WELCOME TO THE MEDICAL TUESDAY - HEALTHPLAN.USA - NETWORK
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Quarterly Newsletter, July 2004
Thank You for Joining the Medical/Professional/Business Gatherings on MedicalTuesdays. On the First Tuesday of Each Quarter, We Review the Problems Encountered with the Health Plans Here and Abroad and the Ideal HealthPlan for the USA, and by Extension for All Countries.
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In This Issue:
1. We're in a Design Revolution in Health Care
2. Medicare Math - 40 Trillion Dollar Error
3. Universal Medicare Would Bring Medi-Disaster
4. Doctor in the House - Helping Sick People Get Well - Medical Predictions on Employer-Based Financing - First Year / Last Year Insurance
5. Government HealthCare in California - Family Leave - Birth Bonding - What’s Next?
6. Overheard in the Board Room - Doctors Sidelined Again
7. What's New in US Health Care - Regaining Control
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1. We're in a Design Revolution in Health Care
In last month's issue of Fast Company (www.fastcompany.com), senior writer Bill Breen states that we are in the midst of a design revolution in business. Any automobile company can manufacture a car that gets us to work and back. But it is the design of the product that not only shapes the reason for a company's existence but causes it to be a trans-formative force in business and society. It's the design that "has emerged as a new competitive weapon and key driver of innovation." Companies have to fashion their product for the consumer who actually uses it rather than the retailer.
Bob Porter, Executive VP of SSM HealthCare, was among the 20 design masters that Breen brought together to rethink the way we innovate, create and compete. He developed a hospital design to "create a humancentric approach to delivering health care." Although the hospital is an important part of health care, it doesn't speak to the totality of a health care system. If you can't afford this type of delivery of care, how will it benefit you? The fragmented system currently speaks to the employer, the insurance carrier, the hospitals, and the diagnostic and treatment centers, but not to the Doctor and Patient interface, neither in the consultation room nor at the bedside where all medical decisions should be made, including the decision on how to utilize the health care system most effectively.
With that in mind, the well-designed health plan for the USA will make health care accessible for all who desire to be in charge of the health of their bodies, including their minds. Health care may be as expensive as buying a new car, and in some cases a new home, but that has not deterred very many Americans from enjoying the pleasures and conveniences of the car or home that they thought they could ill afford until seeing the design and realizing its worth. We are seeing this same idea in health care with the large number of health savings accounts and major medical coverage. Some are even going without health insurance during college and early working years, accepting behavioral risks for that period. Health Savings Accounts are still being controlled by government largess, such as tax-deferred treatment and various artificial limitations. When Americans realize that the government is an insensitive master, they will toss these regulations and limitations to the wind and really begin to innovate. But when?
It's happening now. All across the horizon. It's exciting. The forces of innovation will free us all from the controls of government medicine, HMOs, MCOs, insurance carriers, hospitals, employers who don't wish to be involved and shouldn't be involved, and, yes, from the physician you were forced to accept leaving no option for a more personal doctor and patient relationship should you desire one. Stay tuned to this newsletter where we'll keep you informed.
As you help your children with their New Math lessons, and as you read the Medicare Math lesson below, you may want to share this newsletter with them. After all, they will be the ones enslaved if we don't innovate.
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2. Medicare Math
Jagadeesh Gokhale, a senior fellow at the CATO Institute, reports in the Wall Street Journal that some economists are suggesting that the Medicare Trustees' report - released recently - reveals only about a third of the truth. It shows that out of Medicare's three sub-programs, only one faces a financial shortfall. However, the report counts general revenue transfers as dedicated resources for the other two sub-programs. This is an accounting convention that negates the very purpose of financial reporting - which is to provide useful information to policymakers. Gokhale suggests that it should be changed.
A program's financial imbalance can be neatly summarized in one number - the amount of additional money in an interest-bearing account today that would be sufficient to plug all future shortfalls between its projected outlays and receipts. According to the Trustees' report, Medicare Part A - which reimburses hospital services for retirees - faces a financial imbalance of just under $22 trillion.
However, economists, including those with the Private Enterprise Research Center run by Thomas Saving (one of Medicare's public trustees), have released briefing notes suggesting that Medicare's total shortfall is much larger - about $62 trillion. Unlike the Trustees' report, PERC does not treat general revenues as a dedicated funding stream for Medicare when calculating its financial imbalance.
Financial imbalances over an extended future are not reported for most federal programs that are funded out of general revenues. Were they reported, however, and were they to adopt the convention of including general revenue sources, they would all report zero imbalances. This accounting convention, therefore, hides competing claims on the same general revenue dollar when no one - not even Congress - can spend the same dollar multiple times. (In case you missed the point, if our defense spending is $350 billion and it is balanced by general tax revenues of $350 billion, according to social security accounting practices, our defense cost is zero.)
