The subject of EHRs must be a really “hot” topic these days since in almost any medical journal or newspaper I pick up there is something about EHRs.  For example, yesterday’s New York Times (Saturday, April 18, 2009) had an article in the “Patient Money” section entitled “Some caveats about keeping your own electronic health records,” written by Walecia Konrad.  The article was a well written general discussion about  patient-controlled EHRs (these are often called personal EHRs).  It was clear from the article that just as U.S. hospitals are a long way from wide-spread use of EHRs, the same is true for personal EHRs.  In fact, the article contained an interview with Dr. Ashish Jha, who was the lead author of the New England Journal of Medicine article I wrote about yesterday.  That study surveyed U.S. acute care hospitals and found that fewer than 10% were using EHRs in any meaningful way and fewer than 2% that switched over entirely to EHRs.  In the newspaper article, there was even a photo of Dr. Jha (it’s always nice to put a face with a name), as well as a quote: “we’ve got a long way to go before we get there,” referring to universal use of patient-controlled online health records that can be shared with physicians.

Anyway, I am yet to be convinced that patients should bother just yet with trying to put together a detailed EHR.  It would be much easier if we had a real health care system and in that system every patient had a primary care provider (physician or nurse practitioner or whomever) who had a comprehensive EHR on every patient in the practice.  Of course that EHR would need to have data from specialists the patient might have seen, results of all laboratory tests performed, and so forth.  In this way, all the patient would need is easy access to his or her EHR, which eliminates the need for the patient to do much of anything to have a personal EHR.  I believe that in the long run, that’s how EMRs will work.  In the short run, everything is up in the air, largely blown about by the $17 billion the U.S. Congress just budgeted to stimulate the development of EHRs.

A few days ago (April 15, 2009), I posted an entry about EHRs.  I should have waited because that very afternoon what should appear in my mailbox but  the most recent issue of the New England Journal of Medicine with an article about U.S. hospitals and EMRs.  The article was written by A.K Jha and others and entitled “Use of electronic health records in U.S. hospitals.”  The authors all of whom are from either Boston or Washington, D.C., surveyed use of EHRs in all acute care  general medical and surgical hospitals in the U.S. that are members of the American Hospital Association (AHA).  The survey was conducted between March and September 2008 and included almost 5000 hospitals.  The investigators received responses from 3049 hospitals or about 63% of those sent surveys.  They found that only 1.5% of the hospitals had  comprehensive electronic-records systems (comprehensive meant that all of the hospital’s clinical units were using EHRs).  Another 7.6% of hospitals had  basic systems, meaning that at least one clinical unit was using EHRs.  Even a greater percentage of reporting hospitals had in place at least parts of  EHR systems such as use of EHRs for results of laboratory and radiological reports.  Surprisingly, the perceived barriers to adoption of comprehensive EHRs were similar in those hospitals that had implemented at least some EHRs and those that had not: initial costs; maintenance costs; uncertain return on investment; inadequate IT staff; and physician resistance.  By far the greatest perceived barrier was inadequate capital to purchase an EHR system.  The investigators concluded that among the hospitals that participated in the study, although few hospitals had even  basic EHR systems in place, many hospitals had parts of  systems in place and that governmental policymakers hoping to promote wider use of EHRs should focus on financial support, interoperability, and training of IT support staff.

What is the U.S. government doing to promote widespread use of EHRs?

The U.S. government has taken big steps to “push” the medical community into the use of EHRs.  If you are interested in the subject, I strongly recommend you check out 2 recent articles in the New England Journal of Medicine.  The first, written by Kenneth Mandl and Isaac Kohane was entitled “No small change for the health information economy.”  The second, written by David Blumenthal was entitled “Stimulating the adoption of health information technology.”  Both articles discuss the recent measures taken by the U.S. government to promote use of EHRs through the American Recovery and Reinvestment Act of 2009.  The Act uses both carrots and sticks by offering both rewards in the way of cash payments and punishments in the way of lower reimbursements for patient care services depending on whether institutions and medical practitioners get with it (i.e., implement or do not implement EHR systems).

I must say that I think the U.S. government has perhaps taken on too much now in terms of the rapidity with which the “required” changes must be implemented.  I am particularly concerned that we (i.e, health care administrators, physicians, the general public) don’t yet have a medical care system in the U.S. that could be reasonably considered anything close to a real system and that we haven’t really figured out exactly what we want our EHR system to be as part of the overll not yet existent health care system.  It will be very interesting to see if the “money on the table” helps to sort these things out or if we end up with a bigger mess than we have already.

What is all this business about electronic health records?

