Monday, December 28, 2009
In the wine…
Make me happy…
Make me feel fine.
I was looking for a quiet place to stand, safe from the storm. I usually find it in a silly song… or sometimes a Christmas carol this time of year.
In my youth I was more… political. About thirty years ago, as a matter of self preservation, I stopped talking, listening, reading or even thinking about anything remotely political—until healthcare reform forced itself into my field of view. So, I plugged back into the political milieu and, predictably, I did not like what I saw.
I am worried about our shining city on a hill—the short experiment in human political organization known as the United States of America. The dialectic continues apace but the debate has definitely dumbed down. We now have Olbermann and Maddow on MSNBC versus O’Reilly and Beck on Fox News where once we had Hamilton and Jefferson. I am not saying that our forefathers’ motives were necessarily more altruistic, but it would be true to say that the Hamilton-Jefferson debate elevates while the Beck-Maddow “debate” depresses. Hamilton and Jefferson had their share of lust for power and money. Beck inspires fear in order to boost ratings and the price of gold. Maddow’s on-air craving for approval and popularity with the liberal intelligentsia is palpable. Does that mean we can stop worrying about the current state of American political discourse because it really is just “same old, same old”? I think not. Can we at least get more articulate noise? I must be listening in all the wrong places. For goodness sake, do not tune in CNN and listen to actual speech-making by our elected politicians. It is more depressing than Beck-Maddow.
I can hear the objection: “They are not politicians; they are not even political media; they are in the entertainment business; no one takes them seriously.” That rationalization is in wide circulation as an effort to marginalize Limbaugh, Beck, O’Reilly, etc. It is a patently foolish thing to say. Millions of people listen and are stirred to passion. No other criteria or credentials matter in the face of that fact.
Beck and Maddow seem on such opposite sides of the political spectrum it is easy to forget that they are really two sides of the same coin. Beck and Maddow were both raised Roman Catholic—both on the west coast: he in Washington; she in California. They both entered the national scene after relocating to New England states: he in Connecticut; she in Massachusetts.
Beck is a high school graduate. He was divorced from his first wife amid struggles with substance abuse. He admits to being a recovering alcoholic and drug addict. He cites the help of Alcoholics Anonymous, attending his first AA meeting in November 1994, the month he states he stopped drinking alcohol and smoking cannabis. In 1995, Beck was co-hosting a local four-hour radio morning show in Hamden, Connecticut, billed as the Glenn and Pat Show. During a broadcast of the show, an Asian-American listener called to complain about a comedy skit speaking fake Chinese. Beck made fun of the caller who subsequently contacted a number of human rights organizations. The station manager read an apology on the air and the station issued a written pledge to refrain from offensive activities and instituted cultural sensitivity training for employees. Soon thereafter, while working for a New Haven, Connecticut radio station, Beck was admitted to Yale University through a special program for non-traditional students. One of his recommendations for admittance came from Senator Joe Lieberman. Beck took one theology class, “Early Christology,” and then dropped out. After he remarried, he became a Mormon.
Maddow earned a degree in public policy from Stanford University in 1994. She is a recipient of a Rhodes Scholarship and completed her PhD in politics from Oxford University. Her doctoral thesis was titled “HIV/AIDS and Health Care Reform in British and American Prisons.” She was the first openly gay American to win a Rhodes scholarship. Her first radio hosting job was in Holyoke, Massachusetts. The station held a contest for a new on-air personality and Maddow won.
As I said: two sides of the same coin. Both parlayed their fifteen minutes of fame on local radio stations into a national television audience. Maddow is certainly better educated, or, more accurately, Maddow is educated and Beck is not. To me, that fact only makes Maddow’s on-air rhetoric all the more frustrating. I can almost forgive Beck for being an ignorant buffoon. He is what he is. Maddow should know better.
Here is a synopsis of the dialectic as expressed by Hamilton and Jefferson:
Hamilton: Can a democratic assembly who annually [through elections] revolve in the mass of the people, be supposed steadily to pursue the public good? Nothing but a permanent body can check the imprudence of democracy. Their turbulent and changing disposition requires checks.
Jefferson: Men are naturally divided into two parties: those who fear and distrust the people and those who identify themselves with the people, have confidence in them, cherish and consider them as the most honest and safe depository of the public interest.
Hamilton: Take mankind in general, they are vicious—their passions may be operated upon. Take mankind as they are, and what are they governed by? There may be in every government a few choice spirits, who may act from more worthy motives. One great error is that we suppose mankind more honest than they are. Our prevailing passions are ambition and interest; and it will be the duty of a wise government to avail itself of those passions, in order to make them subservient to the public good.
Jefferson: I have such reliance on the good sense of the body of the people and the honesty of their leaders that I am not afraid of their letting things go wrong to any length in any cause.
