ponderings: health care

[cellio]

In the comments here we were talking about health care in the US. The current system is broken in many ways, but the "nuke it and start over with some nationalized program" proposals are scary too. What incremental improvements are possible? I have to believe that there are some.

One idea I'm interested in is what would happen if we separated paying for routine care from paying for catastrophic care. What would happen if people could be on their own for the former but could buy a policy to cover hospitalizations, major illnesses, and the like? How effective would that be and what would it tend to cost? What would having that in play do to the over-the-counter (uninsured) price of routine care? (Yes, I know that not everyone can afford to pay for routine care out of pocket. I'm exploring a suite of options, not choosing a single one.)

On the flip side, would medical practices or insurance companies be willing to sell affordable plans that cover all your routine care (only), if they were not on the hook for catastrophic losses? Could that get things down to the point where the average family could afford regular checkups, preventative care, and routine tests (which helps prevent some catastrophic issues)? Such plans exist now in niches (vision and dental, most commonly in my experience), but I haven't heard of one for general medical care. Why not? (Am I totally misunderstanding where the profit centers are in the insurance business?)

Both angles are important. What I'm labelling catastrophic incidents are (as the label implies) financially devastating if you don't have sufficient coverage. Outside of elder-care issues I'm not sure how common they are, but it's the sort of thing I wouldn't want to take a chance on. I insure my car and house, after all -- how much the moreso should I insure my health?

What I suspect has a bigger impact on the poor, though, is the routine care. If you don't have insurance, you're looking at a three-digit number to walk into your doctor's office. Throw in some kids and you're in trouble. (This is why I asked what would happen to those costs if catastrophic care were a separate factor.) Could plans that just cover routine care be made affordable enough for most people? This doesn't solve the other problem, but neither does the current system -- we rely on hospitals' obligations to treat (which is a legitimate public demand while they pay no taxes), or medicaid/medicare/SSI in some cases, to get through those. Remember, incremental improvement.

I'd also like to explore the effects of reducing drug regulation, letting people buy from anywhere that's selling and reducing barriers to getting things onto the market. I know the standard argument against this (those high prices pay for R&D), but I'm not sure how much I believe that. What are the other considerations?

Where else could we look for incremental improvements?

(In case you haven't figured it out, I am not a medical professional, an economist, nor part of the insurance industry.)

Comments

[anastasiav.livejournal.com]

What would happen if people could be on their own for the former but could buy a policy to cover hospitalizations, major illnesses, and the like?

That is essentially the system we have for low income uninsured people in this country now -- uninsured people are "on their own" for preventative care but in case of catastrophic illness they can often get care through various "charity care" arrangments at major hospitals and the like.

Bottom line: When people have to pay out of pocket for preventative care, they will often choose (maybe I should put that in quotes - "choose" - as in choose between paying the oil bill or seeing a doctor) to budget that money in other ways.

Such plans exist now in niches (vision and dental, most commonly in my experience), but I haven't heard of one for general medical care. Why not?

So, say your free routine mammogram turns up a lump, and now suddenly you need a biopsy and chemo and heaven knows what else. What do you do? Its the "exceptional" care that drives most of the costs in our medical system now, and its in treatment of things like Breast Cancer where you see the largest disparity between well insured and un- or under-insured populations in terms both of treatment options and outcomes -- to be blunt, the better your insurance, the more likely you are to get wide-ranging treatment, and the more likely you are to live.

(True story: When I was working at MPA we had a low-income woman begin to volunteer with us, because while uninsured she found a lump in her breast, and the doctor advised her that "a biopsy would be expensive - lets wait a couple of months and see what happens" (!) Three weeks later she had gotten a job (at the brand new Starbucks) that came with insurance, and suddenly the doctor was more than willing to provide her state of the art care.)

(Am I totally misunderstanding where the profit centers are in the insurance business?)

Google around on the term "high risk pools" - that's the technical term for groups of people who are considered "uninsurable" because of any preexisting condition.

--

I worked for three years for an organization dedicated to making Universal Single Payer a reality in Maine, and I believe strongly that the only way to fix the health care system in the US is to go to a single payer system. (Read the Mathmatica Study on USP in Maine here (http://www.mathematica-mpr.com/publications/PDFs/mainefeasibility.pdf)) We tried incremental improvement in Maine through the DirgoChoice program, and all we learned from that is that whenever the insurance companies are involved they fight to maintain the highest level of profit they can (its their obligation to their shareholders, after all), which drives up costs and drives down coverage.

