AMA It’s not just about us

AMA It’s not just about us:

Some excerpts from the address of AMA President Nancy Nielsen:

“We need fundamental change in our health care system for ourselves, for our patients, for our nation. Right now annual health care costs exceed $2 trillion. That’s 16 percent of our nation’s GDP. Costs are estimated to reach $4 trillion and 20 percent of GDP in 10 years.

Right now, annual health care costs are the number one reason for bankruptcy. Right now, Americans get about half the preventive services that are recommended. Right now, we rank 19th among 19 developed countries in mortality that could be helped by health care. That means deaths that might have been prevented by health care. Nineteenth out of 19.

Forty-six million Americans have no health insurance, and another 29 million are underinsured. Those 75 million Americans are delaying or failing to obtain preventive care.

In our nation’s sick economy, job losses mean the loss of health insurance. Just yesterday, the government reported that employers cut 240,000 jobs in October alone. And so far in 2008, some 1.2 million jobs have been lost.

We as a nation have to do some serious soul searching. We are the most innovative, resilient, determined, self-reliant and creative nation in the world. Our health care system ought to be the best in the world but currently it is not.

Today we pay twice what other countries with better health outcomes pay. But we rank last or next to last in many health indices. And, that’s compared with Australia, Canada, Germany, New Zealand and the United Kingdom.

Now, we can try to protect the status quo. But the status quo is not serving patients well, and doctors are angry and unhappy. It is high time we do something about it and I’m not talking about single-payer. I am, however, talking about comprehensive change. I’m talking about responsible change that builds on the strengths of the current system. Isn’t it time to build a bridge to a new and better health system? A system where patients are better served and physicians are happier and more fulfilled in their work?”

…

“Do you remember this pivotal question during one of the presidential debates? “Is health care a right, a privilege or a responsibility?” Whatever our personal convictions on the answer to this question, the broader population seems to be moving fairly rapidly to the view that health care is a right.

But who will pay for this right, if that’s the country’s decision? Who will define the parameters of this right to health care? Because everyone cannot have everything, and society should not have to provide everything, nor can it afford to do so.

Take education as an example of setting parameters. Our society has decided that K-12 education is a right, but post-secondary education is a privilege and a responsibility.

Defining parameters for health care “rights” and “responsibilities” will require society’s honest deliberation and some difficult decisions. For sure we have to define the expectations of personal responsibility. What is fair to expect the individual to do? What should be up to the individual, and what should be society’s concerns?”

…

“As we participate with the rest of society in this debate, we cannot allow the discussion to descend into ideology and inflammatory labels. If we do, if we allow reason to be trumped by rhetoric, then we will have lost our chance to shape the change, to build the bridge to a better health system.

So I ask you, are we prepared to participate in that societal debate? Because the debate is going to happen. This is not just about doctors. It is not just about us. But physicians and patients will have to live with the outcomes. That’s why we have a central role to play.

We all use the commons and that is why we all have to do our part to protect it. Make no mistake, I am not in favor of a single-payer system. I am in favor of a health care system that works better for all of us, patients and physicians.

We’re in a time when our country is demanding change. We need change. Let’s harness that energy for our patients and ourselves. For sure, this is for us – we have to remove the sand from our shoes. But it is for so much more than us.”

…

“In many countries, when people are scared, they turn to government for protection. Even though many do not trust Washington politics, they may see it as their only option. There is great concern in our country. We need to help calm those fears. We need to embrace our role as healers in a time of need. We need to help craft a solution that is based on our professional ethics–one that is equitable and just, one that builds on the strengths of our system, addresses current weaknesses, and allows us to regain the joy and simple dignity of caring for our patients. “

Please go check out the whole thing. Credit where credit is due. It is a remarkable statement from the the AMA President.

I am concerned by the last paragraph I quoted, however. My goal is to turn to my government for fairness, and it is not our of fear, it is out of anger at the mismanagement of our system and at the giant sucking sound, to quote Ross Perot, that emanates from our insurers, Pharma, and ourselves that makes our system so inefficient. So, I hope this is not the line in the sand that the AMA is drawing, that a solution based upon strong government regulation is off the table.