Hamilton: I have an indifferent [low] opinion of the honesty of this country, and ill foreboding as to its future system. I said that I was affectionately attached to the republican theory. I add that I have strong hopes for the success of that theory; but in candor, I ought also to add that I am far from being without doubts. I consider its success as yet a problem.
Jefferson: Whenever the people are well-informed, they can be trusted with their own government; whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights. I am not among those who fear the people. I have great confidence in the common sense of mankind in general. My most earnest wish is to see the republican element of popular control pushed to the maximum of its practicable exercise. I shall then believe that our government may be pure and perpetual.
Hamilton: Your people, sir, is a great beast.
Jefferson: The mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.
We have been having this debate for over two hundred years. When Rush Limbaugh and Glenn Beck rely on politics of fear for ratings, power and money, are they conscious of the Hamilton-Jefferson dialectic? The answer is complicated. They subscribe to the superficial view of Hamilton as a proto-liberal, big government Democrat in contrast to Jefferson as a proto-conservative, small government Republican. Yet, power derived from a politics of fear depends on a Hamiltonian view of human nature. Ironic, isn’t it? But then, effete intellectuals tend to find irony in everything.
Irony is interesting—even pleasurable—but it is not an answer to anything, and I can not go to sleep until I tuck some kind of answer in a drawer somewhere in my mind. So, what is really bothering me? We have had civil war and civil unrest but it is the current lack of civility that concerns me most. If I were a weatherman, I would say there’s a storm blowin’ gonna make Katrina feel like a soft, summer shower.
Blow, winds, and crack your cheeks! rage! blow!
You cataracts and hurricanoes, spout
Till you have drenched our steeples.
Lear did not have a quiet place to stand. It’s hard to find the eye in the storm with all the screaming and howling.
I was about to say we all need a calm center to make sense of the chaos—otherwise we risk losing our eyes and becoming as blind as King Lear—but then I remembered the man that corrupted Hadleyburg. Mark Twain was a profound moralist about our “get rich quick” culture, not because he stood apart but because he was so susceptible to it. There is no such thing as “the ethical choice” unless made in opposition to a compelling corrupt choice.
The Becks and Maddows are not going to stop shouting at us. The always-on connection to public media through television, internet and cell is not going to fall silent. Maybe we can learn to turn it into a strength.
Tuesday, December 22, 2009
Wednesday, December 16, 2009
Who knows what tomorrow will bring, but at this moment, the debate is focused on contracting the uninsured piece of the pie, expanding the Medicare and Medicaid pieces of the pie, and maybe, just maybe, contracting the commercial insurance piece of the pie by creating a new piece called “public option.” I don’t know about you but I would not want to be in a pie-eating contest with eaters as strong and as voracious as commercial insurance companies. Yet, that is precisely the nature of the contest currently being waged.
I have a pie-shattering, paradigm-shifting idea. What about doughnuts? Doughnuts are meant to be shared. If you have an early morning meeting with a group of your fellow employees and you want to bring something that says, “We are all in this together,” you don’t bring pie—you bring doughnuts.
What is the pie? The pie is the cost of providing healthcare to everybody in the country. The following chart is meant to be representative of the players holding pieces of pie but it is not meant to be statistically accurate. The economic size of the piece is not as significant as the political strength of the hand holding on to it. The players are likewise a bit different than the usual suspects. The uninsured piece is not based on the actual market force belonging to the consumer-patient responsible for payment because that market force does not exist except as a negative pressure, a kind of anti-piece. The pieces belonging to Medicare and Medicaid are easily recognized but should carry subtitles as a reminder of the federal and state political processes that respectively exert pressure. The piece labeled on the pie chart below as belonging to “provider contract” is not usually recognized as such. The pie is usually divided into “employer provided” insurance and individual purchased insurance, but the fact is employers do not really control a piece of this pie beyond an indirect influence similar to the role of the taxpayers who fund governmental insurances. The “provider contract” piece refers to contracts negotiated by healthcare providers (primarily if not exclusively the large hospital systems in a given market) and commercial insurance companies (primarily if not exclusively the mega companies that dominate a given market). The “provider contract” piece also refers to direct contracts between providers and employers or other groups cutting out the insurance middleman.
Each piece contains a distinct population at any given time. The insurance industry refers to them as “covered lives” meaning that the unlucky millions in the uninsured piece would therefore have to be “uncovered” lives. If you are paying close attention, you might notice that there would be many more lives contained in these pieces than there are people living in this country. A person covered by commercial insurance would also get counted in the provider contract piece. That is as it should be. There is a cost based on the provider contract and a separate cost associated with the commercial insurance “middleman.” This doubling effect also holds true if the Medicare or Medicaid covered life is a commercial insurance hybrid such as Medicare Advantage. These, then, are the principle pie-eaters holding a significant piece of the total cost of providing healthcare to people in this country.
