Three Books: A Summary of a Doctors for America Session held at the National Leadership Conference

Three Books: A Summary of a Doctors for America Session held at the National Leadership Conference on November 9, 2019

I recently did a workshop session at the Doctors for America National Leadership Conference in Baltimore. The session was titled Prospect Theory, Medical Industrial Complex and Social Justice in Health Care: 3 Important Books. I have recently had the opportunity to be able to devote some time to thinking about healthcare reform in general, and the distressing lack of progress toward universal healthcare in America spanning my entire career and beyond.

I came across the late Uwe Reinhardt's last book, Priced Out, which was a summary of his life's work: the ludicrousness of America's Healthcare Wonderland, as he calls it, and the ineffectiveness of any moral arguments to persuade the American political class to move towards universal healthcare. I had the opportunity to exchange a few emails with Prof. Reinhardt about 5 years ago. At that time, he seemed quite pessimistic about the opportunity of America moving forward. In his book, however, his life partner, Prof. Cheng, in her epilogue, makes it clear that he remained optimistic about America's chances for universal healthcare. He thought, she said, that we would probably stumble towards it and not actually make a cultural or societal decision, but that we would eventually get there in fits and starts.

Prof. Reinhardt's chief concern is that we never have the moral discussion required to propel us towards a universal healthcare ethic. Without the ethic, he argues, there can be no successful transition to a universal system. He has said that during healthcare debates, we have an incantation, "’we all want the same thing; we merely disagree on how best to get there.’ That is rubbish.”

He is right. We do not agree. We agree on the left that universal healthcare is an imperative, and those on the right agree that healthcare is a market commodity and should be treated like any other good or service. Of course, progress is made by convincing enough people in the middle that one's policy proposals or political arguments are worthy of implementation. One need not win over everyone. Medicare, Social Security, civil rights, and so much of America's progress in the past century was not unanimous. Given the opportunity, many conservatives would still reverse the New Deal, the Great Society, and of course, the Affordable Care Act.

Progressives have failed to win the moral and political arguments in favor of universal healthcare. As Wendell Potter has pointed out, the methodology of the entrenched and well-funded interests opposing progress are simple: fear, uncertainty, and doubt. Simple and devastatingly effective.

The Undoing Project: A Friendship That Changed Our Minds by Michael Lewis holds many of the answers as to why it is so effective. The book tells the story of the two psychologists who developed Prospect Theory. Prospect Theory was the basis of what we now call behavioral economics. It is the exploration of why we make the decisions we make. It is about why we make the irrational decisions that we make.

Briefly, our brains are fooled in a variety of manners. We have fast, intuitive thinking. This thinking is swayed by a variety of biases. Gains and losses are perceived from specific reference points. The fear of loss, risk aversion, is far more powerful than the lure of gain. Things that come to our mind easily, either through recency or frequency (availability) greatly impact our decision-making. The fast, intuitive mind is influenced heavily by these biases. And unfortunately, the fast, intuitive mind is very confident.

Our more logical, slow thinking brain is analytic. It is also unsure of itself because of its self-critical analysis. That is why a plausible and emotionally resonant feeling, as Mark Twain might say, is halfway around the world before a detailed policy proposal gets its pants on. Or, as Stephen Colbert might say, truthiness works.

There are many lessons to be gained from Prospect Theory, but the key insight from Daniel Kahneman is that “We don’t choose between things, we choose between descriptions of things.”

After reading The Undoing Project I was somewhat optimistic and excited about the possibility of using some of these techniques to combat the campaign of fear and uncertainty and doubt that is awaiting us as we march into an election year with healthcare reform as a major point of contention.

Unfortunately, I then read An American Sickness: How Healthcare Became Big Business and How You Can Take It Back, by Elisabeth Rosenthal. Dr. Rosenthal provides a discouragingly comprehensive evaluation of the medical industrial complex and how it has come to dominate every aspect of the provision of healthcare. The chapters catalog the breadth: health insurance plans, hospitals, physicians, the pharmaceutical industry, the medical device industry, testing, laboratory, and all other manner of ancillary services, contractors, billers, coders, collections agency, researchers, not-for-profit organizations, and of course the rise of the massive healthcare conglomerates, euphemistically known as “integrated delivery systems.”

As Don Berwick recently wrote, there is $1 trillion of waste in the healthcare system. And one man’s waste is another man’s revenue. Dr. Rosenthal details all that waste and in doing so, lays down the markers on the battlefield. One side is well-funded and is fighting for its very existence. Or at least fighting for the very upscale version of its current existence, and desperate to avoid a comparatively spartan OECD-like existence.

As Upton Sinclair once said, "It is difficult to get a man to understand something if his livelihood depends upon his not understanding it." As Wendell Potter more recently said, “Health insurers have been successful at two things, making money and getting the American people to believe they’re essential.”

I finished my remarks, and opened up the floor for discussion. We spent a fair amount of time reviewing the concepts above. I specifically asked for help in developing framing and arguments that might help us in our advocacy work. Several themes emerged, and I have highlighted them here.

1.    Talk about the moral case for health care. We discussed the deserving-undeserving framing, the puritanical streak in American politics, and the fear of others "getting over on us." I told the story of having gone to a progressive conference after the 2018 election. I had the opportunity to hear from four progressive candidates who lost their races in conservative districts. All four of these candidates said they were surprised that so many of the conservative voters were afraid, almost exactly as I had phrased it to you, of having others ‘get over on them.” That these others would get free healthcare when they were going to have to pay for it, for “those people” to be freeloaders that they would have to subsidize, etc.

2.    Talk about work arounds and hassles. I pointed out that the second half of Dr. Rosenthal’s book was a guide for those who are trying to deal with the Wonderland of American healthcare. While quite useful in the here and now, it amounts to a series of workarounds of the system as it exists. Useful, to be sure, but it is not a prescription for ending the need for workarounds. As Teresa Brown recently put it in a New York Times piece, American healthcare system is one giant workaround.

