Sep
11
2019

Health Care Reform – Why Are People So Worked Up?

Why are Americans so worked up about health care reform? Statements such as “don’t touch my Medicare” or “everyone should have access to state of the art health care irrespective of cost” are in my opinion uninformed and visceral responses that indicate a poor understanding of our health care system’s history, its current and future resources and the funding challenges that America faces going forward. While we all wonder how the health care system has reached what some refer to as a crisis stage. Let’s try to take some of the emotion out of the debate by briefly examining how health care in this country emerged and how that has formed our thinking and culture about health care. With that as a foundation let’s look at the pros and cons of the Obama administration health care reform proposals and let’s look at the concepts put forth by the Republicans?

Access to state of the art health care services is something we can all agree would be a good thing for this country. Experiencing a serious illness is one of life’s major challenges and to face it without the means to pay for it is positively frightening. But as we shall see, once we know the facts, we will find that achieving this goal will not be easy without our individual contribution.

These are the themes I will touch on to try to make some sense out of what is happening to American health care and the steps we can personally take to make things better.

A recent history of American health care – what has driven the costs so high?
Key elements of the Obama health care plan
The Republican view of health care – free market competition
Universal access to state of the art health care – a worthy goal but not easy to achieve
what can we do?

First, let’s get a little historical perspective on American health care. This is not intended to be an exhausted look into that history but it will give us an appreciation of how the health care system and our expectations for it developed. What drove costs higher and higher?

To begin, let’s turn to the American civil war. In that war, dated tactics and the carnage inflicted by modern weapons of the era combined to cause ghastly results. Not generally known is that most of the deaths on both sides of that war were not the result of actual combat but to what happened after a battlefield wound was inflicted. To begin with, evacuation of the wounded moved at a snail’s pace and this caused severe delays in treating the wounded. Secondly, many wounds were subjected to wound care, related surgeries and/or amputations of the affected limbs and this often resulted in the onset of massive infection. So you might survive a battle wound only to die at the hands of medical care providers who although well-intentioned, their interventions were often quite lethal. High death tolls can also be ascribed to everyday sicknesses and diseases in a time when no antibiotics existed. In total something like 600,000 deaths occurred from all causes, over 2% of the U.S. population at the time!

Let’s skip to the first half of the 20th century for some additional perspective and to bring us up to more modern times. After the civil war there were steady improvements in American medicine in both the understanding and treatment of certain diseases, new surgical techniques and in physician education and training. But for the most part the best that doctors could offer their patients was a “wait and see” approach. Medicine could handle bone fractures and increasingly attempt risky surgeries (now largely performed in sterile surgical environments) but medicines were not yet available to handle serious illnesses. The majority of deaths remained the result of untreatable conditions such as tuberculosis, pneumonia, scarlet fever and measles and/or related complications. Doctors were increasingly aware of heart and vascular conditions, and cancer but they had almost nothing with which to treat these conditions.

This very basic review of American medical history helps us to understand that until quite recently (around the 1950′s) we had virtually no technologies with which to treat serious or even minor ailments. Here is a critical point we need to understand; “nothing to treat you with means that visits to the doctor if at all were relegated to emergencies so in such a scenario costs are curtailed. The simple fact is that there was little for doctors to offer and therefore virtually nothing to drive health care spending. A second factor holding down costs was that medical treatments that were provided were paid for out-of-pocket, meaning by way of an individuals personal resources. There was no such thing as health insurance and certainly not health insurance paid by an employer. Except for the very destitute who were lucky to find their way into a charity hospital, health care costs were the responsibility of the individual.

What does health care insurance have to do with health care costs? Its impact on health care costs has been, and remains to this day, absolutely enormous. When health insurance for individuals and families emerged as a means for corporations to escape wage freezes and to attract and retain employees after World War II, almost overnight a great pool of money became available to pay for health care. Money, as a result of the availability of billions of dollars from health insurance pools, encouraged an innovative America to increase medical research efforts. More Americans became insured not only through private, employer sponsored health insurance but through increased government funding that created Medicare and Medicaid (1965). In addition funding became available for expanded veterans health care benefits. Finding a cure for almost anything has consequently become very lucrative. This is also the primary reason for the vast array of treatments we have available today.

