Sunday, October 25, 2009

Health Care

This American Life had a special on Health Care . This illustrates many of the problems in our current health care system. The first is the cost and stress of the billing process.

They featured a Four-physician office has four people in the billing department. There are 20 to 25% on billing department and bad code that don't go through. And part of the problem is that the coding system is inconsistent. There is a code for for a spacecraft accident but no code for someone coming in with a complaint of "weak arms." 200,000 medical coders in United States and BLS expects that this will rise.

I have recomemnded that sortition juries look directly at the medical records to determine what doctors, and hospitals should be payed.

How do we pay the pharmaceutical industry? Obviously, we want to pay those who manufacture the drugs and those who develop new drugs. The latter should be proportional to the benefit of new drug over previously-discovered drug. But the system we have doesn't work well. Each pharmaceutical company encourages doctors and patients to demand their new drugs even if the difference is marginal. Meanwhile, the insurance companies charge copayments so that the patient would demand the cheaper generic drug. Example is a drug which can be taken once a day instead of twice a day whcih costs much more expensive. (That is, a time release version of the drug is four hundred dollars a month more. The show emphasized an acne patient with "pimples.") There is also a question of whether insurance companies increase expenditures on health care and making individuals responsible for their own health care reduces expenditure. If it is coming out of your pocket, presumably, one will spend more carefully, than if it is coming out of the health insurance industries pocket. They talked about the veterinary medicine industry where pet insurance is just developing. They featured a couple who spent a lot of both their money and a lot of their veterinary insurance companie's money on Harriet, a hedgehog. So how do we make a payment system where the patient helps control costs without scrimping on things that would truly make them more healthy and perhaps save money in the long run? They had economists who talked about how insurance is driving up costs by separating the consumer from the payment for the services they provide. Yet, Paul Krugman can state, "Serious students of health care have known for a long time that the magic of the marketplace doesn't work in health care..." As a side note, his blog led me tot he article that Massachusetts REsidents support their new health reform by 59 percent to 28 percent. But there is a concern about cost.

I propose that sortition juries allocate the 9.6 per cent, now higher, of the health care budget that is spent on pharmaceuticals. Each pharamaceutical company would get ap ayemnt based upon the improvement they made in the health compared to their competitors. This would encourage them to spend money on research and not on marketing.

The next issue is the war and race to consolidation among both insurance companies and hospitals. Aetna dropped eight million patients/policy holders. (Bill Potters talked about this first on Bill Moyers show and also to a U. S. Senate Committee.) Aetna dropped out of the markets where it was not the top insurer, so it could not negotiate good contracts with the providers. Fragmented insurers are not be able to negotiate the prices. Their health care economics expert compared insurer market share with the hospitals considilated. Thus, there is a race to of monopolists vs. monopsonists.

He advocated the system in Maryland, where there is a standard price for each procedure, regardless of the size of the insurance company or if the person is uninsured. (But what do we do about individuals whose diagnosis, symptoms or treatment just doesn't fit any of the predefined categories. This is replacing the coding problem for insurance companies with a coding problem for the bureaucracy that sets these rates.) I should add in fairness that John Hopkins Hospital, in Baltimore, Maryland, has been number one in the US News and World Report top hospitals ranking since 1991.

And we can bring the group back to group insurance. The group would have a pool of money from premiums. There would be groups that would handle catostrophic cases, cancer, transplants and unfortunate accidents and other groups tht would handle the routine stuff ( a simple broke n leg or a appendectomy). The latter group would make referrals to the other hand. They would bargain with the hospitals, or as I pointed out earlier, pay after the fact so the individuals can deal just with their doctor about the health care. What was the insurance company would be paid for their expertise in organizing information, not for apparently heartless acts like dropping out of markets?

Although not relevant to participatory demoracy, I enjoyed their historical presentation. At 1900, some doctors were still using leaches. There were no hospitals as we know them. They were for the ill. Recall that President McKinley recovered from his wound at the home of the president of the Pan American exposition, where he was to die. (Source, wikipedia, and Complete Life of William McKinley and Story of his Assassination by Marshall EVerett.) Then, the average person spent five dollars a year on health care, $100 a year in today's money. 1909 was the first drug that cured an illness. Salvorsen cured syphillis.

Hospitals started curing things and not a poorhouse for the sick house. In the 1920's Baylor Hospital had unfilled beds due to the price, but people spent more money on cosmetics that on the health care, but the president remarked that a person would have to save up twenty years to cover a hospital bill. So they started the first insurance, $6.00 a year for up would pay for up to twenty-one days. They sold this policy to teachers in Texas. Blue Cross came out of this and started marketing to employers. By World War II, only nine percent of Americans were insured.

In 1943, an unknown bureaucrat at the IRS, made a routine ruling, employers don't have to pay taxes on the health insurance premiums for their workers. This was included in 1954 Tax Code unambiguously.

No comments:

Post a Comment