| "The U.S. is the only developed country that does
not guarantee health coverage for all its citizens." |
This is not true. In Canada, for example, between 2% and
5% of Canadians are not enrolled in a provincial health
plan. If they go to an emergency room and do not pay cash,
they are denied treatment. The United States, in contrast,
has a law (EMTALA) prohibiting emergency facilities that
accept federal funding from refusing screening and
stabilization of patients with acute conditions, whether or
not they have any means of payment. |
|
There are 46 million ["Americans"] uninsured and another
25 million underinsured. | Many of the uninsured are non-citizens. Many "uninsured"
citizens, perhaps 25%, are eligible for SCHIP or Medicaid
and will be promptly signed up as soon as they require
treatment. "Underinsured" probably means that the person
has chosen not to have the type of "comprehensive
insurance" that Sen. Baucus prefers, but instead has chosen
the most cost-effective type, for catastrophes only, and pays
for routine care out of pocket with premiums savings. |
|
"[F]amilies are struggling to keep up with out-of-pocket
costs for medical care." | Owing to the heavy burden imposed by government
through taxation, regulation, and litigation, families are
struggling to keep up with the cost of everything, including
insurance premiums. Medical inflation is greatly worsened
by using third-party payment for 85% of costs. |
|
"Despite high levels of spending on healthcare, research
documents poor quality of care received by patients in the
U.S." | "Quality" is defined to mean receiving care "recommended"
by experts it has nothing to do with proper diagnosis or
skilled treatment. It is quite likely that the poorest care of
all is received by patients with government coverage,
particularly Medicaid. As "cost containment" and
"prevention" are emphasized, increasing "recommended
healthcare" will be at the expense of sickness care needed
and desired by patients. |
|
"The nation s healthcare stakeholders are signaling that
they are ready and willing to engage in serious and
comprehensive reform of the health system in crisis." | The "stakeholders" most of them not caregivers are "at the
table" in order to try to preserve or enlarge their "share" of
the $2.3 trillion dollars that flow through the system and
their control. None of them have an interest in dramatically
lowering the flow of money. The ultimate
payers taxpayers, insurance subscribers, and patients have
no meaningful influence in a system mostly dependent on
third-party payment. |
|
Healthcare reform is essential "to sustain our economy, our
ability to compete internationally and over the long haul to
deal with our long-term fiscal challenges." | Malinvestment throughout the economy is the result of
government monetary and tax policy. Noncompetitiveness
of American industry results from an unfavorable business
climate (taxation, regulation, and litigation) as well as the
more generous compensation package received by American
workers (including health benefits). Increasingly intrusive
government meddling in "healthcare" (one-sixth of the
economy, and one of the healthiest sectors), could sink the
rest of the economy also. |
| "Today, the costs of care for the uninsured are largely borne
by those with insurance." |
This is not true. The uninsured use fewer medical services
than the insured, and they pay a substantial share of their
own costs. Indeed, they may be charged much higher costs
than an insured person for the same service. Uncompensated
care constituted only 2.7% of medical expenditures in 2004.
Nationally, the uninsured paid $30 billion in medical costs
out of pocket. One study showed that half the uninsured
with incomes at least twice poverty received medical care
for which they were charged: 80% paid in full, and 10%
were paying in installments. An additional 8% received pro
bono care. |
| "Providers charge higher prices to patients with private
coverage to make up for uncompensated care." And:
"Requiring all Americans to have health insurance will help
end the shifting of costs from the uninsured to the insured."
|
Cost-shifting is used to make up shortfalls in payment
owing to Medicare and Medicaid price controls or
"prospective payment." Today, productive Americans pay
for the medical care given to Medicare and Medicaid patients
both through taxes and in inflated insurance premiums or
out-of-pocket charges. Providers would have to cut services
if they could not shift costs to a private sector. |
| "Covering all Americans would also insure that the
insurance market functions effectively." |
Effective functioning of the insurance market depends on
the accurate pricing of risk which is rendered impossible
by community rating and guaranteed issue. |
| "If a significant portion of Americans does not purchase
insurance until sick, then premiums for all enrollees will
increase." |
This is the effect of community rating and guaranteed issue;
states implementing these policies have much higher
premiums and have driven large numbers of Americans out
of the insurance market. |
| "Covering all Americans is essential to effective prevention
and wellness efforts in managing chronic illnesses." |
This statement assumes that all Americans are so
irresponsible that they take care of themselves if and only if
someone else is paying their medical bills! This contradicts
common sense and all experience. |
| "Efforts to guard against and better manage illness are an
effective tool to improve health and contain costs." |
Very few "preventive" measures (leaving aside public health
engineering measures such as sanitation) have ever been
shown to save more than they cost. |
| "Wellness and prevention would be prioritized." |
Sickness care would have a low priority. This proposal
would discriminate against the sick, the injured, and the
disabled. |
| Americans are "locked into a job based on the need to
retain their health coverage." |
This is often true; consumer-directed health care attempts to
make insurance self-owned rather than employer-owned.
