I believe it is possible to create a reformed healthcare system with the essential elements desired by both political parties. Please put aside partisan politics, pry open your hearts and minds and listen to what I am actually proposing. I say that because I have found that politicians seldom really listen. Instead, they translate what they hear into something they already planned to say.
We can provide universal healthcare to all U.S. citizens without adding to the deficit, while promoting individual responsibility and preserving a meaningful role for the private insurance industry. I call the system Americare. I know that name is already in use, but I like it.
1. At the center of Americare is a Medicare-for-all basic benefit package covering every U.S. citizen. [Please, dear Republicans, keep listening.] The total cost of providing care for every U.S. citizen for one year would be calculated at Medicare rates, divided by the total number of lives and discounted to 60%, creating a “single payer” annual premium. This premium would be the same for everyone and would thereby cover 60% of the cost of providing universal healthcare coverage. As with Medicare currently, the government would contract with insurance companies to serve as fiscal intermediaries to process and pay claims efficiently. The cost per life would be as low as possible because it would include everyone, including young healthy people who often do not pay for health insurance. This premium would be assessed against everyone but collected in a variety of ways. Those who are covered under Medicare or Medicaid would have the premium paid under those programs. Employees would have half of the premium deducted from their wages with the other half paid by the employer. Self-employed persons would be expected to pay the premium and those who do not would have it assessed against them as a tax. Those covered under unemployment would have this premium paid as a benefit. There would be no tax deduction applicable to payment of the premium.
2. The remaining 40% of the cost of covering every U.S. citizen would then be assigned to a system of payers very similar to the current hodgepodge of governmental and private insurance, and individuals. [Please, dear Democrats, keep listening.] The cost of providing coverage for this 40% “co-insurance” would be assessed based on individual and group loss ratios and risk factors depending on the nature of the coverage. Legislation would prohibit loss of coverage for pre-existing conditions and other nefarious insurance practices, but individuals with higher risk factors would pay higher premiums. If the patient will not quit smoking or lose weight, the premium goes up.
3. There would be no deductibles, but the 40% co-insurance would include mandated individual co-pays so that patients would pay something out-of-pocket each time they accessed healthcare. The individual co-pays would vary based on the underlying co-insurance. Medicaid beneficiaries might pay smaller co-pays than a patient covered under private insurance, but everybody would have to pay something. We cannot cover everyone without making everyone “feel” the cost of utilizing healthcare.
4. In addition to the basic benefit package provided through Americare, governmental and private insurance would be allowed/encouraged/required to offer additional benefits such as vision, dental, etc. A restricted, formulary-driven drug benefit would be provided through Americare and the rates paid to the pharmaceutical companies would be set by the Americare program, just as with all other healthcare providers. Expanded drug formularies would be available for additional premiums. Someone with money to pay for an expanded benefit package or “platinum” service would be allowed to find a willing partner to take his or her money.
5. Medicare would function basically as it does now, but there would be a tremendous savings over the current system because 60% of the Medicare “premium” would be based on the cost-sharing accomplished by putting everyone in the risk pool. The Medicare program would no longer be bankrupting the government. It does mean that young people would, in effect, be helping to pay for care of the elderly, but it is the fairest and most economical way of doing it. Someday those young people will be old. The state Medicaid programs would provide coverage for the 40% co-pay for covered persons—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 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. State Medicaid programs would be encouraged to create a virtual HSA account for Medicaid recipients to promote healthy life choices and to reduce over utilization. Those who reduced their co-insurance premiums would be allowed to choose additional benefits such as dental and vision coverage, education or child care.
6. 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, which is why the premiums for the cost of covering the 40% would be based on individual rate factors. Insurers would still have financial incentives to develop innovative programs. Private insurance companies would be required to spend at least 88% of premium revenue on true medical costs (the so-called “medical loss ratio”).
