Saturday, October 31, 2009

The Most Frightening Thing Tonight: Congress

Get ready everyone, the Health Care Reform bill is about to arise from the hallowed halls of Congress. It won’t look ominous, but contained within these simple (yet completely unintelligible) pages will be a Government program which the blood-sucking power of Dracula on steroids.

For Republicans it appears that the Health Care Reform bill will contain that dreaded and all-consuming ‘public option’ provision. They will be running throughout the nation heralding their warnings that “the public option is coming, the public option is coming.” In their earnest attempt to regain the position of a controlling majority in both or either house, they will implore the citizenry to take up their pitchforks and torches and run the Democratic monsters out of town and to destroy the monstrous Health Care Reform bill before it can harm our children, the elderly or god-forbid our corporate profit margins. Hell, forget the children and the elderly, protect those profits. By golly, our campaign contributions and lobbyist paid boondoggles are being threatened. This evil will not prevail; as long as Republicans have the power to filibuster or to attach amendments to the bill, nothing will stop them from finding ways to limit the impact that the bill will have on their finances. Thank God, Congress has its own health care program and will be protected from being treated in the same manner as the common citizenry.

Democrats are also frightened by this bill. They are aware that they are awakening a monster of unimaginable proportions, an entitlement beast that has the potential to grow ever larger and more demanding than anything they have ever experienced or released into the public realm. But they are unable to stop themselves, they are being driven forward by a sacred belief and an undeniable need to save us all. No truly, it is undeniable; they made this a promise of their campaign and they can’t see a way out except to deliver a Health Care Reform program. And so the Democrats, and who knows maybe even a Republican or two, will insert their old and moldy concepts of how to serve the public by creating a Government imposed method for improving the health care system. It doesn’t matter that they don’t understand the organism that they are experimenting with, they are wise men/women; and their fore-bearers were wise men/women that had created similar creatures. What is there to be afraid of they wonder in their heart of hearts, when sitting in their Government offices late at night.

As we watch from the comfort of our couches, why do we have that chilling feeling and the hairs on the back of our necks springing up? Why the sense of doom falling upon our shoulders, and the churning in our guts that all is not right with the world. Is that cold sensation passing across our scalps an omen, a portent of our demise?

Well the creature is about to be released, and should it break its bonds; we may find that the monstrosity’s appetite is beyond our ability to satisfy. Perhaps we should have made sure that we had embedded controls and limits on the bureaucratic behemoth. And we wonder if we will all be beseeching ourselves with punishing ponderings, “Why, oh, why didn’t we ask someone who knew something about the danger we were unleashing?”
Happy Halloween!

Friday, October 30, 2009

How Do I Immunize Me From You?

Since vaccination is both an individual protection and a societal protection methodology, the question of individual rights and individual responsibilities come into conflict not only with each other but with their societal counterparts: group rights and group responsibilities. In the context of the H1N1 flu health care issue, we can examine this conflict with respect to who is doing what to whom.

A vaccination for yourself is clearly an individual choice, and in consideration of you strictly as a true individual the decision to get the H1N1 flu vaccine does not infringe upon anyone else’s rights. If you want it, and the medicine is not prohibited by some legal restriction (like being a controlled substance requiring a prescription) then you can and should be able to get it. Nothing to protest here.

What about choosing to not get vaccinated? Do you have the right? I believe that this is conditional. If there is no overriding social imperative that vaccinations are required because you are either in a select group that poses a risk to other if you are not vaccinated or if vaccinations are mandated for everyone because it has been decided that vaccinations are required to prevent the disease from placing the general population at risk from anyone who is not vaccinated. In such situations, your individual right is subservient to the group’s superior right as conferred in the social contract. If you are a citizen, you have a priori agreed to the obligation to comply with the vaccination requirement. Refusing is a violation of the agreement and of the legally binding jurisdiction of the Government.

Now let’s add to the context, a shortage of available supply. You still want it, but who gets to decide if your right to obtain the medication is affected by others who also want the vaccine? In the case of the H1N1 vaccine, the CDC in conjunction with other governmental and medical groups get to establish the policies and procedures for distributing and regulating the availability of the vaccines. The rationale includes the collective medical information and judgment about what types and groups in the society are at greatest or greater risk from the H1N1 flu. So the individual’s right to get the vaccine is now constrained by the group’s right and their responsibility to protect those who have a greater need for the vaccine’s protection. What about your responsibility? If you find that you have access to the vaccine even when it is clear that there is an insufficient supply to cover the higher at-risk groups. Well you can get it, but you are displaying a disregard for your social duty and of having an expected level of compassion for your fellow citizens. But you are not in violation of the social contract of our democratic government. To the best of my knowledge, there is no explicit law that you would violate in taking the medication. Of course, if you lied in order to qualify to get the vaccine then your giving of a false statement to the Government’s representative would be a violation of the law; and you could be prosecuted accordingly.

Let’s extend the context a little more. Now you are not just yourself, but you are the head of a family. You are now making the decision about vaccinations for yourself and for the minor children in your family. Your individual right to decide to get or not get vaccinated is extended to your children. Just as choosing to get vaccinated for yourself is not at question, extending the choice to also vaccinate your family is not at issue. Nothing is new here. Having yourself vaccinated but not your family, or the inverse, would require some mitigating reason to explain the decision; but it does fall within your right to make that decision.

Extending the argument to not getting vaccinated under this circumstance, the individual is required under that same logic and the family members are required under the extension of that logic. Your responsibility includes the minor members of your family.

The central tenet here is that where your individual rights would, if unconstrained , allow you to create a risk to the other individuals (the group) and therefore to their rights. If that risk is deemed unacceptable by the representatives of the group – the Government, then your individual rights are trumped by society’s rights to protect and preserve the society.

So, when you think a free, democratic and Constitutional society, like ours, has no authority to compel you to accept compulsory activities then you are not paying attention to your responsibility and obligation to that very society. The concern that you should have is how to insure yourself and the other members of the society from an inappropriate and un-Constitutional abuse of those powers when not justified by the same Constitutional authority.

Thursday, October 29, 2009

How Do You Solve a Problem Like Vaccination?

Short side-trip to a different Health Care topic: Flu vaccinations. Seems like a bland and relatively benign topic, except that there are as usual in our free democratic society any number of special interest groups that can transform the mundane into the political issue du jour. And we can probably find some connective tissue between this issue and Health Care system costs, and even a few useless strands linked to our Congressional leadership.

What is the issue? The seminal issue of vaccinations in the U.S. is the efficacy of vaccines for disease prevention versus the risk that vaccines might cause to individuals. Entangled with the risk issue is the “violation of individual rights” red flag that evokes the “no government has the right to force me to __”, in this case: inject a substance into my body.

