Stan Geiger

Health Care Reform: Wrongheaded

I’ll not claim to be an expert on health care. Nonetheless, I am no supporter of what is presented as reform in Washington these days. One of the reasons for my lack of support has to do with rationale. Politicians seem to think covering everyone with health insurance solves all the problems. I think not. Insurance doesn’t address the core problem. The core problem being medical care in America simply costs too much.

Adding a reported 46 million people to the roles of the insured and expecting that alone to reduce the cost of health insurance for all goes against the grain of the economics I was taught. Increasing demand for a good or service in a free market without increasing supply puts upward pressure on prices, not downward. And I kind of figure people that are paying through the nose for health insurance are more inclined to use it---whether they need to or not. More demand for medical services equals higher prices; higher prices for medical services equals higher payouts for insurers; higher payouts for insurers equals higher premiums.

Add to that the mission to force insurance companies to take on big-ticket clients by not allowing them to cherry-pick. I’m all for that, don’t get me wrong. But that would increase payouts for insurers---and you know what they would do with those increased costs. The companies wouldn’t eat them. In order to maintain profit margins, they would jack up premiums for everybody.

I’ve touched on the problem of foreigners in the past, and I’ll do it again here before moving forward. It is, in fact, impossible to insure everyone in the country unless millions of noncitizens are included. People won’t stand for tax money going to insure aliens, and that kind of blows a hole in the deal from the start.

Last night, I caught a rerun of Frontline’s investigative report on health care. I believe it is called ‘Sick in America,’ or something like that. A reporter went around the developed world looking at how things are done in various countries. It’s an excellent piece.

One thing is certain; no country has the perfect system.

In Britain, of course, there is no private health insurance; the British have nationalized health care. A couple of ladies in their fifties were interviewed by the reporter. They said they had never paid a medical bill in their lives. That sounds great. But there is the issue of the taxation to support such a system.

The British system bars people from going to specialists without first going through what they call a “gatekeeper.” Gatekeepers are the general practitioners. A gatekeeper was interviewed for the report. He noted the bonus money that was available to him for, basically, taking good care of his patients. He mentioned the sum of 80,000 pounds per year. In American dollars, that’s about double the figure in pounds. In other words, gatekeepers in Britain are rewarded for success, not for scheduling the maximum amount of appointments, tests and procedures.

The gatekeeper, it turned out, had some firsthand knowledge of health care in America. He had experienced a heart attack while vacationing in Las Vegas. He said the care he received was excellent. He also said he spent several days in a hospital recovering and the bill for his stay was $67,000. He called that ridiculous.

I have written of the Japanese system in which private insurance is mandated, the government picks up the tab for the poor and, in exchange, sets prices for alls things medical.

Medical care in Japan is quite cheap. The report said a night in a Japanese hospital---if spent in a shared room with four other people---costs 10 bucks. If one chooses a private room, the tab is a whopping 90 bucks. That’s less than the cost of a night in a freakin’ hotel. But, like I said, there is no perfect system. A Japanese official said 50 percent of Japanese hospitals are on the verge of going under.

On the upside, however, was a discussion about MRIs. The reporter said an MRI of his neck would cost $1,200 in America. In Japan, the same scan costs $95. Obviously, it is hard to buy a big fancy machine for $5 million, charge $95 a pop for its use and stay in business. So Toshiba went to work. That company designed and built a smaller, cheaper, machine for the task. The report says Toshiba is now shipping those machines all over the world.

What’s that they say about necessity being the mother of invention?

In Taiwan, people are issued smart cards that can be carried around in a wallet like a credit card. The card is inserted into a reader and a patient’s entire medical history will come up on a computer screen in any medical facility in the country. That sounds like a good idea to me. The smart card gets rid of all that transferring of data from one place to another. The smart card would also be of grand value in an emergency situation. An ER doctor could read the card and immediately have a better idea of what to do or what not to do.

