Few would guess that the famous Clinton Health Care plan can trace its origin to the staunchly Republican Union League of Philadelphia. (1255)
Large employers, distressed by costs of employer-based health insurance, had formed a coalition to do something radical about their problem when the Clinton Health Plan burst into the news. Both groups decided to have a joint look at Health Maintenance Organizations (HMO). (1267)
After the Clinton Health Plan faded, but before new ones emerged, participants thought it safe to talk to graduate students studying the event. What emeges is a picture of big business pulling the plug. (1271)
Healthcare is mainly information processing, but utilizing computers has been a disappointment. Be prepared for high costs and continuing disappointment for decades to come. (1277)
When money was tangible you had to guard it, now that it's mostly virtual you have to verify it. Hardly anybody can, and that's a problem.
(1349)Insurance in Philadelphia
Early Philadelphia took a lead in insurance innovation. Some ideas, like life insurance, flourished. Others have faded.
The Rise and Fall of Life Insurance
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| Hammura |
Life insurance was a comparatively late arrival on the insurance scene, and grew out of experience with maritime risk pooling. The first life insurance company was the Presbyterian Ministers Fund, a Philadelphia institution if there ever was one. Only ministers could be insured by this fund, however, and the Insurance Company of North America seems to have been the first company to sell life insurance to all comers. Even the Presbyterians would have to admit that limiting the risks to a particular occupation skirted the present tendency to regard "adverse risk de-selection" as a no-no, excluding as it undoubtedly did, women and blacks. On the other hand, the concept was totally new; no insurance at all would have been attempted if it had been impossible to limit the risk.
Insurance has spread to many other topics, but it remains true that life insurance has one central unique feature. It is absolutely certain that the customer will die, the policy will be cashed in, and the only uncertainty is when it will happen. After a while it became evident that premiums would be collected until the final date, and could be invested until it happens. When the pool of customers gets large enough, there is almost perfect predictability about the average age at death, so the bigger the company the safer it should be.
There is one great flaw in this system, lying in the fact that the person who buys the policy and receives the assurances will not be around to complain about any failures of those assurances at the time the policy is cashed in. The growth of life insurance was therefore slow until the Civil War suddenly convinced people there were unpredictable risks around. Unfortunately, abuses of the system by fly-by-night companies in the last half of the Nineteenth Century led to heavy government regulation of the industry. Philadelphia's reputation for integrity rapidly expanded its dominance of insurance, but could not prevent the heavy hand of regulation from holding it down, particularly after the Populist movement came to recognize the strategic power of the state Insurance Commissioner. The commissioner was originally charged with seeing that an insurance company did not go bankrupt by charging low-ball prices, but in time that mandate gradually changed to holding down the premiums. In the insurance capital of the country, stockholder returns and executive salaries gradually went from too fat to too thin. Insurance companies, one by one, moved to other states or at least to other counties. It is now possible to wander through the abandoned executive suites on the top floors of the former insurance palaces, and feel as though you were at Luxor, wandering through the abandoned Egyptian temples of Karnak.
To be fair about it, it is also possible to have a real estate agent take you through the former estates of life insurance entrepreneurs whose business practices amply justified a regulatory over-reaction. Plenty of old retired lawyers will be glad to tell you of the times they wrote new insurance laws for their insurance client, who just forwarded them to Harrisburg for enactment -- before the Second World War. But the destruction of the industry does no one any good, and it is surely fair to say that excessive profits were the lesser of the two evils.
Setting the regulatory risk to one side, the life expectancy of Americans has dramatically lengthened in the past century, nearly eight years in the past fifty years. Such unpredictable reduction of risk ought to lead to increased profitability for the insurer, but it also leads to a shift to less profitable term insurance. The young buyer can see a period of several decades of dependent children, followed by a long period of life when the death of the client is a less tragic future. Indeed, living too long becomes a concern, outliving the accumulated savings. When the investment manager of the company is faced with a choice of more safety or greater investment return, he must produce a mixture of the two, an impossible assignment. And so, insurance business drops off as clients wander away toward more glowing promises, or at least toward promises unconstrained by the growls of a consumer-driven insurance commissioner. During the Great Depression of the 1930s, only two life insurance companies went bankrupt, so at least the old way of running these companies produced safety. But the 1930s now seem a long time ago.
http://www.philadelphia-reflections.com/blog/974.htm
A Fair Plan for Fire Insurance (and Health Insurance, too?)
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| Philadelphia Fire Insurance Company |
The Fair Plan (sixth and Chestnut, Philadelphia) is a fire insurance company with unusual features. Some day, it is to be hoped some scholar will write a book about the highly mixed motives of the people who created it, compared with the unexpected ways it did or did not fulfill original expectations, of both its creators and its enemies. The Fair Plan only issues fire insurance on houses, when other insurance companies have turned that house down as a bad risk. Such risky houses would normally draw higher premiums for fire insurance, but the Fair Plan insures these risky houses at normal rates. Therefore, it loses money, which is made up by the other regular fire insurance companies in the state in proportion to the business they do, obviously thus raising the price of fire insurance for everybody. But in this way, Pennsylvania guarantees that everybody can get fire insurance. Is this a good idea? Might this be a way to give health insurance to all those people who can't get health insurance? Let's talk about the Fair Plan.
We'll set aside discussion of whether the Fair Plan was a product of cynical politicians pandering for votes, or whether it was a noble gesture for fairness and equality for our poorer citizens. It very likely had elements of both things in it, but that doesn't matter any more. It's a form of hidden taxation, of course, and it has the result of making Fire Insurance seem more expensive in Pennsylvania than in other places that do their social work with real taxes. Go too far with that, and you will end up buying your insurance in Bermuda instead of boarded-up former fire insurance companies of Pennsylvania.
As the story is now told, the other insurance companies had a choice of taking the "substandard" applicants in turn (Assigned Risk) or creating a new company (Joint Underwriting Association). They decided they preferred the JUA. So a company was formed which specializes in nothing but bad risks, including a few arsonists and other unmentionables, but mostly poor people in bad neighborhoods. If we are ever thinking about following the Fair Plan model in health insurance, it does run the risk of being accused of creating a two-class healthcare system. But no one seems to bring up that rhetoric about fire insurance, primarily because there is very little intrusion of politics in the matter, This system is given orders to spread the extra cost of universal fire insurance out to the policy holders of all fire insurance, and it does it very efficiently, without extending its mandate into setting firefighter wages, running fire departments or repainting scorched woodwork. The fundamental decision was whether to spend Society's money this way. Once that decision is taken, the task is to do it efficiently.
After the Fair Plan had been running for ten or so years, a funny thing emerged. There were years when the Fair Plan made a profit! The fire insurance industry had absorbed the Fair Plan into their scheme of things, and felt free to increase the number of applicants they rejected, during years when money was tight or business was bad. In this way, a better class of applicant came to the Fair Plan, which made the plan more profitable. When economic conditions changed, this reversed, and the Fair Plan again lost money. For this reason, the insurance industry is very anxious not to let the Fair Plan become political, or get tangled up in extraneous worthy ventures. And that's probably a good model, too, if we are considering adopting the system for the health insurance world.
Since this simple, tested idea never seems to get into the discussion phase of present agonizing over health insurance for the uninsured, it's one clear sign that such discussions at present are not terribly serious.
http://www.philadelphia-reflections.com/blog/984.htm
New Health Care Reform Proposal
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| Lyndon Johnson |
In 1965, Lyndon Johnson caused the enactment of two amendments to the Social Security Act, Titles 18 and 19. Title 18 is now called Medicare (for the elderly), and Title 19 is called Medicaid (for poor people). These two laws were cobbled together as negotiated compromises; the history of this contraption no longer concerns us. The outcome is that Congress created a Federal program for the elderly, and a state-administered program for the poor, partly financed by the states but mostly financed by federal taxes. The states howl that Medicaid is an unfunded mandate, and the Federal bureaucracy snarls that the states are mismanaging someone else's money. The welfare patients are bitter about second-class treatment, and doctors have as little to do with this system as possible. The focus of this article however is on the harmful effect of Medicaid on hospitals. Of all the stakeholders affected by Medicaid, the hospitals have historically been the best treated. Nevertheless, it has brought them to the brink of ruin, most of them acknowledge it, and matters are so hopelessly snarled that it is time to call for transfer of the medical components of Medicaid to Medicare. In plain language, that means replacing state administration with federal Medicare management.
It may seem peculiar to call for extracting the medical components from a medical program. Forty years of creeping modifications in fifty different state directions have resulted in many state Medicaid programs spending more on nursing homes, home care, and various educational programs -- than on the activities of doctors and hospitals as originally intended. After forty years, this creeping mandate shows no sign of abating. It may never abate, but certain parts of it could rather easily be transferred to federal Medicare program, leaving the innovative fringes to fight their own battles with state legislatures, arguing those merits independently of this issue.
From the hospital point of view, Medicaid pays substantially (20-40%) less than the costs it claims to cover. The chiseling is worse in some states than others, but it is hard to find a single state Medicaid program which clearly pays its costs in full. Medicare is pretty tight-fisted, too, but at least a majority of knowledgeable insiders would admit it comes pretty close to paying its audited costs. Everybody else pays more than costs, but for this discussion that is irrelevant. Government as a whole is not paying its fair share, the state-administered portion is responsible, and there was never any non-political justification for having two programs. So, combine them. Other components of Medicaid, however worthy in intent or effect, are the responsibility of the various states which created them. When the states have got non-hospital, non-doctor issues carved out and audited, the merits of federal funding can be examined.
Two other features of the Medicaid mess can be mentioned, so long as they are not allowed to befuddle the main message of program consolidation. In general, the proportion of elderly or poor clients in rural hospitals does not materially differ from the proportion of such clients in urban hospitals. There is institutional variation, of course, but the principal distinguishing feature is that small rural hospitals are necessarily semi-monopolies within fifty-mile districts, whereas urban hospitals face competition more directly. State governments therefore are unable to impose discounts on rural hospitals with the same leverage and severity. Seeing this, urban hospitals have often applied political pressure on the legislature to extend comparable relief to them. Since local labor and living costs are lower in rural areas, an excuse is created to word regulations and state laws in a way which recognizes parity in the ratio of audited costs to charges rather than the charges or costs themselves. Quite often, hospital accountants can outwit legislatures in these obscurities, leading to rather obscenely high list prices for hospital services, to shift the ratio. Although it has the temporary advantage of further obscuring public market prices for such services, it constitutes a serious injury to uninsured patients. Other persons, who might perceive no personal need for insurance, are driven to buy it in order to protect themselves from gouging.
Medicare itself is certainly not perfect. The largest remaining issue confounding hospital charges can be traced back to weaknesses of a 1983 Medicare law, the Budget Reconciliation Act. Reimbursement legislation traditionally overpays initially, with every intention of paring prices down later. The providers, hardened to this maneuver, try to stonewall all subsequent amendments as long as they can. In this case, the overpayments have persisted so long they have become basic assumptions, triggering internal re-adjustments which make resolution still more difficult. A number of hospitals have been severely fined for violating the spirit of this law, however close they may come to obeying the letter of it. On the other hand, other courts have held that a situation which has been allowed to persist so long can be deemed to be settled law. The result is a predicament which is quite unnecessary, and might be rather readily corrected.
But let's not wander too far from the basic proposal. The corresponding (doctor and hospital) portions of Medicaid should be consolidated into Medicare, with remaining issues settled independently. Consolidating two government programs may not quite be the "single payer" concept that others had in mind, but it resolves most of the legitimate problems which provoked that mysterious slogan.
http://www.philadelphia-reflections.com/blog/1164.htm
Insuring the Uninsured is Not Entirely a Health Issue
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| James Madison |
shrewdly observed that people could and would restrain state taxation by moving to a neighboring state. The founding fathers never contemplated health insurance or Medicaid, of course, but the same principle applies there in reverse. If one state gets too generous with health and welfare benefits, people in neighboring states will nowadays hear of it and get on a bus to relocate advantageously. A flood of new low-income citizens may or may not be what a particular state wants, depending on local economic conditions.
For example during the great depression of the 1930s,
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| The Great Depression |
Unemployment was so widespread that no state dared attract still more of it with generous welfare benefits. On the other hand, during the recovery period that followed World War II, the industrial northern states definitely did attract cheap labor from the southern states, using better health care, freely available, along with better unemployment benefits. In each case, employers alternate between wanting cheap labor or low taxes, while labor representatives relax or toughen their resistance to cheap competition. Politicians are always looking for the argument that carries the most votes. If you want to understand the persistance of employer-based health insurance alongside unobtainable health insurance for others, look into this trio of motivations.
While it's true state legislatures must tend to the infrastructure, crime conditions and education, they can in the main be regarded as debating societies between employers and labor. There is some, but not much, difference between Republicans and Democrats on the Medicaid issue. A Democratic Governor will welcome an influx of low-income voters who will normally vote for his party, but labor unions will soon remind him that enough is enough. A Republican Governor will gladly supply cheap labor for the state's employers, until rising taxes bring an end to his support. Since the financial stability of the local hospital can be badly jarred by instability of Medicaid payments, doctors soon get annoyed with the misallignment between state motives and the welfare of their patients. It is not much of an exaggeration, that state coffers might be overflowing with surplus, but the budget of Medicaid will not rise a penny if it would attract poverty migrants from neighboring states during a period of high unemployment.
The obvious solution is a federal one, imposing uniform standards. But think that over a little before you jump at it. If the federal government pays all of Medicaid costs, it is going to want to administer the program. All states resist that idea, more so if local and federal political domination is in conflict. Small states will universally be fearful of being overwhelmed by large neighbors, particularly when they have achieved advantageous niches. The disastrous condition of the auto industry might persuade Michigan to agree, but Tennessee and other states with Japanese car plants might disagree. As you get close to the border of large states, hospitals near the border can often attract many patients from the other state; strange political bedfellows can link arms in Congress when you might not expect it.
None of this, absolutely none of it, has to do directly with medical care. But the quality of health care is strongly affected, and doctors are sick of hearing about poor sick folks when the real issue is labor availability. The voice is Jacob's voice, but the hand -- is the hand of Esau.
http://www.philadelphia-reflections.com/blog/1180.htm
What Good Did Medicare Do?
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| Amy Finklestein |
An article in the Wall Street Journal by Amy Finkelstein of MIT describes evidence that Medicare seemingly produced no provable increase in longevity during the period she studied, which was 1965 to 1975. Thinking back to that time in the practice of Medicine, the conclusion while surprising seems entirely plausible after a little reflection. Our system of charity care was good enough so I really doubt if very many people were allowed to die prematurely because of poverty in 1965, at least in Philadelphia. Charity took care of them. Elective repairs were an entirely different matter, however. Working in charity clinics at the time, I well remember that almost every patient seemed to have bad teeth, an unrepaired hernia, untreated varicose veins, or a positive Wasserman and similar threatening but non-fatal conditions. There existed a vast backlog of untreated non-fatal conditions, almost to the point where it seemed we would never catch up, but of course we did eventually catch up. Whatever the costs of the government health programs during that decade, they mainly reflect that huge backlog project of correcting health impairments which were nevertheless not an immediate threat to life, in addition to lifting the former financial burden from our charity institutions of treating conditions which were undeniably life-threatening.
From this historical experience it can be deduced that any new proposals for modifying or reforming the medical system should start with the medical situation as we happen to find it. If a great many people are dying of treatable conditions as they are in Asia and Africa today, then it is likely that extra finance will promptly reflect itself as improved population longevity. If that's not the case and other institutions are providing emergency care, you must then look among the backlogs of untreated conditions -- in that locality -- for a justification of new costs and disruption. Since even the non-urgent backlog in America has now been almost totally eliminated, something else must be proposed as a goal for legitimate improvement. Otherwise, you would have to be so far-sighted that you make a decision to spend an extra 10% or so of the Gross Domestic Product for benefits, every year for ten years, until some unpredictable long-term benefits appear. It's difficult to imagine our political process launching forth on such an adventure.
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| NIH Map |
However, let's continue to look at what did happen, to see what arguments we might have been imaginative enough to adopt. First of all, we can see that the quality of life of the elderly generation, the one I now belong to, has been enormously enhanced by joint replacement and cataract repair --significantly reducing wheelchair crippling and blindness. Neither of these benefactions can be said to result from a brilliant insight by a genius, but rather a slow, incremental process of adding small enhancements until the desirable result becomes standard practice. This sort of development, as in research and development, is very likely a response to a general increase in the funding of the provider community, as contrasted with targetted extra appropriations to the NIH for example. A plausible case can be made for asserting that the undesignated increased funding of the early Medicare program gave tens of thousands of elderly people -- in the next generation -- a comfortable life rather than a miserable one, several decades sooner than a more frugal medical system would have done.