Traditionally, physicians and other health care providers have documented patient encounters by writing illegible notes in medical charts.  If the patient encounter is is with a medical specialist or is an emergency room or urgent care clinic visit, and if the patient has a primary care doctor, a typed letter or report is typically written and sent to the primary care doctor , and maybe also to the patient.  When patients are admitted to hospital, admission, progress notes, and discharge summaries are generally hand-written but typically the admission and discharge notes are also dictated and typed for the medical record and possibly for the referring physician.  So, depending on a patient’s medical history (i.e., rare vs. frequent hospitalizations), traditional hospital charts range from small folders to giant multi-volume tomes of data, mostly unreadable (and often unliftable) except for the typed notes and printed forms with test results.  Most physicians with office practices maintain so-called “shadow charts” on each of their patients which typically contain illegible clinic notes and correspondence, much of which does not appear in the hospital chart- this is complicated since some patients receive care at several different hospitals so that a complete record of their hospitalizations is not available in one location.  Get the big picture? In the past (and in the present for many physicians) patient health care records, particularly those in physicians’ offices are not particularly useful when it comes to allowing communication among physicians and other health care providers about patients’ health history.

Welcome to the age of computers, databases, and the internet

Over the past 5-10 years there has been a slow but steady revolution in the way medical records are constructed and used.  Electronic health records (EHRs) are being used increasingly in routine patient care.  There are 2 main forms, the stand-alone personal health record (PHR) and the so-called integrated PHR.  The former is typically an electronic record used within a single hospital or hospital/clinic system.  For example, a group practice might have a system that allows generation of an electronic note for each patient encounter that becomes part of the institutional patient record database.  The information is collected either from dictations that are transcribed and entered in to the database or keyed in directly by the health care provider.  The institution might generate a typed note that can be placed in the clinic shadow chart, sent to a referring physician, etc., or not generate any paper unless there is a specific need; once the information is entered into the database it can be retrieved easily whenever needed.

The second form, the integrated PHR, allows access to the patients’ data by health care providers or other, including patients who are not part of the individual institution.  Theoretically, this model would allow a physican in a Seattle emergency room treating a patient from St. Louis to have rapid access via the internet to the patient’s medical records.

These 2 forms of EHRs are discussed in an excellent article recently published in the New England Journal of Medicine (Pang PC, Lee TH. Your Doctors Office or the Internet?  Two Paths to Personal Health Records.  N Eng J Med 2009;360:1276-8).  If this subject is of interest to you (it should be), I recommend that you check it out.

My experience with EHRs

The other day there was an excellent article in the New York Times about EHRs (NYT April 11, 2009).  The article was entitled “A rural medical practice moves to digital records, and the doctor is pleased,” and written by Milt Freudenheim.  The article  describes the move to EHRs in a rural Kansas solo medical practice and how beneficial this has been in terms of improving patient care and also in terms of the physician’s satisfaction. The article alos discussed the “down” side of EHRs- the cost; it is difficult to set up even a simple system for less than $40,000-$50,000.  Reading this article made me think about my own experience with EHRs.

My institution, the University of Missouri Health Sciences Center introduced EHRs 6 or 7 years ago.  Prior to EHRs I maintained shadow charts on my patients and dictated clinic notes which were transcribed and typed copies were sent to the hospital chart, to me, and to whomever I indicated needed a copy of the note.  Hospital admission and discharge notes were dictated, transcribed, and copies were placed in the hospital chart, and sent to me for my shadow chart, and to whomever was listed in the dictation (e.g., the primary care doctor).  When we switched to  EHRs, all dictated notes were transcribed, entered into the  the institution database and typed copies distributed to whomever was listed in the dictation.  I could dictate my clinic notes from any telephone, in town or out of town and I could also look up any dictated notes from any computer with internet access.  All laboratory test results were also entered into the database.  Recently, efforts are being made to have physicians and other health car providers at our institution type their own notes which are entered directly into the database with no paper copies unless distribution is requested for another physician, or perhaps, the patient.  Thus, the institution has made major efforts to more or less eliminate the transcription process and all paper records, including shadow charts.  Obviously, this approach requires that computers be available throughout the hospital and clinics and within the clinics, in examination rooms.

So, am I on board with the revolution?

First, in general, I love EHRs.  I love being able to tap into the database whenever I want to and from wherever I might be as long as I have access to the internet.  This greatly simplifies patient care ,and I think, improves it appreciably.  During a patient’s clinic visit, I can quickly look up a laboratory test result that I had not seen earlier.  If I can’t find the patient’s shadow chart, not to worry, as I can quickly get at whatever information I need such as the last clinic visit note.  I can also communicate more easily with other health care providers regarding the patient.  For example, I recently received an e-mail from a former patient who was requesting medical records for an upcoming clinic visit with a new doctor in another city.  The visit was to be in 2 days.  I was out of town.  So, I went on the internet, got into our patient database, reviewed the patient’s medical records, typed a summary for the new physician (an old friend of mine as it turned out) , including pertinent laboratory test results and sent the information by e-mail to the physician and to the patient.  I also had my office fax copies of the medical records from my shadow chart.  Who wouldn’t love EHRs?