Two Reports: Insure The Uninsured Project :

Insure The Uninsured Project : Recent Reports

Health Care Systems Around the World
(November 2008)

Now I’m embarrassed. I just posted my summaries of the OECD summaries and get this in my inbox. Somebody who knows what they’re doing spent some real time investigating and writing about 10 systems from around the world. I haven’t read it yet, but wanted to get it up here, along with the one below:

The Healthy Americans Act (S. 334)
(October 2008)”

Cheers,

UK – OECD Summary

Summaries of summaries of healthcare systems based on the Commonwealth Fund reports.
Author(s) of the originals are:
Karsten Vrangbaek, Isabelle Durand-Zaleski, Reinhard Busse, Niek Klazinga, Sean Boyle, and Anders Anell

UK/NHS
• The UK, along with Sweden, is a prototypical socialized system.
• Essentially everyone is covered and all the funding takes place through a federal government taxes.
• General taxes account for 76% of the funding and then there are national insurance contributions to account for 19% of the funding. (I do not understand what the national insurance contributions are or where this money comes from.)
• User charges also account for a further 5% of the funding.
• Cost-sharing amounts to small drug co-pays of $14 but this is only for about 12% of all prescriptions written so it is therefore relatively small amount. In other words 80% of prescriptions require no co-pay.
• Dental requires up to $400 per year out of pocket before reimbursement occurs (I think).
• Out-of-pocket expenses account for 12% of the total health care expenditure.
• Primary care physicians are paid directly by the primary care trusts through capitation, salary, and fee-for-service arrangements.
• Hospitals are run by national health service trusts.
• Consultants and specialists are salaried.
• The private system in Britain covers approximately 12% of the population. It is a mix of profit and not-for-profit providers as well as supplementary insurance.

France – OECD Summary

Summaries of summaries of healthcare systems based on the Commonwealth Fund reports.
Author(s) of the originals are:
Karsten Vrangbaek, Isabelle Durand-Zaleski, Reinhard Busse, Niek Klazinga, Sean Boyle, and Anders Anell

France
• 79% of all care is publicly financed
• Employer and employee payroll taxes account for 43% of the funding. The employer pays 12.5% of payroll and the employee pays 0.75% of payroll.
• Part of the national income tax goes to funding health care and accounts for 33% of the funding.
• Tobacco and alcohol taxes supply another 8% and state subsidies and other social security taxes provide another 10%
• Coverage includes everything except dental and eye.
• Cost-sharing occurs through coinsurance and co-pays and extra/balance billing
• Out-of-pocket expenditures account for 7.4% of the total health expenditure
• Private health insurance accounts for 12.8% of the total health expenditure
• The public funding goes to public health insurance funds with membership based upon occupation
• Benefits/prices/cost-sharing levels are determined, since 2004, by the national Union of health insurance funds (UNCAM)
• Low income persons also get free complementary-supplementary coverage including dental and eye and they qualify for no balance billing
• Private insurance is like our supplemental policies. It reimburses for the cost-sharing elements of the national plan. This is usually provided by employment-based insurers called “mutuelles” . 90% of the population gets this. So far there is only a minimum competition in this market.
• Physicians, non-hospital-based, are self-employed and fee-for-service. Hospital-based physicians are salaried.
• Two thirds of hospital beds are either government-owned or nonprofit.
• One third hospital beds are private located in for-profit clinics and, I believe, in hospitals as well.
• Hospital reimbursement is moving to a DRG style system. Hospitals do get subsidies for research and teaching and emergency care.
• There are some cost controls in place. Controlling formularies a big issue at the present time according to my interview with Dr. C’alloch in Paris.

