Docs talk about health care reform – sort of

Two weeks ago, The Annals of Internal Medicine posted three articles on health reform and invited readers to comment.  The three articles highlight the perspective of physicians, more specifically internists who generally fit into the category of primary care physicians.  As one commenter notes, the three articles read like committee reports.

There are some pretty heavy hitters among the authors to the three reports so I offer my comments with some trepidation.  Bottom line, they miss the mark.  I have this image of trying to land an airplane when the altimeter is 10,000 feet too high.  The plane just doesn’t seem to touch down.

Except for the details outlined in the EMBRACE program, there is little to disagree with, it is just as if the the wheels just don’t reach the ground.

I administer a benefit plan for about 10,000 employees and retirees and their families.  Every day most of the people who call our office are concerned about losing their health insurance.  In most of those cases, they have been told by their doctor that they have no health insurance.

I’m sure some of those doctors are members of the American College of Physicians, so your members must know there is a problem out there.

In too many cases, the doctor’s office just got it wrong.  The most frustrating are those cases when some cyber leprechaun snatched the member’s eligibility and tossed it to the end of a rainbow somewhere.  There are times when it is the member’s fault.   And some times our office actually made a mistake.  And  for the most part, I am talking about people with insurance.

We Americans struggle to get it right with people who are trying to do the right thing.  That does not even begin to confront the issue of people on the margins of the system.

I can appreciate that your members are focused on evidenced based payment reform.  That is surely high on my list.

Putting the cart before the horse

But I think you are putting the cart before the horse.  Before we can reform the system, we need to find answers to some basic questions.

Question 1.   How do we get patients into the system? I support a system of universal enrollment.  Without patients, doctors have no customers.  Doctors should not need to pay staff to determine eligibility for care.  They should spend their money treating patients.

Question 2.  How do we get the money into the system to pay doctors and hospitals?  I think you are on track with a private, public financing scheme but I don’t think an “insurance exchange” gets us out of many of the vices that plaque our current system.

The method of reimbursement should be simple and clear.   One of the fundamental flaws in our current system is that there is no clear responsibility for the cost of care.  Every payer tries to shift costs to someone else.  It is like the card game Old Maid.

Doctors and patients pay the price for this shell game.  Physicians should not need to pay staff to figure out who should be billed for what service and how to get the balances paid.  They should spend their money on treating patients.

Question 3.  This is the question that the AIM seems to focus on:  How do you distribute the money among providers?  I maintain, that until you have adequately addressed questions 1 and 2, question 3 will continue to be an academic exercise.

We already have too many tiers

One article describes a proposal by the Healthcare Professionals for Healthcare Reform called EMBRACE. The proposal seems to be presented as an alternative to a single payer system.  It outlines a three tier system with each tier offering a slightly richer benefit package.  I suggest we already have a three tier system

Tier 1 – Poor people on Medicaid.  Doctors aren’t paid enough to sustain a quality practice and their patients have no other recourse.

Tier 2 – Old and disabled people on Medicare.  Better than Medicaid, and profitable for some stakeholders, but physicians seem to get squeezed the most.

Tier 3 – Working people with private insurance.  That’s where physicians and hospitals make up for what they lose in the other three market niches.

We could add a high end tier for those doctors who treat wealthy patients who don’t mind paying the balances that insurance companies don’t pay.  And ther are those who never make it to any tier.

If you are just going to overlay universal coverage, then your three tier model may be an economic necessity.  But if you design a system that squeezes the administrative waste and headaches out of the system, you can afford a rich benefit design.  I have been in employee benefits most of my career, and few benefit plans are as rich as what the single payer advocates seem to want.

The current system is not serving patients well and it is not serving doctors well, certainly not primary care docs.   I support a single payer approach as the most rational start to health care reform.  I agree that the single payer plan most discussed does not adequately address payment reform.  It does address questions 1 and 2.  I hope it will clear the deck for an uncluttered discussion of question 3.


4 Responses to Docs talk about health care reform – sort of

  1. wonker says:

    Interesting blog, I’ll try and spread the word.