3.    Talk about student debt, medical school tuition and physician income. We had a discussion about the rabbit holes, as I call them, of excruciatingly detailed policy points surrounding any healthcare reform. As Uwe notes, whenever this happens, we then engage in protracted and useless arguments over the value of quarter hour of an anesthesiologist time, or other some such parochial detail of concern. It was pointed out that these concerns arise out of the value of medical school education and residency training, the heady medical school costs and student debt, as well as physician income. The group argued to take these issues head-on. Have a discussion about subsidizing medical school and have a discussion about the relative value of the various specialties. Have a discussion about work hours and on-call time, medical liability, and the many other practical issues moving towards universal healthcare system.

4.    Talk about price control and administrative simplification. There is no love lost between physicians and the rest of the healthcare industry. There is also no love lost between consumers of healthcare services and the healthcare industry. The group felt that it was well worthwhile to point to alternative methods of controlling costs in the healthcare system. We discussed Prof. Reinhardt’s maxim that “It’s the prices, stupid!” We discussed the unconscionable waste of time and money spent dealing with health plans, from in-hospital utilization management to outpatient prior authorization for everything from procedures to medicines to wheelchairs. These issues potentially put us on the same side with the public and politicians.

While driving home from the conference, I began listening to Daniel Ariely’s Predictably Irrational. Prof. Ariely spends a significant amount of time discussing the difference between market norms and social norms. The way we behave around wages, prices, rents, and other payments are our market norms. The way we behave around doing each other favors, helping one another and other activities that do not involve financial exchanges, are our social norms. He provides many examples showing that things one might do unhesitatingly under the structure of social norms, are out of bounds under market norms. For example, lawyers asked to do work for a nonprofit company at a very low rate reject the proposal. Lawyers asked to do pro bono work readily agree. Injecting finance into a situation that normally operates on social norms profoundly alters the perception.

It occurs to me that this is at the center of Prof. Reinhardt’s assertion in his book. We will endlessly and vociferously debate on the number of and reimbursement for, angels dancing on the head of a pin, and always avoid the underlying discussion of whether we, as Americans should be the keepers of our less fortunate brothers and sisters for their healthcare needs.

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‘Ground Control to John Goodman’ – A Uwe Reinhardt Appeal | A "HealthTweep" Pulse Check

‘Ground Control to John Goodman’ – A Uwe Reinhardt Appeal | A "HealthTweep" Pulse Check

This is a couple years old, but I just found it and since it has some Uwe "gold," it's worth reading!

John Goodman of the conservative Dallas based think tank National Center for Policy Analysis (NCPA) issued a “William Wallace-esque’ FREEDOM pitch today on his blog entitled Reforming Health Care the Right Way.
This is a man who previously claimed that there are ‘no uninsured’ (from a health insurance point of view) in America; after all Goodman posits that everyone has access to the ER, so what are you complaining about? (paraphrased).
In his blog post today one day after the historic Senate vote to advance the health care bill, Goodman opines on the ‘right’ and ‘wrong’ way to reform US healthcare.
What I find most insightful is his post is the rebuttal comment proferred by Uwe Reinhardt as to the fantasy world this man, and unfortunately many other ideological predisposed converts, apparently inhabit. The health care industry defies over simplification, yet ‘sound byte’ disingenuous over-simplification is the prima facie basis on which the ‘anti-reform crowd has stimulated emotive misunderstanding of the nature of the malady as well as it’s appropriate and quite comprehensive remedies.

Uwe Reinhardt Says:
December 21st, 2009 at 1:12 pm
I hear Richard Branson of Virgin Air is seriously exploring space travel as a commercially feasible project.
Once he has that done, I shall be able to book a flight to the distant planet on which John Goodman lives.
It is the planet on which all physicians always are purely the agent of their patients and do not have any economic conficts of interest — such as making money on tests they prescribe to anxious patients or from referring patients to imaging centers in which they have a state or to collegues with whom they play gold, and so on. Such conflicts of interest do not crop up on John’s planet, not because government forbinds them (there is no government on that planet), but because such conflicts of interest just don’t exist there somehow. Remember: it’s another planet!
On John’s planet it is also easy to have price competition among physicians, because all ill health on that planet can be cured with just one standard, well defined “unit of health care.” What that is I do not know, but John does, because he lives there. He’s probable consumed some, rationally, I wouold assume.
Contrast that with an earthbound hospital charge master with 20,000 itsems in it or the physician fee schedule with 7,000 items in it. How would one make diffenetials in the elements of those huge vectors understandable to patients?
John took on a new religion on that planet to where he actually immigrated — he once lived on earth. On earth he always boldly talked for decades about “Consumer Directed Health Care,” but neither he nor his entire think tanks (the NCPA) every did a stitch of work to help develop the user-friendly price information that patients as “consumers” would need to make rational choices in health care ex ante.
Once on the new planet, John realized that he sinned on earth and swore to do better there. Of course, on his new planet it’s easy: there is only one type of health care and one price. The redemption was a piece of cake.
All people on John’s planet have the same income — in fact, they all have John’s high income and all also have Ph.D.’s. or M.D.s So the problem with poor people not being able to afford high deductibles and therefore stiffing doctors and hospitals for it does not exist on John’s planet. Nor is there a problem with health illiteracry, because everyone on John’s planet has a Ph.D. or M.D. Every patient on John’s planet knows exactly what he or she needs before going to a doctor and simple shops around for a low price.
For the most part, an individual’s need for health care in a coming year on John’s planet is certain and predictable and thus not really insurable. Only the need for about 20% of all health care is stochastic and hence insurable.
On John’s planet, 50% of any large group of people account for 50% of all health spending — 80% of the people account for 80% of all health spending. Here on earth, 20% of the sickest account for 80% of all health spending, and much of that 80% will also be insured. It will be managed by some insurance clerk coming between doctor and patient.
Oh how I long to go to the planet where John Goodman lives, where life is so easy and so simple. I am so tired of the mess here on our planet. Aren’t we all?
Small wonder that John just up and left Mother Earth for a planet where all his theories actually work.