Moving to a nonprofit USP system would effectively cut the insurance companies (and their excesses like $25 million dollars in compensation that Anthem paid to CEO Larry Glasscock in 2005) out of the loop. People say that "taxes would go up", which is technically true, but a system funded by a tax on employers would actually end up saving money for most employers who are currently paying all or part of the health insurance premiums for their employees -- and all employers would benefit from healthier employees and employees who were not afraid to change jobs because they fear changes to their health insurance. In addition, in the year 2000, the Maine Blue Ribbon Commission on Health Care reported (http://www.mdf.org/past_initiatives/final2000.html) that moving to a single-payer system would result in an overall Statewide cost savings of at least $300 million dollars vs. the current system (when State general fund costs, charity care, and bad debts were taken into account). A large part of this would be the result in a decrease in overhead -- between 9% and 30% of the premiums paid to for-profit insurers like Anthem vs the 5% overhead of a Medicaid, our existing single-payer system.

We're past the point where small fixes will work, sadly.

[cellio]

What would happen if people could be on their own for the former but could buy a policy to cover hospitalizations, major illnesses, and the like?

That is essentially the system we have for low income uninsured people in this country now

Important difference: I was speculating about an optional system, not a mandatory or worst-case one. I believe there are people who, if the price for a catastrophe-only policy were suitable, would pay all their routine stuff out of pocket and just buy that, because they're basically healthy and it would be cheaper. By separating out the routine stuff, wouldn't we change the composition of the rick pool for the catastrophic care? (Put another way: most of the time your insurance company won't pay out at all, versus now where they always pay out and sometimes pay out more. The present system provides more incentive to boot people out for not being healthy enough.)

I'm not trying to screw poor people; I'm looking for ways to lower costs for everyone, which can include having the non-poor take on some risks in exchange for lower premiums. If you nationalize the whole thing then everyone is entitled to the same level of "free" coverage, where in another system you might have gotten some of those people to pay for some of it themselves. Or not; it's an open question.

So, say your free routine mammogram turns up a lump

You're right -- I didn't address where the line between "routine" and "catastrophic" falls, or what to do about the stuff in between. That's a problem.

Thanks for the info on Maine. Looks like it will be interesting reading.

In your view of single-payer systems, what happens to the patient who can't get timely care? Today, for one example, if worse came to worst I could change insurance companies or pay for care out of pocket, though of course not everyone has that option. ("Change insurance companies" would be implemented by going onto my husband's employer's policy instead of mine, which does not tend to have the pre-existing-condition problems that buying individual insurance does. Obviously this doesn't work for folks without employed spouses.) I'm not saying this is good, by the way; I'm just cautious about vesting decisions about my health in a single authority without fallback options. Because no entity gets it right all the time, and no other entity is as interested in my health as I am -- no government and no insurance company.

[anastasiav.livejournal.com]

I believe there are people who, if the price for a catastrophe-only policy were suitable, would pay all their routine stuff out of pocket and just buy that, because they're basically healthy and it would be cheaper.

There are tons products like that on the market now, and people do buy them - they're basically high-deductible policies ... you pay out of pocket up to $X (often five or six thousand) and then insurance picks up the rest. (See here (http://en.wikipedia.org/wiki/High_Deductible_Health_Plan)) They're apparently mandatory in order for you to get the tax benefits of a healthcare savings account (HSA).

But, again, you need to have the available income in order to choose this. Some people - often self employed people will - but in our current environment they're not popular.

The health care crisis in America isn't really about those who can pay out of pocket. Its about those who can't, or those for whom the existing system fails because the for-profit insurance company refuses to pay for this or that, or for families like Heather Anderson's (aka: "Dooce") (http://www.dooce.com/2008/09/04/and-boom) whose daughter was diagnosed with Plagiocephaly when she was three months old, and is now (stupidly, IMHO) considered to be "high risk". Read the link -- they pay $300 a month for Leta's health insurance, and that policy has a $3000 deductible. So they're paying $6600 per year for health insurance on a five year old child -- and that's just for her. That doesn't take into account whatever they might pay for their own insurance. They're lucky that they can afford it. I couldn't. That's well over 10% of the annual income in my house.

what happens to the patient who can't get timely care?