7. In order to foster true competition among hospitals and doctors, Americare would mandate an “any willing provider” rule, but, since the pay would be the same for all providers, the competition would be for quality and efficiency of service. To maintain a level playing field, state and federal tax exemptions granted nonprofit providers would be phased out over four years—unless the provider was a true charity and received no money from patients for care.
8. The Americare program would create incentive payment programs to encourage quality and to create cost efficiencies. The program would encourage the creation of accountable care organizations, pooling providers into contracted affiliations rewarded for reducing the cost of care. Americare would mandate pay for performance incentives and would create economic disincentives for inefficient or poor quality care. However, instead of focusing reforms on mass-produced, “one size fits all” database-driven, mandated clinical pathways, Americare would promote the development of a nation-wide army of general practitioners, better trained and more highly compensated than specialists. Patients would be required to choose a general practice physician to supervise their care. These general practice physicians would be paid a monthly capitated rate for every patient assigned to them as the patient’s “medical home.” Chronic disease management and wellness care would be covered under the capitated rate, but acute care would be paid according to a fee schedule. The 40% co-insurance would not cover care accessed by the patient outside the medical home unless the general practice physician authorized it. Patients would be allowed to establish a medical home with any physician, but “home jumping” would be discouraged by financial disincentives.
9. There would be a four-year transition period to give private insurance companies and healthcare providers time to adjust to lower profitability.
10. Americare would be regulated by a national panel composed of representatives from all the stakeholders: patients, private insurance, governmental insurance, hospitals, physicians, CMS, etc.
Insurance and pharmaceutical companies will scream that they will go broke. The good ones won’t. They will make a rationale return for a legitimate service or product. Mega health systems will cry that they will close—that it is impossible to provide quality care on Medicare payment rates. No doubt less money will be spent on new facilities and new equipment for many years, but the healthcare delivery system will adapt and survive. Americare is one of those compromises that everyone would hate and complain about bitterly, but it would work.
Paul Taylor
Friday, February 19, 2010
Wednesday, February 17, 2010
Tax Advice: What To Do When Receiving An Erroneous 1099
Courtesy of Amazon.com
Springfield, MO – Though normally adverse to publicity, best selling poet and novelist, Paul Taylor, CEO of Ozarks Community Hospital, who is also one of the nation’s leading experts on healthcare reform, has decided to speak out against the conspiracy to suppress his work orchestrated by what he refers to as the dominant cultural hegemony. Mr. Taylor claims he has obtained proof by virtue of recently released official U.S. government documents that he is in fact one of Amazon’s most successful authors even though the media has refused to recognize his work.
Sarah Montgomery, one of his press agents working tirelessly to break through the official code of silence that has until now smothered his success, offered this personal insight into the drama that unfolded today in Springfield, Missouri: “Paul walked into the media room and threw down a pile of 1099s he got from Amazon in the mail yesterday. His royalties amounted to almost a million dollars last year. You know, some of us on team Paul were beginning to have doubts that the struggle was worth it. He kept telling us that his groundbreaking poetry and narrative fiction would change the world once we got the word out to the public at large, but, sometimes, when you are on the front lines fighting to promote avant-garde literature, you begin to have doubts. We all believed in Paul but it is certainly reassuring to see objective evidence validating our commitment to keep battling for him.”
Mr. Taylor spoke today at an impromptu gathering of his employed supporters: “I knew there was tremendous grass-root support for my work but I had no idea how strong the movement had grown until I received 1099 statements mailed to me directly from Amazon stating that Amazon.com and a number of its subsidiaries have paid me royalties on book sales in 2009 totaling $943,454.49. I hope to receive the checks soon because I have to pay the taxes on that income by April 15th.”
Mr. Taylor published two books in 2008: Grid, a prose poem that has been called the most important work in American poetry since Leaves of Grass by Walt Whitman, and Rehabitation, an experiment in narrative fiction that fuses novel and screenplay in an emotional thriller loosely based on Taylor family history that may soon become a major motion picture. Until he received notice of the 2009 royalties earned through sales of his work, Mr. Taylor had made less than $100 on sales of his books through Amazon.