I am going to first address the rights violation position. Absolutely correct, we all know that the Government doesn’t have the authority or right to impose upon citizens anything to which the individual citizen objects. Well, almost anyway. And therein lies the rub. Our Constitution not only provides a explicit declaration of some of our rights, its reserves all rights not enumerated to the United States government to the States and/or the people. But it does grant and define to the Government a variety of powers that it can impose upon the citizenry. In fact the very concept of a society, and particularly a democratic constitutional society and government, must be built upon the mutual agreement and acceptance of its citizens that they are individually obligated to accept the rules and constraints of their governmental contract. In our case, we are all required to honor the terms and conditions of the Constitution. The only recourse to an individual is to declare and renounce their allegiance to that social contract and leave the jurisdiction of the society. This renouncement voids all rights and claims the individual has within the borders of the nation. Rejection of the social contract is a rejection of everything and leaves the individual with absolutely nothing, with the exception of their own being. No lands, no titles, no property of any kind is owed to the individual by the citizens of the society. You must accept and acknowledge the authority and validity of the Constitution to be able to evoke its power to convey and protect the rights guaranteed by the Constitution.

So the real question about vaccinations is: Does the Government have the power defined in the Constitution to compel individuals to be vaccinated? The answer here is that there are conditions and situations under which the Government can and has imposed medical treatments upon individuals.

Happily for Americans, our Government has been generally cautious about dictating and mandating a medical procedure where the risk of doing otherwise would be highly dangerous to the public at large. Instead, the Government typically relies on an advocacy approach and on public awareness campaigns to encourage and convince the populace to voluntarily avail their selves of treatment.

So let us not be distracted by the emotional joy that we all relish in shouting our defiance of the Government under the banner of individual rights. If it is determined that vaccinations are a necessary action to protect the public from a ‘clear and present danger’ then we can disagree and complain, we can choose to refuse; but we cannot expect to win in a legal test. We could elect politicians that well change the law and provide a restraint upon the Government from being able to compel us in this area. But then we also have to accept the consequences of that act. Consequences which I suspect most of us would not anticipate; and more humorously would be absolutely livid about, and would be insisting that the Government should have prevent us from allowing to happen.

So getting back to the seminal issue: Is the value of vaccinations to the populace as a whole sufficient to outweigh the rights of individuals to accept the risk of contracting the disease (and consequentially exposing and increasing that risk to others in the population)? And now we have identified the true conflict. It is not that the Government has the right to force you to be vaccinated to protect you. It is the that the Government has the obligation under our Constitution to protect me from you. If your decision did not expose me or other members of my family to any risk then the Government would be under no obligation to protect the other members of the society. But where you create an unreasonable risk then you must abide by our social contract, just as I must be responsible for not causing an unacceptable risk to you. Controlling the spread of dangerous diseases is a one of those circumstances for which the Government is empowered by our social and legal system to impose public treatments.

Now in the specific case of the H1N1 / Swine flu, the risk appears to be higher for certain groups in the general population that others. So not everyone is at an equal level of risk, and thus it’s even more difficult to come to the conclusion that the Government should compel everyone to be vaccinated. However, there are also sub-groups in the population that various Governmental entities would have sufficient justification in mandating compulsory vaccination. Health care providers/workers would be an excellent example; but they are not alone in this class. Other sub-groups would include, but not be limited to: military personnel, critical governmental entity employees like the police (probably not Congress, nothing bad would happen if they were infected or incapacitated), educators, and perhaps students.

Now if you disagree, if you think the Government has not right to compel anyone, then I would like to come to an agreement on what you are responsible for if we collectively in our democratic wisdom decide to go along with this view. And that can be for tomorrow.

Wednesday, October 28, 2009

How Do You Train an Insurance Company to Salivate and Heel?

We know what an insurance company wants. They want profits. Profits are their reward for having succeeded at accomplishing one of their various activities that produces the profits.

So you would think that even Congress would know how to induce the Insurance industry to drive the medical and other costs of the health care system down. But if you look at their biggest and best example: Medicare, they don’t seem to have achieved any outstanding or even lackluster success. They don’t reward anything productive, and they don’t negatively reinforce anything undesired. And the Government has set up Medicare (and its ilk) without regard or consideration of how it could motivate Insurance companies to become more efficient and less costly? And why have public oversight boards or committees that regulate the insurance industry paid no attention to creating regulatory environments that induce the industry seek improvements in the system rather than just ways to profit from it, no matter the consequences to the health care and services provided.

What could the Government do? They can’t be expected to be that smart and know how to run the entire health care system, and it would require to many government employees to be involved in all the medical services to be able to render it affordable. So what’s a Government to do?

Maybe it would be best if we compared to approaches: The current approach versus a reward-based approach.

Currently the Government is largely uninvolved in commercial health care insurers’ activities. They regulate and monitor these companies to guarantee that they are fulfilling the services that they have promised their customer base. They may mandate various services that the insurers have to provide if they are to do business. But all in all, the Government does not particularly care about how the insurance industry goes about making their profits. And the Government is completely satisfied with taxing the profits made by these companies. Consequently, the Government does not provide any incentive or reason that the insurance industry would focus on anything that lowered the cost of health care. The Government is content that insurance companies will find ways to reduce their costs and increase their profits, and that a fair portion of those savings will be trickled down to the customers.

Suppose the Government focused a little more attention and legislation toward providing a reward to those insurance companies that provided better and lower cost services to their customers. Maybe even a negative reward for companies that fail to achieve some comparable measure of achievement. Let’s speculate that if you were an insurance company that delivered payments for medical care to your clients for 10% less than your competitors that the Government would give you a 1% reduction on your tax rate. Further if you were an insurance company that paid out a cost for equivalent medical care at a rate 10% more than your competitors that the Government would impose a 1% increase on your tax rate. Now given this approach to rewarding the industry, what would insurance companies be focused on? Would they look to find ways to raise their rates? Would they look for more expensive ways to treat the same illnesses? I don’t think so!

And what would the board of directors of these companies start rewarding their executives for? Increasing profits by raising rates? Finding more costly procedures to include in their rate base or in their business’s cost base to try and off-set taxes? If your company is paid to lower costs, you find ways to lower costs.

Extend this same principle to effectiveness of treatments. If the company can provide more effective results for their lower cost treatments than their competitors, give them another tax reduction. Help them to be actually more profitable if they provide better and cheaper service. Turn their accountants to finding ways to lower costs rather than denying coverage.

Change the reward system to promote the results you want and you don’t have to know how to get there, nor do you have to force or compel businesses to work toward those objectives. You just have to monitor and assess their successes (or failures) and respond with the appropriate reward. The Health Care System will have at least one cog that is turning in your desired direction.

And if you want to motivate the insurance companies more, then you can add some additional incentives to train them to do better. The Government gets to deliver the Health Care system that America deserves, and Congress doesn’t have to know or understand any more than they do (or don’t) today.

Monday, October 26, 2009

Health Care’s First Patient – Profitability

It cannot be a surprise to anyone that health care in America is a profit-oriented enterprise; and the reason for this should be, but apparently isn’t, obvious.