Read the entire article at http://online.wsj.com/article/0,,SB108198618492283212,00.html.
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Overheard on Capital Hill: Senator, I thought you had all the figures for Medicare accurate to the nearest million dollars. No, Ted, with something that big, estimating within 22 trillion dollars should be close enough, don't you think? Yes, Senator, 22 trillion dollars is pretty close, but missing it by 62 trillion dollars is rather absurd, don't you think? (Where does government absurdity begin?)
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3. Universal Medicare Would Bring Medi-Disaster
Max Stanley Chartrand, Managing Director of DigiCare Hearing Research & Rehabilitation in Rye, Colorado, writes in the Wall Street Journal: To espouse universal expansion of Medicare, the most costly, mismanaged and confusing program in the universe of US health care, is to disregard every objective analysis made on the matter. In this vein of thought, Medicare would simply become socialized medicine. A straight line of logic points to outcomes suffered elsewhere: Long waiting lists for critical surgery, actuarial/budget planning based upon denial of care (a form of euthanasia), chronically run-down facilities and underpaid staff, shortages of equipment and medicines, little or no consumer recourse, and a growing exodus toward private pay are all hallmarks of large-scale socialized systems. Should we all be forced into a system of Medicare, we would "enjoy":
1. A system 4.3 times as expensive to fund and deliver as a truly private pay
2. More, not less, non-care personnel under the arbitrary control of labor unions;
3. Rationing, shortages and closed wings even at busy hospitals;
4. Mass closure of most of our current neighborhood clinics and practices;
5. Life and death decisions made by bureaucrats, not doctors and consumers;
6. The end of US leadership in medical technologies and pharmaceuticals.
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4. Doctor in the House - Helping Sick People Get Well - Medical Predictions
on Employer-Based Financing - First Year / Last Year Insurance
George Ross Fisher, MD, in an address to the Actuarial Society of New York, stated: Employers should move out of the health insurance business completely, as gracefully and as quickly as they can. My reasons are medical, or at least based on medical predictions. For far too long, the nation has regarded the financing of medical care as an insurance problem, with insurance solutions, quite ignoring the fact that the purpose of the whole exercise is to help sick people get well. But if we don't have any illnesses, we won't need any insurance, and that revolution may be closer than you would guess.
For far too long, the nation has defined the adequacy of health financing by counting the number of people who lack medical insurance. Better than anyone else, actuaries know the problems caused by over-insurance, some as troublesome as under-insurance. Without asking you, I know you agree that universal health insurance surely promises more than it can deliver.
About those 40 million uninsured people, let's be brief. At least a third of them are only statistical people, caught by a sampling snapshot, resulting from brief periods of unemployment between jobs in a mobile society. The more permanently uninsured are mostly poor, mostly young.
Young people are seldom very sick; if anyone can do without insurance, they can. As they grow older they have more sickness, but also more income. Fifteen percent of the poorest 20 percent of the population eventually rises into a higher quintile of income. In the meantime, many can fall back on their parents in an emergency.
Medicaid is available to the poorest segment of the population, and Medicaid's eligibility is undercounted. Recent increases in the official count of the uninsured can be largely ascribed to the Welfare Reform Act severing the automatic link between cash benefits and Medicaid coverage. Nowadays, a person usually joins Medicaid after sickness brings him to a hospital, where the hospital's social worker then effectively activates the latent coverage. Overall health financing of 40 million can't be called a seamless system, but surely its imperfections don't warrant the title of crisis.
That's the good news. The bad news grows out of more good news. We have one very bad new disease, AIDS, a few moderately bad new ones like Lyme and Legionnaires' diseases, but a whole lot fewer of the bad old diseases such as syphilis, tuberculosis, typhoid fever, rheumatic heart disease, smallpox, polio and, yes, heart attacks and strokes.
All of the above leads to the startling prediction, central to health care financing, that the population up to age 65 could be largely free of major disease within one generation. Immortality is not predicted, no one will live forever, but health costs and health insurance are going to be largely pushed into Medicare. Senator Ted Kennedy (D-Mass.) will have his single-payer dream come true, and my profession will do it for him. The focus of the employer-based insurance industry goes in the opposite direction; the need for that product is going to disappear.
The first-year / last-year thesis calls out for creative destruction of what we now call health insurance. Don't let it die; kill it. First-year / last-year predicts that employer-based insurance will disappear anyway, with nothing much left for employers to insure against except pregnancy. A tantalizing thought is that combining birth and death in the same package might actually ease many insurance difficulties. For example, a lifetime perspective reduces annual marketing costs while offering salesmen less frequent but larger commissions. One of the main forces presently driving the system toward group coverage, therefore, is blunted.