There is no hole in this doughnut. Americare is a basic benefit package covering everyone. In order to determine the cost of Americare, the total cost of providing care for everyone in the country for one year is calculated at Medicare rates and is divided by the total number of lives, creating a “single payer” annual premium for every individual life. It would be a low premium for three reasons:
1. By including all lives, the premium is based on the low cost of covering the “young invincibles.”
2. By forcing the cost of care to the Medicare allowable, the profit margin of the commercial insurers is eliminated.
3. While there are no deductibles, Americare has an across-the-board “co-pay” of 40% and the premium is based only on the 60% of cost actually covered.
The thing that makes this approach a doughnut instead of a pie is that the remaining 40% of the cost would be covered by the traditional pie-eaters. In that way, we can eat our doughnut and they can have their pie, too. In fact, since Americare would function like Medicare by utilizing commercial insurance companies as fiscal intermediaries to process and pay claims, the commercial insurance players would maintain multiple opportunities to feed themselves. The Medicare program would function as it does now but would provide coverage under its terms only as to the 40% co-pay. Likewise, the Medicaid programs would provide coverage for the 40% co-pay for covered beneficiaries—with coverage determined through a combination of federal and state mandates. Employer-funded groups would cover the co-pay through traditional commercial insurance. Self-employed persons would be required to purchase insurance (perhaps through a newly created insurance exchange) to cover the 40% co-pay. Individuals would also be allowed to “self-fund” the mandated insurance requirement through individual HSA investments.
I discuss this Americare version of healthcare reform in more detail in my whitepaper posted on this blog. In order to control the cost of care, it is important to include economic incentives for patients to reduce over-utilization and to maintain healthy lifestyles. Therefore, the premiums for the cost of covering the 40% not covered by Americare would be based on individual rate factors. Insurers would still have incentives to offer innovative programs. There would be healthy market competition between insurers. Providers would compete on a level playing field but there would be remain opportunities for synergies in well-integrated systems.
It should be obvious as to the pay sources of the 40% co-pay, but who pays for Americare? The answer is that much of funding would come from those same pay sources. The “new” payers would be those uninsured persons mandated to pay the Americare premium. There would also be “new” monies made available from that part of the premium dollar now being paid to commercial insurance companies. That dollar would no doubt cover more lives under the Americare system. Providers—particularly the mega systems built on heavy utilization by a saturation of specialists—will howl that they cannot survive on Medicare rates. It will probably be necessary to phase in the program over four years, but providers will adapt and they will survive.
Don’t Bogart the pie. Pass the doughnuts.
Wednesday, December 2, 2009
Monday, October 26, 2009
To Whom It May Concern:
Ozarks Community Hospital is a small health system with facilities in southwest Missouri and northwest Arkansas. We are a for-profit organization providing care to a high percentage of patients covered by government programs in a region dominated by large charitable health systems that vie to control the commercial insurance market. Approximately 80% of our patients are on Medicare, Medicaid or Tricare or are uninsured.
We have never sued a patient to collect a bill. We provide an across-the-board 40% discount for the uninsured based on our belief that those without coverage should never have to pay more than Medicare pays. We allow uninsured patients to pay what they can without having to beg for charity or fill out complicated forms “proving” they deserve charity.
According to a twenty-year study by the Dartmouth Institute for Health Policy, as reported in U.S. News & World Report, our health system has the lowest out-of-pocket cost for Medicare beneficiaries of any hospital in the nation.
As an under-capitalized start-up destined to be a safety-net provider of low cost care with nothing better than governmental reimbursement, our healthcare system should have languished in a dormant state according to conventional wisdom; yet, we have grown in our ten years of existence, from a single hospital with 50 employees and $7 million in annual gross revenue, to a system of two hospitals, more than a dozen clinics, 850 employees and over $120 million in annual gross revenue. During this decade of growth, we have invested in people and services but not in bricks and mortar—and we have made virtually no profit. What we have done every year is provide more and more low-cost care to patients who would otherwise find it difficult to access care.
The point is: we know something about how healthcare works in this country. Congress is about to pass comprehensive legislation to reform healthcare. It is a complicated issue made more complicated by the vast amount of misinformation and propaganda out there. We are like many people and organizations—we were hoping reform would help but now we are worried it will hurt. It would appear the big insurance and pharmaceutical companies have won the battle. If the bill passed by the Senate Finance Committee becomes law in its current form, it is quite possible it will put our health system out of business. We have very little access to private insurance contracts and no leverage to negotiate decent terms. A public option would at lease give us a competitive opportunity to take care of patients.
The reform bill recently passed by the Senate Finance Committee, the bill with the best chance of becoming law, does not include a public option. There has been a great deal of discussion about this so-called public option. Unfortunately, most of the discussion has been based on very little information and virtually no understanding of the historical context.