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'Premium Shock' and 'Premium Joy' Under the Affordable Care Act - NYTimes.com Uwe Reinhardt

Community Rating Under the Affordable Care Act
Under the law, an individual health plan selling policies in the small-group and nongroup market — whether it sells policies through the state’s exchange or not — will be free to set its own premium for a given policy. But within a given age group, it must apply the same premium to all comers, regardless of their health and their gender. Furthermore, the health plan cannot reject any applicant willing to pay that premium, a provision called “guaranteed issue,” or cancel existing policies.
In other words, the X_i based on the individual’s health status in the equation above will be replaced by the average expected health spending per insured, with the average calculated over the insurer’s entire anticipated risk pool of insured members of a given age. To calculate the average, the insurer must consider as one single risk pool all enrollees in all health plans offered by the insurer, whether or not they are offered on the exchange.
This form of premium setting is known as “community rating.” Because it forces healthier individuals to subsidize sicker individuals through the community-rated premiums, it has been much debated.
Community rating invites “cherry-picking” by insurers — i.e., attempts to attract mainly low-risk applicants. To limit the profit potential from cherry-picking, there will be post-enrollment risk adjustments through which funds are transferred from insurers ending up with relatively healthier risk pools to those ending up with relatively higher risk pools.
The community rating under the law is not the pure version found in the social insurance systems of Europe (e.g., Switzerland, the Netherlands and Germany) or Asia, where even age is not considered in setting premiums. Rather, the American version is called adjusted community rating, because it does allow insurers to adjust the community-rated premium for the age of the applicant.
Age-adjusting is done by multiplying the community-rated premium for the youngest members in the expected risk pool by a standard, multiplicative age ratio to be used by all insurers. Thus the quoted premium can increase step by step with age, but only up to a multiplicative factor of 3. At a given age, smokers can be charged up to 1.5 times the regular premium.
The change from what was in place before the Affordable Care Act to post-law arrangements in the nongroup market can be illustrated graphically. In the chart below, we assume initially that all members of a given population are covered by either medically underwritten or community-rated health insurance, with a given package of covered health benefits. The white line represents the premium individuals would have to pay under medical underwriting. The dashed segment of that line is meant to show the actuarial cost and the premium range in which insurers in the real world would reject applicants outright. The green line shows the community-rated premium for this same population. We assume here that age is either not factored into the premium or the population in question is all of the same age, which is why the green line is horizontal.

Premium Shock
As the chart illustrates, a switch from medically underwritten premiums to community-rated ones raises the premiums for the relatively healthier members of the insurer’s risk pool. Many of them will suffer what has come to be called premium shock.
Younger and healthier members of the pool should realize that, in effect, they are buying a call option that allows them to buy coverage at a premium far below the high actuarial cost of covering them when they are sicker. The price charged the healthy for this call option is the difference between the premium they must pay and the current lower actuarial cost of covering them.
Furthermore, for Americans in households with incomes below 400 percent of the federal poverty line, the green and red lines exaggerate the impact of the law on their spending. These Americans will be granted often quite generous, income-dependent federal subsidies toward the premiums they face on the exchanges and their out-of-pocket costs for health care. This makes it well-nigh impossible to make general statements, based on averages, about the net after-subsidy impact of the law.

'Premium Shock' and 'Premium Joy' Under the Affordable Care Act - NYTimes.com

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Testimony for PA Senate Democratic Appropriations Committee Public Hearing on Medicaid Expansion, March 8, 2013

Good morning. Thank you for conducting this session and for inviting me to speak. I am Dr. Chris Hughes, state director for Doctors for America, a nation-wide group of physicians advocating for high quality, affordable health care for all. I have been an intensive care physician for my entire career, now approaching 25 years, and within the past year I have also begun practicing hospice and palliative medicine. I am a former Trustee of the Pennsylvania Medical Society and Chair of the Patient Safety Committee. I have completed graduate studies in health policy at Thomas Jefferson University, and I am now teaching there, in the Graduate School of Population Health.

I tell you this to let you know that I can get down in the weeds with you about the nuts and bolts of implementation of the Affordable Care Act, and I know a fair amount about health care financing, access, cost shifting, and all the rest. But you have fine panelists assembled here today who have been doing this for you, and I know you all know your way around these topics as well. That’s why you’re here.

I am here as a physician and a representative of my profession. Every doctor you know, and every nurse and pharmacist and social worker and everyone in the front lines of health care, for that matter, can tell you stories of how our health care system has failed someone. Our system fails people regularly, and often spectacularly, and often cruelly, day in, day out.

I've had patients who work full time in jobs that fall far short of the American dream. They get by, but they can't afford health insurance.

I'll give you a few of my patients’ stories here, not just to point out the obvious- that we are mistreating our fellow human beings – but that we are misspending countless dollars on the wrong end of the system.

There's the cabbie who recognizes his diabetes and determines to work harder and longer so he can buy insurance before he is stricken with the label even worse than diabetes: preexisting condition! He doesn't make it and ends up in the ICU with diabetic ketoacidosis.

There's the construction worker who has a controllable seizure disorder that goes uncontrolled because he can’t afford to go to the doctor. He ends up in the ICU, on a ventilator – life support - multiple times.

There's the woman who stays home to care for her dying mother and loses her insurance along with her job. When her mother is gone and she finally gets to a doctor for herself, her own cancer is far advanced. She goes on hospice herself.

The laid-off engineer whose cough turns bloody for months and months before he “accesses” the health care system – through the Emergency room and my ICU with already far advanced cancer.

Shona’s attendant, of course. [Shona Eakin, Executive Director of Voices for Independence, in her earlier testimony.]

These are people who are doing the right thing – working, caring for family members – and still have to go begging for health care. How many hours does an American have to work to “deserve” health care? 40? 50? 60? We, as a society, are telling these people that their work, their lives, are not valuable enough to deserve access to health care until they meet some standard of employment in a job that has health insurance.

While doing some research on Medicare cost savings, I ran across a paper from US Sen. Tom Coburn with this quote: "Medicaid is a particular burden on states, consuming on average 22 percent of state budgets." I don’t quibble with the number, I quibble with the mindset that leads one to think that the suffering of millions is a non-factor in the decision making. And the fate of patients is not mentioned in his paper.