The Netherlands – OECD Summary

Summaries of summaries of healthcare systems based on the Commonwealth Fund reports.
Author(s) of the originals are:
Karsten Vrangbaek, Isabelle Durand-Zaleski, Reinhard Busse, Niek Klazinga, Sean Boyle, and Anders Anell

Netherlands
• The Netherlands will be experiencing major changes that began in 2006 due to dissatisfaction with the prior dual system of competing public and private health care.
• All residents are required to buy health insurance.
• Health insurance is “statutory” but provided by private health insurers and regulated under “private law”.(?)
• Financing: statutory health insurance, or SHI or public insurance is funded by a 6.5% tax on taxable income up to €30,000. This 6.5% apparently must be reimbursed by the employer however.
• The self-employed pay a 4.4% rate of tax for their insurance on their income.
• The average annual premium as of 2006 was €1050
• The government completely covers children up to age 18.
• “Substitutive” private health insurance was abolished in 2006.
• The statutory health insurance fund distributes risk-adjusted funds to the insurers. These insurers also provide, for a fee, complementary/supplementary insurance. The premiums for these complementary policies are not yet regulated.
• Private insurers may be for-profit but must accept everyone in their geographic area. They are compensated for this by risk adjustment reimbursement by the government.
• 78% of total health care expenditure is public.
• The statutory health insurance covers usual healthcare and includes drugs but does not include routine dental care. The annual deductible is €150 per year.
• Out-of-pocket expenditures account for 8% of the total health expenditure of the Netherlands
• Physicians contract directly or indirectly with insurers. General practitioners income is a combination of capitation and fee-for-service and pay-for-performance is being tried. Specialists are two thirds self-employed even if hospital-based and one third are salaried.
• Hospitals are mostly private but not for profit.
• Cost controls: it sounds like they are working on a version of managed competition though I am not clear on that.

Sweden – OECD Summary

Summaries of summaries of healthcare systems based on the Commonwealth Fund reports.
Author(s) of the originals are:
Karsten Vrangbaek, Isabelle Durand-Zaleski, Reinhard Busse, Niek Klazinga, Sean Boyle, and Anders Anell

Sweden
• The Swedish system sounds very much like the truly socialized systems that we have come to expect from right-wing fear mongers. Everyone is covered, everything is covered, and virtually everything is funded by the government through taxes.
• There are some co-pays and the deductibles and routine dental care for those over 18 is not generally covered.
• Co-pays for visits amount to about $20 for a general practitioner and $40 for a specialist. There is an approximately $12 per day co-pay for hospitalization and there is a deductible of about $140 annually for prescriptions. Once you go over this amount then there is a scaled re-payment or reimbursement (the higher the expenditure, the higher percentage the state pays.)
• Out-of-pocket expenses account for approximately 14% of total health expenditure.
• Funding is through federal and local taxes.
• The federal government is mostly responsible for prescription drug costs.
• County governments are responsible largely for hospitals, mental-health care, provider reimbursement etc.
• Municipalities are responsible for skilled nursing facilities and the like, as well as home care and some other things.
• Private insurance covers approximately 25% of the population and accounts for less than 1% of total health expenditures.
• Physicians are paid largely through capitation with some fee-for-service. Half of primary care physicians are private and half are employed or salaried.
• Hospitals are mostly county owned and the hospital-based physicians are generally salaried.

Germany – OECD Summary

Summaries of summaries of healthcare systems based on the Commonwealth Fund reports.
Author(s) of the originals are:
Karsten Vrangbaek, Isabelle Durand-Zaleski, Reinhard Busse, Niek Klazinga, Sean Boyle, and Anders Anell