Blue Cross Blue Shield of Missouri is one of the few commercial insurance companies with which we do much business—about 5% of our total patient volume. The Blue Cross Blue Shield organization in southwest Missouri is part of Wellpoint, the Blue Cross licensee in California and a Blue Cross Blue Shield licensee in 13 other states: Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia, and Wisconsin. Wellpoint provides health insurance to 34 million customers, making it the nation’s largest health insurer. It is the ultimate for-profit commercial insurance company. It made $3.3 billion in profits in 2007 and $2.5 billion in 2008. Its CEO makes $10 million a year.
Ironically, Wellpoint, the megabucks, for-profit insurance company, began life as the equivalent of a public option.
The original nonprofit, “public option” health insurance originated in 1929 as an experiment at Baylor University to provide prepaid hospital coverage to members of the community. It morphed into Blue Cross and Blue Shield as independent BCBS plans spread across the country. For more than forty years, BCBS plans were organized under federal law as tax-exempt 501(c)(4) organizations: “engaged in promoting the common good and general welfare of the people of the community.” BCBS premiums were based on a community rating instead of rates based on an individual’s health status. Throughout the country, these charitable corporations offered the same rates to all subscriber groups regardless of age, sex, occupation, or other characteristics that might affect the frequency with which members of the group would require hospitalization.
In 1994, the Blue Cross Blue Shield Association voted to allow its nonprofit members to become for-profit corporations. As the nonprofit plans were replaced by for-profit insurers, they dropped community ratings in favor of the more profitable individual experience ratings. A merger and acquisition feeding frenzy ensued among these BCBS for-profit plans and Wellpoint emerged as the proverbial 800 pound gorilla.
What has this gorilla been up to in our neck of the woods? For one thing, we cannot get it to pay claims. In that regard Wellpoint does not treat us differently than any other hospital. A Wellpoint executive recently testified to congress that it pays 97% of claims in less than 30 days. It would be comical if it did not hurt so much. It is the one constant in the universe. For our patient finance employees, getting a claim paid by Wellpoint in the normal course of business is the emotional equivalent of winning the lottery. It takes four to five employees to collect the 80% of our revenue that comes from governmental payers. It takes 25 employees to collect the 20% that comes from Wellpoint, other commercial insurances and patients. We get paid by Medicare and Medicaid, on average, in less than 30 days. It takes us twice as long to get paid by Wellpoint.
To make matters worse—and this is the really cruel part—Wellpoint pays us less than any other payer: less than Medicare, less than Medicaid. That is bad news for us but why should anyone else care? Like other insurance companies, Wellpoint objects to the public option based on the “cost shifting” myth. Wellpoint claims it pays more to providers because Medicare underpays. Assuming the public option plan would pay at Medicare rates, the private insurance companies paying a higher rate would also be “subsidizing” the public option. Those who favor the public option claim the argument is flawed for a number of reasons, but we have not heard anyone claim that the underlying assumption is wrong—that it is simply not true Wellpoint pays providers more than Medicare. In order to prove the underlying assumption false, we would have to publish the actual payments our hospital receives from Wellpoint. If we did so, we would breach the contract we have with Wellpoint: its contract prohibits us from disclosing what Wellpoint pays for the care we provide.
Everyone talks about transparency in healthcare, but few are willing to provide real information. What do healthcare experts mean when they talk about price transparency? Many hospitals disclose what they call prices. In fact, all they are really doing is disclosing their charges taken from their chargemaster list price. Some might refer to the chargemaster price as the retail price, but that is not a precise definition. For decades, the only payers who paid the hospital’s retail price were uninsured patients, and these days, with all the class action litigation brought against hospitals for making self-pay patients pay more than insurances and governmental payers, there are few hospitals not providing some sort of “discount” for uninsured patients. If no one ever pays the retail price, it is not accurate to call it a price. A hospital’s chargemaster price would be more accurately defined as a reference point used in hospitals’ contracting with payers. If a hospital were truly providing price transparency it would disclose the actual expected payment under its contract with a specific payer. Anyone with access to a computer can find the Medicare expected payment, but expected payments from insurance companies to hospitals are shrouded in mystery.
Some time ago, the Blues announced a plan to phase in price transparency for consumers. However, their insurance contracts continue to prohibit the provider from publicly disclosing negotiated prices, even to patients. In order to provide true transparency, negotiated payment rates would have to be disclosed to the public. Any publication of data compiled from comparative hospital charges merely creates the appearance of price transparency. It would make some sense if expected payments were based on a percentage of charges, but that is increasingly not the case. Our hospital has meaningful contracts with only a half dozen insurance companies (there are a hundred other insurances but none cover more than a small handful of patients). None of those insurance contracts base expected payment on a percentage of our charges. Wellpoint and the other insurance companies primarily rely on a fee schedule to establish expected payment and the fee schedules bear no relation to our charges (or our costs).