“I am really excited that the books have begun to sell so well,” Taylor added. “I had slated Tom Hanks to star as the father in Rehabitation, to be directed by Ron Howard and produced by Steve Spielberg, but I was becoming concerned that Hollywood would lose interest if sales did not pick up.”
Janet Taylor, Taylor’s wife who is also CFO of Ozarks Community Hospital, commented: “I understood Diane Lane was supposed to play the wife in Rehabitation but I was concerned that if they didn’t start shooting the film pretty soon, they would have to go with someone younger.”
Taylor does not have much time to savor his success. “I have been contacted by one of President Obama’s people through an email I received to offer my thoughts on healthcare reform heading into the televised debate coming up next week. I have devised a comprehensive reform package that would completely solve the nation’s healthcare crisis by providing universal healthcare at no additional expense to the taxpayers while promoting individual responsibility and preserving a continuing role for private insurance in the payment system. I have to work out a few last kinks before delivering my white paper to the President.”
Paul Taylor is the CEO and general counsel for Ozarks Community Hospital. Paul Taylor’s Grid and Rehabitation are available on Amazon. His healthcare thoughts are discussed at http://ochhealthcarereform.blogspot.com/.
This Amazon tax error is widespread among authors. Read more here: http://answers.yahoo.com/question/index?qid=20100216122421AASbM8a.
Springfield, MO – Though normally adverse to publicity, best selling poet and novelist, Paul Taylor, CEO of Ozarks Community Hospital, who is also one of the nation’s leading experts on healthcare reform, has decided to speak out against the conspiracy to suppress his work orchestrated by what he refers to as the dominant cultural hegemony. Mr. Taylor claims he has obtained proof by virtue of recently released official U.S. government documents that he is in fact one of Amazon’s most successful authors even though the media has refused to recognize his work.
Sarah Montgomery, one of his press agents working tirelessly to break through the official code of silence that has until now smothered his success, offered this personal insight into the drama that unfolded today in Springfield, Missouri: “Paul walked into the media room and threw down a pile of 1099s he got from Amazon in the mail yesterday. His royalties amounted to almost a million dollars last year. You know, some of us on team Paul were beginning to have doubts that the struggle was worth it. He kept telling us that his groundbreaking poetry and narrative fiction would change the world once we got the word out to the public at large, but, sometimes, when you are on the front lines fighting to promote avant-garde literature, you begin to have doubts. We all believed in Paul but it is certainly reassuring to see objective evidence validating our commitment to keep battling for him.”
Mr. Taylor spoke today at an impromptu gathering of his employed supporters: “I knew there was tremendous grass-root support for my work but I had no idea how strong the movement had grown until I received 1099 statements mailed to me directly from Amazon stating that Amazon.com and a number of its subsidiaries have paid me royalties on book sales in 2009 totaling $943,454.49. I hope to receive the checks soon because I have to pay the taxes on that income by April 15th.”
Mr. Taylor published two books in 2008: Grid, a prose poem that has been called the most important work in American poetry since Leaves of Grass by Walt Whitman, and Rehabitation, an experiment in narrative fiction that fuses novel and screenplay in an emotional thriller loosely based on Taylor family history that may soon become a major motion picture. Until he received notice of the 2009 royalties earned through sales of his work, Mr. Taylor had made less than $100 on sales of his books through Amazon.
“I am really excited that the books have begun to sell so well,” Taylor added. “I had slated Tom Hanks to star as the father in Rehabitation, to be directed by Ron Howard and produced by Steve Spielberg, but I was becoming concerned that Hollywood would lose interest if sales did not pick up.”
Janet Taylor, Taylor’s wife who is also CFO of Ozarks Community Hospital, commented: “I understood Diane Lane was supposed to play the wife in Rehabitation but I was concerned that if they didn’t start shooting the film pretty soon, they would have to go with someone younger.”