The reason is that in America we recognized that profit was essential to the freedom that we demand in our society. No one has the right to set the price that I will agree to place on anything that I value, except me. You cannot make me sell crops, livestock, labor, product or talent for a price that you choose. I can insist that you recompense me for a value that I choose; and which you freely agree to pay. Or you can walk away and go to someone else, or chose to forego the purchase.

Another name for profit in this context is self-interest. The tenet here is that profit is the value that I add to the work and/or property that I am seeking to use to directly benefit me. In the case of my time or talent, if I sell you my effort then I expect I will receive a value for it that is greater than what it costs me to provide. It may be difficult to see and to quantify the costs of my time to myself, but ultimately I need to be better off for having done the work than for not having done it. If I am selling some property of mine, I also need to cover my costs and there is no reason to sell the property if I am not receiving some additional value above what it cost me and any appreciation in value that it would cost me to replace it. Further, if I don’t make some profit above that personal cost then there is no self-interest for me to sell it.

Well the health care system requires the same motivational push. The system cannot operate and survive if it is not driven by profit and its corollary self-interest. Besides, without profit the advances and resulting benefits would not be forthcoming. Consider the players in the system, which of them are not motivated by profit? At the heart of the system are the physicians; they have chosen medicine as their profession. This is how they make their livings; and that is their profit. They make enough to pay for all their costs, plus enough to provide food, shelter, transportation, their offices, payments on their student loans, and everything else they seek as part of their lifestyle. It even covers their taxes. And as we all know, they make livings, all on the profits from their work.

Hospitals, insurance companies, pharmaceuticals, elder care centers, and medical equipment manufacturers are all involved in offering their time and property in the pursuit of making a profit. Even the non-profits are seeking profits, it’s just that they are profiting in a non-traditional business manner. They are not making money for the company, they are making it for the officers and operators of the organization.

This is not a bad thing, it is what made our health care system the best in the world. The problem in the health care system today, is not that these companies are seeking a profit. The problem is that they are being driven to find their profit in completely irrational ways. Ways that are usually promoted by the legislative and regulatory environments that have grown up to administer that they are meeting the laws passed to serve the public. Even if those laws and policies are doing more damage than good. So given the terminal illness that governmental management has inflicted upon the U.S.’s health care system the treatment to cure the system must recognize the criticality of restoring a healthy and robust profit motive to the system. And by a healthy profit motive, I do not mean the government should use the failed and irrational methods that they always use to insure profitability of an industry that they interfere in.

Saturday, October 24, 2009

Maybe It’s the Smoke in the Room that is Fogging Our Vision

So when last we left our hero, Health Care Reform, and were looking at how the proposed reform would transform our health care system into a more affordable and overarching version of itself, what was the approach that we were taking? Oh, yes; first and foremost, we seem to be relying upon the health care insurance industry to “just make it happen, because I told you to” as the tried and true governmental method to solve big, complex, society-spanning, and life-effecting issues. You know the same method that has produced the outstanding governmental successes of the past; like a simple and easily understood income tax system;, or a safe and secure financial and banking system;, or a robust and well-maintained power-grid, air-traffic control system, national highway system; or a well-funded Social Security system, No Child Left Behind educational policy; or a set of practical climate control and environmental policies that mesh well with business and industrial policies. In consideration of the admirable effectiveness that the government has demonstrated with these and hundreds more of our legislatively produced programs, it’s a wonder we are even still around working on ways to improve the health care system that we and the Government have created to date. Because let’s all remember that the Government has helped craft and guide the insurance and medical health care infrastructure that we are now so desperately seeking a new and improved version of from no less an accomplished group than Congress.

Now don’t get all depressed and surrender all hope that we are lost in a political wasteland filled with the usual thieves, con-artists, and thugs; or that we are doomed to a disastrous fate at the hands of those public-service, we know what’s best for you, party placating loyalist addlepated politicians. Yes we are dealing with Congress, so there are thieves aplenty; and we are faced with politicians armed with the intellectual weaponry equivalent of foam-rubber swords in an armored tank battle. But take heart, Americans have fought and succeeded against these forces in the past; and we may yet again prevail against them. We just need to remember that even in the bleakest days and the darkest nights brought on by these misguided and myopic members of Congress, that America has always had two beacons that have carried us through: self-interest and the profit motive.

With respect to Health Care Reform, it will be difficult for Congress to draft and pass any program that will be able to thwart or prevent Americans from seeking their own self-interest in health care matters. They can throw up bureaucratic battlements and lay down torturous mazes of red-tape; but these will not deprive us of our own drive and determination to seek the health care that we need for ourselves or our families. Because we are Americans, we will find ways to undermine the barriers that are erected, and find or open gaps through the walls meant to bar our way. The American spirit will not be diminished and will not be deterred by any policy or program set forth by either party regarding health care or any other aspect of our lives. As long as we remain a free and democratic society, we will advance in evolving those products, services and systems that we find will provide for our life, liberty and our pursuit of happiness.

The profit motive is less easily protected from the inadvertent meddlesome tinkering of a well intentioned Congress. Now I am not talking about the profit motive of the companies and groups that are bribing (I mean contributing to the political campaigns of) every House and Senate representative in the country. I mean the idea of a free-market profit motive protected from infringement by individual, group, company, mega-corporation, government or world-order. I mean the free right to seek better ways to offer products and services in the marketplace without interference and prohibition by others and to be rewarded for those efforts. To be properly compensated for the value that is added above that offered by others, particularly when the value added is equal or superior quality for the same or a lower price.

The reason that this is important to the Health Care Reform effort is that the best and most effective way to attain the very goals that Congress insists are desired is to build the profit motive into the very heart of the Health Care Reform bill. Congress has to learn what American businesses all start off knowing; that they will prosper if they offer a better and more affordable product/service than their competition. And if businesses are better off following the profit motive then everyone benefits along with them; since we get lower prices, better quality and more jobs. This is profit motive phenomenon feeds back upon itself and generates a vibrant and growing economy. You know that thing that made America great, seeking your own self-interest and profiting from it. The basics haven’t changed, but Congress apparently has forgotten that its job is not to tell everyone how to do things; rather Congress should be setting the goals and direction that we agree to take and to insure that there are rewards available and guaranteed to those who can get us to those goals.

Therefore the first patient that we have to look out for in reforming the health care system is profitability and the profit motive. And is it really that difficult to understand why a profit motive is essential to a successful affordable Health Care system in the United States?

Thursday, October 22, 2009

Motivating the Government Way, or How to Implode

Let’s look at the standard Governmental method to motivate and stimulate competition in the Health Care system. Because the Obama Administration and the Democratic party considers Health Care Reform to be one of their “must-do”, “gotta-get”, “campaigned on” political promises to deliver upon, it is a centerpiece of their agenda. To help achieve this goal, the Administration worked out support (a deal) with the insurance industry for a commitment by the insurance companies to reduce the rate of growth of health care insurance costs. So if the Health Care Reform bill passes, then we can all be assured that we have achieved a significant benefit and can expect our health care costs to be more affordable, right? I mean that is the basic objective of the Health Care Reform bill, isn’t it?


