Posts Tagged US healthcare

Tiers of U.S. Healthcare

A recent U.S. presidential-candidate debate included proposals on Medicare-for-all, care for illegal immigrants and private insurance: supposedly a three tier system. Exactly which existing tiers would be removed, which would be funded and how would the budget for care work?

Consider the layer cake of U.S. healthcare, as it exists. Start at the top where little figures of a bride and groom might stand. That is the highly-privileged care provided to members of Congress and many government employees (“Cadillac” health plans with a large percent government subsidized plus pre-tax perks). That insurance provides good care (not as good as the care in the French system, but pretty good).

The next tier is the “CEO” or “rich guy” healthcare. They have so much money they don’t need insurance. They just buy what they want at big name hospitals with private suites staffed by nicely dressed doctors in suits and young nurses with little pointed hats. The motto is “whatever you want”. CT scans of everything happen at least once a year and heart tests proceed just because “you can’t be too careful”. And, heavens, the food you like is on your diet. Rating of care: poor.

The next tier is a hodgepodge of layers or “options” offered by many insurance companies like Blue Cross, UnitedHealthcare, Aetna etc. These are mostly provided through an employer group plan. And, sometimes purchased individually at a higher cost if the person is part-time or retired before age 65. Some plans have high deductibles and high co-pays that financially make care difficult to obtain. Some closed panels of providers limit where a person can obtain care and limit the options for moving or travel. The insurance companies scrape off 15% of the icing (administrative fees). Rating of care: fair to good.

Next is the Medicare tier divided into several layers including Medicare with a supplement (fee-for-service) and Medicare Advantage (per-capita). Rating of care is good with a plus for lower cost compared to the higher layers. Unfortunately, Medicare does not negotiate drug prices according to laws supported by drug companies. Rating of care: good.

Next are decorations of socialized medicine. These include the Veterans Administration, Indian Health Service and various levels of military healthcare (Tricare). Rating of care: good.

Next is Medicaid. A State run and federally supported insurance for the poor. It is limited by budgets and willing providers. Rating of care: fair if you qualify, but many who need care don’t qualify for a variety of reasons.

Finally, the bottom layer. The layer for those with no insurance and no funds. All States require emergency rooms to provide care to “stabilize” a mental or physical illness. Anyone can obtain health care in the U.S. based on this nearly insane model where people wait until they are really sick to receive care in the most expensive setting. The bills, which none in this layer can pay, are astronomical and serve only to further bankrupt the unfortunate. Rating of care: poor with no connection to a primary care provider or mental health follow-up.

In conclusion, the recent superficial debate about healthcare seems to hinge on hot-button issues like rich insurance companies, greedy drug companies and desperate immigrants who become sick. Of course healthcare costs money — only a politician would say otherwise. The healthcare system we have or will have is exactly what we plan.

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US Healthcare — a foolish consistency


Ralph Waldo Emerson is not usually associated with healthcare.  However, his famous quote about consistency may apply.  The US healthcare system seems to be quite consistent, in a bad way.

The Perspective section of the September 7, 2017 edition of the New England Journal of Medicine featured an opinion article by Eric Schneider and David Squires.  The essence of the article is to point out the US healthcare system has a lot of potential, receives lots of money, discovers great treatments and has some institutions that really deliver good care.  The authors suggest with a change in focus US healthcare could be number one in the world.  Yet, it is not.  And, it maintains a poor rating CONSISTENTLY.

The authors state key strategies for improving healthcare:

  1. Timely access to care (preventive, acute and chronic)
  2. Delivery of evidence-based and appropriate care services.

They note several things that stand in the way of delivering care of any type:

  1. Cost of care (US is number one)
  2. Administrative burden (US is number one)
  3. Disparities in the delivery of care (US rates very high)

In any large US city the profusion of stand-alone emergency rooms is testament to the failed notion of high-cost rescue treatment rather than low-cost prevention or ongoing monitoring and early intervention.   The US tends to invest in high-cost drugs, treatments and surgeries and under-invests in primary care and social services.  The failure to adjust the focus of healthcare efforts has become a financial train wreck.

The authors of the above article present four prescriptions for US healthcare:

  1. Improve access to care
  2. Increase investment in primary care
  3. Reduce the administrative burden
  4. Make healthcare more equitable, so all people can receive good healthcare

However, those lofty goals require something else.  The US must stop the foolish consistency of accepting poor health care, of paying too much for healthcare and believing great inventions automatically lead to great healthcare.

Perhaps the Emerson quote is too painful.  An Albert Einstein quote may be better:

“The world we have created is a product of our thinking;  it cannot  be changed without changing our thinking.”

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Healthcare Standstill — poor prognosis

So, what’s the problem with US healthcare?  What’s the fix?  What’s the medication for the ailing health system?