Germany
• Germany’s system is based on public or social health insurance (SHI)
• SHI is mandatory for those with income less than €48,000 (this is about 75 to 80% of the population)
• The top quintile of income earners can opt in or out of SHI; 75% of these high earners opt in. (This matches up interestingly with the quintiles in the US, with the top 5% in Germany opting out of SHI it sounds like.)
• Also civil servants and the self-employed are excluded from SHI and make up the bulk of the 10% of privately insured individuals. (I don’t understand the rationale of excluding the self-employed or, for that matter, civil servants except that I presume they just get these benefits paid for by the government anyway.)
• SHI covers the usual healthcare plus dental and drugs and more.
• Cost-sharing occurs through co-pays for outpatient visits, drugs and dental care. Apparently this is new since 2004. Cost-sharing max-out is 2% of income. Out-of-pocket expenses account for 13.8% of total health expenditure.
• SHI is operated by over 200 competing health insurers and these are called “Sickness Funds”.
• The Sickness Funds are all autonomous and nonprofit but regulated.
• Funding comes from the employer at 8% of gross up to €43,000 and from the employee at 7% of gross.
• For those not in SHI, the sickness funds set rates but in 2009 the government will collect and regulate this as well. After 2009 the government will distribute to sickness funds based upon risk adjustment mix of their clients.
• Interestingly, private health insurance rates cannot change once you have been accepted into the plan.
• Private health insurance accounts for less than 10% of the total health expenditure of Germany.
• Physicians receive fee for service plus “fees per time period” (the latter sounds like capitation). Just a note here to refer to the NPR story about the fee-for-service money running out towards the end of every quarter
• Hospital-based physicians are salaried.
• Hospitals are split up into about 1/2 public, 1/3 private nonprofit and 1/6 private for-profit. The latter for-profit segment is apparently growing at this time.
• Hospital reimbursement is now a DRG based.

OECD Denmark summary

Summaries of summaries of healthcare systems based on the Commonwealth Fund reports.
Author(s) of the originals are:
Karsten Vrangbaek, Isabelle Durand-Zaleski, Reinhard Busse, Niek Klazinga, Sean Boyle, and Anders Anell

Denmark
• The health-care system of Denmark covers all regular healthcare
• Insurance is universal and compulsory
• Cost-sharing occurs in dental and corrective eye care and drugs
• Out-of-pocket costs account for 14% of the total health expenditure
• There is a safety net for the poor and the chronically ill to limit their expenses
• The system is publicly financed
• Federal tax of approximately 8% of taxable income goes into the fund; this accounts for 82% of total health expenditure
• Private or complementary insurance is available. 30% of the population buys this through not-for-profit Danish Health Reimbursement Scheme plus some others. This is often a fringe benefit for employees.
• The system is organized into five regions. Each region owns and runs hospitals skilled nursing facilities etc.
• The various regions finance the practitioners dentists and “pharmaceuticals” (? Pharmacists)
• It was not clear to me whether practitioners get fee-for-service or rates or if they are able to negotiate.
• Some professionals, I’m not sure which, our salaried-perhaps hospital and clinic-based.
• Hospital-based physicians are salaried.
• Other physicians have a capitation arrangement which accounts for approximately 30% of their income plus fee-for-service for the rest.

Mayo Clinic Health Policy Center Recommendations

Mayo Clinic Health Policy Center Recommendations

IV. Provide Health Insurance for All

Provide guaranteed, portable health insurance for all individuals, giving them choice, control and peace of mind.

Requires action from: Insurers, employers, the government and individuals

  • Require adults to purchase private health insurance for themselves and their families. Employers could continue to participate by buying insurance for their employees or giving them stipends to purchase it. However, the individual could own the insurance.
  • Appoint an independent health board (similar to the Federal Reserve) to provide a simple coordinating mechanism for individuals to select a basic
    private insurance option. Allow people to purchase more services or insurance,
    if they choose.
  • Provide sliding-scale government subsidies to help people with lower incomes
    buy insurance.
  • Realign the health system toward improving health in addition to treating
    disease.

This is, more or less, a Bismarckian or “sickness fund” type system. I would argue against leaving the employers in the loop, as salaries/wages can easily be designed to provide appropriate compensation without including it as a benefit. Just makes it easier to administrate.

I’d further argue that a more strenuous effort needs to be made to make the benefits provide and the cost to consumers of a “standard” policy uniform accross the nation. The way other countries have done this is to stricly regulate the costs and benefits of the basic plan very rigidly, and then allow insurers to compete in the non-basic elements of a plan, such as optical, dental, wellness, etc.

I think this approach will win support from essentially all Democrats and more than a few Republicans. It seems to already be in the works.