We have no idea what the Blues are paying other hospitals. We only know what our contract with the Blues allows us to collect—the total from both insurance and patient co-pay. The allowable Medicare payment is provided for comparison. Our average cost per procedure as calculated on the cost report filed with Medicare is likewise provided for comparison. The data table below represents a selection of outpatient procedures such as laparoscopic, arthroscopic, bronchoscopy and colonoscopy. We are not providing information describing the specific procedure priced in the table because doing so would violate the terms of our contract with the Blues.
These numbers are accurate. Blue Cross and Blue Shield of Missouri, a subsidiary of Wellpoint, the nation’s largest health insurance company, earning billions in profit each year, pays our little hospital substantially less than Medicare. Our hospital and physicians have no ability to negotiate for a better payment. It is take it or leave it. We cannot afford to take it. If we decide to leave it, thousands of patients currently being treated by our doctors will have to find new doctors. If that happens, there will not be enough doctors left in the network: bad news for patients but good news for Wellpoint. If patients have trouble getting in to a doctor, there will be fewer claims to pay and Wellpoint profits will grow.
Perhaps the public now better understands why we favor a public option. Without a public option, healthcare reform will consist primarily of a mandate requiring people to buy insurance from companies like Wellpoint. Those insurance companies will continue to tell patients that premiums are being driven higher because they are subsidizing the lower reimbursement paid by Medicare all the while gorging themselves on profit from millions of new premium paying customers. A handful of huge for-profit insurance companies and large, monopolistic health systems will continue to maintain proprietary, exclusive networks thwarting legitimate competition and true innovation.
The public has been told the public option is a scary, new government takeover of healthcare. It would be just as true to say that Wellpoint and other mega-buck private insurance companies like it run healthcare. Frankly, if we had to choose, we would much prefer government-run healthcare to Wellpoint-run healthcare. At least there would be more of a level playing field for hospitals and doctors who do not have “favored nation” contracts and relationships with the monopolistic megabuck insurance companies and health systems. The public has been told we need to get the government out of the way between patient and doctor. Medicare gives the patient the right to choose a doctor and a hospital. The big health systems and insurance companies often conspire to restrict that choice. The public option should function like Medicare and give patients the right to choose their doctor and hospital.
The bottom line is the public option would simply be another third-party insurance payer like Wellpoint or Medicare (or like the original Blue Cross and Blue Shield plans). Perhaps we would not need a new public option if the original public option had not been co-opted by corporate greed.
Paul Taylor, CEO
Ozarks Community Hospital
2828 N. National
Springfield, MO 65803
Contact: Carrie Richardson, Director of Communications
Insurance companies are not telling the truth about the public option!
Springfield, Mo — We have listened far too long to bogus claims by insurance companies that the public option would not be fair competition because they are paying hospitals much more than the government pays. It is not true.
The largest private health insurance company in the nation pays our hospital one-third of Medicare rates for outpatient procedures.
The push for national healthcare reform seems to be nearing the finish line. If there is a single issue getting the most attention, it is the public option. There is one argument that has proven the most difficult for proponents of the public option to counter: the private insurance sector claims it “subsidizes” what the government pays for healthcare. Because Medicare pays less than the actual cost of care, hospitals and doctors depend on private insurance to pay more.
If true, it makes a public option, whose payments would be tied to Medicare rates, not only fundamentally unfair to the private insurance companies who could not compete because they would be paying more to insure the same care, but an economic disaster for hospitals and doctors who depend on better paying private insurance to make ends meet. The advocates of a public option typically counter by claiming that the private insurance sector is currently making billions in profits and will no doubt survive despite the competitive advantage of the public option.
Few have offered proof that the underlying claim—that private insurance pays more than Medicare—is not true.
We do not claim to know how much the private insurance companies are paying other hospitals, but we do know that the largest private insurance company in the nation is paying our hospital less than Medicare—much less. For an outpatient procedure that costs our hospital almost $800, Medicare pays us $614 and Blue Cross and Blue Shield pays us $236. For another, Medicare pays us $2789 and the Blues pays us $932. It is not an exception; it is the rule. There are no outpatient procedures performed at our hospital as to which Medicare does not pay us substantially better than the Blues. So, while it is true that Medicare does not pay us enough to cover the actual cost of the service, it is certainly not true that the Blues are somehow subsidizing the cost of care at our hospital.
We would welcome a public option.
Our CEO Paul Taylor has written a letter on behalf of OCH giving proof that insurance companies are making bogus claims and how that can effect the public’s access to healthcare. Read the full letter at http://ochhealthcarereform.blogspot.com.
Ozarks Community Hospital is a 45-bed acute care provider-based facility located in Springfield, Missouri. OCH was created to support those in need of quality healthcare in the Ozarks. Approximately 80% of the patient population we serve daily includes Medicare, Medicaid, Tricare and a substantial number of uninsured patients.