Now, it would have been even nicer if we had in place an integrated EHR (or PHR as it is usually called) so that the new physician could just tap into the database himself and get whatever information he needed, but what we have in place now is the next best thing.  The big problem at the moment with integrated PHRs is the issue of confidentiality; how does one prevent unauthorized access to patient health data?  Even within my institution there is concern about use of e-mails with patients as being “insecure” communications, which is a legitimate concern.

Yes, I truly love the electronic revolution with e-mails and EHRs except for one small thing.  I am still not sold on the idea of paperless offices and the use of computers WHILE interacting with patients.  It will take some doing to persuade me that shadow charts are not still useful.  I can’t actually remember when I last looked at a hospital chart, but I still rely on my shadow charts.  When I see a patient I want to talk to them, look them in the eyes, and not have my eyes focused on the computer.  I think my opposition to this new approach to patient care is legitimate if not less expensive for the institution (if one does not need to transcribe a note and if one doesn’t need to generate “paper,” it definitely saves money.  Maybe I’m just old fashioned?

I know that I promised to stop obsessing about the U.S. health care system mess and get back to hard core endocrinology issues, but I read a very interesting article on health care that I need to tell you about.  The article was published in The New Yorker January 26, 2009 and is entitled “Getting there From Here;  How health-care reform really happens,” and written by Atul Gawande.   The author should be known to you for his now famous piece, also in The New Yorker, entitled “The Bell Curve” (December 6, 2004).  In that article, the author discussed why some medical centers are more successful in treating cystic fibrosis patients than other medical centers.  As it turns out, the issues discussed in the article are relevant not just to cystic fibrosis but also to most other chronic medical conditions, including diabetes mellitus, an area of interest to me.

The author is an associate professor at Harvard Medical Schooland a surgeon and was a health-policy advisor in the Clinton Administration.  The current New Yorker piece is a discussion of how health-care systems that could be described as successful  (at least quantum leaps more successful than the system in the U.S.) developed in other countries.  His thesis is that without exception, the successful health-care systems developed in highly pragmatic ways from existing systems rather than from approaches that totally scrapped the old to bring in the new.   He calls such an approach “path-dependent” and implies that the U.S. would do well to learn from what others have done.  He ends the discussion with a description of the Massachusetts plan which has built on existing health care system structures to markedly improve health care coverage but at far greater costs than anticipated.

The piece is well worth reading but I would urge you not to get overly enthusiastic about the Massachusetts plan as a potential road map for fixing what ails the other 49 states; as I have harped on over and over, any plan that does not address both access AND costs cannot be successful in helping the U.S. to get there from here.  Nonetheless, Dr. Gawande has provided a road map of sorts that provides an important foundation for the path we will end up taking.

Looking back at my entries from the past 3 months or so, one might get the idea that I am obsessed with the problems plaguing the U.S. health care system rather than addressing endocrinology issues, which is after all what the website is supposed to be all about.  In fact, I felt compelled to address the health care system problems precisely because they are serious barriers to people with chronic diseases such as diabetes mellitus from receiving optimal medical care.  It matters little how caring or brilliant a physician might be if his patients (potential and established) can’t get clinic visits in a timely fashion or afford their medications.

I apologize that I did not write the entries in a very orderly fashion.  I should have started wtih an introduction to the series of articles and then addressed the issues in a logical order, from problems with access to health care (the entry from 29 November 2008), and ended with cost issues (the entry from 18 January 2009 as well as several earlier ones).  Instead, I hopped around from here to there beginning with the first entry 10 October 2008 and ending with the 18 January 2009 entry.  I hope you will read all of the entries in whatever order you wish and with some luck you may find that taken together they make sense.  I would like to hear from you about my proposals to “fix” the U.S. health care system, whether you agree or disagree with any or all of the components.  I promise to get off the health care bandwagon for a while and get back to hardcore endocrinology issues.

In my most recent entry about the US health care system mess I focused on ways to improve access to high quality health care.  I outlined a plan to achieve virtually universal health care coverage without spending more money.  Unfortunately, we cannot realistically hope to improve access without at the same time, reining in the extraordinarily high health care costs, estimated at more than $7000 per  year for every man, woman, and child in the U.S.  We spend more than twice as much per capita as the next closest country.  And to add insult to injury, our health outcomes are the worst among the most highly economically developed nations.   The costs are continuing to rise at a dizzying pace, far faster than the rate of inflation.  If we continue at the same pace, it is estimated that in 30 years our health care expenditures will eat up 30% of our gross domestic product.   Can we tame this tiger?

Where do we start?

I actually instituted a number of important cost cutting measures as part of my plan to improve access to high quality health care.  First, just getting people to health care in a timely fashion will save an enormous amount of money but the cost savings will not be realized for a number of years.  For example, if we can make more timely diagnoses of diabetes mellitus (studies show that the average time from onset of diabetes until diagnosis is about 9 years) and get those people into chronic disease management programs, we will dramatically decrease the risks for diabetes complications, which currently eat up the lions’ share of the money spent on diabetes in the U.S.   Studies by the Kaiser Family Foundation have shown very nicely that development of chronic disease management programs by insurers saves lots of money because patients in these programs less often develop the costly complications of the disease, be it diabetes, heart disease, cancer, or whatever.

