August 9, 2001

“Medicare spending has also risen, by 8.4 percent. The growth rate has been accelerating since increased payment rates to health care providers took effect in April. For the entire year, CBO estimates that spending for Medicare will grow by 10 percent.”

http://www.cbo.gov/showdoc.cfm?index=2981&sequence=0&from=7

Comment: These numbers will certainly be used by those that want to “modernize” (i.e., privatize) Medicare, with the claim that the current Medicare program is inefficient. In fact, the traditional Medicare program has been much more efficient that the private Medicare HMO plans. Recent increases in Medicare spending have been only about 3 percent per year. Much of this year’s higher increase was due to intense lobbying efforts by the managed care industry. They were successful in gaining significant increases for their industry that were well in excess of the statutory limits of the Balanced Budget Act of 1997. We cannot allow the privateers to advance the claim that Medicare is inefficient, when the inefficiency lies primarily within their own industry.

Today’s message from Kip Sullivan, which follows in the next e-mail, you may be inclined to delete since it appears to be another long response in the current Reinhardt-Sager-LeBow-Sullivan series, and most of you are too busy for this. Please bear with us on this one. Sullivan describes one of the most important policy issues facing us today as we struggle with the issues of expanding coverage while containing costs. A major emphasis is being placed on controlling costs by creating patient-consumer cost-sensitivity, or “empowering” the patient-consumer in the health care marketplace. In reading Sullivan’s comments, I would suggest ignoring the challenge to LeBow in order to concentrate on the important policy behind his comments.

Don

Bob,

I disagree with your variation on Uwe’s criticism of “the American people.” Your version is that the American people are to blame for the world’s most expensive health care system because we want too many health services. You rested this rather controversial statement on the comment of a single patient that America’s health care system is expensive because Americans “expect the world.”

I make three points in this response:

(1) If we really must speculate on whether overuse of the US health care system is worse than underuse, the evidence should cause us to lean toward the conclusion that underuse is a worse problem.

(2) Your argument that “Americans expect the world,” even qualified as it was by your statement that our insane longing for medical services is abetted by corporate advertising, assists the right-wing in its quest to maintain a market-based system in the US.

(3) Your argument that drug company advertising is contributing to the high cost of health care is correct, but drug advertising is a minor issue compared to the other causes of the health crisis.

We do have some evidence that a few services are overused (e.g., bypass surgery and hysterectomies, and antibiotics), but we also have substantial evidence that the system is greatly underused. I’m thinking here primarily of the uninsured and the underinsured. I’m also thinking of evidence, including the Surgeon General’s recent report, indicating great underuse of mental health services. The seemingly intractable problem of low-quality nursing home care could also qualify as an example of underuse. I could list other evidence of underuse.

I won’t commit the mirror-image sin I’m accusing you of, that is, I won’t go out on a limb and say underuse of the US health care system is far worse than overuse. But I will say that existing evidence does not warrant the statement that “Americans want the world” and that this insane wanting is causing the US health care crisis. You can say it if you like, but you should note you’re engaged in pure speculation.

I believe the opinion of the patient you quoted is not based on her personal experience but is rather the product of the propaganda machine of the gigantic right wing in the health care debate — the health insurance industry, the AMA, big pharma, the Jackson Hole Group, hangers-on in academia, the Republican party, and a substantial number of Democrats who wish they were Republicans. This unholy alliance has drowned out competing explanations of the US health care crisis, to wit, that administrative costs and prices are excessive. This alliance claims that the health care system is expensive because patients want services they don’t need and because greedy doctors are eager to acquiesce to the demands of their dumb and/or gullible patients.

If the US is going to be forced to retain a market-based health insurance system, it is essential that the public be fooled into thinking that the primary cause of high costs is the consumption of an excessive volume of drugs and medical services, not the price of those drugs and medical services. If the public and law-makers can be fooled into thinking that the problem is primarily high volume rather than high price, they are more likely to be influenced by advocates of HMOs, MSAs, and defined-contribution schemes (e.g., Bush’s Medicare voucher plan). As long as the “volume is the problem” mantra reigns supreme, HMO advocates get to claim that someone has to do the dirty work of wiping out all those unnecessary services, and better to have HMOs do that than some government bureaucrat. And MSA and defined-contribution advocates get to claim that unnecessary services will be wiped out by “consumers” thinking twice about whether they actually need this or that service because now they have “first dollar exposure,” not “first dollar coverage.”