For more information visit us at www.OCHonline.com, https://twitter.com/OzarksCH, follow our healthcare reform blog http://ochhealthcarereform.blogspot.com or become a fan of us on Facebook. Feel free to contact Carrie Richardson, Director of Communications at crichardson@OCHonline.com or by phone at 417-874-4503.
Tuesday, July 21, 2009
Every United States citizen can have basic benefit coverage without increased governmental control and with lower per capita costs.
We want you to win arguments about healthcare reform. So, we are going to do this like a seminar. There is going to be a short lecture (at least everyone including me hopes it will be short but I can be long-winded), a roundtable discussion (educators call that the Socratic method of teaching) and handouts! If all else fails when you are arguing about healthcare reform, do what everyone else does and tell them you heard it from an expert. Tell them you heard this guy say it is possible for everyone in the country to have the same basic coverage Medicare provides and to do it without doctors and hospitals being run by the government and to do it without increased taxes or spending. When they say, “Who was this guy? I have never heard of him. He must not be one of the experts. Why should we believe him?” Tell them this:
- That he is a hospital CEO, an attorney and a teacher [I may not be an expert but I have spent my life in situations where, unlike most experts, what I say has real impact on people’s lives.]
- That he was raised in southwestern Missouri but educated in New England [I may not be an expert but I have my foot in both camps where experts are supposed to come from—the heartland, full of real people with common sense knowledge, and academia, full of eggheads with impressive vocabularies and statistics. Depending on who you are arguing with, either tell them that the guy lives in Webb City, Missouri or that he graduated summa cum laude, Phi Beta Kappa from an Ivy League college.]
- That the hospital he runs was listed in US News & World Reports as the least expensive in the entire nation [I may not be an expert but I’d say that means I know a little something about the cost of healthcare.]
- That, for the last ten years, three-fourths of the patients at his hospital were either Medicare, Medicaid or uninsured [I must not be an expert because the experts will tell you that it is impossible to run a health system on what the government pays—and we have done it without tax support, grants or donations. We are a private, for-profit, physician-owned hospital.]
- That, for the last ten years, his hospital has never sued a patient to collect a medical bill or forced a patient to fill out a complicated form disclosing all kinds of private financial information in order to qualify for so-called charity care [I must not be an expert because I believe most people are willing to pay their fair share of the cost of healthcare and I do not believe people without insurance should be expected to pay more than what the government pays.]
We want you to graduate from this seminar and start winning arguments about healthcare reform. We will suffer more harm from half-way measures and shortcuts than from doing nothing. We have been ready for a fair, rational healthcare system in this country for at least a hundred years. We cannot wait any longer. The time for a complete overhaul of the system is now.
You all have heard the numbers. There are almost 50 million of us without real healthcare coverage. Here is a debate tip for you. When you hear the experts say that 50 million uninsured is not a real number for a bunch of reasons—like, for example, because it includes a lot of people who could afford to pay for healthcare but don’t—just stare at them like they are from Mars and say: “Look, genius, I don’t care why they are not paying. If they aren’t paying, they are making me pay more.”
Half the individual bankruptcies filed in this country include big medical bills. As a private practice attorney I can tell you that people do not feel bad about filing bankruptcy when their situation was created at least in part by medical bills. People feel like it is not their fault if they can’t afford to pay huge medical bills and I believe they are right. The healthcare payment system is so screwed up it does not make sense to anybody. Those healthcare related bankruptcies have costs unrelated to healthcare. When people file bankruptcy because of medical bills, they discharge all their other debts. Why not? Talk about trickle down economics. There are a lot of credit card companies and other businesses that lost money because their customers could not afford healthcare.
The cost of healthcare in this country is higher than any where else in the world. It is bad for business. Here is another debate tip for you. When the experts tell you that healthcare reform will hurt business, look at them like they are from Pluto and say: “Look, genius, the cost of healthcare is hurting American business right now, making us less competitive in the global economy, and it is going to get a lot worse if we do nothing.” I am a businessman, too. I run a business with almost 800 employees. A few years ago, we realized we could not afford the rising cost of paying health insurance premiums to cover our employees. Fortunately, we had an option most businesses do not have. Since we are a healthcare system, we decided to create a self-funded plan and we encouraged our employees to shop at home by waiving the deductible and co-pay if they used our system. If we had not been able to do so and we were like most other businesses, we would have been forced to drop health insurance benefits for our employees. Businessmen can handle almost anything if they know what to expect—if they can plan, forecast, budget. Healthcare costs have risen so dramatically and erratically it has been impossible for businesses to cope. We need to impose rationality on the system. We need universal healthcare as much for the health of American business as we do for individual Americans.