Primary preventive care, part of all good health coverage plans, will also save money in the long run.  For example, making sure all children are up-to-date on their immunizations, making sure people have appropriate preventive health screenings such as mammograms, colon and prostate cancer screenings will save bundles of cash in the long run.

Using Medicare as a template for cutting costs

First, I need to tell you a bit about Medicare.  This gigantic government program was approved by the U.S. Congress in 1965 as a way to assure excellent health care for U.S. seniors. The program is financed by a payroll tax as well as funds from general revenue.   Medicare costs have risen steadily for many years along with medical costs in general.  Assuming that Medicare costs keep going up and up, the Congressional Budget Office has estimated that the program will be bankrupt in the near future unless costs are controlled and/or some way of increasing revenue can be found.

There are 4 parts to Medicare, A-D: Part A covers hospitalization costs with 80% covered by Medicare and 20% by the individual.  At age 65 all people who have participated in the payroll tax are automatically enrolled in Part A at no cost to the individual.  Part B is for outpatient medical care charges and is voluntary with charges ranging from about $90/month to about $250/month depending on the individual’s income.  As with Part A, the coverage is 80/20.

Part C is for Medicare Advantage plans which are Medicare HMOs which I will discuss below.   Part D is the recently enacted prescription drug plan.  Like Part B, this part of Medicare is voluntary and costs about $35/month but I’ve heard that charges are to be increased about 30-40% by most of the insurers participating in the plan.   Part D is rather complicated in that there is a “doughnut hole,” a point at which coverage for drug costs stop until the individual has spent about $1500 out of pocket before the plan picks up costs again.  All in all I think Part D has been a good deal for most people covered by Medicare but the costs have been huge, contributing to the uncertainties about Medicare’s fiscal solvency.

Finally, in some geographic locations, people can enroll in Part C, a Medicare HMO which covers Parts A, B, and D.  Medicare HMOs are different than traditional Medicare in that there are some restrictions on which physicians can be seen and where services must be obtained.  The idea in allowing these HMOs was that costs would be lower and the quality of care as good or better than with traditional Medicare coverage.

In general, regardless of whether a person is enrolled in traditional Medicare or an HMO, I believe that Medicare has been a very good thing for U.S. seniors; guaranteed health care coverage regardless of current health status or pre-existing health conditions.  The 2 biggest problems with Medicare at present are access and costs- where have I heard that before?

As discussed in an earlier entry just having Medicare does not guarantee that an individual can get a timely appointment with the doctor of his choice or sometimes any doctor.  In terms of costs, here I mean costs to the individual; at present, the annual cost to an individual for Parts A, B, and D is about $1500 per year.  That sounds reasonable but remember that the individual had likely been paying into Medicare for years and years.  In addition, particularly for Part D, there may be large co-pays depending on the specific drugs prescribed; my mother pays about $150 “extra” each month for her Part D co-pay.

Also, remember that payment for Parts A and B are structured on an 80/20 basis; one serious hospitalization with a bill for $200,000 (not so unusual) means the individual owes the hospital and/or clinic and doctors $40,000.  This is why many people on Medicare purchase supplemental insurance policies to cover the part of the hospital, physician,  and clinic bills that Medicare does not cover (Medicare now calls such plans “Medigap Policies”).  These supplemental plans range in price from about $2000-$4000 per year, bringing the total annual cost of Medicare to as much as $5500; that comes to $11,000 for a married couple,  a formidable sum for people on modest fixed incomes.

For some people who continue to work after age 65 or for those whose employment retirement plans cover health care costs, Parts  B and D might not be needed (for example, when I retired from my university job and turned age 65, I was automatically enrolled in Medicare Part A, I signed up for Part B, and the University employee retirement insurance plan picked up the costs for Part D and also served as a supplemental plan for costs not covered by Parts A and B (I pay about $100 per month for this coverage, which is in addition to my costs for Part B).

So, now you know about as much as anyone needs to know about Medicare.  You can learn much more by checking out the Medicare website.  Later, I’ll come back to what I think we need to do to improve Medicare, but for now I want to focus on how to use Medicare to decrease health care costs in general.