Secondly, life expectancy did finally increase substantially, perhaps extending an average of ten or more years of life in the period subsequent to the enactment of the Medicare Act. But it did so only after a fifteen or twenty-year lag. It's uncertain how much we may credit Medicare with this benefit, however; the increased basic research funding of the National Institutes of Health seems plausibly responsible. However, at least half of the longevity benefit must be credited to research efforts in the private pharmaceutical industry, which was funded in large measure by Medicare dollars, recirculated through drug purchases. But there's restrained exuberance about even these miracles, which were surely the greatest medical advances in human history.
We have greatly extended the comfortable, useful life of our population, but now must grudgingly admit we directed these benefits to a group of people who are no longer engaged in economic activity. Unemployable people have been transformed into employable ones, but sadly we have mainly given a twenty year vacation to people who are capable of doing productive work, but don't. Instead, we import millions of foreigners to do the work, or outsource it, which accomplishes much the same result without the demographic disruptions. Worse still, we may find these people will often outlive their savings, so the extra longevity could result in years of economic misery and dispair, not necessarily an improvement on the physical and medical varieties. In other words, if we had possessed the foresight to see that ultimately improved longevity and life quality was a worthwhile goal, we should then have simultaneously taken the steps to improve economic circumstances which make that medical miracle seem worthwhile.
As we now consider further steps to over fund medical care, or reform it, or make it universal or whatever, perhaps there will be time to consider whether other improvements in American life are needed before there is a net beneficial effect. Either undertaken simultaneously with the health care financing initiatives, or even possibly, instead of them.
http://www.philadelphia-reflections.com/blog/1183.htm
Community Volunteers in Medicine
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| Comm Volu In Medicine |
Mary Wirshup has a very different medical background from mine, but she's my kind of doctor. I couldn't help wishing, as she addressed our urban luncheon club, there could be thousands more like her, even while understanding more fully than she seems to, the reasons why doctors are driven from her behavior model. As we parted, it felt like saying a last goodbye to the Spartans marching to Thermopylae.
As 46,000 medically uninsured persons in Chester County get sickness and injuries, they know that a Federal Law prohibits a hospital accident room from refusing to see them, so ways are found to shunt patients to the CVIM free clinic, run by volunteers. This law is in turn a response to a government-created situation where a hospital which "accepts" patients must keep them. Any economics teacher can tell you that supply/demand issues are best addressed by price adjustment, so price controls in whatever guise lead to shortages. I must say I have little sympathy with the devious strategies which hospitals often employ to disguise their rejection of uninsured patients. At the same time, I know a lifeboat will sink if too many climb aboard. Nevertheless, the semantic switch from lack of insurance to lack of care implies that only more insurance can surmount the barriers to care, which is absurd. For one thing, I know too many hospital administrators who are paid a million dollars a year, and one who is paid two million. And at least two health insurance executives are in the newspapers with net worth over a billion -- yes, that's billion with a b. We have reached a point where reducing all physician income to zero would only reduce "healthcare" costs by 10%. As I look at Dr. Wirshup's modest clothing I can only surmise she plans to continue her modest living until she is 80 years old, after which her savings might see her out. Squeezing physician reimbursement is not intended to save significant money, nor intended to restore physician incomes to more equitable levels. It is intended to address the oversupply of physicians without confronting either the universities or the foreign trained lobby.
The elite tranche of medical schools do their part to relieve physician oversupply without reducing class size, through the encouragement of their students to go into research. I was well along at the National Institutes of Health before I finally decided I had not gone into medical school with that goal, and returned to teaching and patient care in a more satisfying model not too different from CVIM's obviously Pennsylvania Dutch spirit. The Amish at the far western end of Chester County reject the whole idea of insurance; their most characteristic statement is "Don't send me no bills." That attitude is rather a contrast with the shiny housing and automobiles in the Silicon Valley developments of Southern Chester County, or even with some rather bewildered Quaker farm families scattered over the rest of the county next to the horsey set. Chester County is America.
On Second Street in Society Hill, next to the park where William Penn's house stood and a few feet from Bookbinders, is the house of Dr. Thomas Bond. Bond conceived the idea of building the first hospital in America and with Franklin's publicity machine succeeded in getting it built, to care for the "sick poor". Dr. Bond started a second enduring tradition as well. When the Legislature expressed doubt that the institution was sustainable, he pledged to convince the local medical profession to serve the poor without charge. Some of the legislators who voted for the measure did so in the belief that charity care would never appear, so the gesture would be without cost. The physicians did indeed come forward, in sufficient numbers to run many institutions for two hundred years. In 1965 health insurance made its national appearance, and has regarded the benchmark low costs of charity care as a threat, ever since.
WWW.Philadelphia-Reflections.com/blog/1250.htm
http://www.philadelphia-reflections.com/blog/1250.htm
Clinton Health Plan Starts at the Union League
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| Robert Reinecke |
Robert Reinecke MD and I were members of the American Medical Association House of Delegates for twenty or so years, members of the College of Cardinals, as it were. We were also members of the Colonel's Table at the Philadelphia Union League, a sort of club within the club. With his offices at Wills Eye Hospital only two blocks from mine at the Pennsylvania Hospital, we often walked together to the club for lunch. Since the AMA House takes about three hundred votes on health policy matters every six months, there were lots and lots of topics to discuss during our five-block walks.
One day, he had an idea for an AMA proposal, stimulated by dissatisfaction with the common practice of Health Maintenance Organizations (HMO) to force the patients to see a nurse before they could see a doctor. In fact, if the nurse didn't feel you needed to see a doctor, you couldn't. Bob didn't like that juvenile system at all, and as an ophthalmologist he furthermore disliked the related practice of requiring the patient to see a general practitioner before getting permission to see an ophthalmologist. You can see his point that more money was spent preventing a visit to the eye doctor than it would cost to go see one. So, he had a plan. It grew out of the Sixth Amendment to the Constitution, which says that every criminal is entitled to see a lawyer. We need another Constitutional Amendment, that says everybody is entitled to see a doctor. Well, no. That doesn't sound right to me, Bob; you'd better think that one through a little more.
He did think about it; he seemed to think about it every day , and every time he thought about it, it sounded better. To me, it was just one of those impulses we all get, and if I just remained politely resistant, it would eventually go away. As it might have, except he got a couple of visitors.
Bob represents the Ophthalmologists at the AMÅ, because he is an eminent scientist, a perfect gentleman, and a former President of the Academy of Ophthalmology. You could tell from the way eye doctors deferred to him at the AMA that his opinions mattered a lot. Harris Wofford had been appointed to the Senate seat vacated when Jack Heintz was killed in an airplane accident, was running for election to the unexpired term, and had visited the office of the Academy of Ophthalmology in Washington, soliciting campaign contributions. The office told him they couldn't consider such an idea about a Pennsylvania election, without the endorsement of Dr. Reinecke. So, he and James Carville came to visit at Wills Eye Hospital.
The whole conversation can be easily imagined, with nobody quite saying what was frankly on his mind, but ending up with a modest contribution. As the meeting drew to a close, Bob interjected that he had a proposal for reform of health care; Wofford was in a position where he had to be polite and non-committal, so he promised to have his staff look into the matter and started to edge toward the door. But bald little Carville almost soared through the ceiling. "That's it. That's our campaign slogan. If every crook gets a free lawyer, why can't every American get a free doctor!!" Well, that wasn't coming out exactly the way it started, but now there was no stopping it.
Wofford's opponent ran an indolent, even arrogant, campaign, probably the main reason Wofford beat him in the election. But Wofford went into every nook and cranny of Pennsylvania trumpeting the message that if criminals are entitled to lawyers, all citizens are surely entitled to health care. That's one further step away from the original intent, and who knows what further bounces the ball would take. Wofford's victory was proclaimed an upset of mamouth proportions, and the news was transmitted to Presidential Candidate Clinton that Pennsylvania had uncovered a massive groundswell in favor of National Health Insurance. That's a lot of spin before it even reached the spinmeister. Anyway, Clinton picked up the slogan, and made plans to incorporate it into his presidency as his legacy program for the American people.
http://www.philadelphia-reflections.com/blog/1255.htm
Picking Up the Usual Suspects
The federal government directly controls about half of health care spending, and makes rules affecting most of the rest.
|
| Claude Rain |
Every group or business which receives some of this money is alert not to lose it. Many other groups are alert for openings to get more of it. All employ sentries in Washington. False alarms are frequent, stealth attacks are a constant threat, constituents paying the bills demand immediate reassurances. Members of Congress seldom initiate a disturbance unless someone from inside an industry brings it to them. Consequently, when proposals do surface, and seem to be serious, the question to be immediately answered is -- who's behind this? If you know who starts something, you can readily imagine the motive, assess the political strength, decide how to respond. With what little was generally known about the Clinton Health Care Plan of 1993, it was easy to imagine a host of people with some motive, but very hard to say who was actually pushing one. Must be a Democrat, obviously, but not immediately obvious which of several possibilities was the real agitator.
Health insurance companies would always seem likely to have proposals about national health insurance. Blue Cross dominates the market in large geographical markets, mainly East Coast, and would seem fearful to lose that dominance in a major upheaval. But other market areas of the country are dominated by commercial insurance companies who might seek to upend the Blue Cross monopoly, but whose form of business would be even more seriously threatened by health insurance innovations. Most commercial health insurance was written by large life insurance companies who regard health insurance as a small sideline for the convenience of their industrial customers. Blue Cross was somewhat more comfortable with government work, particularly since the 1965 Medicare and Medicaid programs were patterned after them. However, Blue Cross was non-profit, thus lacking in incentives, and historically controlled by health care providers. That is, Blue Cross was formed by and dominated by the hospital associations, and Blue Shield was formed by and dominated by medical societies. Since doctors and hospitals were very prompt in announcing their deep concerns and uncertainties about the Clinton Plan, Blue Organizations seemed unlikely to make daring proposals so likely to provoke trouble at home.
Not that some doctors and some hospitals didn't try to see what might be made of this opportunity. At the American Medical Association, certain leaders known to have Blue Shield involvement offered conciliatory remarks about waiting for further details before taking a stance, but were abruptly halted by a general opinion that things had apparently already gone too far for substantive negotiation. Much the same thing occurred at the Hospital Association; the winners had too much to lose, the losers had too little influence to matter, and nobody stepped up to claim an inside track. Hospital trustees didn't know what was going on, strongly suspected something was going on, and didn't like either situation. If the doctors got mad enough at a hospital, they could ruin it, and if hospitals got mad enough at Blue Cross, it too was ruined. The main strength behind the Blue Cross monopoly position was the secret discount provided to them by hospitals, which was refused to competitor insurance companies, but could easily be extended in the interest of fairness. If need be. The commercial competitors wanted that discount much more than they wanted new insurance models.
There is one subset of doctors and hospitals that might be suspected of generating a sweeping revision of the medical system -- academia. Medical schools think of themselves as the appropriate source of vision about the profession they are training, and they run large prestigious hospitals. Their heavy dependence on government research grants, teaching subsidies, and tuition support programs puts them in constant contact with Washington bureaucracy and politics; propinquity is a great match-maker. Their style of salaried faculty creates estrangement from making a living by being paid fees for specified services, and they are reasonably comfortable with the flaws and techniques of professional promotion within a large organization. So, a slogan which has been attributed to Wilbur Cohen himself does not greatly jar on their ears. The author of the Medicare Act is said to have announced that the entire medical system of America could be accommodated by thirty or forty Mayo Clinics. Twist that just a little, and you are imagining he said forty or fifty medical school teaching hospitals. The briefest contemplation and rebuttal will knock down that proposal, such as pointing out that we have several times that many teaching hospitals at present without achieving anything like the nation-wide coverage envisioned. After absorbing the administrative chaos of readjusting to that model, you would confront the old repeated history of grossly overestimating, and then grossly underestimating, the future manpower needs of a medical system in the process of constant scientific turmoil. Supppose you built the fifty Mayo Clinics and found you needed two hundred? Suppose you built two hundred and found you needed seventy? And then, finally, remember that each big city could expect to contain one of these organizations, but the fewer of them there are, the longer the distance everyone else would have to travel to get to them. No one has even ventured to speculate how you could go about doing such a thing, let alone doing it three or four times to get it right. But, but. The infeasibility of academia at the center of medical care delivery does not eliminate the possibility that the idea underlying the Clinton Health Plan may have originated in academia, or that academia might support some similar proposal with something else at its center.
Since it was soon clear that the traditional "players" in the health policy arena were unlikely to be sponsoring some self-serving policy that might masquerade as the Clinton Health Plan, the search went on. There were a number of professional groups within the medical community who had traditionally chafed at domination of the hierarchy by physician leadership. Nurses, hospital administrators, pharmaceutical companies, druggists, corporate human resources officers, public health officials, social workers, biology teachers all represented groups who derived status with the public by displaying inside knowledge of medicine. But all of them fell silent when a physician entered the room, and tended to shift their emphasis to faults of the "system" or the "industry". Their Washington representatives placed their emphasis on changes in the existing system which might elevate the prestige and income of the members, and were particularly vigilant for system modifications intended for other purposes which might nevertheless create advantageous loopholes for the members. All of this is normal striving in the good ole' American way, a polite variant of the mixture of bellicosity and restraint usually seen in the Union movement. These people wanted to improve their income and working conditions, but were ultimately quite hesitant about radical proposals that might sink the ship. A quick survey showed they were not supporting any particular reform project, even though they could be counted on to support any reform project. Furthermore, they consistently injured their political strength by extending beyond economic goals to issues like radical feminism in the case of nurses, or direct advertising to the public as in the case of the drug companies, or practicing medicine without a license in the case of limited-license practitioners. These people had votes, influence and lobbyists, but they did not have a national project for health care reform of their own devising, and they surely were not the people behind the Clinton Plan.
During the six months before The Plan was presented to Congress and the Public, a White House task force said to consist of five hundred secret members was meeting under the direction of President Clinton's wife Hillary. No doubt part of their purpose was to give Hillary a public platform on which to show her stuff, with the idea of someday succeeding her husband as President sort of in the back of her mind. But most of it was also quite practical; somebody had to figure out what this proposal was going to be, and newly elected Bill had to spend most of his time learning how to run the rest of the country. Buried in here was an efficiency principle too; the staff members of every important congressman and senator were involved in the process, making the deals and surfacing the political angles before things had to come down to votes and filibusters. Meanwhile, the rest of the country had to wait outside closed doors, fed by rumors and spin.
How well I remember one public seminar on the subject during this period of suspense. The audience was filled with people thought to be influential with the public, the usual suspects in that sense, too. Representatives of various interest groups were seated up front at a table, and for some reason I had been picked to represent doctors. Next to me was a druggist who had made a billion dollars starting an HMO; it was intriguing to watch how many well-dressed women with no interest in health care paraded up to the table to show their stuff to the billionaire, while we waited for the meeting to begin. All of the usual suspects of Philadelphia medical care were at the table, each of us wondering what the other was going to say. When some last Very Important Person had wandered in and taken a seat, it was time to begin. The moderator told a funny story or two, and then asked each one of us what we thought of the Clinton Health Plan. One by one, to the utter amazement of us all, we each explained how we were opposed to it.
So obviously this proposal was not coming from the usual agitators. But, remember, somebody was surely behind it. Before we take a stab at that mystery, let's humanize the usual suspects by describing a few of them.
http://www.philadelphia-reflections.com/blog/1265.htm
Equal Pay for Equal Work
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| American Medical Assocation |
The House of Delegates of the American Medical Association holds a five day convention twice a year. The meetings last from 7 in the morning until midnight, although the main sessions in the auditorium only last eight hours a day during three days. The rest of the time is consumed with meals, committee meetings, geographical caucuses, and even cocktail parties. Newcomers often object to the numerous parties until they come to see that these are merely committee meetings in a different form, with different subsets of the organization picking up the necessary costs. This group of workaholics has to vote on several hundred issues each session, and most Delegates have little advance opinion when they enter the headquarters hotel on the first day. But after meeting with their specialty in one committee, and members of their geographical region in another, and members of their medical school alumni association in yet another, and with issue oriented groups, political allies, and other layers of an overlapping matrix day after day -- by the time the vote is actually called for, most Delegates could safely predict the correct outcome with very few exceptions. The AMA works at its similar job with far greater intensity than Congress does, because Congress has all year to do it, while the doctors have to go home to make a living. Don't worry about the parties, they are really work sessions for everyone except rank newcomers, outsiders, visitors, and wives. What is perhaps more worrisome is the rare occasion when just about every delegate arrives with one opinion, and is persuaded by the leadership to adopt the reverse. That can only happen if new information is suddenly revealed, with little time to check its accuracy.