I do not wish to convey that medical innovations are a bad thing. Think of the tens of millions of lives that have been saved, extended, enhanced and made more productive as a result. But with a funding source grown to its current magnitude (hundreds of billions of dollars annually) upward pressure on health care costs are inevitable. Doctor’s offer and most of us demand and get access to the latest available health care technology in the form of pharmaceuticals, medical devices, diagnostic tools and surgical procedures. So the result is that there is more health care to spend our money on and until very recently most of us were insured and the costs were largely covered by a third-party (government, employers). Add an insatiable and unrealistic public demand for access and treatment and we have the “perfect storm” for higher and higher health care costs. And by and large the storm is only intensifying.

At this point, let’s turn to the key questions that will lead us into a review and hopefully a better understanding of the health care reform proposals in the news today. Is the current trajectory of U.S. health care spending sustainable? Can America maintain its world competitiveness when 16%, heading for 20% of our gross national product is being spent on health care? What are the other industrialized countries spending on health care and is it even close to these numbers? When we add politics and an election year to the debate, information to help us answer these questions become critical. We need to spend some effort in understanding health care and sorting out how we think about it. Properly armed we can more intelligently determine whether certain health care proposals might solve or worsen some of these problems. What can be done about the challenges? How can we as individuals contribute to the solutions?

The Obama health care plan is complex for sure – I have never seen a health care plan that isn’t. But through a variety of programs his plan attempts to deal with a) increasing the number of American that are covered by adequate insurance (almost 50 million are not), and b) managing costs in such a manner that quality and our access to health care is not adversely affected. Republicans seek to achieve these same basic and broad goals, but their approach is proposed as being more market driven than government driven. Let’s look at what the Obama plan does to accomplish the two objectives above. Remember, by the way, that his plan was passed by congress, and begins to seriously kick-in starting in 2014. So this is the direction we are currently taking as we attempt to reform health care.

Through insurance exchanges and an expansion of Medicaid,the Obama plan dramatically expands the number of Americans that will be covered by health insurance.

To cover the cost of this expansion the plan requires everyone to have health insurance with a penalty to be paid if we don’t comply. It will purportedly send money to the states to cover those individuals added to state-based Medicaid programs.

To cover the added costs there were a number of new taxes introduced, one being a 2.5% tax on new medical technologies and another increases taxes on interest and dividend income for wealthier Americans.

The Obama plan also uses concepts such as evidence-based medicine, accountable care organizations, comparative effectiveness research and reduced reimbursement to health care providers (doctors and hospitals) to control costs.

The insurance mandate covered by points 1 and 2 above is a worthy goal and most industrialized countries outside of the U.S. provide “free” (paid for by rather high individual and corporate taxes) health care to most if not all of their citizens. It is important to note, however, that there are a number of restrictions for which many Americans would be culturally unprepared. Here is the primary controversial aspect of the Obama plan, the insurance mandate. The U.S. Supreme Court recently decided to hear arguments as to the constitutionality of the health insurance mandate as a result of a petition by 26 states attorney’s general that congress exceeded its authority under the commerce clause of the U.S. constitution by passing this element of the plan. The problem is that if the Supreme Court should rule against the mandate, it is generally believed that the Obama plan as we know it is doomed. This is because its major goal of providing health insurance to all would be severely limited if not terminated altogether by such a decision.

As you would guess, the taxes covered by point 3 above are rather unpopular with those entities and individuals that have to pay them. Medical device companies, pharmaceutical companies, hospitals, doctors and insurance companies all had to “give up” something that would either create new revenue or would reduce costs within their spheres of control. As an example, Stryker Corporation, a large medical device company, recently announced at least a 1,000 employee reduction in part to cover these new fees. This is being experienced by other medical device companies and pharmaceutical companies as well. The reduction in good paying jobs in these sectors and in the hospital sector may rise as former cost structures will have to be dealt with in order to accommodate the reduced rate of reimbursement to hospitals. Over the next ten years some estimates put the cost reductions to hospitals and physicians at half a trillion dollars and this will flow directly to and affect the companies that supply hospitals and doctors with the latest medical technologies. None of this is to say that efficiencies will not be realized by these changes or that other jobs will in turn be created but this will represent painful change for a while. It helps us to understand that health care reform does have an effect both positive and negative.

