Letters for Sept. 7, 2003
September 6, 2003
More on health care
The recent series of articles regarding health insurance and coverage is not covering all the elements of this very complex issue. Americans want more health care than they are willing to pay for. There are fundamental differences between the manner that health care is funded and all other professional services.
Health care is an “induced demand” business that has been removed from the usual “supply and demand” capitalistic approach of pure competition. The true “inducers of demand,” customers of health care, are the physicians and the providers who order drugs, surgery, and treatments.
Most patients long ago gave up their right to be “consumers or customers” when they contracted with a third party to pay for the services their provider prescribes or recommends. For this reason, the patient depends upon the “agent” (Medicare, Medicaid, insurance company, HMO, etc.) to negotiate with the provider not only what will be paid for the service, but, in some instances, what services will be provided.
A physician, who is contracted as a preferred provider with an insurance network, cannot negotiate price with the patient — e.g., reduce the co-payment or not bill the patient for the deductible portion of the fee. Thus have physicians long since given up their ability to negotiate fees because federal and state insurance laws do not allow groups of doctors to negotiate with insurers unless they are in the same practice. The fees for nearly 50 percent of a physician’s practice are set by either federal or state legislators.
Dr. Amundson’s letter in your Aug. 27 issue is correct in that the answer does not lie within insurance regulation or change, or even within the search for the cheapest insurance. Insurance growth has been simply a 50-year temporary answer to a problem: Americans want more health care than they are willing to pay for.
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Frank May, the chief financial officer of YVMC, explained it correctly when he pointed out that people who are not willing either to pay for their health care or to purchase an insurance program to cover them and still expect our hospital, physicians and air ambulances to provide state-of-the-art care for them free are examples of the fundamental three laws of health care:
Everyone will die.
No one wants to.
No one wants to pay for it.
Additionally, the health care industry has been focused for a century on technological improvement and has produced a very advanced capability to cure disease. That effort is becoming increasingly expensive. We have done this because of health care law No. 2, above. As that expense has increased, the focus is now on law No. 3.
So who will pay for it? Congress reduced payments to physicians and hospitals for the next year, implying doctors and hospitals should pay for it.
Self-insured businesses in Routt County are stepping up to the plate, assuming they will have to pay for it.
Why don’t patients get back into the system again like they were 50 years ago? Why don’t they pay for it? If they want to ride in a car to work, they have to buy a car. If they want an appendectomy, shouldn’t they pay for it?
I know that is too simple, and we physicians are dedicated to do all we can to save life and limb, regardless of ability to pay. But that is not universal — if you do not have a payment source, you will not get a liver transplant. If you do not have a payment source, you will not get to take anti-reflux medications.
So we come down to the issue at hand: The inducers of the demand must take more responsibility to provide only care that is necessary and effective, and lies within the financial constraints of the system. The era of single-minded devotion to patients at any cost is the primary (and some say, only) cause of the health care inflationary climb. Managers of financial resources are not obligated to do themselves financial harm, and physicians are under no obligation to provide care for which no one will pay.
Amundson calls them “advanced care management programs,” or “disease management strategies.” This calls for a systematic approach to individual health care and calls for the patient and provider to strive to a “scientifically evidence based approach to providing care.”
No entity will compete to serve those who do not or cannot pay for their health care. Competition only helps to control costs in a system where all participants have buying power and freedom of choice. People will, in fact, compete for the right to deny care for the patients without a payment source.
Michael Millenson wrote, “With payers no longer willing to pick up the tab for health care costs that don’t contribute to identifiable results, the era of ‘trust me’ medicine is over.” Dr. Paul Eddy, one of the primary movers in President Clinton’s health care reform initiative wrote, “The difference between, ‘It might work, let’s try it, and ‘It might work, but there is an absence of clinical evidence that it will, so let’s don’t do it,’ would decrease expenditures by over $100 billion a year!” This year, Tenet Healthcare was fined more than $30 million by the federal government for unnecessary cardiac procedures.
Thus, the inducers of demand (physicians) are at the point in cost reduction. We must step up to the plate and state clearly that we cannot provide unlimited levels of care in an economically constrained environment. This will drive us to logically, scientifically provide care to the sickest, most complex patients. Our treatments ought to be scientifically defensible, appropriate, effective and at the level of cost for which the payers are committed to provide. Physicians must align themselves and their practice patterns with the employer’s, insurer’s and patient’s financial realities.
John R. Sharp, M.D., M.B.A.
Northwest Colorado MDNet
a physician management company