There are usually fifteen or so parties every night, hosted by large state delegations, large specialty assemblies, and coalitions of smaller groups. Fifteen drinks a night would be quite a bit for most folks, and some newcomers are duped into trying to be polite about it. The rest of us take the proffered drink, walk over to a nearby plant stand and dump it. I hate to think how many potted palms I have fried that way. Each delegation has its own system of organizing these minuets, and I'll try to describe the Pennsylania system.
Nobody will come to your party if you don't go to theirs, so we make a list and divide the group into those who "travel" to the parties of other states, and those who remain to host our own party, "at the door". Everyone is expected to wear a name tag, containing your name in large type underneath which is your caucus designation, in my case "Pennsylvania". The older members instruct the newer ones to put the name tag just under their right shoulder. That way, you can seem to be looking at the hand you are shaking, while freshening your recollection of who in the world you are meeting. You can of course do anything you please, but time is short for a the transaction of a lot of business, and it's just easier to do routine things the regulation way, and get on with it.
On the evening in question, I was "at the door". The formula, repeated many times, was to extend a hand of greeting and recite, "Welcome to Pennsylvania. Are you looking for some friend in particular? Let me see that you have a drink. Come on in and meet my fellow delegate, Scotty Donaldson." You can shepherd a lot of people more or less gracefully if you reduce the formalities to a routine. After several people had been brought in under the tent, a man with highly polished shoes came up, wearing a name tag that said, "Blue Cross of America". He was greeted, his hand pumped, a drink procured, and was introduced to Scotty, our most famous extrovert. I quickly turned to the next person at the door.
Well, this lady was six inches taller than I am, and fifty pounds lighter. She wore a name tag, identifying her as President of some Nurses Association, "Welcome to Pennsylvania! Is there someone from Pennsylvania you know or would like to meet? Can I......" The apparition didn't even look at me as she brushed past through the door. Heading straight for the gentleman from Blue Cross, she poked her index finger into his chest, stopped him in mid-sentence as he talked to Scotty.
"What I want to know, " she announced to this startled man, "Is when are you people in Blue Cross going to pay nurses as much as you pay doctors?" And here I must admit I have to give this guy credit for unperturbability.
"Well, maam," he said cheerfully, "I think that's going to be quite some time."
http://www.philadelphia-reflections.com/blog/1266.htm
A New Gorilla in the Cage
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| William Clinton |
News reports began to surface that big business was talking to Democrats in the White House about major revisions in the national health delivery system. That in itself was news, because big business normally forbids its employees to talk with regulators, and does not commonly welcome any new regulations. But the the Clinton Administration was looking for political allies, while the business community was willing to examine proposals to lighten the burden of employer-based health insurance. The discussions soon probed whether a common system might reduce government costs of Medicare and Medicaid, and simultaneously reduce the costs of employer-paid health insurance. For years, big business had been suspicious that the health community had somehow forced employers to pay an unfairly large share of other people's health costs, through some arcane manipulation of hospital cost accounting. Their term was cost shifting.
The administrators of government programs believed the same thing was happening to them. Since the only group left to benefit were the uninsured, the arithmetic was somehow wrong. A 7% population group, most of whom are young and healthy, could not account for annual premium jumps far in excess of the cost of living, occasionally as much as 30% in one year. In both governmental and business minds, the main beneficiaries of cost shifting must be the hospitals themselves, and the doctors who control them. Somehow, it seems not to have occurred to them that this news was brought to them by their fiscal agents, the health insurance companies, and was therefore likely slanted to avoid attention to middle-man costs. Whenever major negotiations are to be held, CEOs and top politicians take over to make the deals, necessarily basing their judgments on filtered information. Since this is a familiar situation, they employ high-priced consultants.
|
| Clark Havighurst |
The five hundred secret members of Mrs. Clinton's task force were willing to listen to the ideas of anyone who had political clout, especially staff members of Congressional committee chairmen. But these people had been struggling with the problem for fifty years to no avail, so the emphasis had to be on change, on big new ideas. Universities and think tanks were especially welcome to comment, and
Clark Havighurst was particularly influential. But there had to be some kind of track record, some practical experience on which to base such an enormous national initiative. The best available model was the Health Maintenance Organization (HMO), whose most famous proponent was Paul Ellwood, a former midwestern pediatric neurologist who had gravitated into health insurance consulting. Ellwood had a vacation home in Jackson Hole, Wyoming, where he then gathered the non-govermental component of this movement into his front parlor. Insurance companies, human resources officials, academics, and in later stages the newsmedia, were given the Word, an opportunity to criticise, and an opportunity to have their views coordinated with the government group in Washington. There was a rough division of labor, establishing general regions of dominance; but ultimately, the two components intended to fit together in a unified health system for the whole country, bar none. The business community began to see that inevitably in that case the final overarching decisions would be made in Congress.
http://www.philadelphia-reflections.com/blog/1267.htm
Health Maintenance Organizations (HMO)
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| HMO |
It's an ancient wrangle whether a manufacturer should actually own its suppliers, or the reverse; or instead whether it's healthier for industry components to stand at arms length from each other. At issue is not only what is best, but what is fair. If industry mergers seem sufficiently unfair, it will be proposed they should be illegal. That's the main substance of a lot of antitrust argument. Unfortunately, what is valid in good times may be reversed in a downturn. A prosperous supplier of materials often acts as a "cash cow", saving a merged enterprise from bankruptcy. Unfortunately, within a different economic climate one badly failing supplier can bring down the whole merged enterprise. There's also organizational friction; a temporarily prosperous unit may get to thinking it should boss the less prosperous units around. At the very least, the cash cow resists use of its cash reserves to help "losers". Several centuries of experience have thus left a minefield of old laws, traditions, and ingrained prejudice to undermine any broad standards for what is best. In no field is this more true than the Medical Industry.
Eighty years ago in Houston, the first Blue Cross health insurance company was started for a single group of school teachers to pay for service in a single hospital. That expanded to other subscribers and other hospitals, soon making it more workable for insurance, subscribers and hospitals to stand at arms length, allowing for a variety of local combinations. During World War II, combat in the Pacific led shipyards to be built on the West Coast, but westward migration of steel workers was hampered by lack of local medical facilities for them and their families. Taking advantage of the loophole provided in the wartime wage and price controls, Kaiser Industries attracted medical personnel by building hospitals, paying salaries, and offering physicians ready-made medical practices. Because of various licensing laws, Kaiser's medical enterprise was divided into two corporation, Kaiser and Permanente, so a specialized corporation within the Kaiser-Permanente Foundation could accommodate the licensed practitioners. The salaried nature of the physician organization immediately caused trouble with local fee-for-service practitioners, who were thus excluded from a large population in their neighborhood when they could not readily adjust to varying mixtures of the two payment methods. Their reaction, led by an obstetrician in Stockton, California, was also to organize dual-corporation structures which were exclusively fee-for service. Because Kaiser had a Foundation, they also called their organizations Foundations for Medical Care. Then, as now, it proved difficult to run a practice with two different reimbursement philosophies in the same waiting room; in time, friction between the two styles tended to increase as doctors who were more comfortable with each style tended to segregate themselves. Since offers of salaries are more immediately attractive to newly-trained physicians, they flocked to California to serve the steelworkers who were in need of doctors. Fee for service, on the other hand, allowed the gradual assembly of a more durable practice composed of patients who could test what they liked before making a permanent allegiance. Essentially, the transients went to Kaiser, more permanent settlers used fee-for-service.
Thus, it came about that several models for health care reform were tested in a few smallish towns of central California. These demonstration experiments may perhaps not meet everyone's standard for scientific purity, but at least they were public examples with the dumber features knocked away. They certainly provided a laboratory where ideas could develop about topics that otherwise were merely opinions and unsupported conjecture. The Foundations demonstrated that physician-dominated organizations could contain costs and maintain quality in a satisfactory way; there had previously been doubt about their ability to contain cost. The Kaiser organization showed that salaried practice performed acceptably as well, both to most staff physicians and to a majority of the patients; there had been doubt about the willingness of the public to limit choices to a panel of assigned physicians, mostly young and usually from elsewhere. Finally, the two systems seemed to be able to live together more or less peacefully; indeed, the California public seemed reassured that two systems apparently kept each other in check.
The first main difference rested on the system of quality control. The local Foundations developed review systems based on peer review and peer pressure; these worked remarkably well, particularly in constraining non-physician costs like pharmacy, tests, and hospitalizations. Cost and quality control in the Kaiser system was more rule-bound and quicker to apply discipline, kept within bounds however by the ability of both patients and staff to jump ship for the other system. Aside from professional peer review, the Kaiser system experimented with owning hospitals, laboratories, pharmacies. Here, the experience directly paralleled the experience of manufacturing industry with its suppliers; when reimbursement was generous suppliers generated welcome revenue. When reimbursement was constrained and substandard, ancillary service losses were unwelcome. Taken overall, the Houston experience was repeated, that ownership of such facilities was mostly a headache. Indeed, subsequent experience has shown the two systems usually co-exist nicely within independent ancillary facilities.
The Stockton, or Foundation for Medical Care, approach grew popular in the West. The variant which grew up in Utah was locally popular, and attracted the attention of Senator Wallace Bennett. The Bennett Amendment to the Medicare Act then picked out the peer review system as the secret of success, and set up a nationwide system of Professional Standards Review Organizations (PSRO) to conduct peer review of Medicare and Medicaid patients. The drawing of boundaries around these organizations was the most difficult part, and sometimes the boundaries were inept. Rural districts were adamant that the standards of big-city medical schools were not to be applied to their scattered resources, and urban areas saw themselves as ancient Rome surrounded by hostile tribes. Although these difficulties were foreseen, it is not always possible to draw a line that will separate the cultures, particularly where the outward migration of suburban housing was more rapid than the construction of suburban medical facilities, leaving the medical culture unstable. The PSRO system was quite successful in many areas, but caused trouble in others that was not adequately addressed. The central concept of the review system was that the doctors who worked together could quite readily identify the outliers, and better than anyone else could judge whether the local situation was justified. True, some practitioner might try to abuse the system to the disadvantage of his competitor, so no adverse decision was final until there had been an opportunity for outside appeal. There might even be a few circumstances requiring still higher appeal. The system was new and untried, but it produced eminently satisfactory results from the point of view of the Federal Government paying the bills. As former President of one of the largest PSROs in the country, I will assert that there was remarkably little friction or resistance in the medical community. My very good friend, the President of the New York City PSRO says much the same, and most people would say that if you can carry off a new system in New York without a lot of argument, it must work pretty smoothly. The Government wanted to eliminate unnecessary Medicare costs, particularly in hospitals, and it wanted to maintain peace with the medical profession. Hospital costs are obscured by the wide gap between posted charges and true underlying costs, compounded by disagreement about the proper assignment of overhead charges. Charges were not the assignment of the PSRO, utilization was. Days of hospitalization per thousand enrollees fell from roughly 1000 days per thousand to roughly 200 days per thousand, and that satisfies me at least that we were doing our job; physician peer review was doable.
It is likely, however, that peer review was much more apt to produce friction in rural districts. Philadelphia has had more than a hundred hospitals for more than a century. Birds of a feather tend to flock, so the sorting-out process was already far advanced by the application of constrained referrals to practitioners who failed local standards. Mixing members of different hospital staffs on appeals committees was easy in the big cities, and the naturally censorious tendencies of many physicians could be safely counted on to produce adversary balance. Most committees seemed visibly pleased, even relieved, to discover generally good quality in their competitors' practices. However, in the much smaller and more scattered institutions in the nation's regions with low population density, these informal arrangements cannot stretch as well. When there is only one specialist in a field, for example, it is sometimes hard to know whether he is a good one or not, but always easy to say whether you like him or not. Where the population thins out, much greater wisdom is required to make judgments, the number of close cases is greater, and the limited supply of judicious reviewers is similarly stretched. At least that is my surmise, based on knowing the background of most of the AMA delegates who eventually voted 105-96 to condemn the program in a standing vote. The result was the Dornenberger Amendment, which much weakened the system, when instead it should have triggered a more profound analysis and reconsideration.
Perhaps we spend too much time here describing a technical process. It is, however, at the heart of what makes the Foundation approach (sometimes called IPA or Independent Practice Association) superior to the HMO. It is now perfectly clear that both doctors and patients vastly prefer the IPA approach to the HMO, and any reasonable politician would jump at it. But there is one fear, summarized by the slogan that the Fox is guarding the Henhouse. In both systems, an attempt is made to combine the insurance with the delivery of health care. In the IPA, the physicians are taking the financial risk that aggregate income will exceed aggregate costs; it's a risk contract. In the case of an HMO, the employer or the government is taking the financial risk and therefore wants to control it. If revenue is good, the doctors will prosper in an IPA; the insurance company intermediary will prosper in an HMO. Doctors will care about that little difference, but why should the rest of the country care?
Because the prospect is overwhelmingly likely that future revenues will be constricted until something hurts, and when you starve with a tiger, the tiger starves last. In the case of an HMO, the insurance middlemen will starve last, and the quality of health care will starve fairly early. That's an unwise design. When we get to the point where Congress cuts the budget and watches to see what happens, Congress will cut it some more if nothing bad happens; it will back off only if something bad happens, so something bad is certain to happen. In designing the system, you need to design the internal review authority so it will cut the waste, inefficiency and luxury first. The reviewer, no matter who it is, will cut himself last, so you need to arrange the incentives for waste to be cut before the reviewer suffers, and quality of care only after the reviewer has suffered. If you wonder why a whole lot of special interests hate physician-dominated review systems, a short answer will be found in this synopsis. A special exception must be devised for rural health systems, which do have a unique problem.
To return to the well worn slogan about foxes and henhouses, we have overlooked the central question. Who's the fox, and who is the hen?
http://www.philadelphia-reflections.com/blog/1268.htm
National Business Coalition on Health
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| NCOH |
In 1992 the National Business Coalition for Health was just forming at a convention in Chicago. Before I really understood what it was all about, I agreed to their flattering invitation to be the keynote speaker at the kick-off luncheon. Who suggested my name was and is a mystery to me, and I arrived in Chicago with very little idea what they wanted to hear. However, it followed the familiar pattern of inviting the speakers to stay overnight at the hotel on the evening before the meeting began, and to meet for drinks at the bar with the organizing leaders. I had enough experience with public speaking to know I could learn the general slant of the thing at such an informal party, and adjust the speech to the audience to whatever degree seemed needed. Among the people scattered around at tables was Harry Schwartz, who was also there to give them a speech. Harry had been on the editorial board of the New York Times for many years, and was known to be generally quite favorable to physicians. We had both written books about medical care, The Hospital That Ate Chicago in my case, and The Case for American Medicine, in his. We liked each other immediately, and fell into an animated cocktail conversation that would eventually be renewed every six months at the American Medical Association House of Delegates meetings, where I was a delegate and he covered the topic for various newsmedia. As we chuckled together about one anecdote or another of medical politics, the bar gradually emptied out. It soon became clear that all the other cronies had wandered off to dinner together, so we ordered dinner on the house, neither one of us having learned just what we were there to talk about. It really didn't bother either one of us very much, since from long experience we could tell some jokes and make it up as we went along. I knew what I wanted to tell businessmen, so it was just a matter of finding a way to lead into it.
The speech seemed to go well. There were several hundred, perhaps even a thousand in attendance, quite convivial and prosperous. As executives usually do, they looked younger than you might expect from the titles on their name tags; they laughed at the appropriate points, and applauded at the end. In other words, I went home from Chicago with no more idea what this organization was up to than I had before I came. At the very least, it is clear they were forming a national organization of businesses, with constituent representatives largely drawn from Departments of Human Resources. They wanted to speak for American Business with a more or less unified voice, and the topic seemed to be health care. Although fate had put me into the debate at the very earliest moment at Wills Eye Hospital, this convocation of extroverted Republicans seemed to know a lot more than I did about what was secretly afoot among the Democrats in Washington.