  2. Thank you for your in-depth analysis of the issues surrounding healthcare reform. I believe that your three questions are important in the machinations of any healthcare system, but I also believe they do not go far enough.
    The aim of our healthcare system should be to improve the health of all Americans. Any new attempt to change the system should start with this aim and this aim alone!
    Clearly to be able to accomplish this in the United States we need to establish a system that 1) has a clearly defined mission (e.g. “improve the health of all Americans), 2) is fiscally sound, 3) is user friendly for both consumers and providers, and most importantly 4) is politically viable.
    The EMBRACE plan was designed with these points in mind. It starts off with the fact that ALL health care systems ration care (because they have limited funds) AND consequently become multi-tiered systems. As you point out so well, we have a multi-tiered system based on income, age and disabilities. This system is inherently inefficient (it costs twice as much per-capita than any other country), and ineffective (the US consistently comes in the bottom third of outcome measures like infant and maternal death rates and life expectancy). In short, our current system practices “irrational rationing’ of care.
    Our group, Healthcare Professionals for Healthcare Reform (, is composed of anyone who has interests in the healthcare system and includes physicians, nurses, public health experts, healthcare economists, health information technologists, business leaders, hospital administrators, politicians and patients. Even our physician membership is quite diverse and not only primary care deliverers (I am a cardiologist) –in fact we would love to have you join us. The group understands that single-payer systems have better outcomes because they have centralized “Boards” who oversee the delivery of healthcare services (this could be thought of as “rational rationing”). We also understand that despite starting off as a single tiered system, almost all single-payer systems end up having multiple tiers. These outside tiers are often treated as the enemy of the government run system and this leads to loss of control of the content of care (not to mention different providers and even hospitals).
    EMBRACE seeks to incorporate the central Board feature of single-payer but allow all the tiers to be in one system. This has many benefits (as outlined in the article), but what is more important it does not lead to a system where a patient has to choose between “in system” or “out-of-system” providers. The Board also has, because it controls the coding and the re-imbursement, the power to favor preventative services and more cost effective treatment. In fact, EMBRACE answers all three of your questions and accomplishes more effective and efficient care for all Americans.

    • jimmy1920 says:

      Dr. Lancaster

      I absolutely agree with you that the aim of any health care system is to improve the health of the population. I think you will also agree that improving the health of the population is more than just the delivery of medical care. But that is another subject.

      There is a lot of discussion within the health care reform debate about the care delivery system – how to organize it, how to pay for it, how to improve it. There is far too little discussion about the patient delivery system. I applaud the Healthcare Professionals for Healthcare Reform for venturing down that path.

      Our perspectives on healthcare reform are shaped by our own experiences. As the gatekeeper to employment based coverage, I see a fragmented and fractured patient delivery system that can only impede efforts to organize and improve the care delivery system. The HPFHR clearly recognizes that. It underlies the concepts built into your Tier 1 plan.

      But I also see a system that lacks accountability. No single payer assumes complete responsibility for its designated population. Each constantly tries to shift as much costs to the others as it can get away with. As healthcare professionals, I am sure you see that every day. In my opinion, it is where most of the administrative inefficiencies lay. I am not sure I understand how your tiered approach avoids that lack of accountability. I also am suspicious that it adds unnecessary administrative complexity to the system (in comparison to a single payer system, not in comparison to the current system). I hope I am wrong.

      Thanks for your invitation to join your organization. I may just take you up on it.

  3. GIL says:

    Hi Jim,
    Part of the problem of the current system is that there are many different types of ways that a consumer (patient) can be covered. These include (but by no means limited to) private insurance, Medicare, Medicaid, VA and corporation/union based ‘co-op’ coverage like you seem to be involved with. This confusing array of plans (and the uninsured) essentially represents multiple tiers of coverage, each with their own rules and each with their own goals. In fact even each type of coverage is an amalgam of systems that make it more complicated. For example, Medicare is not one (public) system any more. Almost half of Medicare is now private with Medigap, Medicare D and the bane of doctors, Medicare Advantage. Each of these privatized Medicare systems (with the exception of Medigap) has competed with Medicare and, I believe is quickly destroying Medicare.
    Congressional audits on Medicare estimate that the overhead to manage “traditional” Medicare is 1-2%, while for Medicare D is 6 times as high! For health care providers who have to hire people who only deal with insurance “pre-approvals” and other bureaucratic B.S. this overhead is much higher (as much as 25%) when dealing with private insurance or privatized Medicare (but not with traditional Medicare).

    EMBRACE( cuts through this mess. Tier 1 (the coverage for evidence-based basic healthcare and preventative services) is managed like “traditional Medicare” is (was?) managed. This means that public funds will pay for these services.
    Tier 2 services (services that do not have enough evidence to be included in Tier1, or deal with quality of life issues) will be paid by private insurance. The only stipulation is that they will have to offer predefined plans off a menu (like Medigap does for Medicare supplements). They can have different deductibles, different prices and even “pre-existing condition” clauses.

    Since there will be a universal billing form, virtually all bureaucratic overhead will be eliminated. In addition, because all the decisions of tier assignments will be made by the “central computer” there will be complete accountability in the payment of services.

    From a provider point of view, there is no overhead AND the provider can offer all services and testing that he/she feels are needed without having to deal with the insurance carrier. For the consumer (patient) there is free access to any provider (which is DEFINITELY NOT THE CASE in the current system or many “single payer” systems). For the system as a whole there is some accountability of the patient, because if they want a service that is not Tier 1 and they do not have Tier 2 coverage, they will have to pay out of pocket. This will allow the consumer to make “medical market place” decisions that should reduce healthcare costs as well.

    This is the “short” answer to your concerns. There is a lot more but I have to get some sleep.

    And BTW, I will put you on our HPfHR email list so you can get some of our updates.
    Please visit our website: and/or our blog :

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