A PHYSICIAN'S VIEW OF HEALTH CARE

By Tom Brown

On May 19, 2010, Dr. Basil Papaharis, President and Managing Director Soundview Associates, gave a presentation to the Wilton, CT Lunch Bunch on a Physicians View of the Health Care System.   I have added a few comments where I thought it appropriate,
As he said, we have a broken or at least very inefficient system, since we:
spend 17% of GDP on health care in the US.  This is roughly double what other developed countries spend. 

Yet we have a worse outcome if you compare life span and infant mortality,
have a greater incidence of curable disease than other developed countries,

spend 50 to 90% in the last months of an individual's life, raising the argument that we spend too much on terminal patients and

spend 25 to 50% on treatments that are unnecessary or more costly than other equally effective available treatments.

To understand this you need to know and understand the principal players in healthcare, namely the patients, providers, drug companies, insurance companies and the government.

To begin with the patients....

They are overweight, in many cases morbidly obese.  That in itself leads to many cases of diabetes, cardiovascular disease, cancer and joint replacements.  And they smoke.

They are demanding of medicines for everything, especially when insurance pays.  There is an unintended consequence that Medicare patients do not take their medicine during the coverage gap from the drug payment plans and suffer or worsen accordingly.

But ironically they are resistant to taking vaccines, which leads to a resurgence of diseases thought to be eradicated.

Then the providers...

There are of course specialists and primary care providers as well as hospitals. There are 3 to 4 specialists for every primary care provider, which is the reverse of most other developed countries.  Specialists apply the state of the art from their specialty to the patients.  Primary care doctors, for the most part, successfully, try to recommend the most cost effective remedies and preventive practices or treatments for their patients.

There is lots of excessive, expensive imaging, recommended for defensive reasons, and certainly for profit when the emergency room is involved.

There is no standard of treatment for a given condition and each physician does his or her own thing.

It should be said in passing that hospitals are required to 'stabilize' all persons needing treatment, irrespective of their ability to pay.  The effect of this on total health costs is not known, except that it is one of the reasons that hospitals charge private patients, including those with private health insurance more than is ultimately received from public reimbursement for the uninsured, Medicaid and Medicare.

And the drug companies...

They have very high R&D costs, often on new substitutes for old treatments.  They have 21 years of patent protection on new drugs during which time they can charge what the market will bear.  It is well known that prices vary by country. There are obviously some miracle drugs and cures thanks to drug companies. 

The approval processes that they are subject to are certainly arduous, but seemingly most oriented to not harming people, somewhat oriented to helping at least some cases and not really concerned whether a treatment is really worth it to society.

Then come the insurance companies...

People that are not retired and also working usually have insurance with a private company.   That company has priced its program to each company according to the age mix of its employees rates it has negotiated with providers and services that are mandated or that its employees want.   Such programs are tax deductible so that they are government subsidized.  Companies have good risk pools for the insurance companies with mostly healthy people and a mix of ages below retirement age.

People that are self employed or unemployed have difficulty getting individual insurance as they are of unknown risk at best or high risk.  They would like to buy insurance only after they need it.  They are not good business for the insurance companies

There is also insurance for Medicare recipients which is partially paid for by a subsidy from Medicare.
Insurance companies want to not pay claims.

And the government.

State governments regulate insurance companies and run the Medicaid programs in their state to meet federal standards.  Medicaid is the mostly free health insurance for very poor people.  It is very costly and growing as medical costs grow and the population of poor people increases.  It is co-funded by state and federal governments.

The federal government besides setting standards and co-funding Medicaid, runs the Medicare program.  Medicare is available to all people at age 65.  It is very costly and growing as medical costs grow and the population of retired people grows.  It is commonly believed to be funded by payroll taxes, but in fact only the hospital care is so funded in part by payroll taxes and the other parts are funded in part by Medicare recipients.  The balance comes from the general fund of the federal government and relatively small copays by recipients.  Provider reimbursement for Medicare recipients is mandated by the government at very low levels.  Probably the "squeeze" is ill advised as a cost control.

And finally the lawyers.

Lawsuits are an issue, but hardly the biggest issue. And in the view of Dr P, the main issues are punitive damages and jury trials, both being relatively easy to correct.

Another issue out there is medical records.  Electronic medical records are useful but not the biggest issue. Ironically there are several providers of the software and they are incompatible with each other without software translators.  Dr P's firm has a system best for them but not compatible with the local hospital.

So there are lots of things wrong

Obama care has possibly solved some problems and created others.

--it has dealt with the right of access

--it has dealt with the donut hole in Medicare drug plans

--it will exacerbate the shortage of primary care doctors

--it will sharply increase demand and do almost nothing to reduce costs

These are the major issues in the view of Dr. P, but shared by most I'd think.

--we need to get many more primary care providers and reverse the ratio of primary care to specialist

--we need to get comprehensive treatment guidelines that work and have a reasonable cost

--we need buy in to care for terminal patients to emphasize comfort not cure

--we need to lower costs for people that do not pay for their care, like Medicaid, or want to pay less for it

I'd add that:

--We need to seriously limit use of any tax favored funds, including, presently, insurance premiums for expensive or less justified procedures that cannot be made available to the general public. Obviously, anybody has the right to use their own funds to buy any treatment they want and can get providers to furnish.

--A recent NY Times op-ed piece by a medical professor and cardiologist cited estimates that Medicare spending on unnecessary, ineffective or unjustified procedures is 75 to 150 billion per year!  The professor said that this cannot be fixed except by some sort of preauthorization that looks at the patients overall health and prior treatments.