My own sister-in-law watched the film “Sicko” and left the theater convinced that a single payor, nationalized health system would significantly reduce the dysfunction and waste that exists in the U.S. system today.
As we approached our annual vacation together, my brother warned me to steer clear of the “H” subject.
After 25 years in the health care field, I felt compelled to risk internecine warfare to offer some troublesome truths about what’s wrong with health care and how everyone must change to achieve what we all want-a system that covers all Americans, while continuing to innovate, improve and lead the world in quality and affordability.
Serving as a broker, consultant and managed care executive, I have represented employers, insurers and providers. Having lived abroad for 3 years, I have been hospitalized in both private and public health care settings under the National Health Service in the United Kingdom. I have struggled through the confusion of Medicare, Medicare Part D and Medicaid issues that affected my family members.
My advice to everyone, including my sister-in-law, is to become a student of the system first, and understand its current dysfunction and culprits before passing judgment on what needs to change.
As we survey what is wrong, we get angry and want to rush into quick fixes that will most certainly create unintended consequences.
So who should we blame? Grab a mirror folks and follow me.
Many believe the health insurance industry is responsible for the demise of health care in America. Health insurers are certainly a tempting–and at times, convenient–scapegoat. It is clear that nonprofit and for-profit insurers can and should do more to lead the changes that are essential to market-based reforms.
Insurers attempt to price their premiums at or just above the level of medical costs in order to compete with each other for market share. As medical costs rise due to a range of factors (utilization, malpractice, waste, fraud, cost shifting from government, technology, pharmaceutical demand, etc.), premiums rise as well. While insurers have developed extensive programs designed to mitigate costs, these programs can be too focused on controlling provider and facility costs.
As a result of this relentless focus on provider reimbursement, insurers are often at odds with doctors and hospitals. The zero sum game of fee cuts by insurers, countered by a wide range of practice and charge variations by providers, has created tension at a time when payors and providers need to work together.
Insurers, under pressure from employers and shareholders to lower costs, have been limiting increases in fee schedules for physicians in line with competitive market trends. Many doctors feel trapped by the managed care system and feel increasingly compromised by having to see more patients, thus reducing actual consultation times and increasing hours to maintain or slightly increase annual income.
The key to improving the relationship between managed care providers and insurers is to increase reimbursement to higher quality/higher efficiency providers. To make this work well requires provider-based report cards designed in cooperation with doctors and trusted by consumers.
Doctors feel under siege–the threat of malpractice litigation, fee schedule limits, increased patient volumes and a morass of administrative processes that vary from government to private insurers has doctors complaining to consumers, who, in turn, believe that the quality of their own health care is declining.
Employers hear from their employees that doctors are unhappy and pressure management to improve the health plan. Employers, in turn, pressure the insurers to reduce the “noise and disruption” resulting from their health plans but still elect insurers that will deliver the best economics.
Acting as a sentinel to manage the process of health care delivery puts any insurer in a “no win” position. The public relations problem is exacerbated by the fact that few stakeholders trust the insurer as an impartial ombudsman because of a perceived conflict of interest–profit.
Change in health-related behavior has come painfully slow in a U.S. health system that pays for treating illness, not curing it. Most disease management programs are often more successful in reducing the cost of claims of individuals already plagued with chronic illness. The ability to impact those at risk for tomorrow’s claims requires a level of lifestyle intervention that, to date, has been unpopular, unsuccessful or unsupported by many employers and most consumers. Insurers have moved at the pace of their customers, instead of insisting on a commitment to wellness.
Insurers are often accused of not reimbursing claims. One presidential candidate has said that insurers “try to find a way to get out of paying for the claims.” In my experience, insurers pay claims based on plan designs created by employers and the fee arrangements they negotiate with doctors and hospitals. Where insurers sometimes stumble is in their compliance with these contracts–prompt payment to providers, clarity around reimbursement practice and clarity around benefit levels. These phenomena create a sense that the insurer is trying to obscure the process and confuse the stakeholders.
To the degree the consumer experiences a lower level of reimbursement, the insurer’s “explanation of benefits” statements is steeped with legalese, and fails to educate the consumer on why and how their benefits were less than expected. Often, the reduction is due to a plan design not understood by the consumer, a dispute over provider billing due to a lack of information exchanged between the provider and the insurer, or any host of issues that can delay or reduce payment.
Insurers must become more user-friendly and earn trust from the various stakeholders. Insurers have simply not yet achieved trust with the public and, as a result, find it hard to attain the role they seek–a trusted advisor to help America improve its health and health care experience.
There are more than 44 million Americans who do not have health care coverage today. Many others are underinsured.
The uninsured population is a diverse group including a large percentage of individuals under 30-years-old. These “young invincibles” choose not to be insured due to a sense that the risk versus the benefit is not worth the investment in insurance.
Meanwhile, average consumers are angry as they hear from their disaffected providers, their health care becomes more expensive, and insurers seem to be constantly intervening between them and the care they believe they need.
Here’s the problem: Americans want the best technology, immediate access, the ability to self-diagnose and self-direct, and no interference in this process. More than 60 million Americans have a body mass index over 30, which indicates obesity and vulnerability to chronic illnesses.
To make matters worse, the American consumer does not understand the health care system or have the tools to better distinguish between a quality and efficient clinical outcome from one that resulted in less value.
Given the lack of tools and health care education, today’s consumer determines value by a complex subjective algorithm that includes whether he felt the doctor had a good bedside manner, whether he got better in a timeframe that the consumer felt was reasonable, how much the health plan reimbursed for the services, and whether the patient was denied access to services he felt were merited.
Today’s health care marketplace is a massive grocery store where the consumer is charged a considerable price of admission (premium contributions), but once in the store, the consumer does not know the price of a single item he is purchasing.
Consumers hold the solution for healing the health care system in their hands. For example, statistics show that many consumers with insurance coverage who are diagnosed with chronic conditions such as diabetes fail to comply with the basic maintenance and management programs designed to keep their conditions under control. Tests and procedures such as HCA-1 tests for blood sugar and regular use of insulin for diabetes, and use of statins and beta blockers after a heart attack are routinely ignored. These failures to comply lead to significantly higher rates of complication and co-morbidity issues.
Employers are eager to get out from underneath the burden of health care costs.