Getting down to the specifics

I believe we should start by making big changes in the way Medicare pays for things.  Usually, the way Medicare goes, so goes the private insurance industry.  I propose that we start by mandating that Medicare negotiate prices for all of the services it covers.  I’d start with Medicare Part D, the prescription drug program.  It is impossible for a sane person to understand why the U.S. Congress made it illegal for Medicare to negotiate drug prices.  Of course, the result was a very high cost program.  Medicare must be able to negotiate drug prices and also to set up a drug “tier” system where certain preferred drugs cost less than other drugs, just like private insurers do

Medicare must also negotiate prices for laboratory tests, X-rays and other procedures, even things like hospice care.  Just to give you a sense of how crazy the system is, I will tell you about a patient I know who is living at a private nursing home for patients with Alzheimer’s disease who qualified for hospice care within the facility (covered by Medicare) allowing him to remain at the facility until death rather than having to be discharged home to be cared for by relatives and friends or to be transferred to a true hospice care facility.  At present the hospice care services consist of a 1 hour visit once a week by a nurse with Medicare footing the bill of about $6000 per month. It’s a true story.  What about laboratory tests and medical equipment for home use?  If a blood test really costs $6.00 to run including depreciation of equipment, labor, and other overhead costs, why should Medicare pay $200.00?  Hey, I’d be happy to pay  $8 or $10 so the lab can make a little profit on the test.  Why should Medicare pay a medical equipment company $30 per month for 24 months to rent a wheel chair for a patient when buying a new chair only costs $300?  I could go on and on and on but I think you get the point.  Medicare can save a bundle by making sure it is charged fairly for whatever services it covers.

The role of the primary care doctor

I believe we should go back to a variation of the old managed-care idea of having a “gatekeeper,” a person who determines when a patient could get this test of that test or see this or that specialist.  The problem with the original managed-care approach was that the gatekeepers tended to be minimally trained clerks who made important health care decisions based on sets of written guidelines rather than letting the  doctors and nurses make those decisions.  Primary care physicians and probably also primary care nurses should be given the authority to decide what laboratory tests and procedures their patients need and which specialists the patients need to see.  Of course, a patient can see a specialist without having to go through the primary care “gatekeeper” but the patient shouldn’t expect Medicare to pay for it.  Maybe people will want to purchase supplemental insurance that allows them to see specialists anytime they wish (e.g., a Medigap policy)?  That’s ok with me other than if specialists are in such short supply, that they might favor patients who are paying out of pocket or who have insurance coverage that pays more than does Medicare?  Of course, the critical thing here is for Medicare to work out its payment schedules carefully and not pay less than a fair price for the service whatever it might be.

One serious flaw with my scheme to go back to a gatekeeper system is one I discussed earlier, the fact that we have many fewer primary care doctors  than are needed right now, let alone if we set up a gatekeeper system.  What may help some is that if we institute a gatekeeper system, we may find many specialists deciding to do some primary care as part of their practices; I suspect pay for primary care doctors will increase while that for specialists decreases.  It’s not that physicians are struggling to survive; right now, a general internist averages about $125,000 per year but a dermatologist just out of training can make between $400,000-$500,000 per year; no wonder so many of the smartest medical students are going into dermatology.  The U.S. Congress has already begun efforts to increase Medicare compensation for primary care doctors.  Regardless, we need to move to a system where primary care is king of the heap, at least for medical services paid for through taxes.

Medicare charges for hospitalization

Along with figuring out how much Medicare should pay for each of the services it covers, the approach to paying for inpatient services should be revamped.  Instead of Medicare paying  for each hospital day and all of the various tests and procedures that get done to a patient, Medicare should pay a flat per diem for hospital days.  The rate should depend on the level of care; Medicare would pay more for a day in the intensive care unit to treat a heart attack than a day on the hospital ward to treat uncomplicated pneumonia.  In this way, the doctors can order as many tests as they like, but Medicare pays only the per diem.  If this plan is ever approved, I predict, you will find physicians ordering many fewer tests, omitting the ones they didn’t really need anyway.

Alternatively, there could be a per diem based on level of care and additional payment for tests and procedures based on negotiated prices, something we discussed above.  No matter exactly how we do it, we can save an enormous amount of money for Medicare.  But this isn’t just about Medicare; without a doubt, the changes we make in the Medicare program will quickly find their way into private insurance plans.

Should Medicare be used to subsidize graduate medical education?

When Medicare was enacted, the budget included funding to cover most of the costs of graduate medical education.  Medicare still pays most intern and resident salaries, although there have been efforts to decrease or to even eliminate the subsidies.  Giving hospitals money to cover house staff salaries might have made sense in 1965, but in my opinion, it’s throwing away taxpayer money in 2009; it’s a great deal for hospitals that employ interns and resident physicians at little or no cost and the attending physicians who supervise these doctors-in-training still get to bill Medicare for providing care.  In 2008, the average direct payment to each teaching hospital in the U.S. was about $17,000,000.  The total annual cost to Medicare for graduate medical education is several billion dollars.  I believe that money would be much better spent helping to increase the number of physicians in the U.S. by helping with medical school tuition which is now more than $20,000 per year even at state-supported medical schools.

What are the consequences of these changes beyond the cost savings?