Taylor does not have much time to savor his success. “I have been contacted by one of President Obama’s people through an email I received to offer my thoughts on healthcare reform heading into the televised debate coming up next week. I have devised a comprehensive reform package that would completely solve the nation’s healthcare crisis by providing universal healthcare at no additional expense to the taxpayers while promoting individual responsibility and preserving a continuing role for private insurance in the payment system. I have to work out a few last kinks before delivering my white paper to the President.”
Paul Taylor is the CEO and general counsel for Ozarks Community Hospital. Paul Taylor’s Grid and Rehabitation are available on Amazon. His healthcare thoughts are discussed at http://ochhealthcarereform.blogspot.com/.
This Amazon tax error is widespread among authors. Read more here: http://answers.yahoo.com/question/index?qid=20100216122421AASbM8a.
Monday, January 18, 2010
What I wouldn't trade with any other CEO
(This was the speech given to employees, friends, and family at the 2009 Ozarks Community Hospital winter party)
Ten years. Part of me wants to use the occasion to follow Bilbo and make a farewell speech. I am immensely fond of you all. Ten years is too short a time to live among such excellent and admirable hobbits. I don’t know half of you half as well as I should like; and I like less than half of you half as well as you deserve. But I regret to announce that—though, as I said, ten years is far too short a time to spend among you—this is the END. I am going. I am leaving NOW. GOOD-BYE! In a few weeks, we will have been in the hospital business ten years. Of course, the history of the organization is deeper than that, but there is something special about a rebirth. On June 28, 1999, the State of Missouri granted a Certificate of Need for a 45 bed osteopathic hospital located at 2828 N. National in Springfield, Missouri. It was my birthday. We spent the next six months in labor giving birth to a hospital—believing we could do it with two million when conventional wisdom said we needed ten. While the rest of the country was obsessed with Y2K, worried that computer systems were all going to crash at midnight on December 31, 1999, we were trying to figure out how to breathe life back into a system that had been given last rites more than a decade earlier. Most of you know the numbers. We opened with fewer than 50 employees. We now employ 850. We began with two employed physicians outside the ER. We now employ 60. Gross revenue has grown from less than $8 million to more than $120 million a year. We now contribute $40 million annually in wages and benefits to the regional economy. Most of you know the mission. More than 80% of our patients have governmental insurance or are self pay. Based on hospital and physician utilization by Medicare beneficiaries, we are the lowest cost healthcare system in the nation. Most of you know the story. Years ago, during one of our many close encounters with financial ruin, I sent a memo to the physician shareholders. On the cover was a picture of the walrus and the carpenter from Alice in Wonderland by Lewis Carroll.
The time has come, the Walrus said,
To talk of many things:
Of shoes--and ships--and sealing-wax--
Of cabbages--and kings--
And why the sea is boiling hot--
And whether pigs have wings.