This Chicago tea party did one other thing for me. Many months later, when the editors of USAToday were in search of an editorial page writer who was both a physician and opposed to the Clinton Health Proposal, they called Harry Schwartz. And he suggested me. They ultimately ended up with an Medical Editorial Advisory Board of five members, at least three of whom were far to the left of me. At the New York Times, of course, Harry Schwartz was considerably more outnumbered than I was. After it was over, Harry and I used to joke that both sides were fairly evenly matched.
http://www.philadelphia-reflections.com/blog/1270.htm
Nowheres-ville
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| Jacob S. Hacker |
In more recent writings, Jacob S. Hacker seems obsessed with social inequality, but while he was a graduate student he wrote an excellent and objective book, The Road to Nowhere containing unique insights into the politics of the Clinton Health Plan of 1993. After that hubub was over, he interviewed most of the important actors in that drama, at least those active in the liberal politics of it, and they talked freely. Like the rest of us, he was unable to identify let alone talk with the leaders of big business, who are of course still pursuing their original goals. What emerges does sound roughly accurate; Hillary Clinton and Ira Magaziner designated to find out what this health business was all about; solicit every proposal on the mind of political, particularly congressional, allies; gather and examine all the useful ideas in circulation in academia and the insurance community; and negotiate possible solutions with a surprising new ally, the big corporate employers. A huge semi-secret task force was then assembled to exchange ideas, discard really bad ideas, and work the proposal into legislative form. There would be internal inconsistencies and conflicts but no matter.
|
| William Clinton |
Congress would work it out, differing versions would appear in House and Senate bills, and President Clinton himself would eventually be able to intervene when things got to the House-Senate Conference committee. Since the Clintons really had no pre-conceived ideas on this complicated topic, the will of the people would emerge from a huge debate, and the will of the people would prevail.
That's one version. The other way to picture this circus would be that a highly skilled politician would offer everybody a chance to propose pet projects, and those who failed adversary process would be obligated to support the ones who did prevail. Trade-offs would be made, as needed, and the political ringmaster in the White House would have the final say.
But the final version was the one that came through to the public and the leaders of big business. You weren't going to know what the plan was all about until it was too late to do anything but accept it after a big sales talk full of snake oil. Big business, which had a serious interest in a particular outcome, also had an army of experienced Washington lobbyists. These people were aware of the unpredictable quirks of the house-senate conference system, were completely confident that the membership of that committee would be stacked in favor of a particular outcome, and knew that a congressional staff with agendas different from those of business would in the end be perfectly capable of stealing the show. For major employers, that settled it.
|
| Medicare |
Big business had been wavering about whether to go ahead with their own plans, anyway. They had listened politely and carefully to what the government wished for its own insurance plans, Medicare and Medicaid, and were probably willing to agree. But as matters approached a unified approach, too many things surfaced they didn't like, and too much chance the decisions would go against their wishes. There was too much to lose, too little to gain, and well, we're sorry, we can't go along. This or something rather like it seems to have been the final outcome. The press had been furious about exclusion from major news items, coupled with annoyance at the favoritism toward Mr. Weinstein of the New York Times. The whole medical industry was jittery about exclusion from consultation or even notice; the insurance industry was pretty comfortable with the status quo; the public was in a state of utter confusion, After the main partner dropped out, the proposal never even came up for a vote in Congress.
http://www.philadelphia-reflections.com/blog/1271.htm
Hold the Presses
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| Stop the Presses |
At USAToday, techniques are astounding. After getting an 800-word piece, an editor by phone will suggest cuts to 300 words; the piece is always improved. Last-minute speed, trying to match television, is unbelievable. On one occasion, after a medical meeting in Kansas City, watching a baseball game go into extra innings I fell asleep with the game undecided. The next morning a newspaper was pushed under my door. It was USAToday, not only carrying the final score, but a full story, under a color photo of the winning play. Just consider the precision Chicago reporting, Washington DC editing, Kansas City printing and local delivery that took place in seven hours. By contrast in book publishing, a full year often intervenes between manuscript submission and actual bookstore sales.
So on a certain Monday night, the editor called. The Senate Majority Leader, George Mitchell, finally was to unveil the Clinton Health Proposal tomorrow morning. Would I please submit an editorial to run in the morning paper; he would supply the title. It was to be called, What Should Congress Do Now? and the deadline was 7 PM tonight. My watch read 5:30 PM.
Well, what fun. After a few minutes of stumbling around, I resolved to build the editorial around the theme, Don't Make Things Worse. It then seemed natural to allude to similar proposals gone famously wrong, define some predictable traps, and end up with Hippocrates. Over and over it is thundered at medical students: Primum non nocere. First do no harm. It all came together in my head, and I sat at the typewriter to bang it out. But when I came to that last sentence, pleading at least do no harm, I was hit by terrible doubt.
That phrase comes to us in Latin, and Hippocrates was a Greek, living at least five hundred years before the Roman Empire. Famous though the saying is, it wasn't (then) in Bartlett's Quotations, or Roget's Thesaurus, or anything else I could lay my hands on in what was, after all, a medical office. It was 6:50 PM. I called a learned friend from his dinnertable, and he agreed it was a strange business, looked at a couple of books, couldn't help, sorry. So, I drew a deep breath, said the Hell with it, typed in, "As Hippocrates said, At Least Do No Harm," and shoved it into the fax machine. The next morning it appeared, next to two million copies of my photo; so at least the editor seemed to like it. Some friends soon called to say that Senators Dole and Moynihan had adopted the line on the noon and six o'clock news, each attributing it to Hippocrates. No matter what happened to the Clinton Health Plan, it looked to me as though I would be forever guilty of supplying the world with a highly quotable misquotation.
Since then, with more time to do a proper search, I'm unfortunately still uncertain. William Safire at the New York Times, was intrigued but could only refer me to a nice lady at the Library of Congress who was a crony. She tried to help, but was stumped. Some Hippocrates scholars at the Library of the Philadelphia College of Physicians were able to find a reference in The Epidemics which seems to say what we are looking for, and that reference has tardily crept into Bartlett's latest edition. Some people think Galen really wrote it, which might account for the Latin; but even that is unsatisfying to scholars. Somebody or other took that phrase, whether written by Hippocrates or not, and pounded it over and over until it became a medical student incantation. Even if Hippocrates actually did express that sentiment in passing, it doesn't come through as a really important statement, and there isn't much evidence that his students were repeating it over and over as the words of the master.
My present suspicion is that vague rumors about Samuel Hahneman, the father of Homeopathy having a hand in promoting the slogan during the Nineteenth century, may have some underlying substance. Homeopathy was a belief system which emphasized the prescribing of infinitely minute doses of medicines. It had a flurry in the 19th Century when conventional Medicine was reeling from excesses of bleeding and purging, which surely did a lot of harm to victims of, say, Yellow Fever. The acrimony even spilled over into the emotionalism of the abortion debate, because laws prohibiting abortion had been sponsored by the allopathic American Medical Association. The verbal warfare between doctors of Homeopathy and "Allopathy" was bitter beyond describing. Although conventional medical care finally got its feet on the ground, and homeopathy is now pretty much a historical relic, the homeopaths did have that big strong point. Doing nothing is clearly better than doing something harmful. Nobody takes Latin, much, anymore. So the modern medical way of saying the same thing has come to be, "The hardest thing to do, is to do nothing". This way of stating the same idea is widely believed to have been offered by William Osler, but after all the controversy about Primam non nocere, I am now reluctant to be too sure about anything in this area.
http://www.philadelphia-reflections.com/blog/1274.htm
Be Careful What You Wish For
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| Pulse |
Events at the time of the introduction of the Clinton Health Plan to Congress were a confused jumble, but one vignette stands out in my memory. The five hundred or so members of the secret work group were all invited to the White House for a big party, with saxaphones and all. On a television interview at home in Minnesota, Paul Ellwood said he wasn't going to the party. Indeed, he looked rather morose and had little to say. It is clear he had advance notice, before the plan even reached Congress, that things were not going the way he wanted. Since the public, even Congressional leaders, were still unclear just what was to be proposed, Ellwood's dejection, or rejection, did not come from them. No one has said so, but it must be presumed the rejection came from his sponsors, the business leaders. Business, in short, had pulled out; responsibility probably lies with no more than half a dozen CEOs who continue to be anonymous fifteen years later.
At that confused time, the reasoning of the masterminds was obscure. Perhaps they decided HMOs were no good; perhaps an outrageous political demand had been linked to the proposal; or there was to be too much political control, too little business control; or perhaps government costs had been shifted onto the backs of employers; perhaps the whole idea sounded too leftist to be comfortable. And perhaps a lot of other things, who knows. Even today, no one has written a book or even listed a few plain sentences of reminiscence.
What is known is that major business employers immediately launched a nation wide initiative to go ahead with a strong push to convert employer-based plans from fee-for-service to managed care HMOs. This was to be the way employers handled health care they were paying for; the government could do as it liked. It must be admitted it was a bold stroke, quite effectively handled. When you consider the rather uncertain legal right they had to impose a system of health care on their employees, it took more audacity to go ahead than you would suppose they could summon. It was a gamble that the Clinton White House would lack the courage to challenge a private initiative to go ahead with what they had so publicly endorsed, and that providers would be so surprised by the concerted coup that they would hold back legal challenge until evidence of antitrust or conspiracy emerged. It was a sort of Battle of the Bulge in reverse, and it might well have been hugely successful except for one thing they did not anticipate. Their employees almost universally hated HMOs when they tried them out. No one likes to be hustled into something he doesn't understand, no one likes to change doctors, no one like to be told he can't have what he expects to have. Employers expected resistance of this sort, but it simply had to be done to save the fiscal health of the business. Unfortunately, what emerged was that it didn't save much more money than its own extra cost to administer. The hard reality of business life is you regularly have to bully people in order to make any money. But bullying people without making any money is a quick route to dismissal. No wonder there have been no memoirs written.
A quick re-appraisal of the Clinton Health Plan was that the two systems, Medicare for people over sixty-five and employer-based for people under sixty-five, were to be merged into a single system for efficiency and better control. There were to be local, regional, and national governance bodies; evidently the purpose of the National Business Coalitions for Health was to supply a unified business hierarchy to match it up and down the line. Hated politicians, hated bureaucrats and hated unions could be counted on to apply strong pressures; business would have to remain well informed, sternly disciplined, and speak with a single voice for any hope of surviving in such an environment. It is my surmise that such a prospect seemed to guarantee failure for business. No, we're sorry, Business would draw a bright line at age sixty-five, and run its own show where it ruled the roost.
http://www.philadelphia-reflections.com/blog/1275.htm
Computerizing Medical Care
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| First Computer |
My first encounter with a computer was in 1958, and I have loved them ever since. As president of what called itself the Delaware Valley Hospital Computing Society, I remember giving a dinner speech concluding as follows: "If you want to be happy for a day, get drunk. If you want to be happy for a week, get married. But if you want to be happy for a lifetime, get a computer!" After fifty years, my affection continues. But to be candid, billions of dollars about to be spent on computers in medical care, will mostly be wasted. Even worse, like malpractice suits computers will induce behavioral changes in the system costing far more than the directly visible costs.
That's unpopular news at present, since the National Business Coalition for Health has launched a major lobbying campaign to persuade Congress to spend an initial billion dollars inducing physicians to maintain an electronic medical record. Various health insurance companies already provide financial incentives to doctors to file electronic claims forms, eventually threatening to reject any claim submitted on paper. The American College of Physicians has established a rather large department to develop programs for physicians to use in their practices; twenty years ago the University of Indiana started much the same thing. The College of Physicians of Philadelphia has spent close to a million dollars on such a project. It is reported that Microsoft Corp. has a massive project underway to supply electronic medical records. It sounds fairly easy to obtain large research grants from the government to devise something, anything, useful in this area. In my own case, training funds really weren't necessary, since I eagerly got into the field when everybody was a beginner. I was just as good a beginner as any other beginner. But let me repeat: the electronic medical record has been in the past and will be for decades, an expensive digression. In health care, creating more administrative work isn't the solution, it is the problem.
For fifty years the problem with an electronic medical record was that it took too much of the doctor's time to complete his part of the input, and then cost him too much to pay employees to do the rest. Presumably, automatic voice recognition and dictation will soon make it possible to record doctor's notes without handwriting or typing. Since, however, the elimination of current paper forms and check-off boxes will create a major problem in organizing the dictation verbiage, it could add five or ten additional years before programmers manage to rearrange dictation material and effectively integrate it into organized form, complete with laboratory results, dictated x-ray and EKG reports, even small images of the original material. Temperature, blood pressure, weight, photographs and the like can all be readily integrated into the stored electronic record, but to do so usefully is an expensive programming project. Doctors are quite right to be anxious they will lose control of the usefulness of their records in order to ease the task of programmers, speed up the sluggish pace of development, and reduce what will surely be an unexpected cost overrun. Storage and retrieval of such records is known to be an achievable but expensive task, which however also risks sacrificing the speed and ease requirements of the medical task it is supposed to serve -- in the name of cost effectiveness.
Computers are no longer an unfamiliar tool; physicians have altogether too much experience with "vaporware" , unrealized promises of convenience, and the damaging effect on medical quality of the philosophy of Quick and Dirty. To respond to their resistance to design blunders with an accusation of undue conservatism is to provoke an icy stare and gritted teeth. Inevitably, the effective use of automation will require a redesign of workflow with major disintermediation of "gopher" staff; after all, that is how cost savings are to be achieved. That will provoke outcry that physician time is the most expensive component in the process, but unfortunately physicians will discover Information Specialists with a business background will brush that argument aside. The most overpaid people on the face of the earth are investment bankers, but information consultants have persuaded business executives that inefficiency of the investment process is more expensive than even an investment banker's time. Having been through this themselves, insurance executives are unlikely to pay the slightest attention to physicians dancing to a familiar old tune.
For all that, data input is not the real problem; it's just the first problem. It's in a class with data storage and retrieval, which is expensive and cumbersome when you add a need for instant access and total privacy. But costs will come down steadily, and eventually we can expect automated fingerprints or other biological identification, and cheap instant retrieval. Doctors will be able to make rounds in the hospital with a computer in their pocket, record telephone calls in their entirety, dial automatically and whatnot. There are problems with wireless transmission inside buildings with steel girders, and legal requirements for signatures on narcotic orders, but if we are determined, these problems can be overcome as easily as they were with electronic check writing and stock brokerage. Cost may top twenty billion dollars in twenty years, but it all can be done if we insist.
But then you encounter the real problem. Information will accumulate in these records in staggering amounts. Even if you resolutely resist demands to have the nurses record every groan, and the orderlies file every laundry slip, the legitimately important medical information will be exposed as the massive heap of transients that they really are. Plaintiff lawyers will insist no scrap of data may be deleted, hospital administrators will insist on compliance, when in fact most of a doctor's concentrated effort is devoted to brushing aside momentarily distracting data in order to see what's going on, and react to it instantly. When a quick look doesn't solve the problem, the doctor goes back for additional data. If you disrupt these skills and traditions of coping with information overload, evolved over centuries, you will at best impose frustrating delays on a complex system under pressure, and ultimately inspire elaborate systems of short-cuts. The Armed Forces are famous for paperwork, but even they know better than to ask a pilot for his Social Security number as he starts a bombing run. The hospital nursing profession has already just about collapsed under paperwork pressure. If you see five nurses in a hospital, three of them will be sitting down writing something. The terrible truth is that no one reads it, no one checks it, and ultimately it sits in the record room waiting for a plaintiff lawyer with unlimited time to sieve out some misrecorded misconception or uninformed conclusion. My faith in the computer is such that I feel sure that methods can be devised to produce periodic summaries, automatic alarm signals, and mostly effective prioritization of data elements. Unfortunately, medical care is changing at such a rapid rate that ad hoc automation of physician thought processes cannot keep up with the current pace of change in medical progress. You would think some things would be unthinkable, but since I can remember the organized campaign to suppress the CAT scan as an unnecessary expense, I confidently predict that programmer inability to keep up with some advance in medical care will at times lead to organized outcry that we should slow down the pace of improving medical care, so that computer clerks can keep up with it. But that is only a small part of the issue, which at its center is that physician time will be dissipated and his attention distracted by presenting him with unwieldy amounts of neatly printed, spell-checked, encrypted and de-encrypted, biometrically secure, hierarchically prioritized -- avalanches of data which are irrelevant to the issues of the moment. The goal is not, after all, an electronic record. The local goal is to decrease the cost of medical care by increasing the productivity of the physician, and the overarching goal is high quality patient care at reasonable price. Behind all that, since the impetus comes from NBCOH -- the ones paying the insurance premiums -- suggests that the local goal is not so much the improvement of care as oversight reassurance that care provided has been as good and as cheap as possible. The goal is legitimate, but this cybernation approach looks to be self-defeating by being overly specific.