Assuming that the Goldstein Health Care Plan is adopted (I’m not holding my breath) , it is very important that we anticipate and find ways to deal with the “fall out.”  Many hospitals will find their revenue streams slow to a trickle in some areas.  For example, hospitals that did high overhead but very high reimbursement procedures such as sophisticated cardiac surgeries (e.g., heart transplants, cardiac by-passes) may find that such procedures are no longer worth performing given the much lower payments by Medicare.  This will likely result in major organizational changes in many hospitals and clinics but in the long run the adjustments will end up strengthening the U.S. health care system.  I predict that many hospitals will pick areas that they choose to specialize in such as rehabilitation medicine, cancer, diabetes, mental illness, while letting other hospitals focus on orthopedics, burn treatment, etc.  The U.S. military has been using this approach for many years.  The idea that almost every hospital should be able to do provide most any service or carry out most any procedure from the simplest to the most complex is unrealistic and fiscally unsustainable.

It will be important that those in charge of overhauling the health care system work closely with hospitals and clinics to help them make what will no doubt prove to be a difficult transition.  It will be very important to phase in the changes.  I am convinced that the end result will be a much improved and sustainable health care system.  For those who have read my proposal for health care reform and cannot see the “light at the end of the tunnel,” please remember that the full proposal consists of many small steps and a few giant ones.  If we take one step at a time, we can achieve in the end what all Americans need, the best possible health care for all.

Now it’s time to get down to specifics.  Below, I will outline a step-by-step approach that can get us from point A (where we are now- in a mess) to point B (health care system access for all).  We can accomplish this but only if most of us really want to fix our dysfunctional health care system; otherwise we will continue to see the quality of health care fall as costs continue to rise.

Step one:  health care coverage for anyone who has the bucks and wants to buy it.

Right now, many people, particularly those who are self-employed or who own small businesses, cannot afford to purchase health care coverage because of the high costs.  It is nearly impossible to obtain coverage without breaking the bank for someone on their own or as part of a small group (e.g., a small business).  If the individual or someone in the individual’s family or someone in the small group has a “pre-existing condition” such as diabetes mellitus, heart disease or cancer; it can be a hopeless situation.  For example, in Missouri , my home state, a family of 4 that includes a child with diabetes would pay between $15,000-$20,000 to obtain high quality coverage; without the diabetic child, the cost would be about $9000-$12,000, assuming they could  find a plan that would take them.  It’s a desperate struggle for some families willing and able to pay a reasonable price for health care coverage. (I’m not sure how to define reasonable other than affordable- a cost not requiring the family to choose between food and health coverage or even college for the children vs. health care coverage)

So, I would start down the road to universal coverage by letting anyone buy into their state health care plan, the plan that covers state employees, including elected officials.  All 50 states in the U.S. have insurance plans for their employees.  In Missouri, a very high quality health care plan through the state costs about $12,000 for a family and about $7000 for an individual.  The state pays about 70% of the costs and the rest is paid by the employee.  The plan has no exclusions for pre-existing conditions and a short waiting period before coverage is in effect.  So, I’d let anyone willing to fork over the total annual premium join the plan. It’s unlikely the insurer would care much, particularly if the state required this as part of their contract with the insurer.  The additional administrative costs would be trivial.  So, the idea is to let people join large health care plans that keep premiums low (well, maybe not low, but manageable) by spreading out costs among a large number ofl group members.

The plan I am proposing is not an untested idea; the approach is already being applied in a number of states, apparently without difficulty.  Why hasn’t every state instituted such a plan?  I suspect it is fierce opposition from insurance companies, but I’m not sure who to blame.  I am not aware of the range of plans available to state employees (in Missouri or elsewhere- e.g.,  low premium/high deductible plans vs. standard plans, but the full range of plan options should be available to anyone with the cash.

Ok.  What does this accomplish?

This first step is important, not so much for the large number of uninsured people who finally will be able to obtain adequate health care coverage for themselves and their families (my guess is that this step will decrease the number of uninsured by only about 10-15% at most), but by what comes next.

Step two: a mandate for employer and employee health insurance contributions

Now we are into the tricky stuff.  Remember, we have already agreed that it is in everyone’s best interest, that we have universal health care coverage.  We must find a way to accomplish this in a manner that is fairly simple to institute and does not add appreciably to government costs for health care (if you hadn’t heard, our government is already in a serious deficit mode).

At present the majority of people in the US who have health care coverage have it through their employers.  This comes to about 70% of workers in the US who have health care coverage.  As we discussed earlier, that percentage is slipping because of rising costs.  I suggest that we build on what we already have in place rather than creating something brand new and untested.

First, all employers and their employees will have automatic payroll deductions as a percentage of salary to be used for health coverage.

The idea of payroll deductions is nothing new- employers and employees already contribute equal shares to help cover Social Security and Medicare costs.  These mandatory contributions would be tax deductible for employers (as are current contributions towards employee health insurance) and not part of taxable income for employees.  I have not tried to figure out how much the payroll taxes should be but the economists can easily sort that out; the tax must be high enough to cover the cost of the most basic federal employee health care coverage.  Thus I have opted to use the federal government health care plans as a benchmark in determining costs rather than the 50 individual state government plans.  As I will discuss below, this does not mean that people are forced to buy into the federal employee health care plans.

So, what happens next?

