Road To Hellth

In our last post, we took a post-Supreme Court-hearings look at the financial and administrative disaster that the famously misnamed “Patient Protection and Affordable Care Act” (aka “Obamacare” or the “ACA”) has become. At the same time we observed that having it overturned by the high court would provide a much-needed opportunity to wipe the healthcare slate clean and start over.

Thus, the question arises as to what sort of healthcare reform could possibly be implemented in a country that has become as politically divided (and whose discussions have become so divisive) as the United States? We’ve been mulling over that question for some time now, and have come to believe that the answer is “not much”, at least in the current environment. It’s certainly worth a discussion as to why. It has to do with the very idea of what it means to compromise, and why people would wish (or refuse) to do so.

But first let’s take a minute to imagine what the situation in American healthcare will be if and when ObamaCare is completely struck down by the Supreme Court. Many things will change, yet many things will remain the same.

The private insurance market will revert back to roughly where it was several years ago. Many people will be unable to buy health insurance because it is too expensive, they have pre-existing conditions, or both;
The individual mandate will, of course, vanish;
Roughly $2 trillion of new government borrowing and spending over the next ten years will disappear;
The unelected and unaccountable Independent Payment Advisory Board (IPAB) will become an ugly memory;
Medicare will still force clinicians and hospitals to deploy expensive, productivity-destroying and even defective electronic medical records nationwide;
Just as before the passage of the ACA, there will still be no sustainable, practical, effective and humane way to control the growth of healthcare costs – instead total expenditures will be limited by rationing care in a myriad of ways that are said not to be rationing. These include moving people to Medicaid and Medicare programs that pay so little that clinicians cannot afford to see the patients, expanding pre-authorizations and denials for clinically appropriate tests and treatments, and reducing medical productivity with paperwork and red tape;
Practically speaking, clinicians will continue to be directed and held hostage by insurance company and federal bureaucrats who have little or no medical training, yet make life-and-death medical decisions on a daily basis by virtue of their requiring pre-approvals, authorizations, and blind adherence to guidelines and processes that they’ve put in place.

In short, it’s going to be one of the circles of and unsustainable hell. Just a somewhat different unsustainable circle of hell than the one imposed by ObamaCare.

Under normal circumstances and in a rational society, one might imagine that either scenario might be unacceptable. But circumstances in today’s United States are hardly normal or rational. There is and cannot be progress because, in today’s political environment and discourse, there cannot be compromise.

The dictionary defines compromise as: “a settlement of differences by mutual concessions; an agreement reached by adjustment of conflicting or opposing claims, principles, etc., by reciprocal modification of demands”.

Within the memories of millions of middle-aged Americans, compromise is something that happened all the time. If it was generally agreed that a situation was intolerable and one political party wanted it fixed one way and the other a different way, our elected representatives would actually meet and speak to one another in civil tones. The objective was to define a process of give-and-take whereby neither party got exactly what it wanted, but an intolerable situation was made more tolerable for the benefit of the nation’s citizens. Using compromise, Congress would create bipartisan budgets and set policies that were hardly perfect, but allowed for many of the most useful programs and initiatives that we now take for granted. The ability to compromise in government was considered a hallmark of maturity, leadership and, frankly, patriotism. It signaled a willingness to pull together as Americans, as if the nation and its citizens were more important than political parties and PACs.

But there was another key factor involved as well: the ability and the willingness to weigh the available economic and scientific evidence, and use that data to craft the compromise. Lord knows that political interests and strongly held beliefs would have a powerful role in the process as well, but they were far from the only factors considered.

This has changed. With respect to healthcare, politics has entered a realm that has far more in common with religion than anything one might recognize as science or logic. This is a phenomenon unlike anything that we have seen for literally hundreds of years.

As recently as a few hundred years ago, fixed beliefs dominated the way healthcare decisions were made about everything from public health to treating individual patients. Leeches were prescribed for conditions ranging from infections to mental illness. Diseases were caused by imbalances of the four humors (black bile, yellow bile, phlegm and blood), or “vapors” spread through the air. Only after the widespread acceptance of germ theory and the proofs afforded by vaccination, pasteurization and antibiotics did the economic and social models of healthcare begin to change. As they did, the resource allocations devoted to healthcare began to change as well – steering more resources into intensive medical and scientific training, pharmaceuticals, public health and surgical interventions. Shortly after the beginning of the 20^th century, countries began to implement various methods of paying for the progressively larger allocations of resources used to improve health and reduce the impact of disease. Since no data existed on the effectiveness or suitability of any given approach, each effort amounted to a grand experiment in medico-social engineering.

This was pretty much the situation until the late 1980s and early 1990s when it became clear that the cost of healthcare was rising faster than GDP in every developed country on the planet. Something had to be done. But a funny thing happened. In deciding what to do, political leaders stopped dealing in experience, evidence and compromise, and began dealing in faith-based – almost religious – healthcare decision-making.

