The Health Care Reform Bill: Round…?

With the Senate Finance Committee Bill has finally reached the Senate floor, it looks that a bill (with or without a public option plan) will be heading for the conference committee to be reconciled with the House Bill. By the end of the year, if not sooner, a Reform Bill will be on its way to the White House which would certainly be signed by the President. Short of a “mishap” or a “disaster” (or for Republicans a ‘miracle’), an overhaul of the US Health Care system is in our future.
Judging the outcome as ‘Good or Bad’ will await implementation of the final bill. Such judgment is not however the intent of this Blog. Given the broad outline of the bill, the issue that I would like to address here, which is in my view has been overlooked or swept away under the congressional rug is “access to medical care”.
The fact that the bill, assuming its passage, mandates that “one and all” be enrolled in a health insurance plan and that it would penalize those without insurance, the expectation is that some 31 million uninsured persons will have access to the US Health Care System. The prospect of being insured does not automatically translate into access to medical care. Let me elaborate. Unless you are covered by an employer plan, providers of health insurance (at least in my city) insist that the would be insured individual or family , (a) has a primary care physician, (b) must be registered with the primary care physician and (c) that said physician be on the insurance company approved list of physicians. Whether applying for insurance by phone, e-mail or by letter, the application is terminated (no enrollment is activated) unless and until these three (a, b and c) questions are answered in the ‘positive’. As an example, let us say that a formally uninsured person heads the requirement of the new Health Care Law and contacts say BC/BS agent. After exchanging a few pleasantries, the agent will get to the heart of the matter: take down responses to a set of questions on the enrollment form. After a few questions such as age, sex, occupation, the next question is whether the would be enrollee has a primary care physician. If the answer is ‘no’, the enrollment process terminates. The applicant could come back for enrollment after securing a primary care physician and either be seen by said physician or be on his/her register. If indeed, by some ‘miracle’, ‘good luck’ or whatever an uninsured individual has a primary care physician and that the individual is indeed registered with said primary care physician, then the next question for enrollment is whether the primary care physician is on the approved list of the insurance company. If not the enrollment process terminates. Of course, the insurance company is more than happy to supply the applicant with names from their list for the applicant to contact and once again the company agent tells the would be enrollee that once any one of those physicians accepts the applicant and be registered, the applicant can contact the insurance company again to proceed with the enrollment process.
That does not sound to be such a difficult task. In the age of the internet, it is supposed to be quick and easy to contact your chosen primary care physician(s). No such luck. It is amazing for those of us in academia (most of us any way) to contemplate not responding even in the negative to someone who address us via e-mail, phone, fax or in other media. In the case of primary care physicians you may not be able to go that “minuscule” mile.+ Talking from experience, as I shall elaborate below.
Primary care physicians who have posting on the web (most of the time those physicians are staff members at some medical school), will enumerate their expertise, specialties, research and so forth but give no valid phone number or fax—and if valid, no one responds when you call and the fax is inoperative. But that is not so bad, what is bad is that almost all with those glorious “bio” end up the write up with the “standard phrase” (DO NOT ACCEPT NEW PATIENTS). So, the search continues. The next search vehicle is to go back to the list of providers that are listed on the web of the selected insurance carrier as accepting new patients. Unfortunately, it seems that such a list is not current because at the point of contact, once again the sentence (DO NOT ACCEPT NEW PATIENTS) dwarfs everything else.
How to circumvent this? Some of us who did research or writings about comparative health care systems (US and UK) in the 1980’s and the 1990’s were, back then, smug enough to point out to our British colleagues the deficiencies of their health care system. Most of said deficiencies had to do with access to medical care: the long waiting lists for registering with a physician; denial of some procedures like kidney dialysis or transplants to some patients (those over 55 years of age)—i.e. rationing of medical care. Well, with no access to a primary care physician you might as well not bother with the quality of access.
What I have put down here is not fiction or a made up story to knock down the reform. Rather the intent is to seek a fix to a problem that will plague the health care access in the US following the enactment of the reform bill.
