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Sunday, December 4, 2011
Health / Nutrition ... Public Policy ...

I previously wrote in favor of using vouchers as a means of reforming the increasingly dysfunctional and economically threatened health care system in America. I feel that a federal voucher system could be fashioned in a way that meets both Republican and Democratic concerns. I.e., employer-provided health insurance would be abolished. Taxpayers (especially corporate taxpayers and rich taxpayers) would instead pay into a pool used to provide an annual voucher to every American, good for so many dollars worth of health care insurance each year (health care spending is presently around $8,000 per person). The annual voucher could be adjusted so that rich people get smaller vouchers and the poor and working class get bigger ones (i.e., worth more $$). This would allow insurers to compete in an open market for voucher customers. The federal government would regulate this competition so as to discourage “creaming”, i.e. trying to attract only young and healthy participants. The government would also require that every policy meets some minimum standard of benefits (e.g., it can’t be a bare-bones “big emergency only” policy).

I’m not the only one that believes that a voucher-based system is the best (although certainly far from a perfect) way to deal with the health care crisis. A recent article by economist Robert Samuelson mapped out the current economic and political dimensions of the crisis. Samuelson came to the same conclusion – vouchers are the best way to get a handle on this distressing situation.

I fully anticipate (along with Samuelson) that such a system would change the nature of health care for everyone. For the time being, the present dis-coordinated system of having separate insurance companies, private doctors, corporate-owned hospitals and clinics, along with a variety of disconnected government partial-subsidy programs, could be maintained. But over time, the incentive would be towards “one-stop shopping”, i.e. using your voucher with a care company that acts both as insurer and primary provider; i.e., an organization that would provide and coordinate all the healthcare that you need over the next year, in return for your voucher (and possibly a separate charge, if you wanted added features).

This could eventually put the local doctor’s office out of business, making it go the way of the corner grocery store. (The local drug store is vanishing too.) Health care would become “supermarket-ized” by clinical networks. Perhaps 95% of all services would be provided by the network, and any highly specialized services for particular diseases would be fully coordinated by the network and provided by secondary doctors or clinics.

A lot of people would hesitate before accepting this deal; right now most of us (over the age of 40, anyway) have a private doctor who we trust to guide us regarding our health care needs. Under my voucher system, we would put that trust into the hands of a corporate entity (which could be a non-profit, but probably would usually be a capitalist business). We might or might not have a regular doctor to talk to; if we needed hospitalization or other clinical services, that would be set up by a “care coordinator” working for the corporation. I myself wonder if this is going to risk lives and compromise human dignity, in a Faustian trade for profits and efficiency.

But a recent article in The Atlantic gave me some hope that perhaps such a system could work in a humanistic fashion, in a “win-win” way that provides profits for investors, very good health care to individuals, and lower overall health care costs for our nation and our economy. In a nutshell, a California company called CareMore was formed by a doctor in the 1990s to provide medical services to Medicare patients differently than most “managed care” HMOs did. HMOs typically try to contain costs by restricting patient options and denying coverage for as much as possible (perhaps even more than legally allowed, given the “deny first, reconsider only if challenged” procedure that insurers and care companies use).

However, CareMore decided to try reducing hassles for patients and providing preventative care measures especially for patients with chronic conditions like heart disease and diabetes. For example, free transportation was arranged for some patients as to cut down on their appointment no-show rate. As a result, hospitalizations and misdiagnoses dropped, and even though CareMore employs more staff per patient than other companies, its average cost per patient is 18 percent below the industry average. Most CareMore patients are paid for through the Medicare Advantage program, a fixed yearly per-patient payment system that comes close to being a voucher system. It replaces the usual fee-for-service system, which is blamed for much of the health care system’s high costs.

The CareMore approach and its success offers evidence that providing coordinated preventative care can control health problems early and keep them from festering into serious, high cost situations. Arguably, it could actually lower national health care expenditures. This is one of those ideas that seems to make sense to the point of being obvious; but during and since the big Obamacare debates back in 2009, I have read many articles saying that it ain’t so, that there are studies proving that preventative care hardly does anything to “bend the cost curve”, (Example here) and perhaps it only increases overall costs due to higher utilization. (I.e., people will go to the doctor more often once they have dependable coverage). CareMore’s experience seems to counter this notion.

The Atlantic article admits that CareMore’s success in reducing costs while increasing service levels might not be reproducible to all age groups and environments. Furthermore, other corporations or non-profits may not have the same culture as CareMore did (unfortunately, CareMore had been merged recently into a bigger care conglomerate, although that company supposedly plans to expand the CareMore model). But other companies are willing to give the CareMore model a try. If it were to become the industry standard, I might then feel that we could trust our health to a voucher system, resulting in controlled and affordable costs while maintaining high life expectancy and quality for the American public.

◊   posted by Jim G @ 8:59 pm      

  1. Jim, When it comes to insurance I really have no clue. I do think that when it comes to charging for medical services, the prices are outragenous. I know that a doctor I see a couple of times a year, see for not more than 3 minutes, maybe two minutes each time (he actually has to kind of “make up” something to do when he sees me in the office), charges a little more than $170 for the visit! That’s over $5000 per hour! (I wouldn’t mind putting in an hour’s worth of work a week for money like that.) Could his knowledge be possibly worth that much? Maybe, but I’m not sure. And most of the doctors I see charge that much.