Ah, the old "timely care" argument. I'd encourage you to talk to folks who live in Canada. (Actually, Here's a chart from the New England Journal of Medicine (http://content.nejm.org/content/vol354/issue16/images/large/01f1.jpeg), and here's the article that the chart comes from (http://content.nejm.org/cgi/content/full/354/16/1661) which touches on the fact that the purchase of private insurance is on the rise in Canada). You'll note on the chart that the two items with the longest wait times are orthopedic surgery (ie: knee and hip replacements) and plastic surgery, and the wait times for other items - notably oncology - are reasonably short and pretty much in line with what you'd see here in the States. (I don't have a cite for that, but anecdotally I'd say that a 2-4 week wait from the time you're referred to a specialist to the time you start treatment is in line with what I've seen in friends with cancer -- "treatment" doesn't include testing, and it does take a couple of weeks to get a firm diagnosis.)

I'm just cautious about vesting decisions about my health in a single authority without fallback options. Because no entity gets it right all the time, and no other entity is as interested in my health as I am -- no government and no insurance company.

But what decisions are being vested in this "single authority"? In a USP setup virtually everything (save for hardcore electives like plastic surgery) is covered. The only "authority" the overseers have is to pay -- and unlike in the for-profit system we have now, there really isn't any motivation for them not to pay, since no one profits from the "profit".

Canada

[cellio]

I'll come back to the rest of this tomorrow, but one quickie: I don't raise timely care as some sort of hypothetical boogyman; I know a Canadian it happened to. How common is the problem? Don't know; I don't know a statistically-valid number of Canadians and am not sure where to look for the relevant (vetted) statistics. (If his condition had been life-threatening he probably would have gotten timely care, as you said. He instead faced something that would "merely" cripple him, and got nowhere through official channels.)

I'm not drawing conclusions from one data point, but neither am I ignoring it.

Re: Canada

[anastasiav.livejournal.com]

I urge you to look at the chart.

I should be in bed.

[cellio]

There are tons products like that on the market now, and people do buy them - they're basically high-deductible policies

Good to know they're out there; that means there might be some data. (They are not common among employer offerings in my experience.) I didn't know about the HSA tie-in.

But, again, you need to have the available income in order to choose this. Some people - often self employed people will - but in our current environment they're not popular.

Yup -- not saying everyone could or would buy such plans. I'm wondering what the effects would be on other plans if these were more commonly available to the people who would buy them. (Or maybe the answer is that people wouldn't and the idea is flawed. I'm open to that; all of this is thought experiment for me.)

On care times: I looked at the chart and the article; thanks for the links. The data is pretty high-level; I wish they'd provided more drill-down. For example, let's take a category I have some affinity for: ophthamology wait times come in at around half a year per that chart. That's quite reasonable for cataract surgery and devastating for repairing a detatched retina. To evaluate most of these categories, we really need subdivisions.

My impression of countries with nationalized health care is that if it's life-threatening it'll be dealt with quickly (e.g. the oncology numbers in that chart), if it's elective you'll wait almost forever (not surprising), and that if it's important but not life-threatening you can be in for a lot of grief. It's this middle category I'm interested in.

One other comment about the chart: this data is hard to get, but the analysis is not complete unless it also factors in time from request for care to initial visit.

But what decisions are being vested in this "single authority"?

What treatment I get, when, and who performs it. (Do government-run systems support the idea of a patient-initiated second opinion, by the way? That can be pretty important if you have something tricky or controversial.) It is possible that some of these concerns would be aleviated in a mixed system (one where you're allowed to buy private insurance or private care), assuming that's affordable with the much smaller risk pools.

There are no easy answers here. Thank you for having the conversation with me.

[zevabe.livejournal.com]

There are tons products like that on the market now, and people do buy them - they're basically high-deductible policies ... you pay out of pocket up to $X (often five or six thousand) and then insurance picks up the rest. (See here) They're apparently mandatory in order for you to get the tax benefits of a healthcare savings account (HSA).

I had one of these when I lived in DC. It cost about $200-300 for 6 months (if paid in a lump sum up front) I believe the breakdown was: I paid anything up to 2500, they paid half of the next 5000 (anything b/w 2500 & 7500) and they paid everything past that, so a castrophe would cost up to 5000. But being 23 at the time, I figured that was good enough.