Forcing companies to buy insurance substitutes job loss for
job lock. |
| "Those who already have health coverage could keep what
they have." |
Would Americans be allowed to keep their high-deductible
plans and Health Savings Accounts? Would additional
Americans be permitted to enroll? |
| The Baucus plan proposes to set up a health insurance
exchange, presumably like the Connecter in Massachusetts. |
Massachusetts has experienced cost overruns, severe cuts in
funding to safety-net hospitals, and denial of affordable high-
deductible coverage to citizens who would prefer that.
|
| "While the Exchange is being created, the Baucus plan
would make healthcare coverage immediately available to
Americans age 55 to 64 through a Medicare buy-in." |
Medicare patients are finding it increasingly difficult to get
an appointment with a physician, as physicians are being
forced to cut back on their Medicare practice owing to
costly rules and nonremunerative fees. Bringing more
Americans into Medicare and Medicaid may mean that more
Americans nominally have coverage, but their access to
medical services may be significantly curtailed. |
| "Once affordable, high-quality, and meaningful health
insurance options are available to all Americans through
their employers or through the exchange, individuals would
have a responsibility to have health coverage." |
There is no way of knowing when this nirvana will occur,
if ever, and the key definitions of "affordable," "high-
quality" and "meaningful" are all great unknowns.
Americans are now supposed to be responsible for paying
bills they incur. What additional penalties will be imposed? |
| The Baucus "RightChoices" is supposed to guarantee access
to recommended preventative care. |
Where will the funding, personnel, and facilities come from?
Will resources be shifted away from the care of the sick and
the injured? Away from educational, law enforcement, or
other parts of the government budget? Cost savings are
hypothetical, and are realized only in the long term if at all. |
| "Today s payment systems reward providers for delivering
more care rather than better care." |
This is only partly true. Managed care systems actually
reward practitioners for delivering less care. Any reward for
"better care" means submitting reports of rendering
"recommended" services, likely at the expense of other
services that patients prefer. In a free market, patients would
pay more for care that they perceive to be better or more
important. Under today s price controls, the best, most
experienced, and most qualified providers cannot be paid
any more than the least qualified ones. |
| Baucus recognizes that it is necessary to fix the
"unsustainable Medicare physician payment formula" [the
"sustainable growth rate" or SGR formula]. |
The SGR means constantly diminishing returns for the same
work it is unsustainable because physicians cannot
indefinitely continue to work if payment is
nonremunerative. A fix, however, is probably impossible
because of the unsustainability insolvency of the Medicare
system itself. The only solution that would not bankrupt
the system and yet would enable physicians to earn a living
is to repeal the ban on balance billing. |
| "According to the Congressional Budget Office, up to one-
third of that spending more than $700 billion does not
improve Americans health outcomes." |
A substantial portion, probably at least one-third, is not
spent on medical care at all. The only way to reduce that
amount is to reduce the amount of third-party payment, and
return to direct payment of most expenses by patients who
are spending their own money and can benefit from
economizing. Third-party payment should be only for
extraordinary expenses, or on behalf of those who are truly
unable to pay. |
| "Health IT is needed for quality reporting and improvement
and to give providers ready access to better evidence and
other clinical decision-support tools." |
Physicians and medical facilities already have access to IT,
and adopt the technology that they find to be cost effective
and beneficial to their practice. Billions have been spent on
IT that was unworkable and in fact impeded medical care.