Finally, the Obama plan seeks to change the way medical decisions are made. While clinical and basic research underpins almost everything done in medicine today, doctors are creatures of habit like the rest of us and their training and day-to-day experiences dictate to a great extent how they go about diagnosing and treating our conditions. Enter the concept of evidence-based medicine and comparative effectiveness research. Both of these seek to develop and utilize data bases from electronic health records and other sources to give better and more timely information and feedback to physicians as to the outcomes and costs of the treatments they are providing. There is great waste in health care today, estimated at perhaps a third of an over 2 trillion dollar health care spend annually. Imagine the savings that are possible from a reduction in unnecessary test and procedures that do not compare favorably with health care interventions that are better documented as effective. Now the Republicans and others don’t generally like these ideas as they tend to characterize them as “big government control” of your and my health care. But to be fair, regardless of their political persuasions, most people who understand health care at all, know that better data for the purposes described above will be crucial to getting health care efficiencies, patient safety and costs headed in the right direction.

A brief review of how Republicans and more conservative individuals think about health care reform. I believe they would agree that costs must come under control and that more, not fewer Americans should have access to health care regardless of their ability to pay. But the main difference is that these folks see market forces and competition as the way to creating the cost reductions and efficiencies we need. There are a number of ideas with regard to driving more competition among health insurance companies and health care providers (doctors and hospitals) so that the consumer would begin to drive cost down by the choices we make. This works in many sectors of our economy but this formula has shown that improvements are illusive when applied to health care. Primarily the problem is that health care choices are difficult even for those who understand it and are connected. The general population, however, is not so informed and besides we have all been brought up to “go to the doctor” when we feel it is necessary and we also have a cultural heritage that has engendered within most of us the feeling that health care is something that is just there and there really isn’t any reason not to access it for whatever the reason and worse we all feel that there is nothing we can do to affect its costs to insure its availability to those with serious problems.

OK, this article was not intended to be an exhaustive study as I needed to keep it short in an attempt to hold my audience’s attention and to leave some room for discussing what we can do contribute mightily to solving some of the problems. First we must understand that the dollars available for health care are not limitless. Any changes that are put in place to provide better insurance coverage and access to care will cost more. And somehow we have to find the revenues to pay for these changes. At the same time we have to pay less for medical treatments and procedures and do something to restrict the availability of unproven or poorly documented treatments as we are the highest cost health care system in the world and don’t necessarily have the best results in terms of longevity or avoiding chronic diseases much earlier than necessary.

I believe that we need a revolutionary change in the way we think about health care, its availability, its costs and who pays for it. And if you think I am about to say we should arbitrarily and drastically reduce spending on health care you would be wrong. Here it is fellow citizens – health care spending needs to be preserved and protected for those who need it. And to free up these dollars those of us who don’t need it or can delay it or avoid it need to act. First, we need to convince our politicians that this country needs sustained public education with regard to the value of preventive health strategies. This should be a top priority and it has worked to reduce the number of U.S. smokers for example. If prevention were to take hold, it is reasonable to assume that those needing health care for the myriad of life style engendered chronic diseases would decrease dramatically. Millions of Americans are experiencing these diseases far earlier than in decades past and much of this is due to poor life style choices. This change alone would free up plenty of money to handle the health care costs of those in dire need of treatment, whether due to an acute emergency or chronic condition.

Let’s go deeper on the first issue. Most of us refuse do something about implementing basic wellness strategies into our daily lives. We don’t exercise but we offer a lot of excuses. We don’t eat right but we offer a lot of excuses. We smoke and/or we drink alcohol to excess and we offer a lot of excuses as to why we can’t do anything about managing these known to be destructive personal health habits. We don’t take advantage of preventive health check-ups that look at blood pressure, cholesterol readings and body weight but we offer a lot of excuses. In short we neglect these things and the result is that we succumb much earlier than necessary to chronic diseases like heart problems, diabetes and high blood pressure. We wind up accessing doctors for these and more routine matters because “health care is there” and somehow we think we have no responsibility for reducing our demand on it.

It is difficult for us to listen to these truths but easy to blame the sick. Maybe they should take better care of themselves! Well, that might be true or maybe they have a genetic condition and they have become among the unfortunate through absolutely no fault of their own. But the point is that you and I can implement personalized preventive disease measures as a way of dramatically improving health care access for others while reducing its costs. It is far better to be productive by doing something we can control then shifting the blame.