Well, no! There is no objective that the new Health Care system will be more affordable exactly, just that all Americans would be able to get at least a basic affordable plan. This is not necessarily the same thing as a more affordable overall national health care system. It does not promise, and certainly it does not guarantee, that the cost of health insurance that you are paying for (or is paid for you) today will be lower under the new HCR plan. Even if you were one of the ~40 million Americans who are uninsured under the current health care system, the promise that you will now have a ‘basic’ and ‘affordable’ plan is not at no-cost to you. Further, the basic plan that you will be offered does not have to compare with or even come close to any plan that is offered by any insurance company today. So to be accurately and honestly more affordable wouldn’t it be necessary that it cheaper than an identical plan currently is?

The offer to reduce the rate of increase in health care costs means more or less the following:

  • If I was going to raise the cost of premiums at say a rate of say 5% a year (Oh by the way, it was going to be higher); and I promise that it will be lower, say 4% a year then how much cheaper is it going to be than today? It isn’t, it’s just going to be cheaper than it was planned to be next year. So what I saved you is a little of the additional money I was going to take out of your pocket anyway. You still have to pay more.
  • On my side I get to take a current $1000.00 premium payment and charge $1040.00 next year, and $1082.00 the following year, $1125.00 the year after that, $1170.00 a year later, and on and on.
  • If I can keep my costs increases below that rate of increase then I can still make more money.
  • If I get to have more people paying such premiums, which I do, then I make even more money than before. Oh, and it was profitable before anyway.
  • If I get to keep adjusting and adapting what your ‘basic’ plan covers or what co-payment you might need to contribute, or what payments I make out then I can even continue to increase my profitability

I can do all these things, and not one of them will improve health care, or in reality make it “more affordable”.

The meaning of affordable is one of the key concepts that should be assessed, evaluated and clearly understood by the public; so that the American population will know for what they are being asked to accept and pay. This represents a timely and urgent need for a “truth in advertising” facet with respect to U.S. Government legislative efforts and programs. As of today, neither the Democrats nor the Republicans have found, or more likely tried, to provide a clear, complete and comprehensive description of the Health Care Reform act that they are proposing. The structure and formats of the bills that have been presented are reader unfriendly and bureaucratically obfuscated to render them useless to politician and public alike. The best council that I can give the public is: caveat emptor (let the buyer beware).

I don’t disagree with the motives for a good Health Care Reform bill to improve the public health, to improve the Health Care system and to improve the quality of the American health care industry. I even endorse the benefits that an improved system would bring by way of increasing the profitability of the health care industry itself, though no politician or party has apparently considered or presented this concept in seeking support of Health Care Reform.

Another odd aspect of the current debates and disputes on Health Care Reform is that neither party seems to understand the opportunities that Health Care Reform from their ‘traditional’ philosophical viewpoints and standards. [I don’t actually believe that Republican as conservative or that Democrats are liberals. I think they are just run of the mill members of Congress; that is incompetent buffoons.] If it weren’t for party loyalty and their behaviorally programmed rabid compulsive obsession to opposing Democratic legislation, the Republican party’s membership should be salivating at the Health Care Reform act being sought. Given that the insurance industry’s contributions to Republicans is probably greater than those it makes to Democrats you would think they would have figured out how to use the Reform effort to garner even more of our health care dollars into their political campaign funding and all the extra goodies that they manage to get during or after their residency in Congress.

The system that the Health Care Reform act will need to employ to truly make Health Care more affordable, more efficient, and higher quality is to provide both a carrot and a stick program. The insurance companies will have to offer their ‘basic’ affordable plans and compete on price with each other. Additionally, the Government will assess the costs of these plans against the pay-outs and the profitability of these plans and reward companies that have lower costs, lower pay-outs and higher quality of performance and results of treatment than other companies. [Yes, we will have to establish the appropriate metrics and measurement that enable the comparisons and evaluation of companies; but that is part of creating a program no matter how well or how poorly structured].

Let the carrots feed the system and make it grow; but use the stick to train it to perform its tricks ever better.

Wednesday, October 21, 2009

How Do You Compete for Your Health?

I suspect that you think that we already have competition in our Health Care system. After all, you can choose what doctor or hospital that you want to go to. You can even seek out different treatment methods if you desire. It’s a shopper’s paradise. And isn’t that a free-market and the very definition of competition? It is if you can afford to actually do these things, choose that is; and if you have a health care insurer that doesn’t constrain your choices or limits the funding that your coverage will pay for.

But it isn’t if the competition isn’t even yours to leverage. If you are operating under a process that lists out the payments that will be made to physicians and other providers then you are not controlling any monetary incentive and thus there is no motivation for providers to compete at any effective level.

Competition by insurance companies if focused at you or your company, doesn’t provide a motivation for improvement if they are only looking for ways to limit their costs and constrain your options or coverage.

Competition is not in play within the process in the current system by offering fees for services/procedures. The competition that takes place under this scheme is not targeted at you, at improving your medical benefits, or at reducing the cost for providing health care to end-users. The free-market motivation of a fee for service/procedure is to do more procedures and provide more services. It doesn’t matter if these procedures are to your benefit or not.

Therefore a new form and focus for competition in the health care system is needed to use the profit motive as a driving force behind improving health care. Make the means of payment a health-oriented and cost-efficiency methodology, and you will stimulate the industry and its providers to move toward an ever improving health care system.

Monday, October 19, 2009

New and Improved Health Care Reform, The Beginning of a Path

With so much that drives the Health Care Reform efforts wrong, is it possible to find a way that will actually improve it? The reform activists believe that they can. The politicians, who back reform whether from personal belief or astute awareness of their constituency’s willingness to boot them, pontificate that they can. And every vested interest group and ‘for hire’ lobbying/consultant firm promises that they can craft the policy that will do the trick. But as discussed in the previous entries, they follow the path that in fact got us here in the first place. A pervasive view that if you wield political power, you can dictate and legislate the results that you want. This pharaohic expectation that if they can just decree in that absolute authority which they command that “So it is written, so it shall be.”

But like their predecessors, who expected to make nature conform to their simplistic understanding of reality, you can command that Pi (Ï€) be exactly 3.14 so that calculations using it are more easily done; but you cannot make the world and all within it adhere to your proclamation. And the consequences of their arrogance manifest itself in the problems and failures that propagate from the application of a fairy-tale rule used in conjuring up structures of brick and stone that collapse upon the heads. Nature cares no more for their edict than a tsunami cares whether the beach it is approaching is empty or awash in sunbathers. A health care system and the socioeconomic system in which it operates will not produce the costs, quality, and effectiveness that you desire just because you elected to declare that it will be as you command.

How then can we undertake Health Care Reform with an expectation and hope that we might achieve the goals which we all find so desirable? The answer is not guaranteed to be simple or easy, but it can at least be relied upon to take us along a path that will constantly lead us toward the best that we are capable of providing ourselves. What then is the way that is not being pursued by the ardent advocates of the all-American Health Care Reform dream?