When the experts tell you that they are against universal healthcare because it would be another infringement upon individual liberty by the big, bad federal government, stare at them like they have been spending a lot of time on Jupiter recently and say: “Look, genius, we already have universal healthcare; it just doesn’t work very well.” If a patient has an emergency medical condition and seeks treatment in a hospital, the patient will be treated regardless of ability to pay—everyone is covered by this policy benefit. We should stop debating whether to create a universal healthcare system and focus instead on how to pay for it fairly and efficiently. If everyone paid their share of the cost of providing healthcare to all, the cost to each of us would drop significantly.
We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of all parties.
We have laws requiring connections to highly regulated utility services in order to ensure public health, safety and welfare. We have laws requiring automobile owners to maintain liability insurance coverage and to provide proof of it on demand in order to protect the public from reckless, irresponsible drivers. We have laws forcing employers to cover employees with workers compensation insurance in order to protect workers from irresponsible employers and to provide benefits for those injured on the job. There is no similar mandate extending the essential service of affordable healthcare to all people striving to live well in this country.
Here is another debate tip for you. Ask those experts against universal healthcare if they live in a house connected to a public sewer or have their garbage hauled to a public landfill. If they say yes, tell them you just moved in next door to them and you assume it will be okay with them if you let your sewage drain out on the open ground next to their house and dump your garbage in the back yard. Most Americans understand and agree it makes sense that everyone living in a town or city should use the public sewer system and have their trash hauled to a regulated landfill. To ensure public health, safety and welfare, we pass laws regulating public services. Since everyone has to do it, we pass laws requiring everyone to share costs by using the same public service. By the way, if they say they live out in the country and they use a private septic tank and burn their trash, tell them they obviously live in an area where there are not that many people concentrated in big numbers, but that 50 million is a big number and that is how many people in this country are potentially causing harm to the public health, safety and welfare by being connected to the healthcare service and not paying their fair share of the costs.
- universal coverage for basic benefits—essentially the same as Medicare coverage with prescription drug benefits
- emphasis on primary care—the reason our hospital is the least expensive in the nation is a result of an emphasis on primary care
- single payer platform—it will save billions in costs and level the playing field; our hospital is a good example
- claims processing by private intermediaries—we resolve two issues by letting private insurance companies fill this role: 1) we give for-profit companies an opportunity to save the system money by creating efficiencies in processing (quieting those who say government is always bad and private business is always good) and we throw a much-needed bone to the powerful insurance lobby by giving them something they can do to make profits without raping the system
- four-year transition period—most of my fellow hospital CEOs will cry havoc and let loose the dogs of war: they will say that my proposed reforms would shut them down, that it is impossible to run a health system on Medicare rates of payment. I say it can be done and they will do it but we will have to give them a little time to adjust. Insurance companies will also need time to adjust to the loss of enormous profits many of them are making; otherwise, they will be lining up for a federal bailout.
- governance by a national board—do not let the experts sidetrack the debate by claiming that this kind of governance means the feds will be telling your doctor how to practice medicine. I propose a national health board for tweaking big picture issues only like preventing excessive profit making by hospitals, doctors or insurance companies. The problem here is that many of our allies who support universal healthcare are caught up in this idea that we need to reform healthcare by enforcing certain clinical practices from the top down. It is well intentioned but misguided—and it won’t work. [Let the experts win that point. It is a good debate tactic. Tell them, “You are right. It won’t work. It is irrelevant to our reform proposal. Move on.”]
- comprehensive malpractice reform—doctors waste resources because they practice defensively worried about frivolous lawsuits but we also need to protect patients from bad doctors. I propose a system similar to work comp.
- any willing provider—let competition drive quality up and costs down.
The reformed healthcare system would be financed through:
- existing Medicare and Medicaid programs—it would be similar to the Swiss system touted by Bill O’Reilly, of all people; it is not “free for all” or paid exclusively by the government: everyone will pay their fair share but by making everyone pay and by including everyone in the risk pool, per capita costs would be kept as low as possible. Those who legitimately cannot afford to pay would get the equivalent of premium assistance through state and federal governmental programs based on a sliding scale relative to income.
- mandatory premiums paid by employers, employees and the self-employed—as a businessman I can tell you I would not object to providing health insurance for my employees as long as: a) my employees were paying their share; b) my competitors had the same costs; and c) there would be governance to prevent healthcare providers and insurance companies from profiteering.
- unemployment benefits—the money to pay premiums for those who are unemployed would come from the unemployment taxes paid by employers and employees
- a tax assessed on those who fail to pay—if a self-employed person fails to pay the mandated premium, the cost would be assessed on the federal income tax return
There would be a universal 30% co-pay paid directly or covered through secondary insurances. This “healthy” co-pay will be keep patient-directed utilization down. It will be covered through secondary insurance or self-funded. The secondary insurance companies could also offer expanded or additional benefits not covered under the basic plan. If the national governing board failed to keep premium costs down and prevent excess profits by the insurances, it could authorize the “public option” everyone is talking about.