The money generated by the payroll tax would then be used to finance the purchase of health insurance by anyone who files a federal income tax return.  The federal government would deposit in a special bank account enough money to cover the costs to purchase the most basic federal employee health care plan.  Individuals claiming dependents would be provided more money than individuals without dependents since health insurance plans cost more for families than for individuals.  The money in the special account could only be used for health care coverage.  The employee could buy into the federal employee plan, their state plan or any other federal government-approved health insurance plan; all plans must meet certain minimum standards set by a panel of experts.    People might want to participate in plans offered by their employers if the plans were better than the plans available through the government.  Individuals would be required to purchase health insurance for themselves and their dependents- this is already the law of the land in Massachusetts and it seems to be working well even though the government is not giving people the money needed to purchase the health coverage.  If individuals do not purchase health coverage, they and their families will be automatically enrolled in the basic federal employee health plan.

So, what does all this accomplish?

In summary, I have described a plan to provide health coverage for all Americans without spending appreciably more than we are already spending on health care, and likely much less.  I do not believe the details regarding setting up the special bank accounts will be difficult to accomplish.   The biggest obstacles to my proposal will be from those opposed to new taxes and businesses that do not at present provide health care coverage for their employees.  There is no question that these businesses will have increased expenses compared to businesses that currently provide health care coverage for their employees.  One way I have attempted to “soften the blow” is to use the payroll tax approach rather than a flat fee per employee approach; the latter approach would place a heavy burden on businesses that have many employees paid relatively low wages, such as a fast food restaurant chain.  By using the payroll tax approach, such an employer’s expenses would be much lower than if it were a flat fee/per employee towards health coverage.

What about part-time workers?  What about people who are unemployed?

I’m not sure how best to handle special situations such as part-time workers and people who are unemployed for whatever reason.  At the moment, I think the best approach is to provide funding for anyone who files a federal income tax return.   Of course, payroll taxes would be collected for part-time workers just the same as for full-time workers.

What about Medicaid and Medicare?

Under the “Goldstein Plan”  Medicaid would no longer be needed  to provide health coverage for children; all individuals who file federal income tax returns will be eligible to receive funding for health care coverage for themselves and their family members, regardless of income level.  The one exception would be people over age 65 years; they would continue to be enrolled automatically in Medicare.  Later we’ll tackle the Medicare mess-  this will be critical in reining in health care costs.  But, let’s do one thing at a time.

Putting it all together

I have outlined an approach that I believe will fix one of the two major barriers to high quality health care in the U.S., that of health care coverage (remember, the other major barrier is high and rising costs).  My proposal will surely have its critics, particularly those running businesses that do not currently offer health care coverage for their employees as well as those people who are philosophically opposed to new taxes for whatever reason.  In defense of my plan, I would point out that in the long run, the new taxes should lead to much lower total health care costs when coupled with specific cost cutting measures I will discuss in an upcoming entry.  I would also point out that in the short run most employers and employees would find the new payroll taxes more than offset by eliminating what is currently being spent on health care coverage.

For those people whose hearts were set on universal health care coverage based on a “single payer system”

What I have proposed is a plan that assures universal health care coverage.  The plan is more or less a single payer system but still allows the free market to flourish.  I do predict the plan would force private insurers to cut costs (and maybe profits?) if they want to be competitive.  I suspect most of the cost cutting would be the result of decreased administrative costs  and many more negotiated costs for hospital and clinic services as well as for medications (have you been to Wal-mart, Target, or even your local pharmacy lately?  It’s hundreds of generic prescription drugs at rock-bottom prices (e.g., a 90 day supply of this or that drug for $10.00).

In earlier entries I discussed various aspects of the US health care mess, starting with an overview of the problems (poor access and high costs) and ending with a bit of a detour to discuss rationing health care as a means of controlling costs.  Now it’s time to take a step-by-step approach to solving the problems, starting with access.

What are the reasons for poor access to health care in the US and what is the magnitude of the problem?

First, the problem with access is HUGE; at least 40-50 million people in the US have no health care coverage (by “coverage” I mean health insurance, Medicaid, Medicare, VA Health Care, etc.).  In addition, many millions more (some experts estimate another 40-50 million people) have inadequate coverage.

Access vs. real access

So, part of the problem is that many people do not have adequate access to health care because they do not have health care coverage.  Theoretically, these people can obtain access to health care simply by paying for it “out of pocket.”   In practice, many health care providers will not see people needing health care unless they have some form of insurance (within the medical community, so-called “self-pay patients” are considered synonymous with “no-pay patients”).  If self-pay patients are “lucky enough” to obtain health care services, they are typically charged more (sometimes as much as 2-3 times as much) for the same services than an insured patient; most insurance plans have contracts with health care providers that allow for deep discounts for services.

Even having some form of health care coverage may not guarantee access to care.  Many physicians do not see patients with Medicaid, and a worrisome trend is that a growing number of physicians will not see Medicare patients .  At this point, I do not want to get into all the reasons for these access problems except to say that many physicians find the paperwork load for dealing with Medicaid and Medicare patients is not worth the bother given how low the reimbursement rates are for most services.  So, access doesn’t always mean real access.