There are a huge number of free web sites available that can steer us to a more healthful life style. A soon as you can, “Google” “preventive health care strategies”, look up your local hospital’s web site and you will find more than enough help to get you started. Finally, there is a lot to think about here and I have tried to outline the challenges but also the very powerful effect we could have on preserving the best of America’s health care system now and into the future. I am anxious to hear from you and until then – take charge and increase your chances for good health while making sure that health care is there when we need it.

Jack Ross has 41 years of executive level experience with the medical technology industry. His specific area of expertise

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Sep
03
2019

A Socialized Health Care System Requires Population Control and Impeccable Registries

In a nationalized health care system, you need to know who is who – otherwise the system could never be able determine who is entitled. The structure depends on how the system is created and designed, but with a nationalized health care system you will be tracked by the state where you reside and how you move in a manner that is unseen in America. The nationalized health care system becomes a vehicle for population control.

If you leave the United States and are no longer a resident of the state, even if you are a citizen and might maintain a driving license, you will have to report immediately if you want to avoid the 13% health care tax. I use the number 13% as it is in Sweden to exemplify the actual tax pressure that is laid upon you for the nationalized health care.

Let’s say you moved and you do not want to pay the 13% tax for services you do not receive, can receive, or want to taken out from the tax roll. The mammoth entity has no interest to let you go so easy. You will end up having to reveal your private life – partner, dwellings, travel, money, and job to prove your case that you have the right to leave the public health care system and do not need to pay the tax. If you have to seek an appeal, your information could be a part of administrative court documents that are open and public documents. As soon as you return to the United States, you will be automatically enrolled again and the taxes start to pile up.

Public universal health care has no interest in protecting your privacy. They want their tax money and, to fight for your rights, you will have to prove that you meet the requirements to not be taxable. In that process, your private life is up for display.

The national ID-card and national population registry that includes your medical information is a foundation of the nationalized health care system. You can see where this is going – population control and ability to use the law and health care access to map your whole private life in public searchable databases owned and operated by the government.

By operating an impeccable population registry that tracks where you live, who you live with, when you move and your citizen status including residency the Swedes can separate who can receive universal health care from those not entitled. The Swedish authorities will know if you have a Swedish social security number, with the tap of the keyboard, more information about yourself than you can remember. The Swedish government has taken sharing of information between agencies to a new level. The reason is very simple – to collect health care tax and suppress any tax evasion.

It is heavily centralized and only the central administration can change the registered information in the data. So if you want to change your name, even the slightest change, you have to file an application at a national agency that processes your paperwork. This centralized population registry makes it possible to determine who is who under all circumstances and it is necessary for the national health care system. Otherwise, any person could claim to be entitled.

To implement that in the United States requires a completely new doctrine for population registry and control. In an American context that would require that every existing driving license had to be voided and reapplied under stricter identification rules that would match not only data from Internal Revenue Service, state government, municipal government, Social Security Administration, and Department of Homeland Security but almost any agency that provides services to the general public. The reason why a new population registry would be needed in the United States is the fact that lax rules dating back to the 1940s up until the War on Terrorism, and stricter identification criteria following 9/11, has made a significant percentage of personal information about individuals questionable.

If America instead neglects maintaining secure records, determining eligibility for public health care would not be possible and the floodgates for fraud would open and rampant misuse of the system would prevail. This would eventually bring down the system.

It is financially impossible to create a universal health care system without clearly knowing who is entitled and not. The system needs to have limits of its entitlement. A social security number would not be enough as these numbers have been handed out through decades to temporary residents that might not even live in the United States or might today be out of status as illegal immigrants.

The Congress has investigated the cost of many of the “public options”, but still we have no clear picture of the actual realm of the group that would be entitled and under which conditions. The risk is political. It is very easy for political reasons to extend the entitlement. Politicians would have a hard time being firm on illegal immigrants’ entitlement, as that would put the politicians on a collision course with mainly the Hispanic community as they represent a significant part of the illegal immigrants. So the easy sell is then that everyone that is a legal resident alien or citizen can join according to one fee plan and then the illegal immigrants can join according to a different fee structure. That assumes that they actually pay the fee which is a wild guess as they are likely to be able to get access to service without having to state that they are illegal immigrants.

It would work politically – but again – without an impeccable population registry and control over who is who on a national level, this is unlikely to succeed. The system would be predestined to fail because of lack of funds. If you design a system to provide the health care needs for a population and then increase that population without any additional funds – then naturally it would lead to a lower level of service, declined quality, and waiting lists for complex procedures. In real terms, American health care goes from being a first world system to a third world system.