Not long ago, expanding access to health care was a nonpartisan goal. As recently as 2007, a bipartisan group of U.S. senators, including Republicans Jim DeMint and Trent Lott, ( let me repeat that, “Jim DeMint and Trent Lott” ) wrote a letter to then-President George W. Bush pointing out that our health care system was in urgent need of repair. "Further delay is unacceptable as costs continue to skyrocket, our population ages and chronic illness increases. In addition, our businesses are at a severe disadvantage when their competitors in the global market get health care for 'free.' "

Their No. 1 priority? It was to "Ensure that all Americans would have affordable, quality, private health coverage, while protecting current government programs. We believe the health care system cannot be fixed without providing solutions for everyone. Otherwise, the costs of those without insurance will continue to be shifted to those who do have coverage."

Medicaid expansion and the Affordable Care Act will get us closer to this than at any time in our history.

You will hear some physicians speak out against all of this. But what you generally will not hear is their leadership and organizations speaking out against it, except perhaps in the deep south. There is a reason for this. As leaders of our profession, we have to come to terms with the idea that we are not just in it for ourselves. We are in it for our profession as well, and that means we have to put our patients’ interests above our own, and that means we have to do our best to ensure that everyone has access to high quality, affordable health care. Don’t just take my word for it. The American Board of Internal Medicine Foundation and other organizations put together a Charter on Medical Professionalism about ten years ago, specifically making this, fair distribution of health care resources, a part of our professional responsibility. If you go to their website, you will find that virtually every physician organization you can think of has endorsed it. That means the anesthesiologists and orthopedic surgeons as well as the pediatricians and the family practitioners.

For Medicaid expansion specifically, we should note here that the major national physician organizations, including the AMA, and the organizations representing internists, family practice, pediatricians, psychiatry and more, all endorse Medicaid expansion. On the state level, all of these organizations state chapters endorse it as well, with the exception of the Pennsylvania Medical Society, which I am chagrined to say, has endorsed general terms of expansion only.

But this concept is really not controversial among physicians and health care providers. We see everything from the catastrophes to the small indignities. They are tragic, unnecessary, and we are on the road to ending them.

Some in the provider community have expressed concerns about Medicaid in particular as the way we are providing access, so I would like to take a moment to address the concerns we hear most often.

First, that Medicaid is “bad” insurance. What is bad about Medicaid is largely fixed in the ACA. Namely, it is very poorly reimbursed for providers. You’ve already heard from others why hospitals want it, why advocates want it, but for providers in primary care, the frontlines of health care, they get a major boost in reimbursement under the new law. Pennsylvania has historically had awful reimbursement in the Medicaid program, among the worst in the nation. Now, reimbursement will go to par with Medicare reimbursement, a huge incentive for providers to take on Medicaid patients whom they may have been reluctant to see previously. There are other new innovations such as Patient Centered Medical Homes, the new Medicaid Health Homes (which, by the way, we have also not begun implementing in PA – maybe another panel?), and other innovations, coming down the pike, that should really give people who previously had no chance at excellent care, a chance to avoid complications, avoid the ER and avoid the hospital. To live in good health.

I’ve also heard the strange claim that having Medicaid is worse than having no insurance. I suppose that in a vacuum where there is no good data, and where one sees, like I do, patients with no insurance or Medicaid, who don’t know how or aren’t able to access a doctor, you could look at patients who get very sick and mistake that association and attribute that to Medicaid, but we do have data now. In Oregon, due to a fairly bizarre set of circumstances a few years ago, Medicaid eligibility was determined by lottery, creating a natural experiment of haves and have-nots. In the first year, those who were enrolled were 70 percent more likely to have a usual source of care, were 55 percent more likely to see the same doctor over time, received 30 percent more hospital care and received 35 percent more outpatient care, and much more. Incidentally, I heard a cable talking head complain about the Oregon data because it didn’t examine outcomes, such as deaths and such. A fair point if we had more than a year’s worth of data! I, and most other health professionals, would argue that the results they have seen already are impressive and worthwhile in and of themselves.

People often ask me why I am so passionate about this, and I always tell them, “I blame the nuns.” Growing up Catholic, there was nothing so drilled into me as Matthew 25. We used to sing a hymn based on it, “Whatsoever you do to the least of my brothers,” on a regular basis at Mass. And we went to Mass before school every day!

It turns out this is a pretty universal sentiment. I checked. Go to the websites of every mainstream religious denomination – Anglican, Methodist, Mormon, you name it - and it will be in there somewhere: The Social Gospel and Social Justice. Dignity of the individual. Our duties to the less fortunate. It is part of our national Judeo-Christian heritage, and a component of every major religion and philosophy in the world, with one notable exception – Ayn Rand’s. And I mention Ayn Rand and her most famous book, Atlas Shrugged, because it is perennially listed as the second most influential book in America, after the Bible. A damning fact for us.

In spite of that, I am glad that social justice and a commitment to the fair distribution of our health care resources is integral to the sense of duty of my profession, the nursing profession and all health professions.

I often say that I encourage debate about how we get to universal health care, but I refuse to accept that America, alone among all modern nations, and Pennsylvania in particular, will reject the idea that we need to get there.

A final thought from health care economist Uwe Reinhardt, regarding all of the reasons given about why we cannot achieve universal health care; he says, “Go tell God why you cannot do this. He will laugh at you,”

Right now, Medicaid expansion, the Health Insurance Exchanges and many other components of the Affordable Care Act are our best hope. Let’s not squander it.

Thank You.

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Uwe E. Reinhardt: How Efficient Is Private Charity? - NYTimes.com

Uwe E. Reinhardt: How Efficient Is Private Charity? - NYTimes.com: "Although in absolute dollar terms the United States ranks high in that category as well, as a percentage of G.D.P. many European nations outrank us (see Table 1, Annex A, on page 7).

Citizens of other countries may remind us that there is a trade-off between channeling dollars from citizens to charitable or civic activities through the government’s budget and channeling these funds through the budgets of private organizations that we label charitable, whether they truly support charitable or civic activities.