If the reader has the patience for it, let me now cite a historical example of the third-party tail wagging the medical dog. In this case, third-party health insurance similarly overextended its reach by imposing internal health system changes, trying to facilitate the role of monitoring it externally. Specifically, the system of diagnostic code numbers was changed from one devised by the medical profession for its purposes, into a different coding system devised outside medial profession sponsorship, which seemed to suit the needs of payment agencies better even though it suited medical purposes less. After twenty-five years, it is now clear that third-party payers have shot themselves in the foot on this matter, and everyone is worse off. The topic, please pardon the obscurity, is the diagnostic coding system.
To go back to beginnings, the American Medical Association perceived a need for a diagnostic coding system in the 1920s. Organizing or even merely indexing vast amounts of information about a disease required more specificity than free style verbal nomenclature could provide. Quite a distinguished panel of specialists and consultants then produced the Standard Nomenclature of Diseases (SNODO) which in time became the Standard Nomenclature of Diseases and Operations. In order to reduce ambiguity, this system developed a branching-tree code design for anatomy, linked to a branching-tree for causes of disease, ultimately linkable to a branching tree of procedures. These three sets of three-digit codes linked the components together with hyphens (000-000-000). The first digit of each was the most general, as in Digestive, Musculo-skeletal, etc. and subsequent digits were progressively more specific and detailed, as in "Digestive, large intestine, sigmoid colon". The causes of disease would resemble "Infections, bacterial, streptococcal". An example of Procedures would be "Incision, incision and drainage, drainage and insertion of drain". In nine digits, it was thus possible to represent " incision, drainage and insertion of a drain into a streptococcal infection of the sigmoid colon". After a while, the codes grew from three to five and six digits, again repeated three times, so an immensely detailed, unambiguous description might be coded in fifteen digits by a physician who knew the rules, but didn't own a code book. This code was ultimately taken over by the Academy of Pathology, expanded and is called SNOP. The pathologists absolutely refused to give it up.
The rest of the profession gradually yielded to the pressure of hospital administration, who were pressured by the Association of Medical Record Librarians, responding to the views of outside statistical interests, particularly insurance. A simpler, shorter coding system was needed, they felt, concentrating on the thousand most common diseases. The International Classification of Diseases was produced, reducing the millions of SNODO diagnoses to 999 by heavy use of several varieties of "Miscellaneous" or "Not Otherwise Classifiable (NOC)". Since the goal was to count the incidence of common diseases, the coding system was stripped of any logical tree-branching, and became a short list of what was most common, starting with 1 and going to 999. In time, of course, the common-ness of conditions changed, and various complaints from various directions forced the ICD to go to 4 digits, then five. Unanticipated conditions or complications eventually required the patchwork of some alpha "modifiers", and the original short hodge-podge became a long and bewildering hodge-podge. Coding accuracy declined markedly, but ho-hum. The health insurance companies paid the bill, no matter what the code said. At another place, we will discuss the entertaining way that Ross Perot became a billionaire out of the computer chaos of Blue Cross and Medicare at this time, but right now the central theme to follow is DRG, Diagnosis Related Groups. Try to follow, please.
By 1980, Medicare was fifteen years old. It was clear that certain things just had to be changed, because the excuse that the system was new and untried was beginning to wear thin. The early designers of the system based their payments on auditing a hospital's yearly costs, auditing the proportion of patients who were Medicare beneficiaries, and paying a proportionate share. That was easy and reasonably accurate, but it had the rather significant flaw that it took no account of whether the patients needed to be in the hospital in the first place. Or whether they needed to stay so long. The response they adopted (in the Budget Reconciliation Act of 1983) is a measure of just how desperate they must have felt. Knowing full well how inaccurate the ICD coding system was in practice, it was all there was. Consultants, particularly at Yale, ran computer simulations of various subsets of ICD codes to find a formula that would produce approximately the same hospital payments as the system of cost reimbursement. If memory serves, the original formula was to divide the thousand ICD codes into 27 diagnosis-related groups (DRG). Eventually, the process was tweaked to seventy or eighty groups. Walter McNerny, then Past President of the American Hospital Association told Congress hospitals could live with this system, and promptly we had a system for paying out hundreds of millions of dollars. It was touted as a highly sophisticated advance in the arcane science of hospital reimbursement, so it must have included a lot of deliberate overpayment. I can remember trying to remonstrate with McNerny, who felt he didn't have time for the discussion. Physicians had very little to do with the DRG portion of the 1983 Medicare Amendments, because the AMA had long insisted that physicians and hospitals go their separate ways on reimbursement. Russell Roth, who was president of the AMA at the time, recounted many times the episode in the Oval Office, when it was announced to Lyndon Johnson that Dwight D. Eisenhower"was in the next room waiting for him. LBJ excused himself to leave, and on the way out said to Wilbur Cohen, "Give him anything he wants." Things were destined to change, but at least for a very long time, physician and hospital reimbursements were strictly independent.
http://www.philadelphia-reflections.com/blog/1277.htm
Clinton Plan Summary: Physician Effects
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| Physicians |
The Clinton Plan of 1993 was of course a failure, never happened. But it was intended to create a universal system of managed care (ie HMO) unifying the government programs with employer-paid ones. When business groups ultimately decided they would lose too much control with a federal bed-partner, they made their excuses and walked out. But they then promptly set about installing HMOs in their employee health programs, herding their hapless employees into them. In consequence, conversion from the old model of health delivery was never complete, since it was unpopular, fell short of its cost containment goals, and is therefore now receding. In fact, there are signs that a chastened business leadership intends to abandon the project as unsuccessful, or at least now seeks new directions to take things. However, there were appreciable effects on physician behavior that will probably be lasting ones.
Overhead costs for physicians have been rising for fifty years. My own first experience with private practice was in 1950, as a locum tenens just two blocks from where I still live as a commuter. There was no secretary, no nurse, no billing clerk, no appointments. This lack of amenity may now seem shocking, but it made it possible to practice with essentially no overhead costs at all. Essentially all gross revenue became net revenue. I can remember opening the door from my breakfast table, and there in the waiting room would be two or three patients reading old magazines. They were seen, each in turn until no one replaced them, and then the lights were turned out. As the patients concluded their business and left, thanking me, ninety percent of them pressed two crumpled dollar bills into my hand; a handful expected to get bills at the end of the month if I remembered to jot down their names. Sometime each day I had to walk down the street to the local bank and unload the wad of dollar bills from my pocket. Since the office was open both Saturday and Sunday mornings for a few hours, the wad on Monday was sort of a nuisance. But it was fun to walk past the barbershop and have the barber wave his scissors at me, fun to have patients swerve their cars to the curb to chat a little as I walked along. The corner druggist was, perhaps, a little excessive in his cordiality.
In later years, when my office was in the center of Philadelphia, a patient who was an Internal Revenue agent told me that the IRS hated cash transactions because of the opportunity to avoid taxes. Colleagues have told me of the FBI parking a car outside a physician office, counting the number of patients who entered and left; months later, they would come back and demand to see the accounting records for that particular sample day. In fact, an FBI agent said every rookie agent would be assigned to similar activities in nearby retail and restaurant districts; presumably the system of visitor-counting was perfected in that environment. There is now little doubt in my mind that the IRS kept up a steady harrangue on other agencies to encourage systems and rules that might force all mom-and-pop businesses to keep verifiable financial records. There's a lot of reason to believe the underground economy is a significant drain on tax revenues, hence results in higher taxes for those who do pay. By the same reasoning, increased accounting overhead costs also result in higher prices to the public, but the multiple steps in the third-party payor system tend to obscure it, and readily enable compliance costs to exceed the underlying tax avoidance. A general extension of the IRS mind-set has come to mean that more than half of all physician revenue is now consumed by overhead; tax avoidance of the most mendacious sort could not approach that much. Some overhead cost is due to rising malpractice insurance premiums, but the largest part is devoted to appointment systems, billling systems, medical records systems. I notice my own dermatologist spends five minutes per patient, has six employees working at paperwork, and though I know he is an affable man discourages chit-chat even with a medical colleague . A naturally genial person has thus been turned into a drudge, so overwhelmed by overhead that taking a vacation is a daunting expense for him. He can vacation any time he pleases, but six salaries continue while revenue stops. No doubt the IRS is pleased to be able to report near-perfect tax compliance, much better in their eyes than the old loosey-goosey days of 1950. The compliance costs to society of imposing this towering administrative system must in fact be many times the cost of just ignoring it. From the surveillance point of view, physician response to new data requirements must be particularly frustrating, since the almost invariable physician response to a new requirement is to ignore it totally. In time, the requirement is either withdrawn or renewed with some egregious penalty for non compliance. And so we go with the bureaucratic war, with the bureaucrats imagining that they are slowly winning. Perhaps they are, considering the widening disparity between physician income and administrative salaries with benefits. But the taxpayers are certainly losing.
In 1950, I would not have guessed that a significant result of increased physician workload would be overspecialization. But that's the case, and the consequences to cost and quality of medical care are subtle but profound. An unrelenting demand on physician time is the need to keep up with the rapidly advancing scientific frontier. The half-life of medical information is said to be seven years; that is, half the drugs prescribed today were unknown seven years ago. You can go a week, a month or even a year without reading or attending a seminar, but if you go seven years you are half gone, down the professional drain, and may never have the time and energy to recover. Somewhere or other, five or ten hours a week must be found for professional enhancement. Adding that to a minimum of sixty hours of work, the inroads into personal life start to become burdensome; a young physician with a hundred thousand dollars of educational debt must feel frenzied indeed. And so everybody seeks to specialize in order to narrow information demands. That's taking a chance, of course; a specialist like a urologist could see his whole specialty disappear with the discovery of a single new pill. Since at the moment, it is easier to define the cost and value of a surgical procedure, procedural specialties are reimbursed more generously than cognitive medical ones, and seemingly always will be. The net effect of all this is a lot of people can't find a family doctor. You can find a colonoscopist or even a back surgeon, but you can't find a family doctor because they are paid less but must keep abreast of the whole range of medical advances. Generalists are tip-toeing out the door. The same thing happened in England, where the cognitive specialties disproportionately moved to Canada and New Zealand. The empty places in England were then filled with doctors from Pakistan, with social discord that is only now beginning to suggest itself.
In America, the flight of the brightest males from medical school to investment banking takes the form of increasing proportions of medical students who are female, since the girls with fewer occupational choices are generally smarter than the boys. Since my wife and daughter are both physicians, I am not in a position to complain about this trend, although women physicians clearly prefer certain specialties with limited work hours, and women retire younger than men do. But there is one aspect where this army of women physicians will eventually serve us well. In recent years, a nursing shortage has emboldened a sort of union-like behavior among urban hospital nurses. Watching physicians go about their work, and particularly when they watch physicians make mistakes, nurses (like medical students, by the way) develop the idea that they could do better. Add a little feminism to the mixture, and you get some hot soup. But the growing ranks of female physicians are going to stand for none of the feminist implication. I first got this idea at the hospital watching my aunt, who had been a nurse before she became a physician. I have sometimes wished my aunt had been beside me at that party at the AMA, at the door of the Pennsylvania Delegation reception, imagining her brisk and dismissive retort.
http://www.philadelphia-reflections.com/blog/1279.htm
Clinton Plan Summary: Hospital Effects
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| Hospital closed |
ERISA opened the eyes of employers. From roughly 1940 to roughly 1975, employers saw health benefits for employees as a tax loophole. Health insurance costs would be roughly 30% less if the employer paid for them than if the employee bought the insurance himself. Gradually, the realization dawned that employers were taking all the risks, since their premiums went up if their employee claims cost went up. In effect, insurance companies were only providing administrative services but charging as though they were taking risk. So, ERISA permitted employers to become self-insured for the group costs, but employ insurers to do the paperwork for a nominal charge. Although insurers had to agree to the arrangement, it was somehow important enough to maintain the brand name that they offered something valuable in return. Insurance companies, especially Blue Cross, had discount arrangements with hospitals. No matter what charge the hospitals made for a service, the actual payment would be based on internal audits of actual costs. For a long time, the effective discount was about 30%, it grew to 60%, and now it is as much as 90%. An electrocardiogram with interpretation, for which the market price in doctors offices is around $40. is charged $365 in one large teaching hospital in Philadelphia. If you enjoyed the discount, your cost was close to $40. When business leaders considered a switch from fee-for-service payment to HMO arrangements, it was vital that this discount be preserved. Stated another way, they were adamant that no one was going to impose these fictitious surcharges on them.
Becoming self-insured under ERISA taught them a second important thing. They saw to it that the claims came to them, or at least that the aggregated statistics they wanted were provided to them or their auditors. From this data, it seemed to these auditors that employers were somehow being overcharged anyway. They had neither the skill nor the access to data to know how it was done, but their conviction grew strong that they were not getting their money's worth. Many business executives were trustees of hospitals, and were convinced the hospitals were not making excessive profits, or were even actually running at a loss. If business was overcharged, and the hospital lost money, some other group of patients was being undercharged. Fairly or unfairly, the business community developed the firm conviction that what was happening was Cost Shifting. Never mind that in corporate conglomerates it is entirely legitimate for one subsidiary to subsidize another, or even at the retail level, for profit margins on one product to subsidize losses in another. Or perhaps especially because this behavior is so evident to them, they found it necessary to be constantly on guard.
The HMO mechanism imposes expensive control systems on a dispersed medical enterprise which is really quite cost effective, and neither needs not welcomes control. It has some obvious inefficiencies, but they are usually less costly than their seemingly more efficient substitutes. It would seem bizarre for business executives to spend their time managing employee medical choices when they are being paid to manage their own business. But the HMO structure offers one opportunity too tempting to ignore. If the employer substantially controls his employee health delivery, he is put in a credible position to threaten to move the whole group to a different hospital. That is the decision traditionally left entirely in the hands of physicians, thus clarifying the main reason employers have seen physicians are ultimately their enemies. Obviously, local physicians are in the best position to judge the relative merits of local facilities, and therefore obviously physicians will resist anyone who suggests making those decisions for any other reason than the ones they can see. If you don't see this analysis as obscene insolence, you will probably agree it is extremely shrewd. Hospitals are somehow cost-shifting us into bankrupcy, we don't know and don't care, how. The way to get them to lower their prices for our employees is to have a credible threat of moving the whole bunch to some other hospital and, yes, bankrupting this one as an example for others.
So now perhaps it is possible to see the position of hospital administration in the post-Clinton years. Hospitals have long had forty to sixty percent of their patients represented by federal auditors empowered to examine every scrap of their internal accounts. Now, inside a sort of medical Alamo, they have forty to sixty percent more patients represented by hard-faced HMOs who have he power to shift half their business to a competitor on a few weeks notice. Inside the Alamo, there may have been other choices, there may even have been better ones. But the defense against this blood-thirsty onslaught which was agreed upon was, reduce the number of hospitals, either by merger or destruction.
Several books have been written about the expensive chaos created by merging hospitals; the loss of neighborhood facilities is much mourned. It must be left to others to calculate the aggregate cost of this scorched earth defense. But it has been considerable, and is part of the cost of the Clinton Plan, or if you please part of the skyrocketing cost of medical care which calls for drastic reform. It is a heavy cost in any event, and like so many features of modern medical care is not assigned to the business leadership which provoked it.
It is in this way we see the current paradox of massive building and expansion plans in hospitals across the country, at the same time that the number of hospitals is drastically reduced. There were 120 hospitals in the Delaware Valley in 1970, and now the number is around forty. Some of this can be blamed on the malpractice liability mess, since lawsuits heavily concentrate around obstetrics. Obstetrical facilities at the southeastern corner of the state can easily shift across state lines. Other closures allude to the savings in administrative costs, which would make you giggle if it did not make you cry.
Let's end this summary of hospital uproar with a brief mention of its simple solution. There is no need to mention increased waiting periods in crowded accident wards, or extravagent streamlining of patient throughput in order to reduce bed capacity, or the disappearance of reserve bed capacity in the event of a major disaster.
