Healthcare Pyramid

The last thing being discussed in the whole healthcare debate is the concept of “the government’s responsibility in providing healthcare to everyone”. The trouble with this phrase is that there are no limits to the concept. Who is everyone? Which procedures are covered? If we were only talking about prenatal care for pregnant women, the concern would be minimal. The reality is that the medical profession has figured out how to replace most body parts. Some procedures could cost millions. Taken in total the costs for medical care have increased to a point where it is the major or it is the greatest category of expense for the average family with no end in sight.
To me there are only two perspectives from which to address the issue – the value of what is paid for what we get and the best way to pay for it. Normally, a government is too removed from the very personal issue of value to trust it to manage a question like medical value. But if we expect the government to pay for all or part of our healthcare then they are forced into the role of making that value judgment. Otherwise costs cannot be controlled.

Moralizing about the value of someone life is an ignorant and convenient way to avoid conversations about reality. Every individual has a personal responsibility to rationalize limits. It’s as simple as talking about speed limits. The government’s role is to determine a safe speed that people can drive without causing excessive accidents. An individual’s responsibility is to recognize these limits also and stay within them. The system works when the government is reasonable in setting the limits and the people respect that analysis. If either party does not act reasonably then the system self destructs.

The problem with the healthcare debate is that neither the government nor individuals are being realistic or reasonable. The difference between my analogy and healthcare is that there is not a direct relationship between personal choice and someone else being hurt by that choice. However, they are not so different. Someone that drives too fast potentially kills someone else. Healthcare indirectly hurts other people when they spend too much on healthcare and cause other people’s cost to go up dramatically. At the end of the day, someone’s life is threatened when they are priced out of healthcare coverage.

There has to be a systemic way to put limits on healthcare spending. Let’s make it simple again. There are certain things that can be done in the healthcare area that have high outcome results and are the least expensive procedures. Whatever the system is, the value setting process has to be applied to everyone. I’m sorry, if someone wants a procedure that is outside the process then pay for it yourself. Then it is your responsibility and hurts no one else. This also illustrates the connection between the two questions we are trying to answer. The value system also determines who should pay the tab.

The question of how to pay for healthcare has to do with efficiencies and goals. Here are a few objectives that could be applied when answering this question:

1) Help the most people.

2) Ensure that people have access when needed in a timely manner.

3) Advance the science when value is improved.

4) Provide incentives for people to act responsibly, to take care of themselves and punish those that don’t.

5) Provide incentives for research and punish abuse of the system by healthcare companies and providers.

6) Have a system by which people that need excessive medical care can get it but still shoulder the responsibility for the extra cost.

7) Equal sharing of responsibility by all stakeholders to control costs.

Everyone has to respect their roles in the process or the system will not work. I do not subscribe to a system that charges whatever the market will bear. This sets up a “them and us” mentality and a process without limits. When it comes to life and death issues a free market is not necessarily the best way to address the issue. Having a strong military is a life and death issue and we don’t rely upon the free market to determine how much protection is provided. The scope is the same and the number of lives at risk is also the same.

Review the listed objectives above then determine who you believe has been addressing each of them, if anyone. How to pay for healthcare embodies two sub-issues and are intimately linked: the size of the cost and the method of payment. The higher the costs, more creative and cooperative methods are needed to reasonably cover those costs.

We have to work on both sides of the equation simultaneously. Costs have to be constrained and we need to broaden the base of who pays in order to prevent healthcare from being an exclusive club only afforded by the rich. As I said before there may be procedures that can only be afforded by the rich and I do not necessarily have a problem with that. However, there should be a reasonable level of healthcare that everyone is entitled to.

The trick to answering this whole question, is managing the expectations. The expectation can either be realistic or excessive. Rarely do people have minimal expectations. The advocacy presented in this article is that expectations have to be limited by what can be afforded. We approach the problem today by letting the costs be whatever they are then figure out how to pay for it. Rather we should budget the amount or percentage that we are willing to spend then ration it out through a priority system.

The second step is to look at the how to be more efficient so that the cost per person of each procedure is minimized. This way we will be able to afford more procedures and maybe even higher end ones.

Openness in pricing would go a long way to encourage competitiveness. All providers should be required to post their prices, regardless of who ultimately pays. Transparency is the only way to level the playing field between the patients and the providers. Let’s be honest about the situation. Patients can not be in control of the healthcare costs if they are not provided with adequate information to make an informed decision. Providers hide their charges because there are enormous ranges that they charge depending on who is paying.

The government at this time pays the least, insurance companies pay slightly more and those that are not covered by either, pay the most per procedure. Sometimes this is as much as 4 times more than the other two groups. This is outrageous. The group that can least afford it are being charged the most.

Furthermore the groups that have better organizations and access to more information are able to control the system and work it to their advantage. The unfortunate outcome of this kind of process leaves the individual in a hopeless position with no bargaining power. The only entity that is available to negotiate for them is the government. If the government is highly influenced by special interest groups or donors to their campaigns then the government is a poor representative for their interests. That is our current state of affairs.

We have got to try to move the debate about healthcare out of politics. Similar to national defense, healthcare should only be debated on the merits of what is in the interests of the nation and its people. When these two topics are made political footballs then the motivation is which party gains the most in keeping or acquiring more power and has nothing to do with making the country stronger.

Compounding the problem is the cost of all the paperwork, regulations and insurance premiums. None of which contribute to better outcomes or efficiencies. Our goal should always be – how to develop a process that provides the best outcomes and covers the most people.

We have another sad situation – Medicare. Seniors are not helpless but as the years wear on people, it is harder for them to deal with complex systems. Seniors are less able to fight with insurance companies. Medicare is a fairly simple system but it is a double edged sword. Seniors do not have to worry about which procedure is covered. Most are covered. However, this is too open ended. It has set up an expectation both by them and providers that anything can be done and charged off to the un-watchful government. If the government is going to take on a role or a responsibility then a major part of that responsibility is to control the costs and the value of what they do. The negligence and corruption to-date of all levels of government have left the average citizen with no faith that they can manage anything. So I understand this position. But let’s fix it.

Healthcare providers can no longer be allowed to “pile-on” exams, tests and procedures in order to extend someone’s life by days. Forcing families to make the decision as to what to do and what not to do is cruel. If a hospital or a provider is found to be doing excessive exams or they should be forced to pay the patient a double or triple penalty. It should be easy to have a review board make that determination without legal actions being necessary.

The abuses by executives, investment bankers and Wallstreet have undermined any confidence that they are any better at managing such an important issue as public health. Profit should not be the goal for our healthcare system. That just motivates corruption, not a better system. Accountability is the key to forcing the parties that play in the healthcare game to a higher standard. We make such a big deal about the drug problem in this country. This is laughable. The drug problem is minuscule compared to the suffering and death caused by the broken system we have in healthcare. We should be reallocating the resources spent on drug control and enforcement to fixing the Healthcare System and the monitoring healthcare abuses & corruption. We are not holding the politicians or anyone accountable for our broken system.

Politicians have given themselves inflated pensions and unlimited lifetime healthcare. They should never have a better system than the average worker in the private sector. Otherwise they should not be called public servants. The only people that should have a higher standard of healthcare should be those that were injured while performing their jobs, similar to the military. If we believe that the Veterans Administration is a valuable organization then extend it to all public servants that are injured in the line of duty. If necessary for cost control, we might have to even limit veterans benefits to those veterans that were actually injured while serving the country. As a matter of fact everyone should have to put in some period of time serving the country. Another topic!