Many charitable or civic activities financed in the United States with private giving are financed elsewhere through government — health care, education and museums among them.

Why do Americans make so different a trade-off between private charity and government than people in most other nations?

One persuasive reason is that through private charitable giving, the donor can direct where his or her funds go. Americans do not trust their government as much as citizens elsewhere seem to. Yet it is not always clear in whose pockets private charitable donations end up.

A second reason is that many Americans have the notion that private charities are more efficient than government can ever be.

My experience is that to many Americans this notion, which is nothing more than a hypothesis, is an axiom, a statement so self-evident that it does not require proof.

The relative efficiency of private “charity” and tax-financed governmental “charity” is an empirical question. The proper criterion is what fraction of our charitable donations actually flows directly to the activities that we seek to support."

I find it strange this article of faith that ALL private operations are inherently more efficient than ALL government ones.  When I hear this, I ask the person if they've ever tried to question their cable bill, or, even worse, tried to change providers!

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Physician Incomes Internationale

Responding to my post about doctors stepping up for health reform over at FireDogLake, wigwam linked to a couple great pieces from the NY Times. ( I have a Google Alert on "physicians salaries incomes," so I don't know how I missed them, but, here they are now.)

In order, Uwe Reinhardt pointed out in a post about Rationing Doctors' Pay

When Medicare reduces its payments to doctors, it rations money to them. It does not directly ration the health care the doctors might render patients.

If physicians refuse to treat patients at the lower fees, it is they who ration health care, even if the incentive to do so came from Medicare.

While I doubt that the payments to radiologists and cardiologists actually will be cut by 21 percent soon — more on that next time — let us suppose it were so. Would there then be “few radiologists and cardiologists working” after such a fee cut?

Presumably, the afflicted physicians would withhold their services only from Medicare and Medicaid patients, assuming that private insurers pay more. But
could most radiologists and cardiologists actually earn an adequate livelihood only from privately insured patients? I have my doubts.

Like everyone else, radiologists and cardiologists certainly can claim to be sorely underpaid relative to the extraordinarily high compensation of bankers and corporate executives, which appears to have little correlation with contributions to society. But relative to their colleagues in internal medicine, pediatrics and family practice, radiologists and cardiologists actually are very well paid.

...

So even if Medicare cut fees of radiologists and cardiologists by 21 percent, the income of these specialists would still exceed that of their colleagues in primary care by 60 percent or more.

...

The only question then is whether such fee increases [for primary care] will come at the expense of taxpayers or from other parts of the health care sector, perhaps even the more highly paid medical specialties, including radiology and cardiology. That is a political call.

Reading through just a few of the comments revealed this gem:

As someone who is training to be a radiologist, I have mixed feelings about what you’re saying. While you are correct that Radiologists and Cardiologists do make more than primary care physicians, there is also a reason for that. Specifically, it is that when primary care physicians can’t figure something out, who do they turn to? SPECIALISTS. We train for MUCH longer than primary care docs (often times greater than twice as long) and this is the reason that we are paid more per RVU. We also have more responsibility; in fact, the levels of responsibility are worlds apart. While a primary care doctor can always turn to a specialist for help, we have no one to turn to… The buck stops with us, we are the final authority.

Wow. Sounds like our friend suffering amongst us "less skilled physicians" from last year.

Subsequently, CATHERINE RAMPELL cracked open the Congressional Research Service's analysis of the OECD database to find out "How Much Do Doctors in Other Countries Make?"

As a country’s wealth rises, so should doctors’ pay. But even accounting for this trend, the United States pays doctors more than its wealth would predict.

According to this model, the 2007 report says, “The U.S. position above the trendline indicates that specialists are paid approximately $50,000 more than would be predicted by the high U.S. GDP. General practitioners are paid roughly $30,000 more than the U.S. GDP would predict, and nurses are paid $8,000 more.”

But it’s important to keep in mind, the report notes, that health care professionals in other O.E.C.D. countries pay much less (if anything) for their medical educations than do their American counterparts. In other words, doctors and nurses in the rest of the industrialized world start their medical careers with much less student loan debt compared to medical graduates in the United States.

Rampell also links to the MGMA report on American physician income, which you may find either eye opening or eye popping.

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Uwe on Reform :Hits Nails on Head

"President Obama's plan to overhaul the nation's health care system hangs in the balance. Uwe Reinhardt, professor of economics and public affairs at Princeton University, says it won't make much difference to most Americans if the legislation dies. But Gail Wilensky, a health care economist who served in the administration of President George H.W. Bush, says she believes there needs to be an overhaul of the system because the soaring costs are unsustainable."

Uwe Reinhardt nails it again. You can click away when Wilensky atarts.

Lose Valerie Jarret, bring in Uwe. (And bring in Krugman for Geithner while we're at it!)

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This American Life HC Reform Part 2

This American Life:

This week, we bring you a deeper look inside the health insurance industry. The dark side of prescription drug coupons. A story about Pet Health Insurance, which is in its infancy, and how it is changing human behaviors—for example, if you have the pet health insurance, you bring your pet to the vet more often, and the vet makes more money and...well, you can see the parallels. And insurance company jargon, frighteningly decoded.

Prologue. Host Ira Glass describes the crazy world of medical billing, where armies of coders use several contradictory different systems of codes...and none of it makes us healthier. (5 minutes)

Act One. One Pill Two Pill, Red Pill Blue Pill.
Planet Money's Chana Joffe-Walt explains why prescription drug coupons could actually be increasing how much we pay, and prevent us from even telling how much drugs cost. (13 1/2 minutes)

Act Two. Let's Take Your Medical History.
Alex Blumberg and Adam Davidson recount how four accidental steps led to enacting the very questionable system of employers paying for health care. (11 1/2 minutes)

Act Three. Insurance? Ruh Roh!
Planet Money correspondent David Kestenbaum investigates the growing popularity of pet
insurance, and what it reveals about insurance for people. (14 minutes )

Act Four. Sorry Johnny... It's Only Business.
This American Life producer Sarah Koenig reports on a very surprising reason why insurance companies dump members, and how this reasoning contradicts President Obama's argument for what will lower health care costs. (11 1/2 minutes)

Again, a very interesting program to follow up on last week's episode.