Its success depends on two design requirements: structuring it so that it's more profitable if more people live longer, and overcoming the resistance of people who make a living with the present crippled systems. It's well to remember that it took 50 years each to repeal the Glass-Steagall Act or to approve the St. Lawrence Seaway, both of which were otherwise no-brainers.
To read Dr Fisher's entire address, go to http://www.contingencies.org/sepoct00/doctor.htm.
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5. Government HealthCare in California - Family Leave - Birth Bonding
According to Daniel Weintraub in the Sacramento Bee, on July 1, California began a grand social experiment that might become a model for the nation - or might cement the state's reputation as a bastion of good intentions gone awry. Paid family leave took effect last week for most California employees who now are eligible for up to six weeks off work each year, with partial compensation, to bond with a newborn, adopted or foster child, or to care for a seriously ill child, spouse, domestic partner or parent.
The question is how many people will use the program. At the time the bill was passed in 2002, the state estimated that about 200,000 claims would be filed in the first year, a projection that has been increased to 300,000. Other studies have suggested that the number could be twice that high.
If there is a red flag, it might be that paid family leave is not true insurance, where a large group of people pool their money to cover risk that can be quantified for the group but is more or less out of the control of any one person. Experts can predict the chance of someone getting in an automobile accident, for example, but generally, people with car insurance have no control over whether they will need to use it. Family leave, however, is different. Most people decide for themselves whether to have children, and they certainly decide whether to take time off to bond with them.
The measure, passed in 2002, is just one of several major changes in workplace law and regulation enacted by the Legislature and former Governor Gray Davis. Another included dramatic increases in payments to injured workers which helped fuel double-digit insurance rate increases that eventually led to two attempts to trim benefits in order to rein in the costs of that program. Davis also signed bills to increase unemployment insurance benefits and payments for non-work-related disabilities, which in the process pushed both of those insurance funds to the brink of insolvency. But all of those moves represented incremental changes to existing programs or practices. Paid leave, in contrast, promises a fundamental transformation in the way Californians deal with family illness, births and adoptions.
To read Dan Weintraub's entire column, go to http://www.sacbee.com/content/politics/columns/weintraub/story/9846700p_10769028c.html.
It should be apparent that state social programs will have the same error of projections as federal social programs, which, according to some experts, have exceeded projections by as much as 800 percent. In the first week, the revised estimates for employer-based family leave benefits were already up 250 percent. The state experts should easily be able to pass Medicare errors within a decade.
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6. Overheard in the Board Room - Doctors Sidelined Again
Dr Paul, the Pulmonologist who was the director of the Polysomnogram (Sleep Study) Laboratory, was invited by the hospital administrator to be present while the hospital discussed the financial arrangement with the HMO for reimbursement. To the best of my recollection, Dr Paul related the following:
HMO Administrator: I normally don't see a physician in these types of
Hospital Administrator: Dr Paul is the Medical Director of the Sleep Lab.
HMO Administrator: Yes, of course, we're required to have one of those. But we're here to discuss financial arrangements. We would not interfere with medical testing or medical procedures.
Hospital Administrator: We not only do several types of sleep studies, we then do medical testing to see what variable positive pressure devices are required in the course of treatment in order to reverse the obstruction to breathing. A physician is required to monitor the testing.
HMO: Yes, I understand. But as I said, we all know what it is that doctors do. We don't intend to interfere with the practice of medicine. I don't think we need to use this doctor's valuable time to discuss administrative matters, now do we Tom?
Dr Paul: I think my pager is about to go off. I better get close to a telephone.
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7. What's New in US Health Care - The Whole Food Health Plan - Regaining
Ron Lieber, writing in the Wall Street Journal, reports on a Healthy Trend he found at Whole Foods Health Plan which tries to give workers a reason to save. The vice-president at Whole Foods Market, Inc, spoke directly to his physician concerning his $50 office charge rather than just forwarding it to the insurance company. He saved the entire $50 and observed that a patient with a personal financial relationship with his or her doctor can slow the growth in medical costs. The hope is that once the money feels as though it belongs to the employee, people won't get an MRI when an X-ray (or an ice pack) might do. With the employer contribution completely covering the cost of a high-deductible health plan, 95 percent of employees enrolled in the high-deductible plan. Only 65 percent had enrolled in the previous year's full service plans with the remaining opting out to take more vacation days instead. (Again the rolls of the uninsured include many who are there by choice even when employer-based health insurance is available.) When the plan was put to a vote against 30 other plan coverages, with 80 percent of the workers voting, this consumer-driven health plan won 83 percent of the vote.
Already at Whole Foods, the plan is inducing the company's butchers, bakers and baggers to take responsibility for cutting costs by buying generic drugs, asking for fee waivers on lab tests and other procedures, and keeping a closer eye on what doctors charge for their services. One lady was visiting her acupuncturist three times a week at $60 a visit and when this came out of her deductible, she decided that she didn't need that many treatments.