Start over.  Begin again.  Throw out the mess.

Usually, complicated problems are solved incrementally by finding each small problem and fixing each one until the huge problem is resolved.  This approach has failed healthcare in the United States.  The evidence is overwhelming.

  • rising cost
  • declining health
  • inability to train enough workers
  • high infant mortality
  • inability to control drug costs
  • focus on cost instead of health
  • fragmented improvement efforts


The measure of a healthcare system is an average.  It’s not whether one guy is cured from leukemia but whether the average baby survives, the average citizen can get a doctor appointment, can purchase medications, and can have surgery if needed.

Sadly, if you are a legislator every problem looks like a financial problem — you can pay more or pay less.  You tried the first option so now you want to try the second option.

Supply and demand economics does work  But, it just has to be applied the correct way.  If the salary paid to a lawmaker is dependent on improving health in the country then the economic theory would work fine.  It does not work fine when complicated treatments are marketed to a population with low health literacy (and that includes the President and Congress past and present).

The reason Medicare-for-all seems so appealing is because it is a system.  Perhaps it’s not as good as the systems in other countries, but it’s the system we know.  It’s time to stop complaining about cost and complexity.  DO SOMETHING and KEEP IT SIMPLE.

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Bitter Pill — redesign of health care

A fantastic article about US health care was published this week.

Time Magazine March 4, 2013 “Bitter Pill:  Why Medical Bills are Killing Us” by Steven Brill

There are two main lessons from Mr. Brill’s article.  First, as a business, US health care is doing quite well financially.  Second, the overwhelming drive for profit is bankrupting patients and the US economy.  He makes a damning case US healthcare has disconnected the actual cost of care from the high charges for care.  Mr. Brill has exposed the unethical side of US health care.

If  Mr. Brill’s article has a weakness it would be the suggestions for correcting what he has found.  He proposes a few solutions but he acknowledges, as a journalist, he was not looking for solutions.  However, he is on the right track — the US clearly needs to redesign the health care system and, he makes a very good case for Medicare as central to any effort at cost containment.

The following suggestions for redesigning our health care system spring from the collision of high cost, poor quality and the belief an expansion of Medicare will help to solve the crisis.

1. Allow all citizens to buy into Medicare at any age (some would pay more than others according to risk and ability to pay)
2. Mandate that all health care subsidized by the US government (Medicare, Medicaid, postal workers, veterans administration, indian health care etc) is covered by Medicare (consolidate the vast array of  plans to just one — make it simple and manageable).
3. Allow the States to purchase Medicare for their workers — a big cost savings for the States.
4. Mandate employers to provide healthcare for all workers — Medicare would be an option  — but  the health care benefit must be at least as good as Medicare.
5. Allow the FDA to evaluate drugs, devices and equipment for cost effectiveness and to make a Medicare listing of those items that are covered (those that are not listed can be purchased by individuals outside of Medicare).  The FDA would be required to make the cost of the list stay within a maximum stipulated by Congress).
6. Allow Medicare to negotiate the purchase price of drugs, devices and equipment nationally.
7. Force the creation of Accountable Care Organizations immediately.  All Medicare benefits must flow through ACOs.  This solves the payment for volume of services problem.  There has been a delay to “see if ACOs work”.  Similar systems are well proven in other countries, we just need to act.
8. Physicians and hospitals who provide Medicare should be employed by, or under contract to, an ACO.
9. All physicians who work full time under Medicare will be salaried at $200,000/year with an additional $100,000/year  awarded (or not) if established quality and service targets are met.  For example, there is no pay differential for primary care and neurosurgery.  (this payment system works wonderfully in the UK).
10. Establish a copay for primary care, specialty care, ER care, hospital care, SNF etc to incentivize a primary care home, and to put a clamp on overutilization.  (the poor may get coupons, like food stamps, for the copay)
11. Increase the nurse practitioner and physician assistant workforce as quickly as possible.  It only takes 3 years after college for them to be care providers whereas it takes 7-10 years for physicians and surgeons.  Offer to pay for physician training if they will be Medicare doctors for at least 10 years in locations where Medicare finds a need.
12. Mandate a national medical record for Medicare
13. Mandate a national health card — show the card at the point of care, pay the copay and get the service — no paperwork!
14. The US needs to think of health care as a right — a right to reasonably priced health care!
15. Monitor quality for Medicare and push the quality agenda so the US can again have the best quality health care.

Those are my thoughts for a big-picture redesign.  What are yours?


A few links of interest:

Diane Archer (Board of Directors, Consumer Reports)
Bitter Pill:  5 part series (a blog)
Naomi Freundlick (Reforming Healthcare Blog)
Bob Haiducek  (Medicare for All)
James Kahn (Physicians for a National Health Program)

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