Of course in this context we’re not talking about “faith-based” in its meaning of handed down from the one true God (or the many true Gods, depending upon your religion), but instead faith-based in the sense of having fixed and immutable beliefs about things like how to run healthcare or, indeed, the whole country. It doesn’t matter what the available evidence shows or what human experience has been, the political religions of the left and right, Republicans and Democrats, won’t tolerate alternative facts, strategies or explanations. Doing so would be sacrilege, remediable only by human sacrifice. Let’s take a couple of examples.

As the passage of the ACA and the recent scuffle about payment for contraception has demonstrated, many adherents of the Democratic Religion believe that it is mortally sinful for Americans to be asked to pay anything for certain services that the current Democratic administration deems to be “preventive”. Indeed, there are many people belonging to this religion who believe that it is inherently wrong to ask anyone to pay anything for any healthcare goods and services that they might receive. Even more devout individuals believe that access to these free goods and services should be unlimited; that no one has to right to place a limit on the care to be provided by others. We have personally debated such people in public forums, and they are not to be swayed by any discussion of resource limitations, cost or excess demand produced by the combination of human nature and a medical smorgasbord. Yet there is considerable evidence that all of these drawbacks exist. There are not enough medical resources on the planet to provide all of the care demanded by a public uninhibited by cost, and no country on Earth is rich enough to pay for them. It does not matter – for the true believer they have no relevance. If some insurance coverage is good, a LOT must be better.

A second example of religious zeal involves the structure of health insurance itself. Believers in a government-run single-payer system abound, and even include many of the same doctors and nurses who have experienced the growing red tape and unrealistic payment rates of Medicare and Medicaid. It does not matter that some countries with reasonably successful health systems (like Switzerland or Germany) do not rely on single-payer systems, or that places like the United Kingdom whose single-payer NHS is a poster child for healthcare systems gone terribly, terribly wrong.

A third example is the sacrificial cult of electronic medical records. Except for those who work at Departments of Medical Informatics or as physician “champions” for EMR vendors or health systems that are spending billions to implement the darned things, the vast majority of doctors and nurses will tell you that EMRs are a chainsaw to clinical productivity and the amount of time that we actually spend listening to and getting to know our patients and their problems. Non-vendor, non-government studies that show that these systems save money or actually improve clinical results are scarcer than hen’s teeth, yet not a day goes by without having shamans in the Cult of EMR claim that we will see miraculous increases in efficiency, reductions in cost, improvements in health and a blooming of preventive medicine “any day now”. The cult has grown so powerful that has been able to force clinics and hospitals to sacrifice themselves in the process; goaded by the awards and penalties handed out for the presence or absence of “meaningful use”. It’s no great revelation that is a new technology is truly useful, beneficial and cost-effective, there is absolutely no reason that a government would need to mandate its use or bribe people to buy it. Dr. Scot Silverstein at the Health Care Renewal blog has devoted his career to documenting the questionable engineering and lack of clinical awareness that goes into these systems, but you will not identify single iota of doubt in the pronouncements of the Office of the National Coordinator or the politicians who are receiving funds and advice from the “healthcare information technology” (HIT) industry. Their minds are made up. Don’t confuse them with the facts.

We could go on and on with examples, bringing up unfettered beliefs in pay-for-performance, “coordinated care”, mandatory “guidelines” of care (an oxymoron to be sure), and e-prescribing. To be sure, these types of fixed religious beliefs extend well beyond healthcare. In fact, they are the major source of the leadership gridlock and absence of compromise that we see in the nation today. Democrats in California fervently believe that higher taxes and expanding entitlement programs are a path to prosperity, despite a thirty year history of higher taxes, higher deficits, and unemployment rate of 12% and a net loss of 4 million residents over the past two decades. Republicans on the right wing of the party cling to the notion of abstinence-only sex education not because it works, but because they simply can’t (if you’ll pardon the expression) conceive of any other legitimate approach to preventing illegitimate children. Compromise is an anathema to religious zealotry in public policy because it is the moral equivalent of heresy. In the minds of our modern politicians and public policy makers, one can no more believe in just a little bit of HIT than a Catholic can believe in just a little bit of Christ’s divinity. If this one key belief is right, anything else must be wrong.

The United States is blessed by a federal configuration that allows for many different ways to determine what will work and what won’t in healthcare reform. States have a valid role to play as natural laboratories. Massachusetts clearly served as the role model for ObamaCare, even though it was Governor Deval Patrick’s version of the legislation that was ultimately implemented, not the version that then-Governor Mitt Romney signed into law. (Governor Patrick is now co-chair of President Obama’s re-election campaign.) Indiana has an insurance model for its own state employees and low-income population that combines high-deductible policies with health savings accounts (HSAs) to produce high satisfaction and reductions in the growth of expenditures.