"Quality reporting" shifts effort and resources into the areas
that are monitored and away from areas that are not.
|
|
The Baucus plan "would invest more to detect and eliminate
fraud, waste, and abuse in public programs." | Baucus should start with state Medicaid bureaucracies,
especially with eligibility determinations. So far, antifraud
efforts have largely been targeted at private physicians
offices. Bounty-hunting private contractors have been
deployed to search for coding errors. The huge penalty that
a physician can face for inadvertently violating an
incomprehensible rule is another strong reason for
physicians to avoid publicly insured patients. |
|
"Considering policies to shift the focus from institutional
care to services provided in the home and community could
improve the quality of care delivered and reduce costs." | A disastrous consequence in the opposite direction is also
possible. Turning chronically mentally ill patients out of
state hospitals into "community programs" resulted in
dumping large numbers of them onto the streets as
chronically homeless. |
|
"In the short term, healthcare reform would cost taxpayers
more than the government can achieve in savings from all
reforms and financing changes." | This is true, and the long-term savings are purely
hypothetical. In contrast, consumer-directed healthcare has
resulted in immediate savings to many of those who have
adopted it. |
|
Additional comments on body of report: | |
|
Medical care costs too much (p 1). | True. It costs even more when paid for through third
parties, owing to necessary administrative expenses, perverse
incentives, and corruption and fraud. We need to funnel less
money through third parties, including government, not
more. |
|
An example of an AARP Medical Advantage plan with a
policy limit of $37,000 per year: Ms. Kelly is now paying
$2,000 each month for her accumulated medical bills (p 2). | This policy appears to be a very bad deal. One should buy
coverage for high-end, not low-end expenses. |
|
In Japan s largest private system, the cost for magnetic
resonance imaging is less than $100, compared to $1,200 in
the US. | This should refute the assertion that high-tech means high-
cost. MRI is widely available in Japan in a highly
competitive market. |
|
The U.S. has higher infant mortality (p 6). | Such statistics are meaningless without comparable
definitions of a live birth, adjustment for population
characteristics such as marital status and maternal drug
abuse, and stratification for birth weight. The U.S. saves
more low-birth-weight babies. |
|
Patients with chronic care receive "recommended services"
only about half the time (p 7). | The effect on cost or outcome is unknown. Note that the
actual population is much more complex than the study
population from which recommendations are derived. |
|
The "current system does little to steer providers toward the
right choices" (p 7). | The current system has a large but unmeasured influence on
decisions through its payment policy, paying handsomely
for some drugs and procedures (perhaps not the "right"
ones) and poorly if at all for others. Proposed new
"steering" mechanisms are also financial. |
|
Americans want "a complete overhaul of the health
system" even if it means "higher taxes." | Apparently, the same people who are deemed incapable of
making intelligent decisions for themselves are capable of
decisions about the system as a whole. Not specified is the
acceptable amount of tax increase, nor whether the
respondents are actually paying taxes themselves. Also
unknown is how much control Americans are willing to
give up over treatment options. |
|
"National health reform" has failed since the early 1900s."
The Wagner-Murray-Dingell bill [which AAPS was founded
to fight] failed in the 1940s (p 13). | These bills were called "national health insurance" or
"socialized medicine." They were purportedly about
payment only, not about reorganizing and controlling care. |
|
Elements of the Baucus plan:
(1) "Individual responsibility" | Translations:
Collective responsibility for paying everybody's bills
through insurance, with relief of responsibility for paying
charges the patient incurs himself. |
|
(2) "Strengthening the employer-based system" | Not necessarily a good idea; moreover, proposals such as
expanded SCHIP historically crowd out private options. |
|
(3) "Guaranteed access to affordable coverage" | Subsidies for policies made less affordable by mandated
coverage |
|
(4) "Strengthening public programs" | Increasing the strain on already insolvent programs by
adding beneficiaries and mandates |
|
(5) "Focusing on prevention and wellness" | Rationing care to the sick and the disabled |
|
(6) "Addressing health disparities" | Seeking equality rather than improvement or excellence;
always achieved by redistributing resources from some to
politically favored others. |
|
"Our system also prohibits certain legal immigrants from
getting healthcare for five years" (p 14). | Both legal and illegal immigrants can buy medical services
now. Apparently, Baucus favors immediate or quicker
eligibility for taxpayer funding. |
|
Baucus deplores the shifting of costs from the uninsured to
the insured (p 15). | Usually, the shift is the other way around (see above). What
the Baucus plan would do is shift wealth from private
hands, where it can be used for private needs, to public
pools. |
|
The IRS is described as a "point of contact between
individuals and the government," and thus using the IRS as
the enforcer of mandates would "take advantage of the
existing relationship" (p 15). | Most Americans do not view their interaction with the IRS
in a positive way. |
|
It is claimed that 71% of Massachusetts working-age adults
supported the state s health reform efforts (p 16). | Which 71%? The ones receiving subsidies, or the ones
paying higher taxes or forced to buy more expensive
insurance? |
|
Low-risk individuals would pay the same premiums as high-
risk individuals (p 17). | This turns insurance into a welfare system. Baucus makes
the assumption that using health insurance premiums as a