We rallied the troops, held the wolves at bay, kept the doors open and lived to fight another day. Janet and I used to repeat a ritual at the end of each week. We adapted it from the film, It’s a Wonderful Life. It is the scene about the run on the Bailey Building and Loan. George and Mary use their own money to keep the doors from closing. There are two dollars left at the end of the day. George does a little happy dance and says: “a toast to Momma Dollar and to Poppa Dollar, and if you want to keep this old Building and Loan in business, you better have a family real quick.” A few months later, things were looking up and I sent a second memo to the ownership group. I again referred to the walrus and carpenter poem, asking whether the pig had wings, and I answered with a picture of flying pigs under the Doctors Hospital banner:
No one really believed it would ever happen, but the swine flew. [Karla Myers claims she holds a copyright on that expression as it applies to our hospital.] We have had some years when we made money. There have been years when we lost money. At the end of ten years, the profits and losses have almost exactly balanced each other out. I have not been much of a businessman. Many other health systems have adopted a Wall Street, “greed is good” rationale. They believe the ends justify the means. Since the mission is to take care of sick people and that mission is a good thing, it does not matter how many people they have to screw to do it. I am a complete failure at being that kind of businessman. As an attorney and as your CEO, I could have been suing patients to collect money for the hospital without having to spend money on attorney’s fees. Anyone with half a brain for business would have done it. Yet, in ten years, I haven’t done it once. At OCH, our philosophy has been: do good, do it the right way, and the money is supposed to take care of itself. I would rather go broke believing that, doing it that way, than make money doing it the other way. The thing is, tonight, I don’t want to talk about the numbers, the mission or the story. I’ve got this ring of power in my pocket and the temptation to use it is hard to resist. But I’m not Bilbo. He achieved his quest. He helped slay the dragon. He found the golden treasure. He went there and came back again. He earned the right to fade away and leave the next quest to a younger generation. My successes have been limited to a series of recoveries from defeats. I shovel like a madman to fill holes—some of which I dug myself—but the best I can ever do is get back to level ground. I can’t climb the mountain. I can’t climb it but I know it is there. When the whistle blows at the end of my day, I hear a poem by Emily Dickinson. [I can hear the groans out there: “Oh my God! He is going to recite poetry at a party.” I can’t help it. Blame my liberal arts, Ivy League education. It is sad but true. This poem plays in my head like a tune that won’t stop recycling.]
Success is counted sweetest
By those who ne’er succeed.
Not one of all the purple host
Who took the flag to-day
Can tell the definition,
So clear, of victory!
As he, defeated, dying,
On whose forbidden ear
The distant strains of triumph
Burst agonized and clear!
So, I do not stand here tonight to celebrate success. I count my failures and there are many. It is the fear of failure that drives me. No, tonight is not about me or the numbers or the mission or the story. Tonight is about you. The real strength of this organization has always been the special people dedicated to service and to each other. I used to think that we had an advantage due to our small size. We felt more like family to each other than employees at the other health systems. They were just too big to feel that way. Guess what? We’re not that small anymore; yet, I still see, hear and feel the same everyday expressions of compassion, empathy, dedication and selflessness that have been and remain the unique hallmark of our corporate character. I look out here tonight and I see people I love. Yes, it has been rewarding to see the organization grow, but that pales in comparison to the pride I feel witnessing the personal growth and development of so many long time employees. We are going to recognize some of those employees tonight—those with five and ten years of continuous service time. During the first four years of our organization’s existence, we constantly faced issues that should have forced us to close. I still remember the day that the Director of the Greene County Health Department called me and said he had been told by City Utilities to arrange for the ambulance transfer of all our patients in the hospital because they were going to turn off water, gas and electric. I just laughed at the guy. He said, “What do you know that I don’t know?” I said, “This may be the easiest problem I have to solve today.” Make a difference. People use the phrase so often it has become a cliché. For those employees who worked with us five to ten years ago, it was no cliché. Almost every day, something an employee did that day made the difference between staying open and closing forever. Many organizations claim they were built by the blood, sweat and tears of their employees, but I do not know of any other hospital in the nation during the last decade that was literally built on nothing other than the blood, sweat and tears of the employees. As I like to say, anyone could have done what we did as long as they had enough money. Our employees are the only ones who have managed to do it without any money. Ozarks Community Hospital is the only organization in the world that has employees capable of breathing life back into a derelict, defunct hospital facility no one else