Health Care Reform/Re-reform

It is no surprise that the AHA, American Hospital Association turned their back on the presidents plans for health care reform, and they will not be alone. The insurance companies defeated Secretary Clinton when she spearheaded President Clinton’s attempt at health care reform. I am afraid there is so much knowledge in DC that they miss what goes on in the world of hospitals, doctors, insurance, and drug companies. The extortion goes on at such a high level, involves so much money and has gone on for so long that the criminality is as invisible as it was with the credit default swaps. Old line New England Insurance companies with reputations above reproach find it difficult to resist this wind-fall and unfortunately allow themselves to participate. The AHA is in fact an organization of hospital administrators with a special interest agenda not of patient care but of personal gain through an expanded administrative role. Money percolates to the top.

Insurance is a wonderful thing in mitigating risk, but when it is no longer an option, when it is substituted for a basic humanitarian necessity it leads to abuse, and indeed it has. The criminal extreme of this system resembles a protection racket, and some aspects of health insurance come close. For example excluding prior conditions, cancelation of coverage and increasing rates as a result of diagnosis come close to extortion while seemingly logical to those not suffering from some of the outrageously expensive medical and surgical conditions. Of far greater significance, the subtle endorsement by insurance companies of rising costs, charges by hospitals and providers; it leads to an endless spiral of rising cost that serve only to increase the revenue of the insurance companies without affecting their margins. The end result is a massive fleecing of the American consumer/patient with no end in sight.

The percentage game makes it even worse. Pay, say, 74% of usual and customary charges to a provider with an 80% overhead and – guess what?—the charge suddenly increases 26% or more. This upward spiral applies to drugs, hospitals, laboratories, and providers. It is an ugly game and all are corrupted by it.

Facts: Insurance is the problem. Insurance will not go away. Hospitals are the problem. Hospitals will not go away. Drug companies are the problem. Drug companies will not go away. What is left? Well, it turns out there is a great deal left and that is the science and the care of academic medicine. We have centers of excellence, and medical schools that are the envy of the world despite our pathetic ranking in almost every other metric of health care.

Propose: A completely separate public health care system, run by the states and their medical schools and those centers of excellence that choose to participate: no insurance, free to anyone (or very low fee), providers paid by the state (fewer law suits) and utilizing only medical school connected teaching hospitals. Now here is the catch. The present insurance structure remains in place, encouraged and to whatever extent possible optimized as: a private sector, private practice, competitive system. (I’m not making this up; it’s what happened in Europe quietly and without fan fare.)

The private sector must be fairly treated and, indeed, private medicine may return to its humanitarian traditions. The hospitals, the insurance companies the drug companies and the doctors preferring traditional fee for service can thrive under this system unmolested and thus not inclined to fight against the absolutely essential reform that is going to happen one way or another. Who knows, the private sector may turn out to do a better job in the short run, but in the long run I doubt it.

At first the public clinics will be decried by all of the above and may get off to a slow start. Time however is on their side, and a slow start means an affordable program. Let the two systems compete, In fact let the states compete. The diversity is the very science of medicine and the best patient care formula will percolate to the top, control by academics and education, not by regulation, insurance or money. Include Medicare, Medicaid and Workman’s’ Compensation under this proposed public health care system and businesses will back the program as well. Politics is the art of the possible and this scheme is possible while – I suspect – reform under a mandatory insurance program is not.