In Act IV, the interview with Uwe Reinhardt is very thought provoking. Specifically, he talks about the power of suppliers (i.e., hospitals) in the insurer-provider tug of war, and about Maryland's "All Payer System," which I will try to learn more about and pass along when I do...

MP3 of Part 2

MP3 of Part 1 is not offered directly at the website. You can subscribe to the podcast and then download yourself here: http://feeds.thisamericanlife.org/talpodcast

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"Common Sense" Health Care Reform Principles

Uwe Reinhardt Economix Blog

The All-American Wish List for Health Reform

1. Only patients and their own doctors should decide what clinical response is appropriate for a given medical condition, even if that response involves
   unproven clinical procedures or technology.
2. Neither government bureaucrats nor private insurance bureaucrats should ever refuse to pay for whatever patients and their doctors have decided to do in response to a given medical condition. An insurer’s refusal to pay for a medical procedure is tantamount to rationing health care.
3. Rationing health care is un-American.
4. Cost-effectiveness analysis should never be the basis of any coverage decision by public or private third-party payers in health care, for to do so would put a price on human life — which, in America, unlike everywhere else, is priceless.
5. Government should not require individuals to purchase health insurance. Such a mandate would violate the constitutional rights of freedom-loving Americans.
6. Americans have a moral right to life-saving and potentially highly expensive medical care, should they fall critically ill, even if they are uninsured and could not possibly pay for that care with their own financial resources. (Why else would God have created hospitals and their emergency rooms?)
7. Government should stay out of health care. Specifically, government should not control health care prices, nor should it increase its spending on health care, which is out of control.
8. Even small reductions to the future growth of Medicare spending — called “cuts” in Washington parlance — unfairly burden the elderly, along with the
   doctors and hospitals that serve them and the manufacturers of health products, lest the pace of technical innovation be impaired.
   

And so on, and so forth. Any health policy analyst over the age of 40 could easily double the list. It might make for a good parlor game at a bar.

Readers may believe I am jesting. But follow the editorial pages or punditry, especially of the conservative news media, over some time.

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Health Reform Without a Public Plan: The German Model - Economix Blog - NYTimes.com

Health Reform Without a Public Plan: The German Model - Economix Blog - NYTimes.com:

"What if that [public option] plan were sacrificed on the altar of bipartisanship? Would it be the end of meaningful health reform?

"Not necessarily, if the health systems of the Netherlands, Germany and Switzerland are any guide.

"None of these countries uses a government-run, Medicare-like health insurance plan. They all rely on purely private, nonprofit or for-profit insurers that are goaded by tight regulation to work toward socially desired ends. And they do so at average per-capita health-care costs far below those of the United States — costs in Germany and the Netherlands are less than half of those here."

When I get in discussions of HC reform with my friends who are more committed to a single payer solution than I, I point out that most countries we look to as exemplars of excellent universal health care do not, in fact, use the single payer model, but use some hybridized form of the Bismarckian, or Social Health Insurance model, such as Germany. This may explain why the American College of Physicians made its policy recommendations in 2007: though single payer was recommended first, a hybrid system was neck and neck and felt to be more achievable.

Dr. Reinhardt explains the overview beautifully here, and I cannot improve upon it. He, as always, provides great framing to his points that can be appropriated for the discussions you have on the topic. For more details on the German system, go here.

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McKinsey: What Matters: Way too much for way too little

McKinsey: What Matters: Way too much for way too little

The title says it all. A great review of the American health care non-system.

Goes over administrative waste (83 cents of premium dollars go to actual health care at most in PHI market), outcomes, costs and prices, administrative burden, practice variation, and rationing (QALY's CER).

Some good response letters as well.

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What Is ‘Socialized Medicine’?: A Taxonomy of Health Care Systems - Economix Blog - NYTimes.com

What Is ‘Socialized Medicine’?: A Taxonomy of Health Care Systems - Economix Blog - NYTimes.com:

"Socialized medicine refers to health system in which the government owns and operates both the financing of health care and its delivery. Cell A in the chart represents socialized medicine.

"Social health insurance, on the other hand, refers to systems in which individuals transfer their financial risk of medical bills to a risk pool to which, as individuals, they contribute taxes or premiums based primarily on ability to pay, rather than on how healthy or sick they are."
...........
"Former Mayor Rudolph Giuliani of New York has exemplified the perennial confusion in this country over socialized medicine. In his ill-fated presidential bid, and subsequently as a supporter of Senator John McCain’s bid for the presidency, Mr. Giuliani routinely decried as socialized medicine (or “socialist”) any proposal presented by Democratic candidates, because typically the latter advocated tax-financed subsidies toward the purchase of health private insurance or expansions of public insurance programs. But technically none of them advocated socialized medicine.

"Perhaps Mr. Giuliani was unaware that Americans all along the ideological spectrum reserve the purest form of socialized medicine — the V.A. health system — for the nation’s veterans. I find this cognitive dissonance amusing. Indeed, if socialized medicine is so evil, why didn’t Republicans privatize the V.A. health system when they controlled both the White House and the Congress during 2001-06?

"Mr. Giuliani also seems to forget that, in 1996, he found social health insurance a perfect solution to the financial problems faced by former Mayor John V. Lindsay, who fell on financially hard times during the 1990s as a result of chronic illness. "

The chart in the piece is a little tough, the text is better, specifically the first two paragraphs above.

But to me, the key is do we want to continue to decide who can get health care and health insurance based upon their luck? And I don't mean luck in being financially successful, I mean luck in not getting a chronic, life threatening, debilitating illness. And if we get lucky, and make it to Medicare without a big illness, do we really want to rely on that luck holding out for our children, our nieces and nephews, our grandchildren? I don't.

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Uwe Reinhardt: A Medicare-Like Plan for the Non-Elderly - Economix Blog - NYTimes.com

A Medicare-Like Plan for the Non-Elderly - Economix Blog - NYTimes.com:

"A public health plan, however, strikes fear in the hearts of many interest groups. There are several reasons for this.