But if the public and law-makers understand that over-utilization of the health care system is minimal or atypical and perhaps more than offset by gross underuse, market advocates have a much tougher row to hoe. If overuse is atypical, HMO advocates have to admit their professed raison d’etre doesn’t exist, and MSA advocates have to give up pretending that MSAs will save money by cutting services and will instead have to peddle the implausible fantasy that MSAs will save money because patients will now be motivated to bargain with drug companies, hospital chains, and clinics for lower prices. The notion that the US health care system will enjoy substantial savings from patients driving hard bargains with drug companies, hospital chains, and clinics is too ludicrous for words.

Finally, I would like to offer the unfashionable view that the great brouhaha about drug advertising is a tempest in a teapot. Yes, drug advertising appears to be causing too many Americans to demand expensive drugs when less expensive drugs or no drugs at all would do. But total US health care costs in general, and drug costs in particular, were double those of the rest of the First World before the FDA gave the drug industry permission to do direct-to-consumer advertising, and they’re double now. The relative contribution that drug advertising makes to total health inflation is small, and the relative contribution it makes to the enormous disparity between US and rest-of-the-world health costs is very small compared to other factors, to wit, no drug price controls, no controls on provider expenditures, and a multiple-payer system with all its administrative costs.

The next time you hear a patient spouting HMO and right-wing theories of the health care crisis, I urge you to inform her she’s repeating speculative agitprop, not well established fact.

I leave town for a month in a few hours, so I won’t be able to respond to any brickbats or kudos. I wish everyone a cool remainder of the summer.

Kip Sullivan

Excerpt from a message dated 8/11/01:

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AMNews
August 20, 2001
by Cheryl Jackson

“Leaders at the Queen City Physicians Group in Cincinnati figured that if drug company representatives wanted to lavish their doctors with gifts, why not instead have the reps give something that would help the practice and its patients? Hence, the thought process that led to the 56-physician multispecialty group’s plan to charge $65 for a 10-minute visit to listen to a pitch from a drug company sales rep.”

Frank A. Reddick, M.D., chair of the AMA’s Council on Ethical and Judicial Affairs (CEJA):

“This is setting up a commercial relationship, and it might prove a refreshing approach in that it’s a straightforward transaction. Whatever the pharmaceutical reps would have you say about their role, their role is a commercial one.” “Putting it on a flatly commercial way to access the physicians might actually lead to fewer of the sort of concerns that CEJA or the AMA has about gifts to physicians and some things that really aren’t related to the physician’s practice, like taking them to the ballgame. It may prove the wave of the future.”

http://www.ama-assn.org/sci-pubs/amnews/pick_01/bil20820.htm

Comment: From an unrelated letter in the same edition of AMNews:

Herbert Rakatansky, M.D., immediate past chair of CEJA:

“There is clear evidence that acceptance of similar gifts from industry influences prescribing habits. Such gifts are prohibited by opinion 8.061. Doctors who accept such gifts maintain they are not so influenced. The literature suggests otherwise. It is desirable for physicians to avoid even the appearance of impropriety in these circumstances.”

The new chair of AMA’s CEJA could learn from the prior chair. Or is this another unfortunate misstep in the transformation of the AMA?

AMNews
August 20, 2001
by Cheryl Jackson

“Leaders at the Queen City Physicians Group in Cincinnati figured that if drug company representatives wanted to lavish their doctors with gifts, why not instead have the reps give something that would help the practice and its patients? Hence, the thought process that led to the 56-physician multispecialty group’s plan to charge $65 for a 10-minute visit to listen to a pitch from a drug company sales rep.”