The smart card also electronically bills the government for the visit. I don’t recall if private insurance is part of the mix in Taiwan or not. But, apparently, all of the billing runs through the government, electronically. That sounds like a good idea, too. Such a method gets rid of tons of paperwork, the massive filing of forms back and forth between patients, providers, insurers and the government itself.

I recall seeing a network news story a year or two back. It featured a woman that had dutifully paid premiums for disability insurance for years. She came down with something, MS maybe. Anyway, she had to quit working and filed a claim. The insurance company buried her in paperwork. Every time she finished a pile and sent it in, the company sent her another pile. She said she had spent entire 8-hour days filling out forms.

This, of course, is a strategic maneuver employed by insurance companies. A company hopes to wear a petitioner down, making a petitioner give up on the claim so the company doesn’t have to pay. And that’s BS.

A last interesting point about Taiwan: If a patient goes to the doctor 20 times in a month or 50 times over 3 months, the patient gets a visit from a government official to find out why. I suspect that is intended to cut down on fraudulent operations.

I am opposed to the so-called “public option.” I just don’t see how a supposed nonprofit government insurance company and private for-profit insurance companies could peacefully coexist. I would prefer health insurance stay private, exclusively, aside from Medicare and Medicaid, of course. Although, the cost of Medicaid, one assumes, would drop dramatically in an environment of more privately-insured individuals. If there is to be a mandate, the government will have to eat the premiums for those that can’t afford them. Meanwhile, wealthier types would be free to buy all the coverage they want.

How does one fund the federal government paying health insurance premiums for millions of people? That one’s easy: get rid of a bunch of needless crap the federal government pays for now.

I think there are a couple things that need serious consideration.

One has to do with health insurance profits. A common thread runs through other nations’ systems that include private health insurers: profits on health insurance are severely limited if not eliminated. Health insurance providers can exist, the services and jobs they provide can exist, but profits for investors have to go. What would that hurt? Investors have plenty of places to go for returns; they don’t need health insurance profits.

The other has to do with routing payments for all things medical through the federal government. I know that sounds a bit radical but hang with me.

Let’s say I get sick, hit the emergency room and land in a hospital bed for a few days. I get a bill for, oh, $100,000. I’m sunk. Fortunately, however, I have insurance. But the insurance company says it won’t pay for this, that or that. I’m still sunk.

But let’s say the bill for my stay goes not to me or my insurance company. Let’s say it goes to Uncle Sam. And the battle begins.

First, the hospital has to convince Uncle Sam that the bill hasn’t been padded. In other words, Uncle Sam can tell the hospital its bill is exorbitant and cut it in half.

Second, Uncle Sam goes to my insurance company for full reimbursement of the bill he decided to pay.

If either entity wants a dispute, its dispute is with Uncle Sam. I’m out of the loop, free to go on with my life.

See, an individual like me has no power against a hospital or an insurance company. I’m handed a bill, reasonable or not, and that’s the bill. My insurance company tells me what it will or will not cover. What’s my recourse? Do I hire a lawyer? Big money interests have lawyers on the payroll. They can afford lengthy legal battles. If I have no money, how do I pay a lawyer?

If hospitals and insurance companies want to fight, let them fight with an entity that can stand toe-to-toe with them.

This piece has turned into an unintended dissertation. I will offer my apology and make a final point concerning Germany.

The reporter in the Frontline story talked with a German doctor. She makes about half what an American counterpart gets paid. But a couple of key points were mentioned.

First, she pays $1,400 a year in malpractice insurance premiums. The report said that’s about a tenth of what an average American physician has to pay. If we are to reduce the cost of medical care, overhead has to be reduced. Tort reform has to be part of the package.

Second, the report said the lady went to med school for free. That point deserves attention all to its own. I will expound later.

There’s a myth in this country that says we have an elected body known as Congress that writes laws. Congress doesn’t write laws; lobbyists write laws. In the case of health care, lobbyists representing those making money in medicine and those making money selling insurance are writing the bills.

I’m all for health care reform. But let’s try to focus on the root problem rather than the interests of the few, shall we?

---