"First, it is only human that the politically powerful private health-insurance industry opposes competition from such a plan. The industry argues, not without justification, that a public plan might be advantaged by dictating to providers lower prices for health care services and products, and it might benefit from hidden subsidies. That unfair advantage could squish the private plans to the wall.

"But even if those comparative advantages could be eliminated through careful design of the public plan, the industry probably fears the inherent appeal that a public plan might have among the American people.

"The providers of health care and health care products, to whom “national health care spending” represents “national health care incomes,” fear the market power that a public health plan might bring to the demand (payment) side of the health sector.

"Greater market moxie on the demand side, they fear, might significantly bend down the lush, currently projected, long-run growth path of America’s health spending, which has national health spending rise from the current 16.6 percent of gross domestic product to 20.3 percent by 2018 and to 38 percent of G.D.P. by 2050. Once again, it is only human that the supply side of the United States health system prefers a continuance of the weaker, more fragmented demand (payment) side that for four decades now has allowed health spending to grow in excess of 2 percentage points faster than the rest of the G.D.P.

"The most powerful ordnance lobbed at the public health plan by its opponents is the dreaded “R” word, that is, the prediction that it will lead to the rationing of health care in America. In the debate on health policy, getting slapped with the R-word has always has been the kiss of death for any proposal.

"Evidently, many Americans do sincerely believe that when a public health plan refuses to pay for a procedure it is “rationing,” while denial of health care to an uninsured, low-income individual who cannot afford to pay for that care is not. But as textbooks in economics explicitly teach, the role of prices in a market economy is precisely to ration scarce resources among unlimited demands.

"The American health system has rationed health care by price and ability to pay all along for a sizeable segment of the United States population. In its report “ Hidden Cost, Value Lost,” for example, a distinguished panel of experts convened by the Institute of Medicine of the National Academy of Sciences estimated that some 18,000 Americans die prematurely for want of health insurance and timely medical care. That is rationing life years."

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National Journal Online -- Health Care Experts -- Paying (Or Not) For Reform

National Journal Online -- Health Care Experts -- Paying (Or Not) For Reform - Uwe Reinhardt Response:

It didn't take long before one of several howitzers got dug in to shoot at the idea of universal health insurance. The one out now is the familiar 'we need to control health care costs in our bloated, inefficient health system first before we can bring yet other Americans under the umbrella of health insurance and into the system.' That cannon has served us well for over three decades now. I can imagine its roar already, even before the cannon is fully cocked.

To shoot this cannon, you must have a license, and the requirement for that license is that you must be well insured and, indeed, be one of the folks who have helped bloat the system and made in inefficient. And because we, the well insured bloaters, have come to love that system so, we’ll do everything in our power not to change the status quo, won't we?

The other cannon, still being readied, is the 'crowd out' or 'crowd in' cannon. It gets deployed whenever someone in Congress or in the White House identifies the year's 'objects of compassion' (OCs). For example, the OC's may be uninsured children, or unemployed adults over 50, or whatever. The compassionate originator of the idea to do something for the OCs may calculate that it will take, say, $2,700 per OC to practice compassion upon them. No sooner uttered than the computers at the AEI or NBER or RAND or wherever start to whirr, figuring out how many OC-look-alikes now privately insured will be crowded into the new public program intended mainly for the original OCs. And before you know it, the federal budget cost calculated as (federal cost per original OC plus federal cost per crowded in OC) divided per original OC is staggering. Bullet hits on the mark, OC plan is destroyed. Mission accomplished.

This is how America has always successfully warded off any impending threat of universal coverage. Maybe it'll work again this time.

There's more...

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Wanted: A Clearly Articulated Social Ethic for American Health Care

Classic Uwe Reinhardt piece: "Wanted: A Clearly Articulated Social Ethic for American Health Care."

From JAMA. 1997;278:1446-1447

Throughout the past 3 decades, Americans have been locked in a tenacious ideological debate whose essence can be distilled into the following pointed question: As a matter of national policy, and to the extent that a nation's health system can make it possible, should the child of a poor American family have the same chance of avoiding preventable illness or of being cured from a given illness as does the child of a rich American family?

The 'yeas' in all other industrialized nations had won that debate hands down decades ago, and these nations have worked hard to put in place health insurance and health care systems to match that predominant sentiment. In the United States, on the other hand, the 'nays' so far have carried the day. As a matter of conscious national policy, the United States always has and still does openly countenance the practice of rationing health care for millions of American children by their parents' ability to procure health insurance for the family or, if the family is uninsured, by their parents' willingness and ability to pay for health care out of their own pocket or, if the family is unable to pay, by the parents' willingness and ability to procure charity care in their role as health care beggars.

I think this is a great piece and I can't add anything to it and it is well worth the read. The responses in the letters section that followed are, sadly, very revealing about the debate then and now.

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National Journal Online -- Health Care Experts -- The Public Plan: Time Bomb?

National Journal Online -- Health Care Experts -- The Public Plan: Time Bomb?:

"Can Congress fashion a public health plan option so that it does not blow up health care reform this year?"

I didn't get invited to leave a response, so here's mine:

Interesting discussion.

Dr. Nichols wonders if we have examples of regulated private insurers brhaving properly. At the risk of venturing beyond our shores, don't we have examples in Switzerland, Germany and other Social Health Insurance Model countries? His examples of public plans already alive and well in the US seem like good models to consider.

Ms. Turner and Mr. Goodman seem to be arguing opposite sides of magical market place coin: One laments that privte insurers will never be able to compete with the public option, and the other that the private insurers will eat the public plans' lunch. It is possible for them to co-exist, again, if one is willing to suspend the idea of American Exceptionalism and benefit from the experiences of other nations. I will venture to say that if Mr. Goodman is correct and the private insurers provide efficiency, quality and win-out, then "Hallelujah!", and all of us skeptics of the efficiency and value of private insurers will have been proved wrong, will eat crow, and happily allow the private insurers to be our vehicles for value.