I, an insured person for more than 30 years, had the same primary care physician over this period, with excellent insurance coverage faced the same problem—access to services of a “primary care provider”, following the retirement in October 2009 of my primary care physician. The Group practice or clinic that was willing to take on the patients of my primary care physician looked promising enough for me to seek the services of one of their “internal medicine” physician. Having settled on one of the four, I called the office to get an appointment or as the insurance company agent have put it “get registered”. I was told sorry: this physician does not take new patients, another one, my second choice was also unavailable. Thinking that well for the time being I should register with whoever was available, I was then informed that the group practice does not accept my insurance. At that point I was not willing to continue the dialogue—not my first choice and not my insurance! At first, the group practice (a clinic or whatever it is called) responses did not in the least bother me. As the saying goes: “don’t cry over the fish that got away, there are more fish in the sea”. My search for the “elusive” primary care physician proceeded with a vigor. I decided to find out, first of all, which insurance carrier in my city has the largest list of providers; which carrier (because of something or other) has a wide acceptance by physicians, hospitals, etc and which in addition provides the type of plan I seek (PPO or Preferred Provider). Having thoroughly identified such a company (call it X company), I called to switch insurance provider. I called and get the “X” company brochure. I looked at their coverage and was satisfied that it offered the plan I sought. So I contacted the representative. I was told I can enroll by phone. Delighted (no paperwork), the process began. Guess what? Can’t proceed without “a primary care physician”. I informed the agent that my physician has just retired. Sorry about that but get another , get seen by the new primary care physician, get registered then call back to get enrolled. I was given their website to look for a primary care physician who will take new patients. Once again, I did what was expected—contact those on the insurance company list. Waiting for responses from those who did not list by now the dreaded phrase (DO NOT TAKE NEW PATIENTS), I decided to expand my search by asking a few MD specialists who have known me over the years as well as friends for help. I was delighted with their responses. I got names of at least 20 primary care physicians. I e-mailed some (I felt that as professors at a medical school, and I am also an academic professor at a University, the chances for a response even in the negative is likely); called the numbers I was given, but the response turned out to be the same. A central agency operator answered my inquiries about all the physicians I wanted to contact: “None take, new patients but you can be ‘wait listed’ on one or two”. A total waste of my time. Fortunately, a family friend, a former professor at my university suggested I contact his physician. Haleluya—the physician was on the list of the insurance carrier I wanted to subscribe. His office staff was decent enough to register me over the phone and secure an appointment for me. Having done that, I contacted the X-company insurance agent to enroll and was accepted by the insurance company to proceed with enrollment.
As my appointment with the new primary care physician is a bit far in the future, I have asked his staff: suppose that I get ill between now and then; what do they suggest I should do? Well, you would have to go to the hospital’s emergency room to be seen by the ER physician on call.
That is what I mean about ACCESS. I am not or should not be viewed as a FORTUNE teller, but the access problem which is tough enough as it is will get worse, a lot worse unless the problem of access to services of a primary care physician is addressed. Many of us have heard of communities with no primary care physician in sight, of the waiting lists (some reported some 300 people on one physician’s waiting list), the long wait for an appointment, the delay in seeing the physician and so on, but until faced with it one does not appreciate the severity of the problem. There are several reasons for such shortages. Foremost, among them is the differential in pay, prestige associated with specialization and hence the decline in enrollment of medical students in internal medicine.
A recent GAO study, (February 12, 2008),: “Primary Care Professionals: Recent Supply Trends, Projections, and Valuation of Services”, provide information on supply of primary care professionals for 2 years, the base year of 1995 and the recent year, 2005. According to the study, there was 264,086 primary care physicians in 1995 compared to 208,187 in 2005, which gives 90 primary care physicians per 100,000 people in 2005. In 1995 the rate was 80, hence an annual rate of increase of 1.17. This obviously does not give a full picture. More recent data is needed as well as the regional distribution of physicians and, the number of enrollees, office visits and waiting time. Nonetheless, the growth although miniscule should mitigate the problem if it were to continue in future years. *
Hopefully, my experience is an aberration, that there are more primary care physicians out there—if so, well and good. If not, something should be done, and done soon. It is incumbent upon our law-makers to look into this problem before hospital ER are overloaded with patients who are simply there because they have no access to primary care physicians.
A more serious issue is how to get an insurance policy without being registered with a primary care physician. Maybe insurance carriers outside of my city do not have this requirement. If so, I wish to hear from them so perhaps this requirement would be eliminated. In such a case, specialists or other medical practitioners perhaps could fill the bill.
While writing this note, I thought of the British man who was poking the sand on some beach with his metal rod searching for gold. It took him a lifetime to find his gold; I hope it doesn’t take our newly insured citizens that long to get their gold.