leveling device is more fair and affordable than using
taxation. |
|
"Differences in premiums between packages will be due to
the difference in benefits and not differences in expected
risks" (p 18). | If the plan cannot bring in adequate premiums by pricing
risks correctly, then it will ration care to the sickest
individuals. People will pay for their benefits one way or
another: either with money, or with inconvenience,
prolonged disability, or even their lives. |
|
Baucus recognizes the above problem: "offsetting some of
the potential risks to insurance plans is intended to limit
plans incentives to enroll only the healthiest individuals" (p
18). | This assumes that plans who use nefarious methods to select
out the healthiest individuals will not use equally sinister
methods to restrict care to the sick. |
|
A new Independent Health Coverage Council "would
ensure appropriate income-related annual limits on out-of-
pocket costs so that families were not at risk of bankruptcy
by their medical expenses" (p 19). | The more you earn, the more you have to pay for medical
care. This is another way of equalizing income and leveling
down, and constitutes a tax on work and productivity. |
|
The budget-neutral Medicare buy-in for Americans age 55 to
64 is said to be temporary until the Exchange is established.
It is assumed that Medicare can offer the coverage at less
cost than the individual insurance market. The benefits
would be the same as those available to current Medicare
beneficiaries (p 21). | Presumably, the package would have the same rules and
price controls that are making medical care unavailable to
increasing numbers of senior citizens. If physicians restrict
their Medicare panels, would an influx of 55-year-olds crowd
out the older patients? |
|
Enabling individuals to buy into Medicare could enable
them to remain healthy and continue working and prevent
disabling conditions (p 22). | This assumes that coverage is equal to care, and that care
effectively prolongs working life. |
|
The Medicaid system is causing severe financial stress to
states, particularly during times of economic downturn. All
states except Vermont are constitutionally bound to balance
their budget (p 24). | The federal government can print or borrow money,
presumably without limit. |
|
"An estimated 80% of heart disease, stroke, and type II
diabetes, and 40% of cancers, could be prevented if
Americans stopped smoking, adopted healthy diets, and
became more physically active," according to Robert
Beaglehole, World Health Organization s Director of
Chronic Diseases and Health Promotion, in a keynote
address before the Phillip Hauge Abelson Advancing Science
Seminar, December 8, 2005 (p 28). | The connection with a "fractured delivery system in which
individuals with chronic conditions often see more than one
provider and take multiple medications" is apparently left as
an exercise for the reader. What does Baucus plan to do
with patients who already have heart disease or cancer or
with patients who persist in unhealthy behavior? |
|
"To make prevention a cornerstone of the healthcare system
requires a fundamental change in the way individuals
perceive and access the system as well as the way that care is
delivered." | The report is silent about this could be achieved or about
the need to shut down acute care facilities or redirect their
funding. |
|
RightChoices cards are to be given to the uninsured so they
can immediately get physical examinations, immunizations,
health risk assessments, and a plan to maintain good health. | With a shortage of medical personnel nationwide it is not
clear where all of the personnel will come from to do all of
these tests, and what will they stop doing in order to make
time for these. |
|
On health disparities: "One of the most glaring differences
in health status is reflected in infant mortality. African-
American infants die at a rate of 13.6 per 1,000 live births, a
rate that is higher than any other racial or ethnic group and
twice that of whites" (pp 30-31). | No cause or remedy is suggested. Not noted is that
premature and extremely premature births are much more
common in blacks, as are induced abortions, an important
risk factor for early delivery. |
|
One source of health disparity is "lack of language
compatibility" (p 31). | Would Baucus add still more translation requirements for
medical facilities? |
|
The Relative Value Scale and the AMA's RUC process
undervalues primary care. The Baucus plan would "seek a
continued focus on the high value of primary care-related
services, with corresponding reductions in relative values for
overvalued services. The fee schedule rates must accurately
reflect priorities that the healthcare system must adopt to
bend the healthcare cost curve and improve quality over
time" (p 38). | The Baucus plan would reduce payments to specialists. |
|
To get additional payments for the "medical home concept,"
providers would have to meet a set of "stringent service and
capacity criteria in order to qualify" (p 39). | Solo physicians and small practices would probably not
qualify. |
|
Modernization means a prospective payment system for
federally-qualified health centers, FQHCs (p 41). | This is an expansion of the system that causes hospitals to
discharge patients "quicker and sicker." |
|
Baucus would expand pay for performance from pay for
reporting to more aggressive pay for quality. Penalties
would be added to "incentives." Episode "groupers" would
enhance the effectiveness of per-capita reporting for
identifying "outliers." The technology "may encompass
multiple interventions over a period of time and care
furnished by multiple providers." He speaks approvingly of
inclusion of mandatory participation in quality reporting for
specialty board recertification (pp 43-45). | Peer group pressure would be added to financial rewards
and punishments to achieve the objective of equalizing and
standardizing care. |
|
On SGR reform: "In addition to the massive budgetary
shortfall, there are also substantive obstacles to SGR reform.