I don't think this will happen, and it seems that Mr. Goodman may be conflating the role of private insurers in their function as Medicare Carriers and ther role as profit making (even when ostensibly "not for profit") insurers, dominating their regional markets, and squeezing their policy holders and providers alike.

Dr. Reinhardt, of course, always nails things and does again here. I think he may have overlooked another latent demand among physicians and other providers. Depending upon where you practice medicine, Medicare may be your most reliable, hassle free and even, in some markets, your best payer. Private insurers, while paying significantly more in some regions, may cost providers more in time, hassle, staffing costs and the like that their reimbursement warrants.

Ms. Davis also frames the debate well by focusing in on the acknowledged truth that we must pay smarter, not just more and more and more.

Cheers,

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Art Caplan Lecture - Society of Critical Care Medicine

SCCM - Society of Critical Care Medicine:
"Max Weil Honorary Lecture
Arthur Caplan, MD
University of Pennsylvania
Philadelphia, Pennsylvania, USA
Beyond Band-Aids: How to Cure America's Ailing Healthcare System
Arthur Caplan, MD, argued that the United States healthcare system is broken, and it is important to evaluate the various healthcare reform proposals and their political feasibility. Healthcare professionals should have a prominent place in the discussion to ensure ethical and meaningful reforms."

Dr. Caplan spent the bulk of his time making the ethical case for healthcare reform. He based his argument on the right to opportunity, or equal opportunity, of all citizens to be free from the encumbrances of illnesses untreated due to lack of personal resources or lack of resources from our social safety net.

Fair enough, but I think this argument will fall flat, of course, to those who oppose health care reform of any stripe, but I think it rings peculiarly hollow to most others as well, including the most fevered advocates for reform.

I will be flagging my ignorance of formal ethics and bioethics here, as I am, like most, simply an amateur (but nonetheless opinionated) ethicist. (But, I am an intensivist, so maybe I am semi-pro?)
I think in addressing health care professionals, it is reasonable to appeal to their professionalism. In the Charter on Medical Professionalism, we are called to advocate for Social Justice:

"Principle of social justice. The medical profession must promote justice in the health care system, including the fair distribution of health care resources. Physicians should work actively to eliminate discrimination in health care, whether based on race, gender, socioeconomic status, ethnicity, religion, or any other social category. "

And this argument does need to be made to specialty physician organizations. Repeatedly. Many of our organizations have devolved into glorified trade organizations, only springing into action when income or clinical territory are threatened. We need to call ourselves and our colleagues to the better angels of our nature.

But this is really only the tip of the iceberg required to make the ethical case for universal healthcare. The real case rests on our common humanity, our common respect for the dignity of man, The Golden Rule.

A recent program aired on Bill Moyers Journal called "Beyond Our Differences", which explored the common themes of all world religions. It is a terrific program and I advise everyone to watch it, preferably with your family.

Is there a moral philosophy on the planet that does not require us to care for the least among us? Is there one which does not require us to care for the poor, the sick, the hungry to the best of our ability? Is there one that does not require us to respect the dignity of our fellow humans?

I like to joke that there is such a philosophy, Ayn Rand's Objectivism. Maybe there are other philisophical schools of thought that also reject these tenets, I will let the real philosophers out there correct me. But all religions, east and west, and secular humanism all carry forward this strong ethical mandate. As I look through my "Social Justice" subject tag, quite a lot are covered: Catholics and the Jesuits, Charles Dickens (and Protestants and humanists), physicians, Jews, and even the self-intersted. The "Beyond Our Differences" program covers these and more.

So, how to make the ethical argument? I think we must rely on our common humanity, our common philosphy of honoring the dignity of our fellow humans and doing our duty as citizens of a great country to "promote the general Welfare".

But better yet, let me sum it up as Uwe Reinhardt would, "Go explain to your God why you cannot do this, and he will laugh at you."

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Interview with Uwe Reinhardt on Inauguration Day | Worldfocus

How the U.S. measures up to Canada's health care system Worldfocus:

"The Worldfocus signature story Canada’s hospitals cut the paperwork, emphasize care explores Canada’s health care system.

"In this extended interview, Uwe Reinhardt, a leading adviser on health care economics and professor of political economy at Princeton University, compares the Canadian and American health care systems. Reinhardt criticizes the U.S. health care culture and expresses his optimism about the Obama administration.

"As part of Worldfocus’ Health of Nations signature series, correspondent Edie Magnus conducted this half-hour interview with Uwe Reinhardt on January 20, 2008, the day of President Barack Obama’s inauguration."

Terrific interview! Highly recommended!

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What Doctors Make, and Why - New York Times

What Doctors Make, and Why - New York Times:

"In “Sending Back the Doctor’s Bill” (Week in Review, July 29), you compare the incomes of American physicians with those earned by doctors in other countries and suggest that American doctors seem overpaid. A more relevant benchmark, however, would seem to be the earnings of the American talent pool from which American doctors must be recruited.

Any college graduate bright enough to get into medical school surely would be able to get a high-paying job on Wall Street. The obverse is not necessarily true. Against that benchmark, every American doctor can be said to be sorely underpaid.

Besides, cutting doctors’ take-home pay would not really solve the American cost crisis. The total amount Americans pay their physicians collectively represents only about 20 percent of total national health spending. Of this total, close to half is absorbed by the physicians’ practice expenses, including malpractice premiums, but excluding the amortization of college and medical-school debt.

This makes the physicians’ collective take-home pay only about 10 percent of total national health spending. If we somehow managed to cut that take-home pay by, say, 20 percent, we would reduce total national health spending by only 2 percent, in return for a wholly demoralized medical profession to which we so often look to save our lives. It strikes me as a poor strategy.

Physicians are the central decision makers in health care. A superior strategy might be to pay them very well for helping us reduce unwarranted health spending elsewhere.

Uwe E. Reinhardt, Princeton, N.J., July 30, 2007"

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More Uwe, 'cause it's fun!

Lecture slides from a Reinhardt talk from 2003. Worth it for the Christmas card alone (about 5 slides in).

This is why they say never to agree to follow Uwe at a conference.

Cheers,

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