It starts with an old-fashion, tried and true, good old American know-how approach. One of the basic principles that must be embedded in the core of the system is competition within the market-place. And this competition will provide the same American promise that we have relied upon since our pilgrim/immigrant forefathers came here. You will be rewarded for success and you will not be entitled to succeed because of who you are or who you know.It’s a seed of an idea.

Let’s water it and watch it grow.

Saturday, October 17, 2009

The Alamo Principle – Standing Up Against All Odds

When was the last time you remember a politician standing up for a position that he/she knew was going to cost them their elected office. Oh, and I don’t mean the ones who have refused to “go gently into that good night” (Dylan Thomas) when they were caught with their hands in the cookie jar. You may remember SC-Governor Mark Sanford or NV- Senator John Ensign as having recent fidelity behavioral issues, or Jack Abramoff and assorted officials and legislators that were involved in a vast array of bribery and other monetarily illicit activities, and very recently in the news Congressman Charles Rangel has had some difficulties with understanding the U.S tax system despite his chairmanship of the Ways and Means Committee. Don’t consider these poor souls as uniquely due to be ostracized by us upstanding and honest citizens; there are orders of magnitudes more members from the federal, state and local ranks of politicians that are august members of this club of disreputable, deceiving, degenerate delegates. And somehow we managed to elect each and every one of them to office. With such a proven record of accomplishments, I think that the voting population has a lot of explaining to do. But this is not the point of today’s tidbit.

It is not the dregs of the political process that I am seeking, it is the cream. The stalwart champions of America’s promise that I want to see stepping forward and leading the fight for what is fair, just and compassionate for our civic welfare and common good. A search for our guardian of government who pursues their responsibilities to serve their oath of office even under the fatal risk of their vocal and vicious opposition seizing their effort as a club with which to beat them into the ground. Attacks that are not focused on anything more than the opportunity to displace them from their office in order to take up the power of their office to serve their own ends, not to serve the public.

And we, the public, lap up the hate and lies offered up as party doctrine or righteous fervor of some vapid adherence to a conservative, liberal, or radical philosophy. We react to our base fear that because we do not understand the complexity of the problem that we may lose something and therefore we must first protect ourselves.

Health Care Reform is desired by the majority of Americans. Why then are the politicians unable to stand up and stand together to find a workable approach? They can’t because they forgot the Alamo Principle. There are situations and times when you have to stand up, stand your ground, and go down fighting; knowing that you are going to go down. And surprisingly, those times are always now. There are always reasons to stand up and fight for your country. But politics and politicians have infected the pubic and the politicians with me versus you, and us versus them positions that create fear. A fear that is rooted in nothing that is consistent with American ideals or American values; but that is undemocratic and corrosive to our lives, liberties and pursuit of happiness. Fear that is unproductive and destructive to our interests and common welfare.

Friday, October 16, 2009

How Did We Go So Wrong!

The founding fathers found a way to create our democratic governmental system despite the fact that they had very diverse opinions and positions about what it: should be, should protect, should be prevented from being and doing, and how it should operate. They each had regional views and interests to protect, and they had principles and values that they would not sacrifice. Yet even with these differences and pressures pulling them apart, they managed to come together and form a civil government that protects individuals’ freedoms and has fostered a society that has become the envy of the world. We may not be everyone’s vision of the ideal society, and many other countries may consider our way of life unacceptable; but in direct contradiction to such stated view these same country strives to attain the benefits and standard of living that we have in America. If such countries do not seek this status for their countrymen, at least they do want it for their leaders.

Americans take great pride in the success that our democratic system has produced. We even acknowledge and celebrate that when we have failed to live up to the ideals and aspirations of our free society that our system allows us to address and correct our failures. We eliminated slavery, guaranteed a right to vote, extended the vote to women, and made Senators elected by a popular vote. These amendments to the original Constitution (and Bill of Rights) are our efforts to evolve the American democracy toward a better and freer governmental system.

In our current political climate we certainly have individuals and parties that are in great opposition to each other. But I doubt that their excessive disagreement with and opposition to the other side’s positions and views are any stronger than those that have existed throughout our history. I suspect that the poor opinion that the public seems to have had about Congress over the years has in part been due to the fact that they act toward and react to each other with just violent hatred and anger that the public is inundated with a torrent of negative information and characterization.

So the difficulties that our current Congressional members are embroiled in on the Health Care Reform effort are no more challenging than those which their predecessors had to wrestle with in the past. The differences which may prevent these august representatives of the people from accomplishing their historic task are whether they are rational and reasonable individuals, and whether they are capable of compromising and collaborating with their counterparts of different political philosophies.

Are they rational and reasonable, or do they have even one of those traits? I suspect that most of them are rational, at least, more often than not. They are clearly capable of acting within our society with sufficiently sound judgment to get a large enough portion of the electorate to vote for and keep them in office. So on a general basis, we can expect that they are rational. But with regard to Health Care, their knowledge and judgment is likely to be insufficient and perhaps not good enough to enable them to make rational decisions that stand up over time on how to establish a medical health care system for the entire country. You may be the sanest auto mechanic anywhere, but I don’t want you to design or run my nuclear power plant. Are they reasonable? If we look at the partisanship voting and posturing than no, they are not reasonable; because they are rejecting the opportunity to solve a problem out of hand on the basis of a pre-conditioned position. Neither side is fulfilling the duties and obligations that they committed to in their oaths of office. This is not a situation where they are demonstrating any characteristic of being or acting in a reasonable fashion. I tend to think more of obstinate and mean spirited children; not intelligent and mature adults.

As to compromising and collaborating with one another in order to reach a reasonable accommodation so that they can deliver a prudent and sound Health Care policy for the nation; their decline into distortions and lies about each others’ positions are the antithesis of jointly working together to reach a accord that serves the common welfare of the union and its citizens. The failure in Health Care Reform, Congress lies not in the reasons you espouse but in your selfishness, your lack of foresight, your smallness of mind and meanness of spirit, and in your disregard for your fellow Americans.

Thursday, October 15, 2009

No Health Care Worker Should Be Forced To Protect Patients – A Side Trip To Stupid

Big brouhaha about the Seasonal and Swine Flu vaccines and mandating by some states or even hospitals that health care professionals be required to get them to continue their employment. Some, admittedly not all, health care workers are all in a bother about “big brother” intruding upon their rights. This group of health care workers believes that the decision to get or not get these flu shots should be left up to them, and that no one has the right to force this requirement upon them.

Now who among us would not agree that the government or an employer should not and does not have the right to impose on individual citizens an obligation to subject their own beings to a medical procedure? This is America! We are all endowed with basic rights and individual freedoms as part of the very fabric of our system of government. And certainly we would not allow the government or a company employing our citizens to selectively designate that particular groups of people must conform to dictates and directives which are not equally and fairly applied to all citizens. There are no circumstances that justify such outrageous, officious and odious interference in anyone’s life that American’s would tolerate.