It would not take rocket scientists to clearly delineate the historic economic and health impacts of these various models and assemble the most promising elements of each from the perspective of cost and health impact. Whole books have been written on the topic of learning from what works and what doesn’t in medicine and healthcare. This is way real healthcare reform would be undertaken in a culture governed by facts and reality rather than dogma. And this is exactly why we are so skeptical about the prospects of valid, sustainable healthcare reform coming out of a Congress that is divided into warring religious factions apparently incapable of considering more than the most simplistic of answers for a complex world.

You see, that’s the problem. In order to learn from anything you have to have an open mind.

If you’re like most people, by now you’re probably sick to death of hearing about the details of the arguments surrounding the constitutionality of the Affordable Care Act (the “ACA” or “ObamaCare”) made recently in the Supreme Court, President Obama’s strange and almost imperial warning to the court in reply to the hearings, and the backpedaling “of course the court can overturn unconstitutional laws except it would be very unwise in this case, if you know what we mean” explanation by the attorney general of the President’s remarks.

For although these events have been excellent theater (why else would the President make such remarks given the fact that the Justices had already voted on the matter?) the real importance and the real consequences of the decision still don’t seem to have filtered through the coverage. Perhaps this shouldn’t be surprising. Why bother with consequences when the results won’t be known until June? Surely there will be plenty of time then to rail against the decision, clean up whatever broken glass is lying in the streets after the inevitable reaction by one side or another, and use the decision in an attempt to twist the sentiments of the electorate.

But in their usual fashion the media and most commentators have refrained from discussing what is really at stake based upon the decision of these three justices. We say four because there appears to be absolutely suggestion that the four liberal members of the court – Kagan, Sotomayor, Ginsburg and Breyer – have given even the slightest bit of consideration to the notion that the law might be even a little bit unconstitutional, while Alito and Thomas are supposedly reliable votes for overturning it. That means that the fate of the future of American healthcare is in the hands of justices Scalia, Kennedy and Roberts. What is at stake is astonishingly valuable. Overturning the law means that our country would have the opportunity to try again; a chance to come up with a healthcare system that is fair, sustainable, efficient, effective, affordable, and preserves some modicum of individual choice. For if one thing is clear, it is that none of those descriptors will apply to ObamaCare if it is allowed to continue to roll out as designed by its creators.

Let’s face facts, the bill that “had to be passed so that we could find out what’s in it” was packed with items that represent an impossible mix of the unworkable, the untenable, the arrogant and the just plain stupid. Consider just a few of the highlights:

The CLASS Act, which was to account for $86 billion of Obamacare’s claimed $210 billion in deficit savings from 2012 -2021, was found by the CBO to be something more akin to a Ponzi scheme than a legitimate means of deficit reduction, and had to be put to euthanized by the Obama administration itself.

The ten year cost of the law has gone from the $940 billion projected by supporters at the time of its passage, to over $1.7 trillion as of today, and will exceed $2 trillion next year as the ten year window slides forward another notch. But even these new estimate are clearly too low. The Independent Payment Advisory Board – the unelected and unaccountable group of individuals who are supposed to save Medicare $500 billion solely by cutting payments to providers – faces a rocky future, even though its demise would add another half-trillion dollars to the cost of ObamaCare. Republicans in the House have already passed a bill to repeal it, and even Democratic legislators are getting cold feet about the prospect of reducing Medicare payments below those of Medicaid, and well below the cost of actually providing healthcare services. President Obama has promised to veto any legislation abolishing the panel that manages to make it to his desk, but even he can’t force the delivery of healthcare goods and services at below their true cost indefinitely.

Despite the passage and implementation of ObamaCare, (or more likely because of it), private insurance premiums have continued to grow at double-digit rates, becoming less and less affordable even before insurers are forced to incorporate the most expensive measures of guaranteed issue despite the presence of pre-existing conditions, unlimited benefits and the need for any sort of waiting period for those who may not have bothered to purchase insurance prior to being hit by a truck. In dollar terms the freebies that the law has handed out thus far – complete coverage of preventive care and requiring that children up to 26 years old be coverable on their parents’ policies – are small potatoes. Even if the individual mandate is not overturned by the Supreme Court, the laughably small penalties for failing to purchase health insurance practically guarantee that large swaths of the population will gladly pay them rather than pay annual premiums an order of magnitude larger. For example, in 2016 a family of three (two parents and one child under 18) would have a flat dollar penalty of $1,737. The current average premium for that same family is roughly $1,200 per month today, some four years earlier.

One of the primary mechanisms ObamaCare uses to reduce the number of uninsured Americans is to place millions of us into the already teetering Medicaid program. Unfortunately, as Avik Roy has written about at length, the scientific evidence available to date suggests patients with Medicaid are actually more likely to die, even after adjusting for other factors, than those with no health insurance at all:

“Despite all of these adjustments, surgical patients on Medicaid were nearly twice as likely to die before leaving the hospital than those with private insurance.