Thousands, if not a million, American residents live as any other American citizen but they are still not in good standing with their immigration even if they have been here for ten or fifteen years. A universal health care system will raise issues about who is entitled and who is not.

The alternative is for an American universal health care system to surrender to the fact that there is no order in the population registry and just provide health care for everyone who shows up. If that is done, costs will dramatically increase at some level depending on who will pick up the bill – the state government, the federal government, or the public health care system.

Illegal immigrants that have arrived within the last years and make up a significant population would create an enormous pressure on a universal health care, if implemented, in states like Texas and California. If they are given universal health care, it would be a pure loss for the system as they mostly work for cash. They will never be payees into the universal health care system as it is based on salary taxes, and they do not file taxes.

The difference is that Sweden has almost no illegal immigrants compared to the United States. The Swedes do not provide health care services for illegal immigrants and the illegal immigrants can be arrested and deported if they require public service without good legal standing.

This firm and uniform standpoint towards illegal immigration is necessary to avoid a universal health care system from crumbling down and to maintain a sustainable ratio between those who pay into the system and those who benefit from it.

The working middle class that would be the backbone to pay into the system would not only face that their existing health care is halved in its service value – but most likely face higher cost of health care as they will be the ones to pick up the bill.

The universal health care system would have maybe 60 million to 70 million “free riders” if based on wage taxes, and maybe half if based on fees, that will not pay anything into the system. We already know that approximately 60 million Americans pay no taxes as adults add to that the estimated 10-15 million illegal immigrants.

There is no way that a universal health care system can be viably implemented unless America creates a population registry that can identify the entitlements for each individual and that would have to be designed from scratch to a high degree as we can not rely on driver’s license data as the quality would be too low – too many errors.

Many illegal immigrants have both social security numbers and driver’s licenses as these were issued without rigorous control of status before 9/11. The alternative is that you had to show a US passport or a valid foreign passport with a green card to be able to register.

Another problematic task is the number of points of registration. If the registration is done by hospitals – and not a federal agency – then it is highly likely that registration fraud would be rampant. It would be very easy to trespass the control of eligibility if it is registered and determined by a hospital clerk. This supports that the eligibility has to be determined by a central administration that has a vast access to data and information about our lives, income, and medical history. If one single registration at a health care provider or hospital would guarantee you free health care for life and there is no rigorous and audited process – then it is a given that corruption, bribery, and fraud would be synonymous with the system.

This requires a significant level of political strength to confront and set the limits for who is entitled – and here comes the real problem – selling out health care to get the votes of the free riders. It is apparent that the political power of the “free” health care promise is extremely high.

A promise that can not alienate anyone as a tighter population registry would upset the Hispanic population, as many of the illegal immigrants are Hispanics – and many Hispanics might be citizens by birth but their elderly parents are not. Would the voting power of the younger Hispanics act to put pressure to extend health care to elderly that are not citizens? Yes, naturally, as every group tries to maximize its own self-interest.

The risk is, even with an enhanced population registry, that the group of entitled would expand and put additional burden on the system beyond what it was designed for. That could come though political wheeling and dealing, sheer inability from an administrative standpoint to identify groups, or systematic fraud within the system itself.

We can speculate about the outcome but the challenges are clear. This also represents a new threat to the privacy and respect for the private sphere of the citizenry as an increased population registration and control empowers the government with more accurate information about our lives and the way we live our lives. Historically, has any government when given the opportunity to get power taken that opportunity and given that power back to the people after the initial objective was reached? Governments like to stick to power.

To ensure the universal health care system is designed to function as intended it, would require procedures that would limit fraud, amass a significant amount of personal information, have access to all your medical data, and also determine who you are beyond any doubt. Just to be able to determine if you are entitled or not and, track the expenditures you generate.

The aggregation of these data could also open the floodgates for any data mining within these data under the pure excuse that it would help the universal health care system to better “serve you” and lower the costs.

To lower the costs also means to identify which procedures should not be done on which type of patients as it is not viable based on the government’s interest to optimize your productivity under your life cycle. The collection of data has a tendency to look inviting and good when we start to collect it but aggregated data and personal information creates a deep intrusion in our privacy.

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