Frank A. Reddick, M.D., chair of the AMA’s Council on Ethical and Judicial Affairs (CEJA):

“This is setting up a commercial relationship, and it might prove a refreshing approach in that it’s a straightforward transaction. Whatever the pharmaceutical reps would have you say about their role, their role is a commercial one.” “Putting it on a flatly commercial way to access the physicians might actually lead to fewer of the sort of concerns that CEJA or the AMA has about gifts to physicians and some things that really aren’t related to the physician’s practice, like taking them to the ballgame. It may prove the wave of the future.”

http://www.ama-assn.org/sci-pubs/amnews/pick_01/bil20820.htm

Comment: From an unrelated letter in the same edition of AMNews:

Herbert Rakatansky, M.D., immediate past chair of CEJA:

“There is clear evidence that acceptance of similar gifts from industry influences prescribing habits. Such gifts are prohibited by opinion 8.061. Doctors who accept such gifts maintain they are not so influenced. The literature suggests otherwise. It is desirable for physicians to avoid even the appearance of impropriety in these circumstances.”

The new chair of AMA’s CEJA could learn from the prior chair. Or is this another unfortunate misstep in the transformation of the AMA?

The Washington Post
August 11, 2001
by Juliet Eilperin

“Rep. Dan Burton (R-Ind.), chairman of the House Government Reform Committee, arranged for an unusual government-paid trip to Frankfurt and Bonn this week to investigate the German postal system. He is also visiting his wife, who is receiving medical care in Frankfurt, according to the congressman’s aides.”

http://www.washingtonpost.com/wp-dyn/articles/A61368-2001Aug10.html

Comment: This is a very difficult report on which to comment. Those of us that dedicate our lives to health care are always saddened to hear stories of serious medical problems that require extraordinary measures. Our first and overriding response is the deep concern that we have for Mrs. Burton and for her family that shares in the pain of her difficult challenges. Any comments that follow inevitably will be interpreted by some as being callous for having used this opportunity to posture politically, but the posturing is precisely on behalf our concerns about access to health care for everyone that faces similar difficulties.

On to the comments:

What rhetoric predominates today?

Examples:

American has the best health care in the world.

We must continue to support research by our technological and pharmaceutical firms that are providing us with the most advanced care available, no matter what the cost.

Everyone should have the same insurance that members of Congress have (FEHBP).

Medicare needs to be modernized, giving beneficiaries choice like the federal employees have with the FEHBP program.

We don’t want a government program of health care.

Etc., etc.

Most of those reading these comments recognize this rhetoric, and understand the policy issues that drive it. There are very serious problems with our health care system, especially in access and coverage in a system that is infamous for wasting our abundant resources. Our national policies continue to favor the entrepreneurial elements in the health care system while continuing to neglect the unmet needs of the people. Unfortunately, the rhetoric continues to drive the displacement of our national priorities, as if the unmet needs were merely a nebulous construct, rather than real needs of real people.

Back to the difficult part of this message. We need to look at the actions of Rep. Burton, a man who is now deeply and intimately involved with the real needs of a real person. This overriding issue makes it impossible to fault his actions. He is making the best decisions he can in a very difficult, trying situation. He has walked away from “the best health care system in the world” and gone to another country that offers some of the best care available. He has walked away from “the most advanced research and technology” to another nation that likewise has advanced research and technology. With FEHBP coverage, he has his choice of any care within the limitations of his plan, but he elects to go to a country that happens to assure that care is covered and accessible for essentially everyone, with virtually no restrictions on providers. At home, he continues to work with elements in our society that want to keep government out of our health care. Yet he accepts a government funded health plan, and even is not above accepting government transportation for a combined personal and quasi-government-business trip. Apparently Rep. Burton does want the government involved in health care when it is providing him and his loved ones with access and coverage.

Real people have real needs. None of our needs are met by rhetoric. In health care, they are met partly by our own personal efforts. But clearly most of us by ourselves can never assure that we can meet the financial demands of catastrophic illness, nor the public health protections that can be provided only on a population basis, nor the assurance that the health care infrastructure will be there when we need it, nor the assurance that our resources will not be frittered by Wall Street and by the technological and pharmaceutical firms that have their own priorities which they have placed higher than the public good. Real people with real needs can expect those needs to be met only with a combination of personal effort balanced with a public effort that places reality above rhetoric.