wanted, given up for dead for two-and-a-half years, doing so without any money, facing unfair barriers to competition that would strangle a healthy, wealthy company, eventually going broke in the process… and then doing it again. Those of you who have joined us more recently will find it difficult to connect to that emotion or believe in the underlying truth of these words. You have no doubt heard similar words spoken about other organizations. I want you to hear and understand and believe this. Every day, there was one employee or another, usually someone making about eight bucks an hour, who had every reason in the world to give up on the impossible task at hand, call it a day and go home, but who, for some inexplicable reason, did not… did not give up… and because they did not give up there was just enough of something that was needed the next day, the next week, the next month, to get by, to make do. It was a nurse playing the part of a biomed technician because we didn’t have a biomed department back then or it was an ER tech performing an IT service because we didn’t have an IT department or it was a housekeeper becoming the purchasing department by making something work that another hospital had thrown away. It was an employee who, instead of saying “I can’t do my job because I need something we can’t get,” said, “I will figure something out and get it done.” I am the one who gets the pat on the back for being the miracle worker, for pulling rabbits out of my hat, but I know better than anyone who the real miracle workers were. I get to be the wizard but even Gandalf will admit that he can’t burn snow, and if it had not been for a lot of hobbits chopping wood, this fire would have gone out a long time ago. A spark here and there in the actions of a few dozen employees ignited a flame of effort and commitment that still burns today. It infects new employees like a virus. Not everyone catches it. Some are immune, but those who do seem to enjoy work and maybe even life more than those who do not. It is not going to get any easier in the years to come. I have been advocating for some kind of healthcare reform that would level the playing field for providers, insure more lives and make care more affordable, but the fact is that the people and institutions with power in this world use it mostly to hang on to power. It would be naïve to bet against them doing so again. We are not going to win the lottery, receive a large grant or suddenly get paid more for the care we provide. Unlike most health systems focused on profit (and, of course, I include billion dollar charitable organizations in that group), we do not compromise patient care by cutting staff in order to preserve a healthy bottom line. We don’t buy new if we can find it used. Our facilities don’t look like Wall Street board rooms. Our floors may not be as fancy but they are just as clean—in most cases, cleaner. I have been visiting a number of hospitals recently to talk healthcare reform with other CEOs and as I walk around the other guys’ buildings I usually say to myself: “They’re not in the same business we’re in.” We have to get it done, providing the same quality healthcare for less pay, with fewer resources and none of the advantages taken for granted by other health systems. There is not a hospital CEO in the nation who would trade financial statements with me, but I would not trade employees with any of them. Will we get it done? You will. I know you will.
Ten years. Part of me wants to use the occasion to follow Bilbo and make a farewell speech. I am immensely fond of you all. Ten years is too short a time to live among such excellent and admirable hobbits. I don’t know half of you half as well as I should like; and I like less than half of you half as well as you deserve. But I regret to announce that—though, as I said, ten years is far too short a time to spend among you—this is the END. I am going. I am leaving NOW. GOOD-BYE! In a few weeks, we will have been in the hospital business ten years. Of course, the history of the organization is deeper than that, but there is something special about a rebirth. On June 28, 1999, the State of Missouri granted a Certificate of Need for a 45 bed osteopathic hospital located at 2828 N. National in Springfield, Missouri. It was my birthday. We spent the next six months in labor giving birth to a hospital—believing we could do it with two million when conventional wisdom said we needed ten. While the rest of the country was obsessed with Y2K, worried that computer systems were all going to crash at midnight on December 31, 1999, we were trying to figure out how to breathe life back into a system that had been given last rites more than a decade earlier. Most of you know the numbers. We opened with fewer than 50 employees. We now employ 850. We began with two employed physicians outside the ER. We now employ 60. Gross revenue has grown from less than $8 million to more than $120 million a year. We now contribute $40 million annually in wages and benefits to the regional economy. Most of you know the mission. More than 80% of our patients have governmental insurance or are self pay. Based on hospital and physician utilization by Medicare beneficiaries, we are the lowest cost healthcare system in the nation. Most of you know the story. Years ago, during one of our many close encounters with financial ruin, I sent a memo to the physician shareholders. On the cover was a picture of the walrus and the carpenter from Alice in Wonderland by Lewis Carroll.
The time has come, the Walrus said,
To talk of many things:
Of shoes--and ships--and sealing-wax--
Of cabbages--and kings--
And why the sea is boiling hot--
And whether pigs have wings.