    Hospitals cost similarly outrageous amounts of money. Yes, they have to pay overhead, salaries of well trained personnel, pay for the newest medical machinery, etc. Yet, it is notorious that nurses, to say nothing of aides, who treat the most ill are seriously ill paid. I find myself asking: Does heating and lighting cost that much?

    Then too, I find myself wondering: How is it that, when it comes to Medicare, a bill for $1000 can be immediately reduced to something like (a guess but not that much of a guess) $12? A few blood tests that require perhaps 5 minutes of time for drawing the blood and an unknown (to me) amount of time to analyze the blood (of course, expertise is required of such that do this work and yes the meachines have to be bought and paid for to analyze the blood), these few blood tests are often billed something over $2000; yet the hospital will be willing to receive a couple hundred dollars for those. I find myself asking: Which price is the REAL cost? It is well known that anybody who has no insurance and is obliged to pay such medical bills can negotiate them down to more reasonable prices. Yet, too often hospitals do not give the break to the person who does NOT have insurance, but does give the break to the insurance company. Something’s wrong with that picture.

    So, first, before insurance, I find myself wondering about the charges for medical expenses.

    When it comes to insurance, I actually like what I have and would NOT like to see it changed: I pay huge amounts in premiums, some co-pays (which have doubled recently) for medications, and all rest of the bills are paid by my insurance. Yes, I do find myself wondering if one of these days I simply will not be able to pay the premiums for this good insurance that a lot of people simply do not have or cannot afford.

    Which brings us to insurance–at least to my way of thinking. I definitely know that I do NOT want my providers being “supermarket-ized”. Oh, no!

    I also am sure that I am not that keen about all this business of “preventive medicine.” OK, a certain amount of it. But after a certain point–both when it comes to the kind and amount of preventive tests–I tend to think “preventive medicine” raises a lot of unnecessary anxiety in people. I also personally know a doctor who at the slightest mention by the patient of any twinge immediately calls in a specialist for that particular twinge. Who is that doctor fooling? Likely, that medical professional is taking an “I’ll help you; you help me” kind of approach to the whole business.

    So, I personally have decided that I do NOT want a lot of that “preventive” stuff. And OK, if as a result I die, then I die. It’s going to happen one way or the other. I say, skip the anxiety about whether it will be this or that that might cause our death and skip the pretense that we can either “prevent” death or postpone it. We can do neither. Meanwhile, I say life a good life and enjoy the time we have.

    So far, I have not addressed your idea of “vouchers”. Maybe that is because I tend to think that a good look at medical charges of all kinds could easily reduce those charges, yet give those who actually perform the medical services an honest fee for services. There may be no need for vouchers or any other kind of “whateverCare” if some of the money saved could go to helping those without insurance or with poor insurance.

    It seems to me that if the medical fees were adjusted to some sort of honest fee for one’s knowledge, payment for those who staff the office, and payment for a pleasant atmosphere where the medical services are performed, and, of course, payment for equipment (which is likely as overpriced as everything else is nowadays), the charges for medical services could be reduced, thus reducing the insurance claims, etc., allowing for some money to help those without insurance.

    Maybe something could be done about healthcare charges, insurance premiums, and thus the problem would be “fixed”?? Or have I simplified the situation too much?

    I myself have spent years and years of my life in, around, near doctors, hospital, nurses, nurses aides, having taken care of several ill loved ones and being myself seriously ill too many times. I am only too acquainted with charges for medical services–and what salaries various members of the medical “caste” (is there another appropriate word? I can’t think of one.) are paid. (I myself once worked as a nurse’s aide. I’m here to tell you that the jobs that SHOULD be paid the most are paid the LEAST.) (I once saw a doctor–a specialist–who was dressed to the nines, accompanied by no less than 4 nurses–NOT student doctors; this doctor did not even sign his name to a prescription–had a special nurse who did only that, sign his name to prescriptions. As he came in the room to deal with my medical problem, all I could think of was: Who is paying for his clothes and his retinue? I lost all interest in his doing anything at all for my situation. This was maybe 25/30 years ago; I wonder what he charges now for his services; or maybe he’s long retired and living very well indeed.)

    So, basically, it seems to me that when it comes to this whole “insurance problem” and “Obamacare” and who is going to get what and who is going to pay for what, I find myself thinking that the first place they should start is with the charges themselves. Second, I think that our country should pay quite a bit less money for wars and all that accompanies wars, and the money saved could be spent to help those less fortunate in our society who have no or bad insurance. MCS

    Comment by Mary S. — December 5, 2011 @ 3:51 pm

  2. Jim, Another thing that bothers me about this whole change in healthcare business: Nothing is said about when/how it will be implemented or phased in.

    Specifically, I think of all the very sick people who are unable to make choices for themselves and who have no one who can do this for them. As I understand, no one has said anything at all about what will happen to them, who will make decisions for them.

    I find myself wondering just how our politicians plan to phase in a new system. This problem, I think, is a big one. MCS

    Comment by Mary S. — December 5, 2011 @ 7:04 pm

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