Well, yes; there are a few actually. And these circumstances and conditions tend to stem from the same principles that all Americans hold to dear to their love of Freedom. We in fact established our system of government to insure that there is justice, provide for our common defense, and promote the general welfare. In creating our democratic way of life, we have acknowledged that there are times and situations which require individuals to adhere to the laws and policies that are defined to deliver to us our rights to life, liberty and the pursuit of happiness. In some non-health care arenas we accept that the government has the right to draft citizens into the military if it becomes necessary. The fact that the draft is not used today does not invalidate the ability and legitimacy of the government exercising its right to do so. And in the case of the draft, the government can selectively apply it to a sub-set of the citizenry. They may have to be careful and prudent when they do this, but do it they can.

How about taxation? Hasn’t the government established its right to collect money from the citizenry? The rare and occasional individual who persists in fighting that the government doesn’t have this right, can occupy themselves with the legal windmills; but at the end of the day, the windmills will win. And as most of us would acknowledge, we do all benefit from some of the tax dollars we surrender. We may not like everything, but if we lost everything that the government has undertaken in either support of our defense or welfare; I suspect that we might all be standing in line to admit the foolishness of our decision and offer to provide a little more than we currently do, just to get it all back. And with regard to justice, I don’t think many of us would believe that we would be better off if we were not compelled to follow the laws that we have established to protect and define our liberties.

In considering health care, there are already laws that allow the government to mandate vaccinations and other more stringent procedures when the health of the population is at risk. We can quarantine and confine individuals when they pose a threat to the public. We can prohibit treatments and practices that are deemed unsafe and unhealthy to the public. And we can even require vaccinations in such circumstances. If you join the military, you are obligated to be vaccinated for a wide variety of illnesses or conditions. And if you want to says, “Yes, but the military is voluntary so you have a choice.”, I want to remind you that when it is a drafted military, you don’t get to choose.

The health care workers who don’t want to be forced to get vaccinated, whether it’s just because they don’t like the government telling them to do it or, they don’t want to be vaccinated for their own reasons; I agree they should not be forced to. I also believe that they should not be allowed to place the public at risk in a health care service arena. So they can quit, a very individual and free decision that they can make. But their decision to not be vaccinated also encroaches upon my right to life, liberty and the pursuit of happiness; on my expectation of being properly defended by the government and having my welfare secured.

The real issue here is whether there is a risk to the society and is it at a sufficiently high enough level to have the government or medical institution take the proactive action to declare that you cannot provide health care services unless you are vaccinated.

Wednesday, October 14, 2009

As The Plan Comes In For A Landing (Crash?)

Can’t you just feel the joy, the excitement, the anticipation of the new Health Care Reform plan? It’s all the buzz in the news. All Congress has to do is merge the various House bills with the various Senate bills to render a comprehensive and cohesive bill for both to vote on and if passed to send to the President to sign into law. This task of merging the bills is a routine task that the House and Senate undertake on every bill. So with the vast experience and talents that Congress has acquired in making new laws, this should be a smooth and simple effort; not the confusing and confrontational chaos that Congress has engaged in getting to this point. The most complex part of their job is making the compromises that will be required to meld and weld together this merged masterpiece. At the end of this process, we the American people will have a completely compromised Health Care system.

Wait! Isn’t compromised sometimes a bad thing? I mean, if your health is compromised, or the security system at your bank or financial institution is compromised; don’t we usually get very upset and fearful of the impacts that such circumstances can have on us? I think it would be prudent of us to make sure that we understand what kind of compromises Congress is going to make on our behalf. As they work out their differences in position and opinion of the plethora of the new governmental Health Care policies, I would like to know that they are choosing a settlement of their differences by making mutual concessions that satisfy the original goals that they said they were working to achieve. I don’t want to see them tweaking the language in the bill to eliminate the conflicting issues so that the Insurance industry or the Medical professions and associations are satisfied that they will benefit, and that I will be only obligated to pay for it and accept the consequences good or bad. If Congress goes after their typical tit for tat modifications on each sides demands, we will wind up with the usual poorly defined and operationalized bureaucratic disaster.

A compromising Congress will not find any better result from merging multiple versions of bills that individually would fail under their own incompetency. Just finding ways to constrain, limit, direct, or obfuscate the polices and processes that their Health Care Reform act will create will not make it capable of improving the defects in the system that we live under today.

The way to improve the Health Care system is to use the same mechanism that drives our economy and wealth today. We need the new Health Care system to reward efficiency, competition, and innovation. And that is not something you get by pushing more money into the system, and not by dictating that you will be a better system because Congress passed a bill that says: You will do better and do it for less because we wrote it down in our bill.

Given that Congress-men/women know first-hand that you can buy anything for a price, I mean being politicians they have sold themselves many times over, they think that you can get the world-class affordable Health Care system that we all would want if they throw our money at it. Not being individuals that have any experience in solving problems (other than the “I’ll just throw money at it kind.”) how likely are they to solve a problem as complex as Health Care in America?

Of course, you did elect them; so I suppose you are absolute confident that these guys/gals know what they are doing.

Sunday, October 11, 2009

If Your So Smart, Why Are You in Congress?

You know how you always hear the phrase: “The best and the brightest”, when people are talking about the people that are chosen or appointed for public service. Surely, you don’t think this applies to the Congress-men/women that win the elections. Even if we look at the current President, we acknowledge he is intelligent; but the concept of him being the best and brightest is not the position being pushed. And there was never any doubt that his predecessor was not touted as a man of superior intelligence. Further, when we look at the behaviors that many of the Congressional legions getting caught and being engaged in disreputable actions; we quite often ask ourselves: “What was he/she thinking to do such a thing?” And more often than not, we think these individuals are to stupid to be believed.

I am prompted to say: “It’s inconceivable!” in the spirit of S. Morgenstern’s “The Princess Bride”; but from another line in said same book, I would be forced to conclude that “I don’t think that word means what you think it means.” If I actually thought our elected officials or their cadre of appointees and advisors were of even modestly above average intelligence, I would be grossly disappointed in their legislative efforts, their public behavior and their personnel lives. Unfortunately, I have adopted a prima facie assumption about politicians and their ilk that they typically are neither knowledgeable nor adequately informed about the subjects that they propound to be prepared to render their wise and considered judgments upon.

Some justification for this low opinion could be attributed to the fact that most of these preeminent politicos have not read the bills that they vote upon. Further many are ready and willing to proffer their vote at the direction of their party leadership or based upon carefully cultivated positions that resonate with the local, regional or national constituency that they feel or fear they must appease to retain their office. In a circular definition and logic process, these ‘best and brightest’ amongst us must rely upon the ‘superior’ wisdom and judgment of the masses to make the right decision.

Our leaders have become icons of an intellect which must depend upon the collective understanding and knowledge of the very same people that these Congressional marvels believe are not as able, informed or prepared to deal with. Champions of ideology who can lead us to the greatness that America offer, if only we can show them the way.