The fundamental flaw of the SGR is that the behavior of an
individual physician, even a large group practice, cannot
affect a formula driven by the practice habits of more than
800,000 providers" (p 47). | Some way of decreasing the amount of care is
needed perhaps a global budget? |
|
The Medicare demonstration project called Physician Group
Practice Demonstration addresses the problem that
physicians and facilities paid separately have little incentive
"to work together" to "effectively manage patient care."
Any savings from "better care coordination" now accrues to
Medicare (pp 48-40). "Bundled payments" and "gainsharing"
are also proposed. | These methods are collectivized incentives for rationing
care. Note that readmissions are attributed to lack of
coordination rather than premature discharge. |
|
Uses of health information technology (HIT) include:
tracking patient care, reporting to chronic disease registries,
and providing evidence-based decision support to physicians.
It is a critical part of "quality performance measurement and
reporting" (p 57). | Baucus acknowledges obstacles such as loss of privacy, high
cost, and the fact that any savings accrue to payers, not
providers. However, a "way forward that drives adoption
must be found." |
|
If the private sector didn t meet the deadline for a timely
consensus, then the office of a national coordinator health
IT would immediately promulgate "harmonized
interoperability standards." | As with HIPAA, if one entity (Congress for HIPAA
privacy standards, the private sector here) doesn't meet a
deadline, the bureaucracy will do it. |
|
On cost: Much of the savings would not accrue until
policies have been in place for several years" (p 66).
Eventually, we'll save the $700 billion in excess of what is
needed to get today's outcomes. If we don't do it now, we'll
end up spending $4 trillion on health care. |
The source of additional funds is unspecified, as is the
amount. An eventual payoff on the "investment" a
reduction in what we would otherwise have spent must be
taken on faith. |
|
Expenditures for control of waste, fraud, and abuse are not
keeping pace. Baucus cites the 1994 definitions by June
Gibbs Brown, Inspector General of HHS. "Abuse is any
practice that is not consistent with the goals of providing
patients with services that which are (1) medically necessary;
(2) meet professionally-recognized standards; and (3) are
fairly priced. Waste is the incurring of unnecessary costs as
the result of deficient practices, systems, or controls." | Apparently, Baucus envisions considerable savings from
more severe punishment of those who provide
"unnecessary" care that does not meet quality standards.
Physician-owned hospitals are one target. |
|
Professional liability: The high cost of liability insurance is
not considered to have a substantial effect on overall health
spending. Alternative dispute resolution, better preventative
efforts that lead to fewer risky procedures, administrative
determination of compensation, and specialized health
courts are discussed (p 74). | More data collection is a centerpiece. |
|
Tax incentives: forgone revenue from the tax exclusion for
health insurance is estimated at $300 billion. Various
modifications of the tax exclusion are discussed; Baucus does
not want to cause "widespread disruption of employer-based
health benefits." | Lacking is any proposal to expand Health Savings Accounts
(HSAs); the Call to Action barely acknowledges their
existence. |
|
Conclusions: "The time for incremental improvements has
passed; health care reform must be comprehensive in scope."
And "the costs of inaction, both in human and financial
terms, are greater than any initial outlays." | This proposal is about radical reform of the way medicine is
practiced, not just about payment. It is alleged that the cost
of inaction is greater, but no way is given to estimate costs. |
|
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REFERENCES
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