Health Care

Sometime in the next decade the US will follow the rest of the civilized world and have some form of national health care system. The lead up however, will be a heart-wrenching discussion that no politician seems yet to have the courage to initiate, rightly fearing that it will end his or her career.

We will have to list what a health care safety net includes and what it does not. We will also have to come to grips with death, and acknowledge, as do other societies, that life ends naturally. We will have to refocus resources on palliative care and hospice rather than costly heroic measures. When we reach agreement, individuals and businesses will be able to acquire broader gap coverage in commercial markets, while the health care safety net will cover all Americans with basic life-sustaining care.

All agree that the current system is unsustainable. At its heart is the issue of how we harmonize capitalism and its need to produce profits and a fundamental social mission like healthcare. Specifically, how does the “utilization review” insurance administrator possibly reconcile the dual mandates to meet profit targets and ensure the well being of the patient?

We know from a recent McKinsey Study that nationally there is at least $98B in excess administrative costs on the insurer side alone, half of which is marketing and underwriting. This does not include other costs in the multi-payer system like denial management. The report finds another $66B paid in excess drug costs because of Congress’ irrational decision not to allow government to negotiate competitive drug prices. These two items alone account for $164B in savings. The report projects the cost of insuring all Americans at half that – or $77B.

Vermont‘s own regulatory approach has fostered the development of a largely non-profit health care system, and all hospitals in the state are not for profit. The wisdom of this approach is reflected today in the rising failure of many national urban health systems that permit the private sector to siphon off the most lucrative medical procedures, especially those with higher levels of reimbursement such as hip and knee replacements or vascular surgery. The surviving public hospitals absorb the enormous burden of ER visits by 45 million uninsured. Non-profit hospitals have an “obligation to treat.” For profit hospitals do not.

So what about Vermont? We must look to our network of community hospitals and clinics and see them as an integrated health care network, not competitive entities. We must challenge them to integrate and deploy new services cost- effectively, sharing clinical specialties. Each will function as a primary and in some cases secondary community health center serving surrounding communities. Tertiary and quaternary cases will move up to the academic medical centers, Fletcher Allen or Dartmouth Hitchcock, for more complex care.

Our fixes must be both strategic and incremental. Vermont cannot afford a mini-national health care system with its micro-economy and 620,000 taxpayers. We can, however, and must take immediate steps towards getting all Vermonters covered. (500 words)

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2 Responses to Health Care

  1. Dick Mallary says:

    I agree with youur fundamental premise; that the U.S. will end up with some sort of national health care system. And, I agree that it should require an agonizing discussion of priorities in the care that system delivers. I don’t agree, however, with your assumption that the politicians will have that discussion and then come to grips with it. What they are unlikely to do is to make an explicit decision as to what care the system will deliver and what care will be denied. The necessary rationing will be left to the administrators of the system who, confronted with inadequate funds to give everyone everything they want, will ration care by queueing, incovenience and underinvestment. It may eventually be better than what we have now, but it is unlikely to result in a rational allocation of limited funds to an unlimited desire.

  2. Bil Schubart says:

    I did not mean to imply that politicians would lead the rationing discussion, they will only respond to increasing public pressure and debut a system. I had hoped to convey that any discussion of how it will be deployed on their part would simply end their political career, as the underlying reality of a health care social safety net is too daunting for most politicians to address even though badly needed.

    I am sad that our national arrogance does not allow us to cull best practices from some of the health care systems that work reasonably well around the world and to learn from their successes and failures as we design our own. Those of us accustomed to great health care quality and access will be shocked to find that a national system will not be “all things to all people.” But only those of us who are better off ever believed that anyway. Those with no access will be grateful for something.

    I believe the biggest problem will be cultural. People in countries that have had systems for several decades know what to expect and what not to expect or possibly to insure for.

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