Uwe Reinhardt comments on Bob LeBow’s response:

“It is hard to argue with Bob. He is totally right.”

Repeating the concluding remarks of Bob LeBow’s response:

Our system seems to embrace the ideals of “personal responsibility” for the poor but “personal opportunity” for the rich. Community benefit? That would be socialism. So “personal opportunity,” with its double-digit inflation result, has set the tone for American health care. We can see that with the direction our system is taking, the poor and near-poor will be increasingly left out, priced out of the market, by the “opportunists” who will then continue to lecture the less well-off about “personal responsibility.”

Yes, we have created a monster, but some folks are more to blame than others.

The Washington Post
August 11, 2001
by Juliet Eilperin

“Rep. Dan Burton (R-Ind.), chairman of the House Government Reform Committee, arranged for an unusual government-paid trip to Frankfurt and Bonn this week to investigate the German postal system. He is also visiting his wife, who is receiving medical care in Frankfurt, according to the congressman’s aides.”

http://www.washingtonpost.com/wp-dyn/articles/A61368-2001Aug10.html

Comment: This is a very difficult report on which to comment. Those of us that dedicate our lives to health care are always saddened to hear stories of serious medical problems that require extraordinary measures. Our first and overriding response is the deep concern that we have for Mrs. Burton and for her family that shares in the pain of her difficult challenges. Any comments that follow inevitably will be interpreted by some as being callous for having used this opportunity to posture politically, but the posturing is precisely on behalf our concerns about access to health care for everyone that faces similar difficulties.

On to the comments:

What rhetoric predominates today?

Examples:

American has the best health care in the world.

We must continue to support research by our technological and pharmaceutical firms that are providing us with the most advanced care available, no matter what the cost.

Everyone should have the same insurance that members of Congress have (FEHBP).

Medicare needs to be modernized, giving beneficiaries choice like the federal employees have with the FEHBP program.

We don’t want a government program of health care.

Etc., etc.

Most of those reading these comments recognize this rhetoric, and understand the policy issues that drive it. There are very serious problems with our health care system, especially in access and coverage in a system that is infamous for wasting our abundant resources. Our national policies continue to favor the entrepreneurial elements in the health care system while continuing to neglect the unmet needs of the people. Unfortunately, the rhetoric continues to drive the displacement of our national priorities, as if the unmet needs were merely a nebulous construct, rather than real needs of real people.

Back to the difficult part of this message. We need to look at the actions of Rep. Burton, a man who is now deeply and intimately involved with the real needs of a real person. This overriding issue makes it impossible to fault his actions. He is making the best decisions he can in a very difficult, trying situation. He has walked away from “the best health care system in the world” and gone to another country that offers some of the best care available. He has walked away from “the most advanced research and technology” to another nation that likewise has advanced research and technology. With FEHBP coverage, he has his choice of any care within the limitations of his plan, but he elects to go to a country that happens to assure that care is covered and accessible for essentially everyone, with virtually no restrictions on providers. At home, he continues to work with elements in our society that want to keep government out of our health care. Yet he accepts a government funded health plan, and even is not above accepting government transportation for a combined personal and quasi-government-business trip. Apparently Rep. Burton does want the government involved in health care when it is providing him and his loved ones with access and coverage.

Real people have real needs. None of our needs are met by rhetoric. In health care, they are met partly by our own personal efforts. But clearly most of us by ourselves can never assure that we can meet the financial demands of catastrophic illness, nor the public health protections that can be provided only on a population basis, nor the assurance that the health care infrastructure will be there when we need it, nor the assurance that our resources will not be frittered by Wall Street and by the technological and pharmaceutical firms that have their own priorities which they have placed higher than the public good. Real people with real needs can expect those needs to be met only with a combination of personal effort balanced with a public effort that places reality above rhetoric.

Uwe Reinhardt comments on Bob LeBow’s response:

“It is hard to argue with Bob. He is totally right.”