In this area, our leaders fail us all because they have failed to understand that being in a position of power does not bestow upon you the ability to make reality conform to their dictates nor their will. Having taken up a role in a country that became great, they take upon themselves the belief that they are able choose how to reform the world to their beliefs, to their desires and to their prejudices.

In the case of Health Care Reform, the sides are drawn and argued over is it socialism, is it beyond affordability, is it government take-over, or will we give up our freedom to choose our own physicians. Certainly these are very good and valid topics to consider and debate; and even eventually to address in the context of the legislation that is created. But why do these ‘best and brightest’ not even seem to be aware that the problem that they are trying to solve is not even exploring solutions which not only would suit their small-minded spirits and over-inflated egos; but solutions that would set America upon a path to a Health Care system that would be both the technologically most advanced in the world and would be patient-focused, market-driven, democratically oriented, and economically cost efficient.

Why, because these are not people who are accustomed to or experienced in solving problems; and they are never able to see that they should be turning their efforts to crafting a system and process which is not dependent upon their knowledge, wisdom or judgment to operate in the public interest.

Friday, October 9, 2009

Health Care: Congress Never Saw A Problem It’s Didn’t Create

Our final contestant is a collaborative venture apparently designed to bring together two groups of individuals that either singularly or jointly will do everything in their power to do exactly the wrong thing at the worst time, all in the best interests of the people that they pledged to serve to the best of their ability. Ladies and gentlemen, I give you: Congress!


God made the idiot for practice; He then made Congress. (to borrow from Twain). This sentiment is a preamble to the results and consequences of the laws, policies and programs that Congress institutes in their well intentioned efforts to serve the public. While this opinion is not universally shared, it would be a rare instance where a majority of the population would not agree that “the Government can’t do anything right”. And on those rare instances when this is not true, the public is more likely than not to have suffered a serious case of massive stupidity.
Now why would it be? Most members of Congress are lawyers and so should be reasonable well educated. There is no reason that they would want to create laws and programs that are poorly thought out, or that are doomed from the start to become enormous wastes of tax dollars, or that either make the very problem that they were trying to address worse or create a newer and more disastrous problem. Their difficulty arises from the very manner in which they do their craft.

The impediments that Congress faces in attempting to apply their best effort to solving our society’s problems are many. Not the least among these are that the members of Congress would have to be:

  • Knowledgeable and well informed regarding the subjects that Congress is working on
  • Unbiased and selflessly directed toward addressing the public’s interests in the issue or problem, avoiding any influences that would interject corrupting aspects into their efforts
  • Rational and reasonable individuals capable of collaboration and compromise with their counterparts with whom they may have opposing views and philosophical positions
  • Willing to risk their position and the privileges of their office when they believe that the right decision required of them is likely to be at odds with that of their supports and constituents
  • Able to put their responsibility to Country, Constitution and the Common Welfare before that of party, profit or politics

How many Congress-men/women would be able to truthfully say they do not have most of these obstacles?

Health Care Reform requires our members of Congress to act under the above principles. Whether Congress decides to act upon Health Care Reform or pass on it, each of them should be able say with their honor intact that when called upon they were the dutiful servants of the American public and did their best to fulfill their pledge and oath of office.

Thursday, October 8, 2009

Medical Magic Machines – How Expense Are They Really

Maybe the high cost of medical care is just a result of the very expensive medical devices that we and the doctors all depend upon to produce the modern miracles of medicine. We often hear about how expensive the state of the art medical systems are; and therefore why it costs some much when your doctor wants to have you tested with one. Now, are these devices really that expensive?

Let’s consider the buyer’s market for these systems. Given the high price (by the way, price the what the manufacturer want to charge, cost is what they had to spend to create and to assemble it) the hospitals, doctors’ practices/groups, medical centers, and clinics that can afford to buy one is limited. So yes they are expensive because the price is high. Whether the price truly reflects the costs of creating the machines is really a different issue. The most we can conclude from the “limited market space” for these products is that, yes the profitability of the devices requires that each entity purchasing one will have to contribute a large part of that profit. The market space is actually bigger than just the US health care system, these systems are also in demand from foreign buyers. So the market is bigger than just us US tax payers.

If these system just cost a lot to actually construct, well then they are expensive and the only recourse we can look for is to help insure that they are used to the greatest extent possible. This will at least make the unit cost of use as low as possible. Achieving this requires a highly efficient and coordinated health care system which allows different entities to collaborate in promoting the use of the system.

What about the cost of research that needs to be recovered by the companies that manufacture the machines? These state of the arts technologies are going to come from start-up companies that are “betting the ranch” on their new idea. Some come from research centers that are funded by the government, manufacturers, or organizations that are often charities or non-profits; and some are from educational institutions that are funded to do basic and applied research.

If the devices are from a start-up, then they either really are just recovering their costs; or if they are reaping really big profits then they have to reinvest (hopefully producing more marvels) or pay out (and get taxed). We pay either way.

If the systems are from research centers then the question is how much are they subsidized by our taxes or tax exemptions that we still pay for. The investments made by the funding entity for the research has already made their profits or funding from some source. So we were likely the source of the underlying research dollars. In this case, it seems unfair that the manufacturers get to load research investments into the price of their systems. It’s like getting to pay again.

If the system comes from educational institutions research programs, well we all paid or pay for that through one method or other: taxes, tax exemptions, tax deductions, tuitions, royalties paid to them, and so on. With such a profit motive, there is no reason to contain the price that get established that we as end-users windup having to pay.

In the end, the medical equipment systems appear to be a health care program cost contributor that on their own are not easily reduced. The means to reduce their costs impacts are to motivate developers and manufacturers to produce lower-cost system that are as or more effective than current devices.

Wednesday, October 7, 2009

Wasting Away Again in Medicare-ville: Elder Care and Retirement Communities

I have heard several times over the last year or so that the cost of medical care for the last year of life is enormously more expensive than for other equivalent time periods. Now one important factor here is that it if probably less likely that you will need or have the same medical activities going on in non-last year of life periods. After all, we do expect doctors, hospitals and care providers to actually do things to keep you alive. Plus, who really needs an emergency operation when you have not just been hit by the proverbial bus?

So ok, we are going to spend a lot of time and money on trying to keep people alive. And let’s face it, if its you that we are talking about providing that last year of life effort on, you are probably highly in favor of it. And in many cases, I would expect that there are a good percentage of people who wind up actually having many more years of life because the effort was made. Remember, even if you get hit by that bus if the doctors are successful in repairing the damage then you don’t die and the effort turns out not to be the end of and last year of your life.
Basically, there are going to be some thorny problems in finding ways to reduce costs in this area. Not that we should not try; but we are going to have to be very creative, very careful and very wise in making sure that we don’t “pull the plug” when that is not actually the smart thing to do.

