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By John Geyman, M.D.
The Huffington Post, Feb. 17, 2015

Steven Brill, author of the well-known 2013 “Special Report, Why Medical Bills Are Killing Us,” in Time magazine has just released his new book, “America’s Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System.”[1] Based upon in-depth reporting of interviews with more than 240 people involved in various ways across our health care industry, he gives us an inside look at how the Affordable Care Act was written, passed, implemented and changed over the last five years.

The result is an honest, damning indictment of our market-based system, with all its profiteering and run away costs. He concludes that the ACA, despite the hype of some of its architects and supporters, will fail to contain costs:

“There’s nothing in the legislation that brings down the cost of healthcare. … The bad news is that the taxpayers are paying for it and they’re paying the same exorbitant prices that make the system so unworkable. … The drug companies are making more money, the hospitals are making more money, the medical device makers are making more money, and everybody is happy except the taxpayer.” (2)

Brill’s description of the flaws of our profit-driven system are further amplified by his own personal experience with open-heart surgery for an aortic aneurism. After an eight-day hospitalization, his medical bills came to $197,000. Some time later, even Stephen Hemsley, president and CEO of UnitedHealth Group, his health insurance company, could not explain the medical bills and explanation of benefits.

Brill’s meticulous and well-documented reporting of our system problems falls apart when it comes to fixing these problems. There is somehow a striking disconnect between his objectivity in the first part of the book and the proposals he puts forward toward the end. Yes, he is very well-informed, is a graduate of Yale Law School, and has had personal experience as a patient, but that does not make him a health policy expert, as many of his readers now expect. He says in his book, as he was recovering from surgery, he began to frame his “unusual idea” of how to go beyond the Affordable Care Act, which he believes is unsustainable because of costs, and to fix U.S. health care:

“At first, pieces of it came in the form of seemingly random thoughts that popped up during the extra time I had to read and watch television. But they soon began to come together.”[3]

These are the components of his seven-part proposal for regulating our health care system:

1. Require that any market have at least two big, fully integrated provider-insurance companies (e.g. Kaiser); large markets could have more.
2. Cap the operating profits of what would be those now-allowed dominant market players, or oligopolies, at perhaps 8 percent, compared to the current average of about 12 percent.
3. Cap the salaries and bonuses of hospital employees (including the CEOs) who do not practice medicine full-time at 60 times the amount paid to the lowest paid full-time physician, typically a first-year resident.
4. Establish ombudsman’s offices in each oligopoly to streamline the appeals process for patients who believe they have received inadequate care, and for physicians who feel they have been pressured to limit care.
5. Any government-sanctioned, oligopoly-designated integrated system should have a physician with practice experience as its top executive.
6. Require any sanctioned, oligopoly provider to insure a certain percentage of Medicaid patients at a stipulated discount.
7. Require these regulated oligopolies to charge any uninsured patients no more than they charge any competing insurance companies whose insurance they accept, or a price based on their regulated profit margin if they don’t accept other insurance.[4]

While there may be merit in some of these proposals, Brill’s brief prediction of how they would reform our system is unpersuasive and comes across as only wishful thinking, uninformed by evidence. His “plan” would just add another layer to our flawed system, based especially on getting some of its providers bigger yet somehow more accountable. There are many problems with his proposals. For example, what would they do for people in many parts of the country, including rural areas, and why is “bigger is better” a solution to our already consolidating system?

For some reason, Brill ignores mountains of experience and evidence that there are more logical and proven ways to rein in our out-of-control system. For example, he recognizes in his first chapter that the U.S. spends more ($3 trillion in 2014) than the next 10 biggest spenders on health care combined: Japan, Germany, France, China, the United Kingdom, Italy, Canada, Brazil, Spain, and Australia. But then he shows no interest in finding out how these countries can spend so much less on health care than we do while also providing better access and usually better outcomes of care. Recent years have seen a growing information base of how they do it, including T. R. Reid’s excellent 2009 book “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care,” in which he notes, after study of the experience in France, Germany, Japan, the UK, and Canada, that:

“The American system does well when it comes to providing medical care, but has a rotten system for financing that care. … All the other rich countries have found financing models that cover everybody and they still spend much less than we do. We’ve ignored those foreign models, partly because of ‘American exceptionalism’ — the notion that the United States has nothing to learn from the rest of the world.”[5]

Brill also ignores long-standing efforts in this country to enact universal coverage through a single-payer system, improved Medicare for all, as embodied in John Conyers’ bill in the House, H.R. 676. He cavalierly dismisses this alternative in these words: “[My proposed regulations are] certainly more realistic than pining away for a public single-payer system that is never going to happen.”[6]

Good as Brill’s book is (and I strongly recommend it) in the diagnosis of our health care problems — the toxicity of our profiteer-dominated system — his proposed treatment is speculative and uninformed by evidence. At best, if implemented, his proposals would just tinker around the edges of our problems.

We still need to ask more fundamental questions before we can see how to go forward with real health care reform, such as: who is the health care system for? (our current answer is the profiteering, mostly corporate stakeholders, not patients and their families); should health care be just another commodity for sale on an open market?; and is health care a personal right (as it is in most advanced countries), or a privilege based on ability to pay?.

Brill and I agree on one reality — the ACA is unsustainable because of its inefficiency, increasing bureaucracy, and unaffordable costs to taxpayers as well as patients and families. As all this becomes more clear, he asks, as we all should, what should follow the ACA? My just released book, “How Obamacare Is Unsustainable: Why We Need a Single Payer Solution for All Americans,” describes and supports the single-payer solution, improved Medicare for all, as a public financing system costing less than the ACA, coupled with a more accountable private delivery system.[7] I hope that readers will read both books and compare their merits based on evidence and experience.

References:

1. Brill, S. America’s Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System. New York. Random House, 2015.
2. Brill, S. Health care expert Steven Brill on Obamacare: “Everybody is happy except the taxpayer.” Real Clear Politics Video, January 5, 2015.
3. Ibid # 1, pp. 418-419.
4. Ibid # 1, pp. 438-441.
5. Reid, TR. The Healing of America: A Global Quest for Better , Cheaper, and Fairer Health Care. New York. The Penguin Press, 2009, pp. 225-226.
6. Brill, S. Ibid # 1, p. 441.
7. Geyman, JP. How Obamacare Is Unsustainable: Why We Need a Single Payer Solution for All Americans. Friday Harbor, WA. Copernicus Healthcare, 2015.

http://www.huffingtonpost.com/john-geyman/brills-bitter-pill-accurate-diagnosis-obamacare_b_6693302.html

By Nancy T. Block, M.D.
The New York Times, Letters, Feb. 16, 2015

As Elisabeth Rosenthal eloquently documents in “Insured, but Not Covered” (news analysis, Sunday Review, Feb. 8), our health insurance system is little better than the nonsystem we had before the Affordable Care Act.

President Obama’s reform was doomed by the failure to exclude the major profit-driven industries (health insurance, drug manufacturers and for-profit, hospital-based medical-industrial corporations) from taking it over and milking it for profits.

Virtually all of the problems (excluding the initial enrollment difficulties) can be attributed to tactics intended to transfer more cost to the consumer (and the government, which is ultimately us), while delivering higher profits for less actual care, which we are discouraged from seeking.

Congressional Republicans propose to turn even more of the system over to private, for-profit entities; instead, we should be instituting “improved Medicare for all.” Covering everyone equally, and eliminating time- and money-consuming confusion with a clearly defined, dependable system, relatively simple to understand and administer, would save billions of dollars while providing better care.

Dr. Nancy T. Block is a psychiatrist. She resides in Berkeley Heights, N.J.

By Steffie Woolhandler and David Himmelstein
The Huffington Post Canada, Feb. 12, 2015

In many countries, bereaved families get condolence cards and flowers. In the U.S., they are also deluged with hospital bills and insurance paperwork.