+ To be fair, I got one reply. Unfortunately, the physician was not a general practitioner.
* In my next Blog, I shall provide more data on physician per capita, office visits and other pertinent information. Also, a video about the Health Care Reform Bill was suggested by rosa@newsy.com which can be accessed at http://www.newsy.com/videos/health_care_reform_in_2009.

The Continued Saga of Health Care Reform 2009

Many of us or at least some of us watchers of the health care reform debate are pondering the question: will it ever end? Or put differently, when will it end?
During the presidential debate health care reform was at the top of the domestic agenda and with the democratic party wining both the White House and majorities in both houses, the expectation was that, the reform bill should have a clear sailing. The president even thought that he would be signing the reform bill by the end of August or early September.
Here we are at the end of the month of October and no Bill in sight. One could argue that we are almost there. But are we?
From the news account one needs to ask: Are we or are we not serious about reforming the health care system?
Without addressing the specifics of the Senate Finance Committee bill now before the Congress (that will have to wait until a bill garners a majority in both houses—a Herculean task), let me begin with defining the term reform. In doing so, one may perhaps be able to judge the essential character of the bill if not the expectation of what the bill is likely to achieve.
The Merriam Webster Dictionary defines the term reform as: “to make better or improve by removal of fault”, alternatively, “to correct, rectify, emend, remedy, redress and revise”.
If the health care bill is to reform the existing system, then legislators and their constituents (we the people) should be inspecting the bill to see that it meets the criteria set forth to earn the reform label. The first step then is to identify the shortcomings of the existing health care system and in light of these shortcomings look for improvements, redress, corrections the reform bill legislates.
The debate, at least in the media, in my view, is misguided in that it focuses on the “private” rather than the “public” good. Moreover it fails to address the fundamentals of reforms: The principles upon which reform is based.
Our legislators, if not the media should have sought to fathom the debate along the lines used in debating tax reform. Back in the 1960’s, the 1970’s and the 1980’s no discussion of reforming the federal income tax system was deemed “legitimate” without setting forth the principles that should guide tax reform. Before getting into the “Nitty-Gritty” of specific provisions, the principles had to be agreed upon first. Since then it has become the standard for any change proposed or enacted. The well known principles were: equity, efficiency and simplicity.
So what are the principles that ought to guide the reform of the US health care system?
From my readings (albeit not too carefully) of the 259 pages of Chairman’s Mark: America’s Healthy Future Act of 2009, I cannot discern those principles.
Title I (84 pages) deals with: Health Care Coverage. It spells out the proposed insurance market reforms. It goes into details about a wide range of issues from the current insurance system’s shortcomings to setting up new procedures that would replace or amend some of the existing provisions in insurance policies as well as outlining the role of the federal government in addressing these shortcomings. Title II: Promoting Disease Prevention and Wellness (86-96 pages) deals with Medicare and Medicaid. The objective is to insure that Medicare beneficiaries have “access to comprehensive health risk assessment”. For Medicaid recipients, this section outlines the requirement for “improving access to preventive services for eligible adults”. Title III: is about Improving the Quality and Efficiency of Health Care (pages 96-135). Titles IV and V deal with transparency and program integrity, frauds, waste and abuse. Title VI (pp. 231-258) spells out changes in the revenue items like fees, tax credits and itemized tax deductions.
The “meat” of the bill and controversies surrounding the bill is found in Title I and Title VI.
Before getting into controversies surrounding provisions in Titles I and VI, one needs to ask: What are the criteria that underline these provisions?
Title I, subtitle A spells out the proposed reforms to the insurance market. These perhaps are the most straight forward reforms and well understood, having defined reform as “correcting or rectifying” what is there, then one infers that the existing health care system is deficient in meeting either the criterion of “equity” or “efficiency” or both. The corrections deal with pre-existing conditions and guaranteed renewability of policies. No controversy there. What is debatable is the specifics about premiums, rating rules in individual markets to insure compliance with the new directives. If I were to choose a criterion for these reforms the one that is applicable is “equity”. The individual cases put before us during the Town Hall meetings on health care clearly documented the need for action to stave off either bankruptcy of afflicted individuals or families whose insurance was cancelled because of pre-existing conditions or denied coverage for same reason. To providers of insurance, the new regulations give rise to cost that has to be either absorbed by those insured or recouped from them through cost shifting—a rise in insurance premium.
It will come to no one’s surprise to learn that cost shifting is the rule rather than the exception whenever a “tax” is imposed on a product. The shift may occur over time and in many instances may be hidden. Even if cost shifting does occur the insured will not bear the full cost of being integrated in the insurance pool which was denied to him previously. On equity ground as well as efficiency (spreading the cost) this provision meets the definition of reform—redressing a need.
Subtitle B: State Exchanges and Coverage Assistance and Subtitle C: Making Coverage Affordable deserve a great deal of scrutiny. In this regard the on and off “public option” need to be integrated. In my next Blog I will examine these two in light of the criteria of reform set forth above. These need to be examined in conjunction with Title VI where the revenue implications of the reform provisions are spelled out.
For the moment, it suffices to say that the state of “America’s Healthy Future Act of 2009” is in jeopardy. Unless and until the competing interests of the various players in the market are reconciled—the public option in the exchange market, state rights (whether they can or cannot opt out), Private insurers and employers as well as health care providers (physicians and hospitals), the chances for a robust bill, a bill that would meet not only the equity and efficiency of the health care market but also the criterion of simplicity is but an elusive dream.
If I were to design a “Health Care Reform Bill”, I would begin with the following questions: Does the existing system meet the standards of equity, efficiency and simplicity? To answer this question, the system has to be reduced to its components: Access, affordability and efficiency. The three components must then be ranked in terms of priority and trade off made when conflicts occur. Legislators guided by their constituents must rank the three elements. For example should access take precedent over efficiency of delivery? Should affordability be the overriding criterion, or is it the efficiency of delivery. As an economist these are the questions which have to be addressed before a “blueprint for health care reform” is developed. This may be an easy task for an economist but a difficult one for a legislator.