The increasing cost problem associated with this area of health care is unfortunately still going to be driven up by many of the factors previously discussed and will add new factors of their own. For instance, we are in aggregate living longer, getting exposed to more and more exotic substances and we are getting fatter. So unless some other bad behavior(s) in our society help us out by killing off a significant portion of the elderly population, we are looking to more people needing more care, particularly in the last year of their life.

Certainly, nothing related to elderly care and retirement communities is going to shepherd in the ‘magic walker’ of Health Care cost control.

These centers are set up to concentrate the services into an environment which is more effective than would otherwise be possible; but they also set up profit motivated operations which are not really driven to lower costs. And to the extent that they actually prolong the life of the elderly, they are also therefore extending the costs of those same elderly. I am not saying that this is wrong, only that it’s a fact to be understood. If we help people live longer by spending more money on health care, we also increase the cost of health care.

Tuesday, October 6, 2009

If You Can’t Do, Teach; If You Can’t Teach, Administer

One group of players in the health care system game that must be able to direct and control its costs are the various administrators. These administrators are the governmental bureaucrats and operating managers for the various medical businesses that in aggregate form the group of individuals who run the day to day Health Care System in America. You all know what “Administrator” do, they set up the rules and the procedures that everyone must adhere to in order to get the system to do anything. The administrators don’t bring any medical skills or knowledge to the system, they bring … ummm? Well, they keep it working. But because they run the system, they are in the best position to control and manage the costs. But the question is: Are they motivated to reduce the costs or raise the costs?

First up, the government bureaucrat administrators; their motivation is to grow the bureaucracy. Or perhaps it would be fairer to say that they are motivated to not let their organization shrink. They exist to define policy, procedures, and rules. They collect information and data, generate reports, and make recommendations to higher-ups and political appointees about how much they are doing. They provide forecasts and projections for their annual budgets, and they always need more. They may on occasion indicate that the only way to contain their costs is to tighten up the policies, procedures and rules and collect more data to identify where the costs are coming from. Once they have their results, they will advise that new regulations are needed to restrict the costs that actual medical service providers should get for their services; and may stick in the need for additional funding to cover their organization’s additional administrative expenses.

Next up, industry administrators: now these guys come from many different arena but they all share some common dimensions. Whether they are administering insurance company operations, hospitals, medical practices, pharmaceutical company processes, or other medical businesses; they purpose in life is to increase revenues and/or profit margins, preferably both. They must seek every way possible to bill for more, and if possible pay for less. Not exactly a group that would be the poster-child for cost savings for the customers of the health care system; since it’s the users of the health care system from whom they get their money.

We should not be surprised, if the businesses are looking to increase their profits the administrators are their operatives for making it happen.

We are not going to see a more economical health care system from these guys.

Saturday, October 3, 2009

Is there a Cost Angel in Health Care. You can be Insured There Is

After finding so many parties that seem to cause the price of health care to rise, we should be able to look to the health care Insurance companies as one group that is on the side of the cost angels. If anyone has a vested interest in containing and reducing costs it is surely the insurance companies.

Whoa, there nugget! Let’s not go off getting ahead of ourselves. Before we just “ass-u-me”, perhaps we can consider what motives are behind these pillars of capitalism and selfless servants of society’s civil subjects. First and foremost they want to make money, more importantly profits. Secondly, No! there is no secondly; they want to make money, the more the better. So how would their making money, affect the cost of health care?

There would seem to be two basic ways for them to make money. Way number one, they can operate their businesses efficiently, control their costs and provide their services at a more competitive rate so that they can gain clients and thereby increase their profits by gaining market share. Now this is very hard to do; it requires constant diligence to controlling operational costs, obtaining exceptional investment returns and reducing pay outs whether fraudulent or even justified. But these efforts are directed at increasing profits and do not clearly lead to lower costs for us health care consumers. Just because the premium costs are as low or lower than their competitors would also require that they pay out at the same claims level as their competitors; and in order to know that that would happen the companies would have to violate one of their profit-motives. So naa! Cheaper for them is not cheaper for you.

Way number two, they can do all the above and they can raise the cost of health care in order to justify their rate increases. Now this is the easy way to make money. The higher the cost of health care, the higher the cost of their premiums, and guess what; their regulatory body and government approved rate of return is going to generate more absolute cash in profits than if the cost of health care is lower. So our salvation from these advocates of avarice is unlikely to be realized.

Thursday, October 1, 2009

Patient Zero – The Root Cause of Costs

If anyone can cause health care costs to go up, it has got to be the patients. After all, if they were not sick or injured there would be no costs in the first place. So the costs start with the patient and they continue to grow from there. So using a term from the medical parlance, it all begins with Patient Zero.

How could the patients be responsible? The patients don’t set the rates, order the test, or perform the work. Patients don’t manage networks or administer insurance plans. Patients are the poor (or they will be when they finish paying their medical bills) bastards who need to services of the health care professionals and institutions. It’s patently absurd that to blame the patient for rising costs; to do so would require that these people are actively engaged in doing something that actually incurs additional work or services beyond what would be required. Why that would mean that Patient Zero would have to things like:
  • Go to the doctor for unnecessary and unreasonable matters.
    Like going to the doctor’s office because of a hang-over, minor head-cold, or bruise from playing volleyball.
  • Ask or tell the doctor to perform a test or procedure that the doctor would never have done on their own.
    Patient Zero may want a “full set of tests” to makes sure that everything is ok, even though there are no specific symptoms that would warrant more than a blood test.
    Or, Patient Zero may ask for a procedure that they want, because it will get them what they want. A gastric bypass operation so they don’t have to struggle with a diet, or spinal surgery to fuse vertebrate rather than a physical therapy program recommended by the doctor, or monthly treatments with a chiropractor that never end instead of an exercise program that would mediate the problem.
  • Request the doctor to prescribe a medication or treatment that is not medically necessary.
    How many patients go to the doctors seeking a new medication that they have heard about or been told of by a friend. Or patients who just want more of the same medication that they got for some temporary pain, insomnia, depression, anxiety, …; it’s not that they are going to be cured by these prescriptions, it’s just that they want them.
  • Use medical services inappropriately (e.g., call an ambulance to get to the hospital because you, Patient Zero, does not pay for the service)

While the cost of these services, medications, and procedures may be very nominal and appropriate; the real need to prescribe these items to these Patient Zeros is not appropriate. And if these Patient Zeros are not paying for these then we all know who is paying for them. They become aggregated into the “operational costs” of providing health care and become part of your health insurance premium; your income, Social Security and Medicare taxes; or your own medical bills.


And not only are these Patient Zeros costing you for these services, they also increase the administration costs of the health care systems and consume time and resources for everyone else which translates to more costs.


Like it or not, misuse by a percentage of the patient population directly harms everyone both in the wallet and in the risks that it imposes on anyone else who may need those resources for a legitimate need.


If you don’t recognize all aspects of the problem you may not be able to solve other problem areas that may be produced by the problem source that you don’t see or won’t see.
So any system that is going to fix the Health Care will have to reform not only the medical community itself, it will have to address the public as well.