing for self correction and adjustment.
 
REALISTIC PROPOSALS:
 
1. Price Transparency.  Hospitals, physicians and clinics will be required to post actual costs and prices and given incentives for discounts, including a tiny subsidy for accepting credit card payments (offsetting the bank-lender fees).
 
2. Expanded, Shared Risk Pools. In cooperation with state governments and private insurers, the government will insure shared risk pools that contain a sufficiently large mix of patients to offset the high-cost patients.  The resulting per-patient cost then is shared by all private insurers who buy into the pool, subject to the federal guarantee.  Note: The scope of the guarantee is carefully limited, though it can be augmented by state, municipal and charitable supplements.  The risk pools should be assembled incrementally, but available nationally as they come on line.  An illustrative example: $4,500 deductible per condition or per year for serial conditions, with a $1 million cap.  Private individuals could buy-in directly; private insurers, from HMO’s & 80% coverage models to self insured small businesses could contract to fold the group in to a package that includes other coverage.  Each fiscal year, costs and risks would be reevaluated by industry and government actuaries and guarantees adjusted accordingly.
3. Indigent Clinics, Not ER Crowding. The requirement that no one can be turned away from an emergency room would be relaxed whenever a hospital, otherwise subject to that mandate, facilitates the establishment of a qualifying clinic nearby to which the hospital contributes at least one physician on call and a nurse practitioner.  The financial arrangements are to be kept flexible, with an expectation that private donations could be commingled with public resources, including volunteer medical staff.  These would be structured as not-for-profit entities, loosely affiliated with the parent hospitals that would establish operating standards but would be fully insulated by law from all liability.  Fees for service would be scaled, a nominal fee for all (to be waived in extreme cases) up to the full fee. Credit cards and prepaid medical cash cards accepted. 
 
4. Fast Track Medical Bankruptcies. A separate, streamlined bankruptcy procedure would be established for medical expenses only.  Under rules established by the court, for good cause, additional bankruptcy filings can be entertained before the current waiting period.
 
AVOID THESE HEATH CARE TRAPS AT ALL COSTS
 

1.       DO NOT, UNDER ANY CIRCUMSTANCES OR GUISE, FORBID OR DIFFERENTIALLY BURDEN THE RIGHT OF AN INDIVIDUAL PATIENT TO PRIVATELY CONTRACT WITH A WILLING PHYSICIAN.   THIS IS NO IDLE CONCERN.  THE ORIGINAL BILL WOULD HAVE SET IN MOTION A BUREAUCRATIC JUGGERNAUT THAT WOULD HAVE ACCOMPLISHED JUST THAT. DO NOT APPROVE ANY BILL THAT HAS NOT BEEN CAREFULLY VETTED TO PROTECT THE PATIENT’S ACCESS TO PRIVATELY RETAINED MEDICAL SERVICES.
 

2.       BEWARE THE “FUTILITY” DOCTRINE.  BUREAUCRATIC CONTROL OF HEATH CARE RESOURCE ALLOCATIONS NECESSARILY MEANS TOP-DOWN COST CONTROLS IN THE FORM OF DOCTRINES GOVERNING ‘APPROVED AND ‘NOT-APPROVED’ MEDICAL PRACTICES.’  ONE OF THESE DOCTRINES IS THE ‘FUTILITY’ DETERMINATION.  THIS IS A DRAMATIC STEP THAT CAN BE INVOKED RIGHT IN THE ER, WHERE TREATMENT SUDDENLY STOPS.  THE DOCTRINE ALLOWS A PHYSICIAN (OR COMPELS THE DOCTOR SUBJECT TO A BUREAUCRACY THAT CONTROLS PHYSICIANS) TO DENY ANY TREATMENT IF IT IS ‘FUTILE’ GIVEN THE PATIENT’S AGE OR OTHER CONDITION.   THIS IS A SLIPPERY SLOPE.  IT STARTS WITH THE DENIAL OF GRANDMA’S HIP OPERATION, BUT QUICKLY LEADS TO THE DENIAL OF YOUR HEART OPERATION BECAUSE YOU ARE OVER SIXTY FIVE, THEN FIFTY FIVE.
 

3.       DO NOT ALLOW AN UNELECTED COMMITTEE OR AGENCY TO CONTROL YOUR ACCESS TO MEDICAL CARE, ITS QUALITY OR SOPHISTICATION. 
 
SOME my fellow Blue Dog Democrats are getting the message: The federal ‘In-box’ is already jammed with spending far beyond the national means.  Don’t screw this up for our children.
 
Will the forces of common sense and fiscal restraint acquire the necessary backbone in time? 
 
___
 

Jay Gaskill, a California Attorney, was the former Alameda County Public Defender

 


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