Health Care Outcomes: Is Our System All that Bad?

An article in the Washington Post: “U.S. Losing Ground on Preventable Deaths: Despite High Medical Spending, Results Trail Other Wealthy Countries”, (Ceci Connolly, Tuesday, Oct 6, 2009). Quoting a study by Common Wealth Fund the writer states:
“Although the Unites States now spends $2.4 trillion a year on medical care—vastly more per capita than comparable countries—the nation ranks near the bottom on premature deaths caused by illness such as diabetes, epilepsy, stroke, influenza, ulcers and pneumonia”. Comparing costs and outcomes may not be all that relevant unless everything else is held constant.
The U.S. health care system has always been costlier than other systems in the developed world. Ever since OECD (Organization for Economic Development and Cooperation) has been compiling data on comparative health care, we have been put on notice that as percent of per capita GDP, the U.S. spends more and consumers of health care do not fare better, perhaps worse. This means one of two things, maybe both: The American population are either sicker than the “comparative” population hence the low return of investment on their medical care or that health care providers in the U.S. are “greedier”, “less efficient” in the delivery of health care than providers in other countries.
Let us, for a moment, accept the proposition that our providers are less efficient. The question that arises is why are they? Given the innovation that emanates from the U.S. not only on the diagnostic front but also in the drug therapy, it is worth a moment of reflection to contemplate the failure of the system to meet the efficiency standards of other European health care systems. Such reflection invariably leads us to an assessment of the disease-specific cost of intervention and there lies an ocean of difference between the U.S. system and European Systems.
Economists, rightly or wrongly, when discerning the effect of an increase in the price of good X on the demand for good X, will always tell you, “everything else remains constant”. That may sound foolish since nothing ever remains constant, or at least not for long, when good X’s price rises. We do that to ascertain the direction of effect and not necessarily the exact change in the demand. The same logic should apply to the demand for health services and hence the cost. Comparing the “comparative” cost per service delivered in one country viz a viz another in relation to the corresponding outcomes make good statistics but unfortunately masks a great deal of differences between systems. I tried to emphasize, “everything else remains constant”. That translates into comparing “like” with “like”. How can one judge life/death outcome of a diabetic patient in the U.S. compared to a diabetic patient say in France? The statistics says, a “premature death” for the U.S. patient compared to the one in France. But is this information really telling? To compare outcomes, given cost one first of all need to keep constant the profile of the patient, the environment of the patient, and a host of other issues that frame the comparison. Or take the cost comparison: It may be true that our providers are “greedy” , it may also be true that pharmaceutical pay providers to over prescribe or prescribe expensive drugs, but it is also true that the patient in the U.S. expects and demands to receive the best available medical care.
The U.S. system promotes patient’s right to choose the medical care he/she is to receive. To so many in the U.S. this right is worth the cost society has to bear. To make the cost comparison worth while patients here and there have to hold similar expectations. To make health outcome comparisons, one needs to compare like with like. Neither of these two elements hold in the U.S., European comparison.
Having said that, one should not shrug aside the three critical issues that impact costs and outcome the Post article alluded to. These are:
· The “efficiency” of the delivery of medical services;
· Access to health services , and
· Patients’ expectations
I shall address these issues in conjunction with some of the Senate bill provisions for Health Care reform 2009. Once the bills gets out of the Senate Finance Committee as the bill provisions touches on the issues raised in the Post article.