Repeating the concluding remarks of Bob LeBow’s response:

Our system seems to embrace the ideals of “personal responsibility” for the poor but “personal opportunity” for the rich. Community benefit? That would be socialism. So “personal opportunity,” with its double-digit inflation result, has set the tone for American health care. We can see that with the direction our system is taking, the poor and near-poor will be increasingly left out, priced out of the market, by the “opportunists” who will then continue to lecture the less well-off about “personal responsibility.”

Yes, we have created a monster, but some folks are more to blame than others.

U.S. Department of Health and Human Services Agency for Healthcare Research and Quality
Evidence Report/Technology Assessment, Number 17 March, 2001

“It is estimated that over 45 million people in the United States have acne vulgaris…” “Coupled with loss of productivity and unemployment, the direct cost of acne may exceed $1 billion per year in the United States.”

Findings: * “The literature is extremely heterogeneous, severely limiting the number of meaningful conclusions…” * “Evidence for subpopulations is either not available or reported in such varied manner as to prevent meaningful integration.” * “Evidence for quality-of-life outcomes and cost is not available.” * “Of 250 comparisons, only 14 had evidence of level A.” (Level A = moderate to strong evidence of a clinically meaningful endpoint) * “The literature is not organized to differentiate responses to (different levels of) therapy.”

http://www.ahrq.gov/clinic/acnesum.htm

Comment: If we cannot evaluate the management of the most common medical disorders, how can we ever make decisions about the proper allocation of our resources? An integrated, information technology system that links together our entire health care system would move us much closer to a model that would more readily provide answers to these fundamental questions about health care and our health care resources. Yes, there is much more work to be done to refine the information technology tools that would enable this, but we are moving much closer to that reality. Some of the challenges are discussed in the publication, “Networking Health” published by the National Academy Press (http://www.nap.edu).

Attempts at integrating our fragmented health care system, as exemplified by the Healtheon model, have failed miserably, largely because of conflicting interests in the marketplace. The framework that would enable integration would be a universal system of publicly-administered health insurance. Through an integrated information technology system for health care, we could help to provide a basis for making rational decisions on where our health care dollars would be wisely spent, and avoid wasting them on ineffective services. We will never achieve high quality until we develop a health care structure that drives quality.

Gerald Gollin, M.D., Assistant Professor of Pediatric Surgery at Loma Linda University School of Medicine, comments on the underfunding of pediatric care in El Paso, and the implications for access to care for all of us:

I am one of the pediatric surgeons mentioned in the NY Times article who left El Paso because a children’s hospital was not built. The article is exactly right that the situation in El Paso is what much of the rest of the country can expect with the current system. Just making more people eligible to share the same limited pot of funds is not going to work, even though it makes us feel good to say that more people are being “covered”. The only way that my partners and I can make it in Southern California is that we have a mechanism to share in the disproportionate share that our hospital receives from the state. If not for that, it would be impossible to care for our population that is well over 50% MediCal. The shortage of pediatric subspecialists in California is critical and it effects all children–even those with full insurance. It is the same situation in El Paso. There are no pediatric surgeons–no matter how much money a patient’s family has–so a child with a surgical emergency is up the creek.

Gerald Gollin, MD

Comment: Dr. Gollin clearly confirms the premise in yesterday’s quote and comment. In spite of our great resources, we do not have an effective structural system for allocation that would assure efficiency in the use of those resources. Dr. Gollin has demonstrated that our current fragmented system of allocation has resulted in the total deprivation of pediatric surgical services for everyone living in El Paso, and also has resulted in the need to resort to the defective and unreliable policies of gamesmanship and cost shifting to fund pediatric surgical services in a mecca of health care.

Maldistribution of resources is not just a problem for the poor. It is now affecting all of us, even the most affluent. The Los Angeles Times published an article that provides yet another example. Inadequate resources are being directed to our emergency rooms, threatening their solvency. This is partly because of the burden of caring for uninsured individuals that, by default, are forced to use emergency rooms as their primary source of care. In a follow-up editorial, the Los Angeles Times stated what this means to all of us. “We can be rich. We can have health insurance. We can have our federal tax rebate check in our back pocket. None of this will do us any good if we’re in the back of an ambulance and the nearest hospital emergency room is full.”