Geographic barriers

Another problem with access is a geographic; patients who live in rural areas may be many miles from the closest health care facility and much further from specialty care.  Given the shortcomings of the US transportation system, most people who live far from health care facilities are completely dependent on the automobile to get health care.  What about an elderly person who lives in a rural setting and does not drive a motor vehicle?  That person might have the best health insurance possible but it doesn’t do them much good if they can’t get to the health care facility.

Manpower barriers

Last, but not least, a major problem with access is the shortage of health care professionals, particularly in primary care.  How can physicians afford not to see Medicaid and Medicare patients?  It’s easy.  They are very busy already with customers who pay well.  We need more primary care physicians (family medicine, internal medicine, and pediatrics) and nurse practitioners that specialize in primary care.

Part of the manpower problem is one of geographic  distribution; physicians, nurses, and other health professionals generally want to live near the bright city lights not in rural areas.  In many ways that is good since many more people live in the cities than in the small towns.  But even in large population areas, it’s much easier to get a timely appointment with a cardiologist or a dermatologist than with a primary care doctor.

Access vs. high quality access

Finally, there is a difference between access and high quality access.  Unfortunately, the quality of health care varies greatly in the US.  Some people are lucky enough to have high quality health care plans and easy access to high quality health care providers.  For example wouldn’t you rather see a health care provider who focuses on preventive care and who has access to highly skilled chronic disease management teams (e.g., for patients with diabetes, heart disease, and cancer)?  Some people are not so lucky.  Most reputable health care plans in the US now do include such services (for a good example of what I consider an excellent health care plan, take a look at one of the Kaiser-Permanente HMO plans).

After I posted my last entry (FYI: An Important Newspaper Article About The US Health Care Mess), I got to thinking about the concept of rationing health care- that is, providing health care for some problems and not for others.  It really boils down to money; if one has a health care budget and if the demands cost more than the budget and if one is not willing to allow deficit spending (by either printing more money or borrowing it) some health care demands will not be paid by whomever writes the checks.  Of course, that does not mean a person whose health care service request was denied cannot go out and buy the service on their own, unless such an approach is not permitted.  The idea that someone somewhere will be making life and death decisions about access to health care services makes most people uncomfortable.  But maybe we need to think about rationing in a much broader context?

How much is a human life worth?

Our society already rations many services that put a price tag on how much a human life is worth and seem to  we accept the approach.  For example, private citizens, industry, and the government (federal and state) already determine how much to spend on transportation safety.

In building roads and in setting rules for transportation, governments look at costs and then try to strike a balance between the most safe possible solution and a downright dangerous one.  Having limited access roads, long merge lanes, dedicated lanes for large trucks, etc. makes for safer roads and fewer traffic accidents.  Unfortunately, such roads cost much more to build than roads without such features.

We could build the safest possible roads everywhere except that highway departments have finite budgets and must decide on how best to spend their money.  The decisions are often based on statistical information regarding the likelihood of motor vehicle accidents leading to injuries or deaths given the volume of traffic, speed, etc.  Often historical data are used to help make decisions whether or not to make road improvements, such as adding a traffic light to a certain intersection- only after so many injury motor vehicle accidents at the intersection in question is it “worth” spending  the money.

Individual decisions that balance safety vs. costs

When people shop for cars, they usually have a pretty good idea how much they can afford to spend.  Once they pick out the brand and model they are interested in, they usually then decide which options to purchase, including safety features (thank goodness more and more, vehicle manufacturers are including important safety features as standard equipment, such as multiple air bags and stabilization control) which are known to save lives in the event of an accident.  If money were no object, most people would get the safest vehicle possible.   But costs do matter to people and they routinely make personal safety decisions based on their cost analyses.

Rules that balance safety vs. convenience and personal freedoms

Let me give you  one last set of examples to illustrate the fact that health care rationing is not all that different from  rationing we already do in other areas.  It is well known that using  seat belts save lives, yet the US has moved very slowly to make seat belt use mandatory (and even when mandatory, the consequences for not wearing a seat belt are minimal).  It is also clear that lowering speed limits on roads saves lives, yet we as a society are reluctant to impose major restrictions on individual freedoms.   It’s the same for states that do not have helmet laws for motorcycle riders.  I could go on and on.  I am not saying that the government should or shouldn’t be able to limit individual freedoms if certain rules can save lives but only that we already make many decisions in our society that truly have life and death consequences.

So, in many ways our society does put a price tag on how much a human life is worth.  Of course we do not have a single well accepted formula for calculating the value of a human life and there is no consistency in the approach from issue to issue.  That’s what makes the notion of rationing health care so difficult to come to grips with, yet we must find a way to do that if we are to improve US health care in the end.  I am quite confident that we can control costs and attain universal health care access.  I’ll try to persuade you in subsequent entries.