All of these problems would go away if we reversed the Maricopa decision and relaxed antitrust strictures against the ownership of HMOs by local physicians. Local physician reviewers may well squeeze hospital costs, but they will never move themselves to another hospital. Managed care by Health Maintenance Organizations may or may not be a good system, but having such organizations controlled by payors without allowing physician-owned competitors as a restraining benchmark has been thoroughly tried, and is a disaster.
http://www.philadelphia-reflections.com/blog/1280.htm
Clinton Plan Summary: Nation's Financial Health
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| Check |
We now address two national financial issues which dwarf some others of fairly major consequence. During the past two decades we have seen dramatic changes, even revolutions, in the management of financial transactions. Banking with paper checks is on the way out, mortgages held by banks are obsolete, coupon bonds are a quaint relic, retail stock brokerages are vanishing, financial instruments like derivatives and private equity are consuming us before most people can even define them, the central banking management of the money supply is a miracle, and so on and so on. No one claims those things are unimportant. They just aren't as important as the way we blundered into financing health care; any action we took is less important than the way we neglected it. Or refused to face it.
When the state of New Jersey made a promise to pay the healthcare costs of state employees after they retire, the Legislature created a liability. Although provisions were made to pay for the costs of this promise for a few years, the liability was essentially unfunded. That is, it was quite predictable that in a few years there would be no way to pay for it. At present, the unfunded liability is calculaed to be $58 billion dollars, and the state taxes in New Jersey are already the highest rates in the country, hurting the influx of business and prompting the emigration of those who find a cheaper place to live. Remembering there are fifty states in only slightly better shape, the total national debt for this purpose alone is surely more than a trillion dollars. Secondly, the auto industry is said to have $100 billion in unfunded liabilities for the healthcare benefits of their retirees. We have lots of other industries of course, so it's not wild to assume that another couple trillion exist in industrial healthcare financing. Give or take a trillion, it's a lot of money without mentioning Medicare, the biggest unfunded liability of all. While this burden of debt was bound to create a problem eventually, it now comes at us with a fairly predictable shortfall when the baby boomer quits contributing as workers and starts demanding payment as retirees, because the boomers neglected to have enough children to support them.
The auto industry has the same problem with demographics, but has the additional problem that the Japanese made better cars. Starting later, the Japanese companies won't have as many retirees for a decade or so. Our politicians are thus beginning to see they may have to choose between watching our biggest industry go bankrupt, or bailing out the auto companies with tax money. With the Medicare deficit just on the horizon, it will be fairly uncomfortable to add to it in the next couple of years. The discomfort for politicians will be deepened by publicity about the terms of the agreement made decades ago between the auto companies and their union, the United Auto Workers. The heart of it can be briefly stated to be that the companies agree to pay absolutely all the healthcare costs of the workers, even those who quit in six months, for the rest of their lives. If Medicare pays the costs of the workers that will be fine, but if not, the companies are on the hook. The substance of this arrangement is to raise the company costs every time Medicare introduces a cost-saving measure.
The third ingredient of this perfect storm on the horizon is the consequence of whatever the government decides to do about it. We can raise taxes, but the government's chronic inability to save money makes it unlikely that we can pay much of this debt off in advance. To use fancier language, we are already at the point on the Laffer Curve where raising taxes produces progressively less revenue; carried to extremes, taxation will provoke a depression. On the other hand, inflation isn't very attractive, either.
For centuries, governments have found it easier to borrow money than to raise taxes. The currency gets progressively less valuable until it eventually can become totally worthless. That's what happened to Austria and Germany after the reparations of the Versailles Treaty were imposed as external taxes in the 1920s. The suffering caused by this episode of hyperinflation was one of the main grievances leading to the ascendency of Adolf Hitler, although it is true the German economy was in poor condition after losing World War I.
In any event, whether our efforts to correct the situation lead to depression or inflation, or both, the sequence of collapse of the auto industry, followed by desperate constraint of healthcare costs, and then the monetary convulsions amply justifies the term of Perfect Storm. The sooner the matter is addressed the less painful it will be. There were a hundred opportunities to address this problem, starting in 1943. But the last time the country stood at attention, waiting for revelation of what would reform our broken system was in 1993. And when the miracle of deep academic thinking finally emerged with fanfare, Congress wouldn't even bring it to a vote, and rightly so.
http://www.philadelphia-reflections.com/blog/1281.htm
Clinton Plan Summary: Effects on National Health
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| health care |
The huge 19th Century professional battle about homeopathy demonstrated that. not only is it possible to do the right thing for the wrong reason, it is possible to make briefly improved outcomes emerge from a silly approach. In general, the medical professional focus on the quality of care rendered is founded on an article of faith. It is assumed that if you do the right thing well enough and often enough, aggregate patient health will improve. Unfortunately, the provably better health of the American public in the past two decades was in spite of, not because of, the changes employers forced on the organization and financing of the medical system.
Life expectancy of persons who attain age 65 appears to have lengthened by three years in the past ten. A significant component of this totally unprecedented event lies in the fact that the mortality rate from cardiac disease has fallen fifty percent in five years. About half of this decline in deaths is due to preventative measures, about half due to rescue and repair. It seems almost certain that a longer time period will see an increasing benefit from prevention, and therefore a further decrease in mortality from heart disease is probable. And a huge decrease in medical costs.
When improvements of this magnitude are taking place, it is impossible to judge whether comparatively trivial effects are taking place in the opposite direction, propelled by employer meddling in the health system, and associated insurance torment of the provider community. Because it is impossible to test conflicting assertions, it is futile to make them. The concurrent malpractice mess provides a useful example, however. It is now just about impossible to deliver a baby in the nation's capital, because obstetricians have shifted their practices across the Potomac River to Virginia. The premiums for malpractice insurance reflect the differences in judge and jury selection within the District of Columbia, compared with Virginia. Philadelphia is similarly situated across a river from another state, and a migration of obstetrics to New Jersey is plainly evident. One would not expect infant mortality rates to show much difference, so it is possible for a determined partisan to shrug off the matter; that's plainly wrong. The approach of examining statistical outcomes data is not going to resolve this issue, whether the point under debate is malpractice or managed care.
The matter is further compounded by patient cooperation, and here we rely on Benjamin Franklin's advice to abandon logic and just tell stories. It is widely repeated in conversational medical circles that Bill Clinton himself was given statin pills to prevent heart attacks. He took them for a while, and then quit, following which he soon needed to be admitted to Columbia Presbyterian Hospital my old alma mater, for cardiac by-pass surgery. He thus converted an inexpensive prevention into a very expensive repair.
Perhaps, when he and his wife were redesigning the American health financing system, they should have included a provision that those who do such things should pay for it themselves.
http://www.philadelphia-reflections.com/blog/1282.htm
Healthcare Reform: Looking Ahead (1)
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| baby boomers |
By this point, a patient reader of these reminiscences has probably learned quite enough about the Clinton Health Plan and its immediate aftermath. There is of course more to say, but except for political junkies the topic doesn't warrant protracted dissection. It might be worth knowing the motivations of the insurance industry when they launched that bombardment of "Harry and Louise" television advertisements. Opinion within the insurance industry must certainly have been divided, however, and the main decision makers are probably all now retired. The Harry/Louise ad campaign is often given credit for the political assassination of the Clinton Plan, but that seems unlikely. The decisions about medical care were made without heeding the opinions of providers of medical care, so it would not be surprising to learn that decisions about insurance were made without completely candid discussion with insurance professionals.
In fact, grieving too much for the past may have led to looking too little at the future, which clearly contains a whole new set of facts. When the largest generation in history, the baby boomers, start to retire in 2012, those boomers own children will then be at peak earning power, but will be a very small generation, too small to support their more numerous parents. Consequently, the 12.5% tax the current teenagers pay for retirement benefits will be too small to pay for their parents' health costs. It will be uncomfortable to increase that 12.5% by much. Thus, the Ponzi scheme we have run for eighty years will then be unable to conceal its facts with talk of trust funds and lock boxes. For nearly a century, Congress has spent the Social Security and Medicare tax surplus for non-medical purposes. They will have to stop doing that in less than ten years. Consequently, we can confidently expect the boomers to protest loudly: they contributed 12.5% of income during their whole working lives to support medical care, and now learn that nothing was saved for their own health care. Even more exasperating is that the second Bush administration did attempt to introduce legislation in 2006 to set aside some current surplus to reduce the impact of the coming crunch -- and Bush was howled down. It would thus appear to be the nature of current politics that this boomer healthcost shortfall will not be seriously addressed until the crisis is actually upon us. Democrats will apparently stonewall the matter to avoid blame for designing and ballyhooing a welfare expedient of the 1930s that was swept under the rug during decades of affluence. Republicans will be determined not to be paymasters for a welfare scheme they had opposed from the beginning. So what will happen?
Government only has two options in funding programs where the money has already been spent; they can raise taxes or they can borrow money. By raising taxes, they risk precipitating an economic depression. By borrowing, they flirt with hyper-inflation of the sort that destroyed Germany and Austria in the 1920s. By adopting a little of both remedies, we wander into "stagflation", a term invented in the 1970s to describe a very unpleasant episode. Whatever the description, there seems a very strong likelihood of economic pain and political uproar. It sounds pretty unlikely the public will be in a mood for expensive additions to health insurance coverage.
All this is preamble to impending cuts in the health budget. We must anticipate the only approach government ever uses for program reduction, the only arrow in the government quiver. It goes like this: first you cut a program budget by, say, ten percent and watch to see if anything bad happens. If nothing bad happens, cut it again. If something bad does happen during a series of cuts, deny that it did happen, and scramble around to patch up the damage. If possible governments restore some of the cuts when they go too far, but in Medicare whose unfunded deficit is in the trillions of dollars, that may not be possible. Try to get re-elected after you pull off one of these capers, and you begin to sense how dictators get into office. It really isn't comfortable to talk apocalypse this way, and one would certainly hope there is some flaw in the prediction. There could be other unexpected events in the meantime, deus ex machina, but a stock market crash, a thermonuclear war, or violent changes in the environmental temperature are all going to weaken the world economy, not make things better. This doomsday scenario seems almost certain to include some serious cost-cutting in the health financing system. Therefore, it is only common sense to examine what advance changes might be made in the health delivery system to minimize the damage to it.
My proposal amounts to suggesting that we put the doctors in charge of the cost-cutting. In accident rooms, battlefield medical stations, and even television war serials, the person in charge of sorting out the influx of unexpected casualties is said to be in triage. In triage there is one basic rule: put your best man in triage. If the security guard, the admissions clerk, or the night watchman directs the emergency down the wrong corridor, the ensuing blunders will cascade as the system struggles to get things back on track. We can expect objections to what I have to propose which will take the form of warnings about letting foxes watch the henhouse, but in general the public already supposes the non-physicians will step aside for the doctors in an emergency. So the more open the discussion about command and control, the better, with ultimate faith that the public will support the common-sense approach of putting your best-trained person in charge.
For present purposes, the general proposal is that when drastic cuts in budget get imposed, it should be the physicians of the local community, not the administrators or the insurance executives or the local business leaders -- who should make the painful choices between what is essential and what can be sacrificed. This is most readily achieved by setting aside the Maricopa decision and clarifying the HMO enabling acts to the effect that it is not an antitrust violation for physicians professionally practicing in nominal competition to participate in the shared governance of health maintenance organizations. In other words, that HMOs such as the Maricopa Foundation need not fear antitrust action, using the experience of a dozen other Foundations for Medical Care as proof of the harmlessness of the approach. It should not be necessary for these organizations to prove positive value, only to demonstrate lack of harmfulness. If they can be established and allowed to compete with insurance-dominated or employer-dominated HMOs, their worth can be established by success in the marketplace. Ultimately, the choice of governance form will thus be made by the patients, and the proposal should be a popular one.
It should also be popular with hospital administrators. They chafed at physician control thirty years ago, but that was before they encountered the far more brutal price negotiations of HMOs dominated by business and insurance. The consequent costly and disruptive wave of hospital mergers is defended by very few, although it would be interesting to examine dispassionate analysis. Probably no one adequately appreciated the threat that employer domination of these practice groups represented to hospital administrations. When hospitals confronted employer groups in serious hard price negotiations, hospitals came to the shocking realization that these people actually had the power to move large groups of people to a competitive hospital, and they certainly talked as though they were capable of doing it. The resulting panic of hospital mergers, consolidation into chains, and emergence of for-profit competition by hospitals that had no thought of a charitable mission, has created a degree of cost and disorder that was not in the original plan. Hospitals in rural California who told their colleagues of the burdensome power of their staff doctors under doctor-run Foundations, would now have to admit that a return to that environment would be a distinct relief.
And there might even be a reconsideration by business leaders. What physicians would bring to the table, what is now new and different, is the undeniable experience that dominating captive HMOs has not proved as useful to employers as they hoped it would be. The cost savings have been disappointing, the exploitation by insurance intermediaries, and the undeniable employee restlessness were not exactly anticipated. Running employee health projects is a large distracting time waster for C.E.O.s who have other goals and mandates to pursue. If employers keep a focus on their reason for involvement in employee health, hardly any of them could defend a posture of resisting the emergence of new choices which make a reasonable claim to reducing employee contentiousness, at competitively lower cost.
And the government? Among the various unpleasant alternatives that Congress must consider, is the possibility to be discussed next that employers may want to pull out of employee health care entirely. Allowing competitive forms of ownership of existing arrangements might not seem too risky a step, compared with that prospect.
http://www.philadelphia-reflections.com/blog/1283.htm
Healthcare Reform: Looking Ahead (2)
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| health care |
The Industrial Revolution crowded people together into smoky, draughty unhealthy places to live and work, and thus created ideal conditions for the spread of smallpox, tuberculosis, plague, poliomyelitis and many other infectious diseases. With better sanitation and hygiene, those diseases declined steadily for two centuries. Meanwhile, medical science developed a steady stream of expensive enhancements to health like removing an inflamed appendix, inserting pins into broken bones, utilizing CAT scans and artificial kidneys. These things each made life more comfortable and extended it a little longer, but steadily increased the cost of care. Here and there major leaps forward occurred, like the discovery of antibiotics and the prevention of arteriosclerosis, but it seldom seemed that medical care was stamping out disease, it was just making it more complicated and expensive. But if you stopping plodding forward for a moment and looked backward, the aggregate progress was astounding. Dozens of diseases either disappeared entirely or are well on the way to disappearing, like polio, smallpox, tuberculosis, syphilis, rheumatic fever, and what have you. Life expectancy for Americans at birth, which had been 47 years in 1900, was approaching 80 years in 2000. When I started as an attending physician in 1955, I was in charge of a 40-bed ward continuously full of diabetic amputees; during the last fifteen years of my practice, however, I did not attend a single diabetic amputation. At some point in this amazing medical pilgrimage I can remember realizing that for really important purposes, there were only two diseases left. Arteriosclerosis and cancer; and now arteriosclerosis mortality has declined fifty percent in ten years.
So now it is possible to have the luxury of asking: what will happen when we finally cure cancer? Oh sure, there is Alzheimers Disease, HIV/AIDS, schizophrenia and childbirth, plus an apparently endless variety of ways to produce self-inflicted conditions. Everyone will eventually die of something, so doctors will keep busy. It is not necessary to predict the end of medical care to see that some important social transformations are likely. For example, if we cure cancer around the time of financial chaos caused by the retirement of baby boomers, it is going to be hard to resist the demand that we reduce spending on medical research. Every tedious word of the impending debate on the topic could be written right now to save time, because it is a very strong probability that spending on medical research will decline, once an effective cure for cancer is behind us.
Let's, however, continue our march into the future of healthcare reform. When employers became self-insured for employee health costs, they came into possession of data about what they were buying. It didn't look adequate to them to explain the sums of money they were spending, so they concluded they were being hoodwinked by hospital cost shifting, with consequences summed up as the Clinton Health Plan. Now put yourself in their shoes when the Wall Street Journal tells you cancer has been conquered. Michael De Bakey once pressured Lyndon Johnson to start a crusade against Heart Disease, Stroke and Cancer, and now even cancer is gone. A significant number of C.E.O.s are likely at that point to decide that since Far Eastern competitors don't have this cost to contend with, perhaps it is time to declare that you have been fleeced long enough. Give the employees some money, and tell them to buy their own health insurance.
There are even some more legitimate arguments for doing so. Individually owned and selected health insurance would be portable, putting an end to "job lock", the fear of changing jobs for fear of losing health coverage in the process. Employee divorces create a different twist to job lock, and inequities jump out at you from the tangle of arguments about dual coverage for working couples. Add same-sex marriages to this issue and employers are driven to despair. Individual policies would simplify all of these issues, and open the door to life-long coverages, which we will discuss in a later section.