Then and Now: The Saga of Health Care Reform

The nation or more precisely the Obama Administration is consumed with the debate about health care reform. The debate is far from academic it is commingled with rhetoric, uncivil discourse, charges and countercharges. For those who are not directly involved, who are on the sideline so to speak, the foray is a bit out of place.
Health care reform was at the top of the presidential candidates’ agenda. One and all: democrat, republican, or independent heard the presidential candidates speak about the need to reform the nation’s health care system. Many articles were written comparing the candidates’ plans. Economists and journalists took aim at the specifics of the two major proposals: the Obama plan and the Clinton plan. Nothing was left to the imagination. Judging from the coverage, no one doubted that if either Clinton or Obama won the presidency, health care reform would be at the top of the new president’s agenda.
Given that this expectation has been realized one needs to ask: what soured the population (public opinion seems to be oscillating between for and against) on reform?
There are several reasons that may account for this: The first and foremost is a doze of reality. The president took office in the midst of a financial crisis that brought the country to the brink of economic disaster. Although the recession was already in place prior to the inauguration of the new president, the euphoria surrounding the election did mask the severity of the financial and economic collapse. Americans are optimistic by nature; hence the expectation was that with a new democratic president, a congress with democratic majority in both houses, things could only get better.
Then came the realization that this assessment was too optimistic, that the financial crisis is more severe, and that many people’s livelihood was on the line. When one’s livelihood is on the line, the first priority is “jobs”: putting food on the table. The second or the third, is to make sure that medical care is there when needed.
I believe the administration missed the opportunity to inform the people—those unemployed, those who lost their houses, those who had to file for bankruptcy, those who lost faith in the American dream—that the Administration’s first priority is “insuring” their livelihood. Bailing the financial market first, a sound action to be sure, did not tell the ordinary citizen (Mr. Joe the plumber of the campaign) that his welfare is the focal point of the rescue plan of the economic system. Although actions speak louder than words, in personal crisis words matter as much as concrete actions. People’s interests were not at the forefront, not in the words or deeds until later on in the administration rescue game plan (The cash for clunkers!).
Once the faith of the people in the administration’s ability to address their needs has weaned, critics found an entrée to challenge the administration in all fronts. The most critical and perhaps the most effective challenge is directed towards the Obama’s plan for health care reform. And the public seems to be listening so let me take a minute and raise a couple of questions:
First, do we need health care reform? If not, we can quit now and go our merry way. If the answer is yes, then the “battle” is worth fighting.
Second, how much support “Health care reform” garners? In a democracy the plurality rule of 51% must be satisfied. Public opinion seems to put the support at over 50%. According to CNN, “going into the speech (Obama’s speech on September 8th); a bare majority of his audience—53%--favored his proposals. Immediately after the speech, that figure rose to 67%.”
Third, if the reform is a “mandate”, all must have health insurance by a certain date, then the question of affordability arises. To figure this out one needs to focus on the 15 percent of the population who are without insurance. A bit of information from the presidential debate about health care reform may be helpful at this point.
On March 25, 2008 The Ott Blog discussed the health care reform issue under the title: The Biggest Dilemma: How to reduce America Health Care Costs and “Ensure” an Affordable Quality Health Care for All? The article briefly compared candidate Obama’s plan with candidate Clinton’s plan. Although these two plans differed, they had two themes in common: Expand coverage to the uninsured and “cap” spending on health care.
Having set these two straightforward goals, implementation as everyone is finding out is not so straightforward. As it is turning out, the “DEVIL” is in the detail.
What was candidate Obama’s blueprint for reform (Barack Obama’s Plan for a Healthy America)?
· Coverage: Expand insurance coverage to the uninsured. No need for mandate, except for coverage for children.
· Choice: Offer all Americans an enhanced choice in the selection of insurance coverage through a mix of private and public plans. A new public insurance program would be offered to those who neither qualify for Medicaid or SCHI, nor covered by employers’ plans. He also called for a “National Health Insurance Exchange.”
· Quality and costs: Improve quality and cut costs through monitoring of services and modernizing the system.
True to his platform, the president put into motion his legislative agenda: To reform the US Health Care System. His reform proposal in its broad outline departed very little from the blueprint of reform outlined in the “Barack Obama’s plan for a Healthy America.”
Why then has it taken so long to enact a plan? And why all those cheap shots and not so cheap shots are lunched against the reform?
To answer these questions one needs to look at the realities of reform—the players; the legislators; our representatives in congress who write the laws, The Providers: Insurance companies, hospitals, physicians and nurse practitioners.
The payers: Those with employer provided insurance; those with own private insurance and those on Medicare.
The uninsured: Those who must now buy coverage.
I shall discuss how each of these groups is likely to fare or believe they fare under the reform plan (once the bill sets out of the Finance Committee) in my next blog.