Providers will always compete with each other for the resources that we do have. But if this competition occurs within a system designed to optimize allocation, we will all have access to better care. Only a unified, single payer system offers this promise. Health policy analysts understand this. But if we are to convert this principle into action, we must make every effort to be sure that the voters understand as well.

Los Angeles Times:

“Amid Nationwide Prosperity, ERs See a Growing Emergency” http://www.latimes.com/news/printedition/la-000063865aug06.story

Editorial, “Closed Door at the ER” http://www.latimes.com/news/local/la-000064011aug07.story

The New York Times:

“A City Struggles to Provide Care Ensured by U.S.” http://www.nytimes.com/2001/08/07/national/07CARE.html

The New York Times
August 7, 2001
by Jim Yardley

“El Paso – For the last year, an ambitious campaign by this border city focused on a critical if not particularly glamorous role: enrolling poor children for federal health benefits.”

Dr. John Guggedahl, an El Paso pediatrician: “The good news is that these children do have some access to the delivery system. The bad news is that we don’t have an adequate pediatric delivery system, because of chronic underfunding for so many years.”

Dr, Gordon McGee, chairman of the Border Health Institute: “A physician who takes nothing but CHIP and Medicaid can’t make money.”

Sara Rosenbaum, a professor of health law at George Washington University: “What El Paso is experiencing is a look into the future for all of us if we don’t come up with a national health policy.”

http://www.nytimes.com/2001/08/07/national/07CARE.html

Comment: With the $1.1 trillion that we spend on health care each year, we have more than enough funds to provide high quality, comprehensive health care for everyone, while providing very comfortable incomes for the providers of care. What we do not have is an effective method of distributing those resources such that we can assure that the delivery system is funded fairly and waste of our resources is minimized.

Our current system is designed on a business ethic that mandates pulling resources out of the system, away from patient care. We clearly need to adopt a national health policy that rewards providers for maximizing the utilization of resources for patient care. There is absolutely no question that a publicly administered, universal insurance program would provide the requisite framework. Representatives of the various components of our health care system certainly would continue to advocate for larger allocations of the available funds. But at least this form of “allocation shifting” would be shifting resources between various patient care needs based on priorities, rather than our current fragmented system that shifts allocations unfairly, resulting in excess funding of some sectors, a clear waste of resources, and grossly deficient funding of others, especially those sectors attempting to meet the needs of the most vulnerable members of our society.

We have the resources. Let’s now adopt a rational national health policy to properly manage those resources.

The American Medical Association
June, 2001

Principle IX: “A physician shall support access to medical care for all people.”

Adopted by the AMA House of Delegates June 17, 2001

http://www.ama-assn.org/ama/pub/category/4256.html

Comment: Access and coverage are different issues, but the greatest impediment to access is the lack of adequate health insurance. Although access problems related to our health care infrastructure must be addressed, truly universal access is impossible without comprehensive, universal insurance. Creating a universal health insurance program is the greatest and most urgent priority if we are to realize this goal of universal access. Let’s start the process now. After all, the House of Delegates of the American Medical Association has declared it to be unethical not to do so!

The New York Times
August 5, 2001
by Robin Toner

“Robert J. Blendon, a professor of health policy at the Harvard School of Public Health, said the public is closely divided on whether the government is doing too much or too little. But on Medicare, it’s not a close call, particularly among the elderly.”

http://www.nytimes.com/2001/08/05/weekinreview/05TONE.html

Comment: Dr. Blendon and others have demonstrated that Americans have accepted the rhetoric that we do not want the government involved in our affairs. In fact, Dr. Blendon’s polls, produced jointly with The Washington Post and Kaiser Family Foundation, have been used in Washington to dismiss discussion of universal, publicly administered insurance. But now, Dr. Blendon separates rhetoric from reality. The public emphatically supports publicly administered insurance in the form of Medicare, albeit for a segment of our population. We Americans may be protective of our rhetoric, but, we’ll always dismiss rhetoric in favor of the reality of health care security once we have it.