If medical progress makes just the right progress in the impending time interval before doomsday, it is even possible to start talking about eliminating health insurance in a practical way. If there is no threat of medical expense, why buy insurance against it? Since everybody will die of something, it is hard to envision a time without insurance. But maybe Medicare is enough. Senator Edward Kennedy (D, Massachusetts) will finally have his universal single payer system -- by default.
What we have here are the daydreams of a corporate C.E.O., struggling to make his numbers for the next quarter, and they are pretty strong stuff. But who can doubt the power of these concepts to move the system away from an employer-based formulation?
http://www.philadelphia-reflections.com/blog/1284.htm
Healthcare Reform: Looking Ahead (3)
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| Junker |
For fifty years, turmoil in the health insurance industry has originated in the steel and auto industries. It seems strange that no heroes have come to general public attention, although there may be heroes who are known to insiders; somebody may yet write a book about it. This may be of only passing importance, but the present distress in the American Big Three auto makers suggests that unexpected legislative proposals concerning health financing could emerge from that direction. The turmoil in Detroit once centered on the auto industry enjoying windfall profits which labor wanted to share. More recent discord comes from the opposite direction: the auto makers now cannot afford to honor those contracts they signed with labor having to do with health benefits.
The contract for the United Auto Workers was certainly generous. Printed up in a little red book for wide distribution, the contract states emphatically that an employee for six months or more will be completely covered for medical expenses for the rest of his life. If Medicare pays some of the cost, that is fine, but if Medicare reduces its benefits, the employer is liable. Some features of this contract may have been changed since it was printed, but it is difficult to imagine what incentives the UAW would have to agree to modifications. Except, of course, the self-interest which emerges when it looks as though the employer might go out of business unless there is some form of relief from wage costs.
To judge what is going to come of this is to judge the likelihood of the various arguments, predictions and recriminations that are so common in heated disputes. Two things are pretty clear to auto industry outsiders: the UAW contract provides more generous health benefits than almost any other employee group enjoys, while the auto industry has worse earnings than many or most other industries. Consequently both the employees and the stockholders have an incentive to make adjustments in the auto industry, a situation shared by the steel industry and other major auto suppliers. The form this has seemed to take is to favor some form of national health insurance, in which the taxpayers would take over the obligations of the auto manufacturers. So, look out for proposals from Senators and Congressmen from Michigan, and watch which nominees for U.S. President are favored by the rust-belt political delegations.
Workers in other industries are not certain to go along with such proposals. After all, most people resent it when someone else makes out better than everyone else for decades, and then comes asking for a hand-out.
http://www.philadelphia-reflections.com/blog/1286.htm
Segmented Health Insurance
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| Pie Graph |
Everybody knows the old insurance saw, that the big print gives but the small print takes away. If health insurance pays for one sort of thing but not another, there is anxiety that a bewildered patient can be deprived of coverage he thinks he paid for. A patient knows he was sick, that he saw a doctor, or that he went to a hospital; beyond that, it's better not to leave room for arguments. To a certain degree, this is what has made HMOs seem so threatening; complicated assurances can lead to disappointing loopholes. So, for a century it has almost been an article of religious faith that health insurance should cover everything that costs money when you are sick. However, that headlong faith is exactly why the matter needs to be subject to critical review. Not only does monolithic insurance conceal a vast system of cross-subsidies. It has existed for too long when everything else in Medicine has changed for the original premise to be immune to change.
There are health insurance considerations which go beyond mere convenience of administration. Transparency and flexibility, for instance, suffer when everything is under a single blanket. Women pay a share of prostate surgeries they will never have themselves, people who hate abortions have to pay a share of them anyway. The ability to buy what you think you need is taken away, so some people who could afford what they need are unable to afford the whole package because it includes what they feel they would never need. And then there is moral hazard. Some people reach for what they don't need just because it costs nothing extra. Well, this isn't 1930; we don't need to debate the whole issue top to bottom. But there may nevertheless be a few features of global health insurance which could be advantageously teased out separately.
For a first example, look at terminal care. Everybody is going to die, and mostly the cost is picked up by Medicare because most people who die are elderly. Some insight into the issue, and a reasonably workable definition of terminal care, is provided by the statistic that a third of the expenditures of Medicare are paid for someone in the last year of life. Statistics on the average age at death are known with great precision, so it would be easy to calculate the yearly premium cost at any age, or the size of a single-premium policy needed at any age to cover the average cost of the last-year-of-life. If we are ever to fund the unfunded Medicare program, this is the place to start. And if you are wondering how you know in advance when you are going to die, you don't need to know. Just establish an independent "endowment" fund, which reimburses the current Medicare program for any expense incurred during what proves in retrospect to have been the last year. Presumably, the cost of running the unfunded portion of Medicare would then drop by a third, while the cost of the funded third would be diminished by the investment strategy of its manager. The relatively few people who die without Medicare eligibility might be treated in the same way, reimbursing whoever paid the costs, but the risk calculation would be more difficult, and a life insurance policy might be preferable. Once the younger individual with such a designated life insurance policy attained Medicare eligibility, some sort of coordination would be desirable.
Everyone dies once, and no one escapes dying. But terminal care benefits are not so terribly different from some other health issues. Nowadays, just about everybody can expect to have two cataract operations, and most people can expect a hernia repair, a gallbladder removal, and if male a prostate removal. Everybody ought to have a pneumonia immunization, and a colonoscopy, by age 66. It would be easy to compile lifetime risks, and update them yearly, for the typical male with 1 death, 1 pneumonia vaccination, one colonoscopy, 0.76 prostatectomies, 0.59 cholecystectomies, 0.37 hernia repairs and so on. The cost of this sort of routine care is not really insurance, it is pre-payment. It is not subject to abuse, and need not be challenged or reviewed, unless statistical monitoring shows that the incidence of some component was rising in a particular zipcode area. In that case, what would be called for would not be claims review, it would be provider review.
Perhaps the reader can see where this is going. Having stripped out routine pre-payment as much as is practical, you are left with the unknowable "all other". Insurance which covers this sort of risk becomes true insurance, in an umbrella form. As medical care continues to advance, more things can be moved from "all other" to "routine". Ultimately, and probably sooner than most people would guess, you can achieve a true insurance system, defined as having a trivial insurance premium for a remote risk. From that point forward, you can direct your cost-cutting attention to reducing the cost of routine care. That would include the devising of strategies to pay for luxury versions of routine care, as desired.
http://www.philadelphia-reflections.com/blog/1287.htm
Making Money (8): Virtual Money
 When money was tangible you had to guard it, now that it's mostly virtual you have to verify it. Hardly anybody can, and that's a problem. 
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When money and wealth were wampum, precious metals, and paper currency, these physical objects required physical protection. It was all a big nuisance, with six-guns on the belt, bank vaults and appraisers of one sort or another. But now that wealth is merely a bookkeeping entry on someone's computer, things may be even more nuisance because verification is almost beyond us. Counterfeiting of the computer variety must be left to institutions to detect or deflect, causing them to introduce firewalls of various sorts that also block legitimate inspection by customers. "Trust but verify" doesn't work so well in this environment. Let's use a personal example, slightly fictionalized to protect the innocent.
Several software products now exist to download transaction information automatically from various institutional sources to a customer's home computer; they are either free or cost a nominal amount, and are quite "user friendly". In my case, however, the reports they generated were quite significantly at variance from the monthly reports which were issued directly by my counterparties. Dear Sirs, Please explain.
What I soon discovered was that everyone blamed someone else, and everyone blamed me for bothering them. Quite obviously, I had little understanding of these specialized accounting niceties, and quite obviously I had too much spare time on my hands. Telephone help desks, often located in India, will not give out telephone numbers for incoming calls, and are programmed to check the size of your account before placing you in a call-back queue. The first call is usually taken by a trainee whose job it is to screen out the silliest sort of help request, and then to refer to a supervisor if things rise in complexity. Supervisors have supervisors. That's if you are lucky. More commonly, the tedious software business has been farmed out to a vendor, and the contracting agency has neither the necessary understanding of the issue, nor any ability to fix it. From the sound of it, the vendor often gives the contracting agency the same sort of isolation treatment that they would give a customer if he could find their telephone number. And guess what. At the end of the day, one of those high-handed defensive linemen -- turns out to have been at fault.
Let's explain one problem. On the surface, we were talking about a $40,000 difference in account balances; one may have been correct, but a second one must have been wrong. That rises to lawsuit level, so the matter got intensive study. It turns out the stock broker had misinterpreted instructions for a "sweep-account" system. When a stock in your portfolio pays a dividend, the amount of the dividend is subtracted from that stock's line item, and added to the line item of your money-market fund. That's fine, but there is one exception. When the money market fund itself pays a dividend, subtracting that dividend cancels out the addition, and the dividend essentially disappears from your net worth. Was this intentional? Certainly not; no one could stay in business doing that. It's not even a highly stupid error, since you can easily see yourself making the same oversight of the one implicit exception to the rule of sweep accounting. Because this "bug" in the program involved one institution making a mistake and transmitting it to a second institution, the systematic error did not unbalance any books, until it reached mine. But since I did not detect the error for five months, there must be dozens, hundreds, maybe thousands of customers who did not detect it. Ouch. Do the math yourself to judge whether this was a serious error.
This illustration, only one of several on my personal report, leads to at least two larger principles. The first is that the transformation of money from tangible to virtual has occurred so rapidly that bullet-proof safeguards have not had time to emerge. After a century of use, most people cannot balance their checkbooks, but enough people can balance them so that systematic errors are not likely to slip past. When enough people with home computers repeatedly test the internal complexities of their virtual money accounts, confidence will develop that the system is probably working. Confidence is an important matter; it is possible to imagine quite a bank panic if the public suddenly got the idea that virtual money is maybe a mere vapor. In fact, the securitized credit panic of 2007 is a little like that. With a few new regulations and a lot of computer programming it surely will be possible to know who owns how many bum mortgages. That innovative mortgage system got ahead of its tracking verification, and we now just have to hope nothing serious happens before that gets fixed.
The second important lesson is that our health insurance system has a similar problem of far greater size and complexity. We are here talking about at least ten percent of Gross Domestic Product, in which one daily unit of measurement is in truckloads of insurance claims forms. Stocks and bonds are admittedly complicated, but compared with thousands of different diagnoses, drugs, procedures and hospitals -- verifying financial transactions is trivial compared with measuring medical ones. With a twenty billion dollar budget and ten years of lead time, we might have a shot at it. Except for the fact that during the ten year interval, medical care will have changed so much you will have to start over on the project.
http://www.philadelphia-reflections.com/blog/1349.htm
Exit, Pursued by a Bear
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| John Kastor |
Everybody ends up getting fired in a recent book by John Kastor about recent events at the University of Pennsylvania just like everybody ending up dead in an Elizabethan play. The vital difference, of course, is that the dramatis personae at Penn can still relate to a bewildered audience their own versions of those grand events. To protect himself, the author peppers his book with more footnotes than a PhD. thesis. And thousands of stakeholders at the University can now realize that during those eventful times they were as clueless as Rosencranz and Guildenstern.
One basic fact about that institution is that the medical school spends three quarters of the entire university budget. That leads to grudges in the little law school, the little engineering school, and the little president's office, as they knuckle under to the Golden Rule. The department chairman with the gold, makes the rules. Since most of that gold comes from research grants, hence ultimately from the federal government, the medical students and the teaching faculty don't have the same power they had during the Vietnam War era, either. Although medical school tuition imposes a crushing burden on the students and their families, leading to debts close to a quarter of a million dollars apiece, the tuition money doesn't amount to much in the university scheme of things, either. In some schools, tuition amounts to two percent of the medical school budget. You could eliminate the students entirely and not see much difference in the "school".
Unfortunately, when you become dependent on government grants, you find they can suddenly be terminated, or awarded without funding, or held up for several months by Congressional bickering. Meanwhile, there are salaries to pay, contracts to fulfill. Even if you can furlough some of the staff, it's not easy to see what you do about a thirty-year mortgage on a research building when there is a lull in its research funding. If you try to save money, the granting agency will try to get it back; they aren't authorized to make grants to be squirreled away. If you shift money to unauthorized uses, you risk going to jail. And yet, if you don't do something along those lines, the whole enterprise can collapse.
Having said that much to be fair, it is still uncomfortable to see the financial transparency of our most valued nonprofit institutions vanish behind a Byzantine fog of secrecy, out of which arise the magnificent towers of new buildings, and in front of which an occasional limousine is to be observed. No wonder the research scientists feel the constant pressure to produce. A Nobel Prize every ten years, or so, would go a long way toward quieting envious remarks from the liberal arts faculty.
Housed in those ivy towers are three institutions, the teaching hospital, the medical school, and the university, with three boards of trustees, and at least three ruling potentates. At irregular intervals, congressional committees do things to the Budget Reconciliation Act which enrich one of the three components of the institution, or suddenly impoverish another, or both. Integration of the three under one governance sounds plausible until you notice how radically different is the mission of each one. You can take a big building away from one component and rent it back to them, and things like that; but you can't do it without starting whispers about Enron. You can gather up surplus funds from one of them during the decade of the eighties, but you have trouble giving it back twenty years later. Officials at Blue Cross come snooping to see if health insurance premiums are passing through this shell game, ultimately paying salaries in the department of English Literature. Everybody distrusts everybody else, somebody sasses somebody, and everybody gets fired.
Nothing unusual about that. It happens at every medical school.
http://www.philadelphia-reflections.com/blog/830.htm
South Amboy Explodes
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| Explosion |
South Amboy, New Jersey, is a waterfront industrial town on a remote promontory behind Staten Island, jutting into lower New York Bay. It's across the Raritan River from historically important Perth Amboy, but it's fair to say that few people ever heard of South Amboy until sunset on May 18, 1950, when they suddenly heard a lot. An entire freight train, five lighters, and a railroad pier suddenly exploded and disappeared. About twenty-five people were never seen again; the largest piece of metal from the explosion was only about a foot in length. A significant part of the town was leveled, steeples were knocked off churches, and windows were broken in five surrounding counties. Considering what caused it, it seems remarkable that so few people were killed. The explanation usually given is that the explosion blew straight up and straight down; the distant windows were smashed by pressure implosion.
When Pakistan split off from the rest of India, there were bloody migrations in which millions of people died. So Pakistan bought the rights to the design of certain land mines to protect its new borders, and contracted with a firm in Newark, Ohio to manufacture the mines. Two trainloads of these explosives were shipped from Ohio to a railroad pier owned by the Pennsylvania Railroad in South Amboy, to be lightered out to a waiting cargo ship and sent to Pakistan. The first of these two shiploads sailed off uneventfully, and on May 1, 1950 the second shipment had already left Ohio and was under way, when the Coast Guard suddenly declared the South Amboy pier to be closed and forbidden. As the train chugged slowly eastward, frenzied negotiations took place with Admirals in Washington. There was plenty of time, because the train moved very, very slowly and it was detoured over six different railroads to Wilmington Delaware, where the Hercules Powder Company had packed two freight cars with dynamite, which were to be hooked onto the end of the train as it inched its convoluted way to South Amboy.
The method of packing the land mines was of some importance during the huge litigation which inevitably followed. Land mines were packed in cardboard boxes about six feet long, divided into six compartments. Our own Army regulations about such things state that never, never should fuses be packed in the same carton with the mines. However, this particular shipment had five mines to a carton, with the fuses in the sixth. It was later argued that this particular arrangement proved harmless in the first of the two Pakistan shipments, but there was testimony that defective fuses were removed from those boxes and passed back up the line, where those deemed satisfactory were re-packed in the cartons which were in this, the second shipment. A fuse, by the way, does not quite describe these objects, which were screwed into a hole provided on the bomb part. They contained a spring and a steel ball in a tube; when the gadget was cocked it was held by a hare-trigger. The idea was that the pressure of stepping on the mine shot the steel ball into the ball of explosives, and boom.
The railroad ammunition pier, for some reason called The Artificial Island, consisted of two rail lines extending a quarter mile from land, but no structures. Stevedores transferred the boxes from the train to the lighters, and then five lighters took the partial shipments out to the anchorage where the ocean freighter was waiting. The deck of the lighters was lower than the train tracks, so a wooden ramp was laid from the freight car to the lighter, resting on several mattresses on deck. It all worked on the first shipment, didn't it?