That paperwork isn’t merely an insult. It costs U.S. society a fortune. Take hospitals, for instance. According to research we recently published in Health Affairs, U.S. hospitals spent $215 billion in 2011 on billing and administration, a striking 1.43 per cent of GDP.

Put another way, about $1 of every $4 of U.S. hospital spending goes to bureaucracy rather than patient care.

Other countries manage modern, first-rate hospital systems for far less. While administration devoured $667 per capita annually in the U.S., we found that Canada spent only $158, Scotland $164, England $225 and the Netherlands $325.

If U.S. hospitals ran as efficiently as Canada’s, the average U.S. family of four would save $2,000 annually on health care.

Moreover, U.S. hospital paperwork costs have risen sharply since 2000, even after adjusting for inflation. In contrast, administration’s share of hospital budgets in Canada has actually fallen since 1999.

A generation ago, it took just one or two managers to run a U.S. hospital. Now, the CEO has been joined by “chief officers” for operations, finance, compliance, information, quality management, and more.

Each chief commands his/her own legions – hundreds of billing and registration clerks, referral managers, upcoding specialists (to translate doctors’ diagnoses into the most profitable billing codes), and massive IT departments whose first commandment is “get the bill right.”

Why are U.S. hospitals so inefficient? Our multiple-payer insurance system forces every hospital to negotiate rates with dozens of insurance plans, each with its own coverage rules, billing procedures and documentation requirements. And each hospital must collect deductibles, co-payments and co-insurance from tens of thousands of patients.

In contrast, Canada and Scotland — where bureaucratic costs are lowest — have single-payer systems that reject this kind of red tape and the need to bill for every Band-Aid. They pay hospitals simple lump-sum budgets, the way we fund local fire stations. And like fire departments, their hospitals don’t need to collect from each victim of misfortune.

But the complexity of hospital billing isn’t the only thing driving bureaucracy. Hospitals have been forced to add layers of business expertise in order to survive in our market-driven system.

A hospital that doesn’t show an operating profit can’t fund essential new investments in new equipment and cutting-edge services, or modern buildings. That means administrators have to devote resources to financial gaming like marketing lucrative services (e.g. sports medicine); billing units to squeeze every penny from insurers and patients; and strategies to recruit profitable (well-insured) patients, and avoid unprofitable (e.g. uninsured) ones.

The dismal record of for-profit hospitals illustrates the problem with running hospitals as businesses. The for-profits have higher death rates and employ fewer clinical personnel like nurses than their non-profit counterparts. But care at for-profits actually costs more, and they spend much more on the bureaucracy, a reflection of the high cost of implementing shrewd financial strategies.

Canadian and Scottish hospital administrators don’t have to play financial games to assure their survival. Government grants — rather than operating profits — pay for new buildings and equipment. Even in France and Germany, where hospitals bill multiple payers, bureaucratic costs are modest because government directly funds most hospital investments.

England and the Netherlands provide unfortunate counter-examples. Pro-market reforms initiated during the Thatcher era have driven English hospital administrative costs sharply higher. And only U.S. hospitals have higher administrative costs than those in the Netherlands, where radical market-oriented reforms now pressure hospitals to show a profit.

Economics textbooks hold that subjecting medicine to market forces will stimulate efficiency and root out waste. But reality stubbornly refuses to obey. In health care, market-oriented policies encourage hospitals to shift resources to business strategies that boost the bottom line, but contribute nothing to care.

Dr. Steffie Woolhandler is an advisor with EvidenceNetwork.ca and co-founder of Physicians for a National Health Program. She is professor of public health at the City University of New York and lecturer in medicine at Harvard Medical School. She is also an internist at the Montefiore Medical Center in New York.

Dr. David Himmelstein is an advisor with EvidenceNetwork.ca and co-founder of Physicians for a National Health Program. He is professor of public health at the City University of New York and lecturer in medicine at Harvard Medical School. He is also an internist at the Montefiore Medical Center in New York.

http://www.huffingtonpost.ca/steffie-woolhandler/canadian-vs-us-healthcare_b_6663650.html