A Salute to the Assistant

On this day in May (May 17) and on so many other days in May, I have witnessed the “crowning” of so many assistants. The assistants’ assistance, at least for me and for those like me, is indispensible to our work. We rely on the assistant’s skills for carrying out data analysis, word processing, typing draft, deciphering illegible hand writing, and above all doing the task with geniality, respect, love, and appreciation of the learning experience.

On this day in May, Clark University Economics Department graduated six new PhD’s and Seven MA’s. Over my tenure at Clark of more than 35 years I have the privilege not only of being involved in the education of our graduate students but to chair the doctoral theses of more than the number of those years. Most rewarding for me perhaps is the opportunity to work closely with so many assistants.

On this day in May, I have hosted a party to celebrate the achievements of some of our graduates. It has struck me then as it has in other occasions, that how many of our graduates were my assistants in one year or another. Some were with me for 3 or 4 years.
The celebration, which I have arranged in almost every year to follow the graduation ceremony, brings together the new graduates with some of their predecessors not only to celebrate their achievements but also to give them a taste of what await them out there. The celebration however could not be complete without my acknowledgment of the assistants’ contributions to my own scholarly achievements. Over so many years I have relied on them, worked with them and learned a great deal from them. Without the “assistant”, it would have been less pleasant for me to be my “own assistant”.
Rather than heaping on myself the praise for being their mentor and professor, I thought it is time for me, if not for all other who were privileged to have assistants to salute the “ASSISTANT”.

To all of you who worked with me as assistant at Clark University or elsewhere, I salute you. I pay you the highest regards one is able to convey. I wish you all the best.
As you depart and embark on your new carrier, remember the “Assistant”. One day you will be celebrating the “assistant’s” own accomplishments, but in doing so do not forget that in his celebration you are celebrating your own.
Good luck to the Assistant and to all graduates. Mille Merci.