We have to ask ourselves. What do we believe? Do we believe that life, liberty and the pursuit of happiness are fundamental human rights? If so, then the creation of a healthcare delivery system designed to ensure that people have an opportunity to lead healthy, happy lives is not charity. It is an obligation imposed on each one of us simply by living in our society. Independence and self-reliance are fundamental values in our American culture. When we are free and happy and healthy, we tend to forget that we are all in it together, that our actions and choices affect everyone else and that we all depend on each other—unless we happen to live in the wrong part of New Orleans when the hurricane hits. We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of everyone. We can have basic benefit coverage without increased governmental control and with lower per capita costs.
Friday, July 10, 2009
Sunday, July 5, 2009
We distributed the OCH White Paper a couple of weeks ago. The responses we have received thus far can be summarized as follows:
- Single payer universal healthcare is government-run and won’t work.
- Single payer universal healthcare will bankrupt the country.
- Your white paper is long and complicated.
- Your white paper is a compilation of reform ideas that have already been analyzed and rejected.
I suspect that the first two responses were mostly from people who did not actually read the white paper, and the last two responses were from people who did. My answer to the first two would be no and no. My answer to the last two would be yes and yes. I hope to get into a point and counter-point debate at a later time if there is sufficient interest, but, for now, I have been asked if I could provide a short statement focused on the one most essential message I hoped to convey in the white paper. It is this:
We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of all parties.
The one question I am most often asked is: “How are we going to pay for it?” The answer is not by a huge subsidy from the federal government. Healthcare is an obligation we all share and we must all pay for it. While we must all be obligated to pay, the reformed payer system can use existing financial channels. The Federal Health Board would establish the “universal premium” we all owe each year. Since the risk pool includes everyone in the country—young, old, healthy, sick—the cost per life would be the lowest possible amount. That “premium” would be assessed to the Medicare and Medicaid programs, collected from all employers and employees, paid by the self-employed and covered as an unemployment benefit.
The payer system—built on the existing Medicare database—would be engineered to ensure effective and efficient delivery of services while preventing profiteering by individual or corporate providers. There is no reason why such a system could not also be designed to create an incentive for research and development, while rewarding wellness programs and innovation in technology.
The 30% “universal co-pay” applicable to all services initiated by the patient would not only reduce the basic premium, it would also create a disincentive for excessive utilization by patients. While the premium cost would be based on the average cost of providing care to all patients, the cost of the co-pay would be based on individual utilization and other risk factors. The Federal Health Board would regulate premiums for this secondary insurance and/or provide a public option, but it would do so with a mandate that individuals would suffer financial consequences for their lifestyle decisions.
Tuesday, June 23, 2009
This OCH White Paper on Healthcare Reform is presented in three main parts—our rationale for reform now, our unique perspective on healthcare and our reform recommendations. If the reader has no particular interest in our rationale for reform or our story but is primarily interested in the reform proposal itself, the final section can stand on its own. With the anticipation of reaching a general audience, certain healthcare industry concepts are explained in a manner that will no doubt irritate readers inside the industry. We placed some inside a text box to make them easier to skip!
Thursday, June 4, 2009
“The healthcare system will suffer more harm from half-way measures and shortcuts attempting reform than from doing nothing. The moment for a complete overhaul of the system is now,” writes author and OCH CEO Paul Taylor. “There is an ‘inconvenient truth’ about universal healthcare coverage in this country: we already have it; it just does not work very well. If a patient has an emergency medical condition and seeks treatment in a hospital, the patient will be treated regardless of ability to pay—everyone is covered by this policy benefit.” We should stop debating whether to create a universal healthcare system and focus instead on how to pay for it fairly and efficiently. If everyone paid their share of the cost of providing healthcare to all, the cost to each of us would drop significantly. We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of all parties.
Recommended reforms include universal basic benefits, an emphasis on primary care, increased bundling of hospital services and specialty care, a single payer platform with claims processing by private intermediaries, a four-year transition period, governance by a national board, comprehensive malpractice reform and any willing provider rules. The reformed healthcare system would be financed through: traditional Medicare and Medicaid programs; mandatory premiums paid by employers, employees and the self-employed; unemployment benefits; and a tax assessed on those who fail to pay. There would be a universal 30% co-pay paid directly or covered through secondary insurances. The reformed healthcare system would eliminate the nonprofit tax exemption granted providers who do not provide all services free of charge, as well as the tax deduction for employer plans. There would be a separate premium to finance a long-term care benefit for the elderly and disabled.
Paul Taylor is the CEO and general counsel for Ozarks Community Hospital. Ozarks Community Hospital is a small health system headquartered in Springfield, MO. Copies of the paper can be downloaded at http://www.ochonline.com/. Discussion to follow on Paul Taylor’s blog: http://ochhealthcarereform.blogspot.com/