The initial results at Whole Foods have been dramatic. Last year, overall medical-claim costs fell 13 percent from the year before and hospital admissions per 1,000 employees fell 22 percent, according to Whole Foods' figures.
Some policy experts fear that plans such as these could lead people to skimp on their own care in order to save money for a rainy day. But what seems to be generally overlooked is that in HMO and European plans, coverage for a specific benefit is frequently denied or waiting lines eliminate timely care. By denying care in a top down bureaucratic fashion, one never knows whether the outright denial or long waiting lists causes death or injury. Data from the National Council of Policy Analysis found that in the UK, a significant percentage of patients that have curable cancer when first diagnosed, are incurable when they eventually get to the front of the line and receive care. It’s the patient and his or her doctor that are in the best position to evaluate the risks of skimping on care. That's where the decision should be made - in the consultation room, not in the board room.
To read Lieber's entire article, go to http://online.wsj.com/article_print/0,,SB108793995630244509,00.html.
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URL References for your perusal or study at leisure. You may want to Bookmark these or add to your Favorites. Become knowledgeable about health care matters and political perspectives, and make one hour every Tuesday your MedicalTuesday.
For MedicalTuesday Archives, see http://www.medicaltuesday.net/index.aspx
HealthPlanUSA Quarterly Newsletters
HealthPlanUSA Intro http://www.healthplanusa.net/NewsLetterIntro.htm
January 2003 Newsletter: http://www.healthplanusa.net/Dec2002.htm
April 2003 Newsletter: http://www.healthplanusa.net/April2003.htm
July 2003 Newsletter: http://www.healthplanusa.net/July03.html
October 2003 Newsletter: http://www.healthplanusa.net/October2003.htm
January 2004 Newsletter: http://www.healthplanusa.net/Jan04.htm
April 2004 Newsletter: http://www.healthplanusa.net/April2004.htm
Other Articles on Health Care Issues
Medical News Headlines: http://www.healthplanusa.net/MedicalNews.htm
Single-Payer Initiatives: http://www.healthcarecom.net/EditorialNov94.html
David Gibson, MD, National Health Care Consultant: http://healthplanusa.net/DavidGibson.htm
Single Payer: http://www.healthplanusa.net/DGSinglePayer.htm
Why are the uninsured, uninsured: http://www.healthplanusa.net/DGUninsured.htm
What’s behind health care costs: http://www.healthplanusa.net/DGRisingHealthCareCosts.htm
Pharmacy costs: http://www.healthplanusa.net/DGPharmacyCosts.htm
Understanding the difference between the right and the left on our culture and values.
Tammy Bruce: The Death of Right and Wrong http://www.townhall.com/bookclub/bruce.html
Reviewed by Courtney Rosenbladt.
Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. – Frederic Bastiat, French political economist, (1801-1850) Essays on Political Economy, 1846.
Our Theme for This Month in History - July - Is Freedom.
July is an important month for Freedom because so many nations gained their freedom.
July 1, 1867 is Freedom Day when Canada became a self-governing dominion
of Great Britain.
July 1, 1863 is also the anniversary of the beginning of the Battle of Gettysburg, the defining battle of our Civil War, where each side lost one-fourth of their Army and where President Abraham Lincoln later gave the Gettysburg Address wherein he gave a particularly meaningful definition of democracy: "Government of the people, by the people, and for the people."
July 2, 1776 is the real birthday of American independence when the Continental Congress adopted the resolution stating that the colonies "are, and of right ought to be free and independent States." John Adams wrote that the second of July, 1776, will be the most memorable epoch in the history of America.
July 4, 1776, two days later, the Continental Congress decided to adopt a much longer and more eloquent full Declaration of Independence. It has come to be known as Independence Day.
July 14, France celebrates the anniversary of its first revolution.
Algeria, Argentina, Columbia, Belgium, Peru, Liberia and Venezuela gained self-government and freedom during this month.
President Ronald Reagan, in a meeting with Mikhail Gorbachev who wanted us to stop our Strategic Defense Initiative otherwise known as "Star Wars," told Mr Gorbachev to tear down this wall instead. He brought an end to the Cold War which not only freed the people of Russia from their dictatorship, but also gave about twenty states their freedom.
On July 1, 2004, Iraq has gained a measure of freedom, the first one in the Arab world, where human rights and women's right are being implemented. It remains to be seen if President Bush and Prime Minister Blair will be successful in establishing a beachhead of freedom and democracy and equality, also for women, in the Arab world which may also spread to the other twenty Arab nations.
On July 24, 2004, the 136th anniversary reunion of the Heinrich Dietrich Friederich Meyer Family in America will take place in Kingfisher, Oklahoma.
Let Freedom Reign and Ring