We rallied the troops, held the wolves at bay, kept the doors open and lived to fight another day. Janet and I used to repeat a ritual at the end of each week. We adapted it from the film, It’s a Wonderful Life. It is the scene about the run on the Bailey Building and Loan. George and Mary use their own money to keep the doors from closing. There are two dollars left at the end of the day. George does a little happy dance and says: “a toast to Momma Dollar and to Poppa Dollar, and if you want to keep this old Building and Loan in business, you better have a family real quick.” A few months later, things were looking up and I sent a second memo to the ownership group. I again referred to the walrus and carpenter poem, asking whether the pig had wings, and I answered with a picture of flying pigs under the Doctors Hospital banner:
No one really believed it would ever happen, but the swine flew. [Karla Myers claims she holds a copyright on that expression as it applies to our hospital.] We have had some years when we made money. There have been years when we lost money. At the end of ten years, the profits and losses have almost exactly balanced each other out. I have not been much of a businessman. Many other health systems have adopted a Wall Street, “greed is good” rationale. They believe the ends justify the means. Since the mission is to take care of sick people and that mission is a good thing, it does not matter how many people they have to screw to do it. I am a complete failure at being that kind of businessman. As an attorney and as your CEO, I could have been suing patients to collect money for the hospital without having to spend money on attorney’s fees. Anyone with half a brain for business would have done it. Yet, in ten years, I haven’t done it once. At OCH, our philosophy has been: do good, do it the right way, and the money is supposed to take care of itself. I would rather go broke believing that, doing it that way, than make money doing it the other way. The thing is, tonight, I don’t want to talk about the numbers, the mission or the story. I’ve got this ring of power in my pocket and the temptation to use it is hard to resist. But I’m not Bilbo. He achieved his quest. He helped slay the dragon. He found the golden treasure. He went there and came back again. He earned the right to fade away and leave the next quest to a younger generation. My successes have been limited to a series of recoveries from defeats. I shovel like a madman to fill holes—some of which I dug myself—but the best I can ever do is get back to level ground. I can’t climb the mountain. I can’t climb it but I know it is there. When the whistle blows at the end of my day, I hear a poem by Emily Dickinson. [I can hear the groans out there: “Oh my God! He is going to recite poetry at a party.” I can’t help it. Blame my liberal arts, Ivy League education. It is sad but true. This poem plays in my head like a tune that won’t stop recycling.]
Success is counted sweetest
By those who ne’er succeed.
Not one of all the purple host
Who took the flag to-day
Can tell the definition,
So clear, of victory!
As he, defeated, dying,
On whose forbidden ear
The distant strains of triumph
Burst agonized and clear!
So, I do not stand here tonight to celebrate success. I count my failures and there are many. It is the fear of failure that drives me. No, tonight is not about me or the numbers or the mission or the story. Tonight is about you. The real strength of this organization has always been the special people dedicated to service and to each other. I used to think that we had an advantage due to our small size. We felt more like family to each other than employees at the other health systems. They were just too big to feel that way. Guess what? We’re not that small anymore; yet, I still see, hear and feel the same everyday expressions of compassion, empathy, dedication and selflessness that have been and remain the unique hallmark of our corporate character. I look out here tonight and I see people I love. Yes, it has been rewarding to see the organization grow, but that pales in comparison to the pride I feel witnessing the personal growth and development of so many long time employees. We are going to recognize some of those employees tonight—those with five and ten years of continuous service time. During the first four years of our organization’s existence, we constantly faced issues that should have forced us to close. I still remember the day that the Director of the Greene County Health Department called me and said he had been told by City Utilities to arrange for the ambulance transfer of all our patients in the hospital because they were going to turn off water, gas and electric. I just laughed at the guy. He said, “What do you know that I don’t know?” I said, “This may be the easiest problem I have to solve today.” Make a difference. People use the phrase so often it has become a cliché. For those employees who worked with us five to ten years ago, it was no cliché. Almost every day, something an employee did that day made the difference between staying open and closing forever. Many organizations claim they were built by the blood, sweat and tears of their employees, but I do not know of any other hospital in the nation during the last decade that was literally built on nothing other than the