Well, it didn't work this time, and we have no way of knowing who stumbled or dropped something; we only know it all went sky-high. For this, the ship-owners were delighted because it is a well-established principle of Admiralty law that unless the ship was in contact with the owners, their liability is limited to the value of the damaged vessel. Under conditions of total disintegration, that means the lighters had a liability of zero. But there were six railroads, the Pakistani government, the Coast Guard and the two manufacturers of the explosives available to sue. Everybody had insurance, so a dozen insurance companies were involved. All of the victims and hundreds of people with property damage, all had lawyers; everyone agrees that many lasting friendships were established among lawyers who were milling around. Finally, the judge declared this case just had to be settled, or else it would continue for the rest of everybody's lifetime. The total amount of the claims submitted came to $55 million. Obviously, the settlement would be for less than that, but settlements are kept secret and you are not supposed to know how it turned out.
So, the question that remained was this. If everybody was insured, why not let the insurance companies haggle about who owed what to whom. Why did all of those railroads have lawyers hanging around? Well, the answer is a lesson for all of us. You need a lawyer to watch your insurance company's lawyer, because once a claim action begins, you and your insurance company develop a conflict of interest.
www.Philadelphia-Reflections.com/blog/1482.htm
http://www.philadelphia-reflections.com/blog/1482.htm
Veterans Hospital
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| Philadelphia VA Medical Center Home |
At a recent meeting of the Right Angle Club, Stephen C. Bennett an administrator, and Alix Esposito a social worker, kindly addressed the club about the Veterans Hospital where they work. The federal government pushes its mass produced products into every city, but gradually a local flavor starts to creep in; how this process works is illustrated by the fact that Steve's grandfather Claude was once the manager of the Bellevue Stratford Hotel. The VA hospital may be a piece of Washington D.C. planted on Philadelphia soil, but Philadelphia will surely absorb it with the passage of enough time. The VA was once a part of the Veterans Administration, but now it is a part of Department of Veterans Affairs, run by a cabinet Secretary, no less. It's the second largest department of the federal government, and since the only bigger department is the Department of Defense, the combination of the two shows you how far we have come from the nation's original opposition to "standing armies". The fact that these two components of our war machine are separate, on the other hand, surely symbolizes some hidden tensions between our regular armed forces and the American Legion, or the hidden frictions between two congressional committees, or else some other mystery of bureaucratic politics.
The Veterans Administration was founded in 1930, the Philadelphia VA Hospital was built in 1950. Originally, it was designated as a Deans Hospital, signifying the intention to confer prestige and lessen friction with the medical schools. Originally, Philadelphia's VA was affiliated with several medical schools, but in time its proximity to the University of Pennsylvania led to the elimination of ties with other schools. Although the bed capacity is growing in reaction to America's successive wars, its open wards converted after 1960 to more semi-private style, and its focus of medical activity shifting with changes in medical science, the VA remains isolated from the rest of the city and the rest of Philadelphia medicine. Part of this is physical; the hospital is confined by the University of Pennsylvania, the parking complex next to the Amtrak lines, and the Woodland Cemetery, so there is little room to grow. And comparatively little commonality with the neighbors. There are 2000 employees and a $30 million budget, marooned in a sea of automobile traffic going elsewhere in a big hurry, too big to ignore but too small to influence the local culture.
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| Vietnam War |
The patients are distinctly different from those you find in other hospitals. There is a great deal of chronic mental disorder, a heavy influence of alcohol and substance abuse and rehabilitation, and even some residential apartments for patients. On a national level, between a third and a half of homeless people are veterans, but for some reason in Philadelphia, only a tenth of the homeless are veterans. During the Vietnam War, the system of draft avoidance through educational exemptions resulted in that generation of veterans coming from an unusual concentration of low income and low educational subgroups. The system of government pensions and promotions tend to retain employees in the system for a lifetime. It's true that informal transfer arrangements allow a certain amount of migration to Florida (in the winter), or Maine (in the summer), or California (to see what LaLa land is all about), but those who do this stay within the VA system. Consequently, the interchange of ideas and techniques that professionals carry with them between hospitals is curtailed, confined somewhat to variations within the VA system, conforming to its social norms. An archipelago, although not exactly a gulag archipelago.
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| Veteran |
But by far the greatest source of distinctiveness in the VA hospitals comes from the byzantine eligibility standards for the patients. The reimbursement systems of Medicare, private insurance -- which more or less copy each other -- changed around 1988 in a way that more or less eliminated psychiatric inpatient care in the community, especially if it lasts more than a month. The VA, on the other hand, was forced by circumstances to increase its attention to this area. Consequently, all social workers everywhere inquire immediately whether an addict or a schizophrenic might be a veteran. A differential sorting process quickly gets under way, with the VA as the preferred place to send such patients if at all possible. Non-veteran victims of the same conditions tend to have a worsened time of it, because the pressure on state and local governments to make some provision, has been relieved.
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| Walter Reed Hospital |
At the other extreme, the social elite of the armed forces are not admitted, either. President Eisenhower was unquestionably a veteran, but he had his famous hospitalizations at Walter Reed Hospital. There's an income limit for VA admission, which automatically cuts off 20-year veterans above a certain rank, possibly major. And there are overlapping disability classifications for military hospitals and veterans facilities, with considerable latitude available to uniformed boards of three serving officers, only one of whom is a physician. The result is a general perception that if you have any influence at all, you can generally avoid the VA and be treated in a military hospital, probably in a VIP unit. Good for them; I'd take advantage of it if I had a chance, too. But by siphoning off the top brass, a lot of pressure to improve quality is removed as well. If a VA hospital had eight or ten Admirals and Generals as patients, with academy classmates coming to visit, it's safe to assume that courtesy, orderliness and cleanliness would instantly improve. And take it from me, the quality of care would improve, as well.
http://www.philadelphia-reflections.com/blog/1598.htm
Madeira Party 2009
The hundred years war, the thirty years war, the seven years war, and other European disagreements made it difficult to import wine to England, turning the wine import trade to Portugal. Port wine was of course prominent, but the best wine of all came from the Portugese colony of Madeira. The island of Madeira is closer to Africa than to Portugal, so the triangular slave trade made it easy to import Madeira wine to the British colonies in America. The eastern seaboard of America had no grape culture of any note, so the beverage trade centered on rum, whiskey, beer and Madeira. George Washington is widely reported to have had half a bottle of Madeira every day for lunch, for example.
The other evening at the Franklin Inn Club, a traditional Philadelphia Madeira party filled the hall, and the membership were brought up to date on some of the traditions and finer points of the occasion. In the first place, the Franklin Inn was founded by S. Weir Mitchell. Mitchell, in his spare time as Father of Neurology, had written a short story called The Madeira Party which worked in a large number of details about what was what about Madeira, ending with ribald tipsiness. Nathan Siven, a well-known wine authority, instructed the group in the various types of grape and vintage, and other members who have summered in Madeira related current conditions. Because the volcanic island is a favorite place for visitors, particularly Englishmen, real estate is at such a premium that most vineyards have only one or two acres of grapes. The wineries whose names are on the bottles pick up the crop from these local growers and take it on from there. This seems as good as any other explanation for current high prices of the wine. However, a century ago a disease wiped out the French and Portugese vinyards, who were forced to beg back some exported grapevines from California to get back in business. So, one wonders about the scarcity claim.
It is related that a number of cargoes of Madeira, particularly those of John Hancock of Boston were caught being smuggled to the colonies, and got returned. It was discovered that the taste of the wine was greatly improved by the tumult, so that each vintner experimented with various methods of agitating and heating the wine to produce a particular brand. Madeira, like sherry, is a fortified wine, with various proportions of grain alcohol and brandy added in secret formulas. On one point there is general agreement, that if fortified wines are aged for long enough periods, eventually they all taste alike. There thus has emerged a tricky business of aging the wine long enough for the vintage of the wine to match the age or anniversary of the person being honored by the gift. Fifty years is the tricky goal; it's the most popular gift, but perilously close to the point where you can't tell if it is sherry or Madeira. There are four main varieties of Madeira (brand names are something else), getting progressively sweeter, darker colored and more expensive as they age. Malmsey, in a barrel of which Shakspere portrayed the royal princes being drowned, is claimed to be the very best. Some people regard it as too sweet, however. At proper Madeira party, each variety is served with a different course of terrapin or whatever. The President of the Franklin Inn read off the instructions for cooking the traditional first course of jellied boiled boar's head, and the guests agreed that modern tastes called for a substitute. After the reading of Mitchell's short story, the group added a new tradition of singing Flanders and Swann's ribald song, "Have Some Madeira, m'dear".
Chuck Barber, the current President of the Green Tree Insurance Company, added an entirely new historical slant. The Insurance Company is well known for having the best dinner in town at its meetings, since directors of insurance companies don't do much. At the dinner in 1799, news was brought in that George Washington had just died. A member rose to propose what has become an annual toast in Madeira, "To President Washington!" In time, S. Weir Mitchell became a member of the board, and the famous short story was the outcome which firmly fixed the rules of the Philadelphia Madeira Party. Bill Madeira was called on to verify this history, but he protested that his family name was derived from the wine, not the other way around.
It seems appropriate to add another historical note. Benjamin Franklin, after whom the club is named, suffered severely from gout. Although some sort of association with liquor had been mentioned as far back as Hippocrates, Franklin's powers of observation and his fame as a scientist placed him in a position to make it irrefutable doctrine that gout was a medical penalty for drinking liquor. It was of course Madeira that old Ben was drinking, and it was the rule that Madeira was transported in lead-lined kegs. The Green Tree has some of the old kegs if you doubt it. Franklin's observation was acute, but what he was reporting was the effect of the lead poisoning, not of the wine.
http://www.philadelphia-reflections.com/blog/1672.htm
Reforming Health Reform (2009), New Jersey Style
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| Congressman Robert Andrews |
A single e-mail to constituents, and no other communication visible to the general public, announced a town hall meeting with our Congressman, Bob Andrews, on the campus of Rowan University, from 6 to 8 PM, August 24, 2009. The subject was to be Health Care Reform Legislation. On arrival, it was hard to find the auditorium in the square mile of new college campus, and only a small sign entitled "Event" indicated the place to park. Lots of cars.
By counting seats in a row and multiplying by the number of rows, the University Auditorium held 3000 people, but at 6PM it was difficult to find a vacant seat. The doors were almost blocked by two lines of people standing to speak at microphones in the center of the hall, snaking all the way out past the television cameras and then out the door. These people were strangely silent, preoccupied but not rude, apparently rehearsing their speeches. In the lobby outside the doors, several workers were distributing posters showing "Thank You!", checking people off on lists of some sort. Many of those who got posters were wearing red T-shirts emblazoned with something or other.
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| Rowan University |
When I finally got a seat inside, it was behind a whole row of such T-shirted poster-holders, mostly but not entirely of the black race. The Congressman was giving a little speech to the effect that he was one of the committee members who wrote the bill, so of course he had to support it. Strange, that as a member of Commerce and Labor he was working on a bill which traditionally is the province of the subcommittee on Health, of the Ways and Means Committee. In any event, that gave him the ability to explain some of the language which was a little too hard to understand. Several in the audience shouted out something unintelligible at that point, but mostly the audience sat in silence, waiting for the questions. He soon opened it up for questions, because he wanted to know what his constituents were thinking.
Although a few inevitably wandered off the point, questioners were confident, moderately deferential, remarkably effective. No matter how it was stated, and no matter how it began ("I have always voted for you, Congressman"), they were at the microphone to run a sword into him. To some extent, posting the entire bill on the Internet has changed politics. One old man, reading from his papers, said that page 343 says, etc; to which the harassed Congressmen blurted out, "That isn't true!" And the old man held his ground, "Oh, yes, and what else isn't true, that's written in the bill?"
Our congressman represents a working-class district, as clearly illustrated by his previously running for Congress without opposition. In searching for the reason this solidly Democrat audience was so antagonized, one gathers they generally have Unionized health benefits, and feel threatened that insuring the "illegals" will be paid for by impairing their own insurance. Somehow they feel that anyone who denies it is lying to them. ("It isn't what's in the bill, it's what will be in the bill ten years from now.") Except for college professors, they have the most luxurious health insurance coverage in America, and are accustomed to boasting of it. Somehow, this privileged position drowns out their envy of rich people. When told that only the top x% of the country would have its taxes raised, one man bore right in on the Congressman. "You never heard anyone asking a poor man to give him a job". (Yeah, right, right on, Yeah.)
Although the people in red shirts holding posters put up a fight for fifteen minutes or so, they soon subsided out of recognition of who owned the room, and the remaining three hours of "questions" were almost uniformly negative. After an hour, the television cameras left the room, and at that signal the people in front of me wearing red shirts, also left. After a succession of speakers praised physicians somewhat excessively, a couple of physicians got up and made a poor showing at the microphone. One of them, a fat woman, had the poor judgment to tell these folks that many diseases like diabetes were self-inflicted, but later heard that it would help if our President would himself stop smoking and leave the rest of us to mind our own business. Two women who proclaimed themselves single mothers were no better treated..
At 9:30, a meeting scheduled to end at 8PM still had a thousand people in the audience, and fifty at the microphones. But I had had enough. They made their point. All that remains is to see how fairly the television editors extract significant clips, and to find out how the rest of the nation feels.
LATER FOOTNOTE: As matters turned out a few months later, this national legislation had more of a local New Jersey effect than the audience could have guessed. Mandating health insurance for 30 million uninsured, Obamacare accomplished it for 15 million of them by forcing them into the state Medicaid program, which is widely acknowledged to be the worst program in American medicine, because it is the most under-funded. New Jersey residents are firmly opposed to anything which would raise their already high local taxes, and will focus intently on the attempt in the coming lame-duck session of Congress (November 2010) which intends to transfer federal money to states to pay for Medicaid, and which is given only the narrowest chance of success.
http://www.philadelphia-reflections.com/blog/1714.htm
Time To Care
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| Dr. Norman Makous |
It sometimes seems as though Medicare has been a standard part of the scene for so long it now needs major reform, but when a doctor has practiced Medicine for sixty years he has seen a lot of contrasts between the old way and the new way, not all of them favorable to the new -- which we are now tired of, and trying to repair. That's particularly true if the doctor practiced at America's first and oldest hospital, because it sustained many traditions from two centuries before, and was among the last to yield to the imperatives of newcomers for the last forty years, their hands grasping for the purse strings. Dr. Norman Makous must either have a remarkable memory or a thick, detailed diary. He tells three hundred pages of fast-reading anecdotes about sixty years of his own medical practice, before summing up in fifty pages of reflection. One by one, he describes the innovations in his field of cardiology and how they affected him and his patients. Thiomerin, one of the first of many easy ways to pump out excess body fluid accumulation, transformed the treatment of congestive heart failure. Synthetic digitalis claimed to but probably did not much improve things over dried digitalis leaves; it certainly raised the cost. Cardiac catheterization, electro-shock resuscitation, ultra sound diagnostics, MRI and CAT scans, cardiac surgery using the heart-lung machine, and finally cardiac transplants -- all started out as headline-news spectaculars, evolved into cutting-edge advances, and then settled down into the Standard of Care that you obtained a plaintiff lawyer to sue about. All in one medical lifetime, supposedly prepared for by one Medical School course, followed by one residency apprenticeship, the specialty of Cardiology was completely transformed at least six times.
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| Time to Care |
Meanwhile, the leadership of the medical profession was tenaciously resisted by those who supposedly followed its direction. Hospital administrators, either trying to reduce costs or to maximize institutional reimbursement, and sometimes just trying to glamorize their corporate vehicle; million-dollar-a-year salaries for administrators probably held out some perverse inducements, as well. Nurses, cut loose from hospital training programs to invent a new profession of nursing administration within university campuses remote from the scene of sickness. Health insurance executives, trained in the art of income maximization by Business Schools, driven by the need to lobby and the need to accommodate quirky laws lobbied by others, pressured by corporate human resources departments who were in turn pressured by unions and corporate managements -- and constantly bothered by expensive new technologies invented by doctors "who needed new toys". University administrations, placed in charge of numerous recalcitrant medical staff physicians, applying the principles of the German research systems upon an intransigent profession that persisted in preferring the care of sick people to the chase for research grants. And politicians, elected for two-year terms in which they felt pressure to accommodate a hundred conflicting interest groups.
Against all this and more, Dr. Makous describes how the practicing physicians especially those trained in the traditional way, found only one sympathetic, kindred interest group -- the patients. During a period when everybody else seemed determined to snitch a piece of the health insurance money pie, the patient wanted one major thing from the doctor. He wanted to be helped through his illness. The patients loved their doctor, in what was known as the patient doctor relationship. But a strange thing was also true. The doctors loved their patients, the only group in society who seemed to care what the doctor was trying to do.
http://www.philadelphia-reflections.com/blog/1725.htm