Patients on Medicare were 45% more likely to die than those with private insurance; the uninsured were 74% more likely; and Medicaid patients 93% more likely. That is to say, despite the fact that we will soon spend more than $500 billion a year on Medicaid, Medicaid beneficiaries, on average, fared worse than those with no insurance at all.”

Not to mention that this expansion clearly threatens to decimate state budgets in the not-too-distant future.

Most recently, the General Accounting Office (GAO) published its Spring 2012 update on the long-term fiscal outlook for the Federal Government. In it, it expressed considerable doubt about the viability of “savings” likely to be realized as a result of the ACA, conceding that: “The Trustees, CBO, and the CMS Actuary have expressed concerns about the sustainability of certain health care cost-control measures over the long term.”

We could go on and on and on in this vein. The 2,700 pages of the original bill, (or alternatively the small-print 900-page version of the actual law as published in the Federal Register), contains one convoluted page after another of sham savings, benefits of questionable value (for example, why on earth would anyone try to solve the problem of insuring young adults up to the age of 26 by allowing them to be covered on their parents’ policy, rather than devising an affordable means of providing them low-cost catastrophic coverage of their own?), expansions of insurance programs that are already known to be defective, and mandates that are guaranteed of increasing the amount of confusion and bureaucratic overhead with no real evidence that they will improve care or reduce costs. If anyone really doubts this we strongly encourage them to take the time to read the actual law and look at the evidence, both historical and scientific, that speaks to the probable impact of its provisions. (If you can even figure out what they are. Many, if not most, of the law is implemented by unelected officials such as the Secretary of HHS in the form of regulations We have written about many of them on these pages. If they can come away from the exercise feeling confident, reassured and able to defend their optimism with facts, then we hope they’ll send us a guest post about it. We’ll gladly publish it. But the odds are that 99% of potential readers will be defeated by the measure’s length and indecipherable prose before they make it halfway through. With the possible exceptions of dictionaries and cookbooks, few works are better defended against being read cover to cover.

“But surely it would be better to fix this legislation than to overturn or repeal it?” supporters might say. “Look how long it took and how hard it was just to get this!”

If only it were true. The Affordable Care Act is a stone castle built upon a foundation of sand. There can be no stable, affordable and sustainable system of healthcare without taken into account – and making use of – the innate psychological and economic forces that regulate the behavior of both patients and the individuals and businesses who care for them. Regulatory control – and ObamaCare is completely and utterly based upon regulatory control – has three inherent defects.

The first is that regulators are always regulating the past rather than the present. Regulation works have having human being look at data collected in the past, making determinations about how to address problems, and implementing those fixes into the future. However collecting and analyzing this data is always associated with a time lag – even with electronic reporting systems. Taking the time to formulate good regulatory decisions takes even longer. The result is that no matter how good they are, regulators are always addressing today’s problems with solutions based upon yesterday’s information. By the time those solutions are canned and implemented the problems have changed and they no longer work. Surpluses have become shortages. Deficits have become gluts. The individuals involved have moved on. The science had changed. The policies and procedures so carefully formulated are inherently obsolescent.

The second problem with regulatory control is that it is performed by people. President Obama may be perfectly happy with the decisions made by Secretary Sebelius, but he and his supporters may be dismayed by the actions taken by her Romney-appointed successor. Imagine the destructive impact of changing insurance regulations, provider payment and preventive care policies every four years. Since the Secretary decides what qualifies as “preventive medicine”, those birth control pills may not be a covered benefit after all in a year. Continuously whipsawing one-sixth of the U.S. economy is hardly a recipe for optimizing productivity.

The third and final problem with regulatory control is that healthcare is just too complicated. According to the Bureau of Labor Statistics, over 11% of all private sector workers are in the healthcare business. (That doesn’t include healthcare workers employed by the Veterans Administration, military, HHS, CDC or other public agencies.) That’s about 17 million people. There are only about 3 million people employed by the Federal government. If anyone thinks that any government regulators, no matter how gifted, can successfully manage not only their own activities but those of a private industry five times the size of the government itself, they haven’t yet heard about the Las Vegas meeting of the GSA in 2010.

As President Obama likes to say, let’s be clear. What’s really at stake in the decisions of those three Supreme Court Justices is whether our nation will be allowed to put this massive mistake behind us and start over with a clean slate. In our next post we’ll discuss how even two warring political parties might be able to do something constructive with respect to overhauling healthcare.

Archive for April 2012

Starting Over With Healthcare Reform Is, Unfortunately, a Matter of Religion

A Chance, However Slim, to Retrieve Healthcare from the Abyss

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