blood, sweat and tears of the employees. As I like to say, anyone could have done what we did as long as they had enough money. Our employees are the only ones who have managed to do it without any money. Ozarks Community Hospital is the only organization in the world that has employees capable of breathing life back into a derelict, defunct hospital facility no one else wanted, given up for dead for two-and-a-half years, doing so without any money, facing unfair barriers to competition that would strangle a healthy, wealthy company, eventually going broke in the process… and then doing it again. Those of you who have joined us more recently will find it difficult to connect to that emotion or believe in the underlying truth of these words. You have no doubt heard similar words spoken about other organizations. I want you to hear and understand and believe this. Every day, there was one employee or another, usually someone making about eight bucks an hour, who had every reason in the world to give up on the impossible task at hand, call it a day and go home, but who, for some inexplicable reason, did not… did not give up… and because they did not give up there was just enough of something that was needed the next day, the next week, the next month, to get by, to make do. It was a nurse playing the part of a biomed technician because we didn’t have a biomed department back then or it was an ER tech performing an IT service because we didn’t have an IT department or it was a housekeeper becoming the purchasing department by making something work that another hospital had thrown away. It was an employee who, instead of saying “I can’t do my job because I need something we can’t get,” said, “I will figure something out and get it done.” I am the one who gets the pat on the back for being the miracle worker, for pulling rabbits out of my hat, but I know better than anyone who the real miracle workers were. I get to be the wizard but even Gandalf will admit that he can’t burn snow, and if it had not been for a lot of hobbits chopping wood, this fire would have gone out a long time ago. A spark here and there in the actions of a few dozen employees ignited a flame of effort and commitment that still burns today. It infects new employees like a virus. Not everyone catches it. Some are immune, but those who do seem to enjoy work and maybe even life more than those who do not. It is not going to get any easier in the years to come. I have been advocating for some kind of healthcare reform that would level the playing field for providers, insure more lives and make care more affordable, but the fact is that the people and institutions with power in this world use it mostly to hang on to power. It would be naïve to bet against them doing so again. We are not going to win the lottery, receive a large grant or suddenly get paid more for the care we provide. Unlike most health systems focused on profit (and, of course, I include billion dollar charitable organizations in that group), we do not compromise patient care by cutting staff in order to preserve a healthy bottom line. We don’t buy new if we can find it used. Our facilities don’t look like Wall Street board rooms. Our floors may not be as fancy but they are just as clean—in most cases, cleaner. I have been visiting a number of hospitals recently to talk healthcare reform with other CEOs and as I walk around the other guys’ buildings I usually say to myself: “They’re not in the same business we’re in.” We have to get it done, providing the same quality healthcare for less pay, with fewer resources and none of the advantages taken for granted by other health systems. There is not a hospital CEO in the nation who would trade financial statements with me, but I would not trade employees with any of them. Will we get it done? You will. I know you will.
Monday, December 28, 2009
Watching the storm from the porch of civility
Tiny bubbles…
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.
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
Another way...
The healthcare reform drama has become a medieval morality play. Shakespeare could have had some fun with this material. I have decided that the real problem is pie. Everyone loves pie. The players strut and fret upon the stage in order to protect their individual pieces of the healthcare pie. No one believes it is possible for everyone to get enough to eat; so, they each lay claim to a separate piece and guard it jealously.
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.
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.
Thus far, healthcare reform has focused on reducing the size of the pie (or, more accurately, slowing the rate of the pie’s increase in size) by shrinking/enlarging some of the pieces relative to the other pieces (or, in the case of the public option, introducing a new pie-eater to the contest). It is difficult to shrink the overall size of the pie using that kind of strategy. Thankfully, there is another way. Bring doughnuts!
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
Healing Hands: An OCH Gravette documentary
This is the trailer for a compelling story about healthcare in small town USA. This story documents the trials and tribulations of the community of Gravette, Arkansas as they fight to gain access to healthcare.
Subscribe to:
Posts (Atom)