The limits of cost
reduction
There are
only two potential methods of bringing down the cost of health care:
1) Reducing
inefficiencies in the system (reducing wasted expenditures)
2) Rationing
care (reducing useful expenditures)
The entire
public discussion on health care spending in the United States to date has
rested on the notion that the high cost of health care can be explained
almost entirely by the inefficiencies in the health care delivery system,
such as administrative overhead and suboptimal utilization of resources
(i.e., waste and fraud). This argument, which allows us to imagine that we
can control health care costs simply by eliminating unneeded expenditures,
is the only politically feasible one that can be made (since, if this
argument were not true, our only remaining alternative would be to ration
health care). Therefore, virtually all the methods proposed for dealing
with the high cost of health care have been based on the assumption that
improving inefficiencies in the system is all that is needed.
(It is worth noting here, once again, that such an argument is only
for public consumption. Experts
in the field of health care economics, in their scholarly writings, start
with the premise that rationing is the only choice we have.)
Nobody
denies that there are plenty of inefficiencies in the health care system.
And nobody disagrees with the notion that we should make every
effort to eliminate unneeded expenditures.
The problem with relying on a reduction in inefficiencies as the
primary means of controlling the rising cost of health care, however, is
that it won’t work.
David
Eddy, in his book Clinical Decision Making (Jones and Bartlett
Publishers, 1996), examines the feasibility of reducing
inefficiencies as a means of controlling the cost of health care. Assume,
he says, that in 1970 (around the time a health care crisis was first
declared) a severe austerity program had been initiated within the health
care system that accomplished all the following things:
| Eddy's Austerity Program for Health Care |
1. cut all administrative costs by 50%
2. cut costs of all prescription and nonprescription drugs, plus
costs of all other non-durable medical goods, by 50%
3. cut physician services by 20%
4. eliminate all government public health programs
5. eliminate construction of all health care facilities
6. eliminate all medical research |
Further, assume that these cuts had
been maintained, at the same levels, for the next 21 years - from 1970
through 1991.
Obviously,
one would expect such a drastic program of cuts to significantly reduce
national health care expenditures. And
in fact, it would. The
following table compares actual U.S. health care expenditures for that
21-year period to the expenditures that would have occurred under Eddy’s
austerity program (values are reported in billions of dollars):
| Year |
Actual spending |
Austerity spending |
| 1970 |
74.4 |
59.2 |
| 1980 |
250.1 |
206.4 |
| 1989 |
604.3 |
499.5 |
| 1991 |
751.8 |
623.6* |
*values in billions of dollars; derived from Eddy, pp
270-274.
Note that the
austerity program saves a lot of money right away. In 1970, the first year
of the cuts, only $59.2 billion would have been spent, compared to the
actual expenditures of $74.4 billion.
Further, the significant savings persist over time.
In 1991, only $623.6 billion would have been spent under the
austerity program compared to $751.8 billion in actual spending.
Note, however,
that the amount of money actually spent in 1989 is roughly the same as the
amount that would have been spent under the austerity program only two
years later, in 1991. In other words, all one
ultimately gains after 21 years of an austerity program even as improbable
and severe as this one is a little time; in this example, a little less
than 2 years.
Why
is this? It is because the
rate of increase in health care expenditures is largely unrelated to
anything that was cut under Eddy’s austerity program.
So when the cuts were made, health care costs continued rising at
the same rate as before – they simply started at a lower baseline.
The only thing that was saved with this Draconian effort was time,
and not all that much time, at
that.
This phenomenon is not just theoretical.
It is being experienced by all western countries, even those like
Canada and Great Britain, that have tightly-controlled, single-payer
health care systems with overt rationing measures in full view.
In general, while health care spending in such countries is
significantly lower than in the United States, the rate of growth of that
spending is very similar to the double-digit rate of health care inflation
seen in the U.S. The economic
crisis we are experiencing is shared, and recognized, by most developed
countries around the world, despite tightly managed health care systems in
many of those countries.
In the U.S. itself, the “reforms” in
health care that have been instituted since 1994 brought the annual rate
of growth in health care to below 5% for a few years.
However, latest indications are (now that we have made the
“easy” cuts) the rate of growth is rising again.
In the state of Pennsylvania, by 1999 the increase in insurance
premiums paid by companies for their employees was back to 10 – 15% per
year. Managed care and
administrative reforms can significantly reduce the cost of health care,
but the rate of growth is ultimately unchanged.
Ultimately, in fact, the only thing gained by reducing waste and
increasing efficiency is a bit of time. The basic assumption made by virtually
every party in the great health care debate (i.e., that reducing
inefficiencies is all that is needed), is demonstrably wrong.
There are finite limits to how much money
we can spend by instituting systematic efficiencies in the health care
system, even "efficiencies" as drastic and as unacceptable as
the ones postulated in Eddy's thought experiment.
The bottom line on rationing
To reiterate, the essential problem is not
that a substantial proportion of health care spending is wasted due to
inefficiencies in the system (though there are plenty of inefficiencies).
The essential problem, the one we cannot escape, is that the rate
of growth of health care spending is too high, is unrelenting, and
is unrelated to those systematic inefficiencies. If we are to gain control
of health care costs, somehow we must deal with this rate of growth.
What is responsible for this unrelenting
growth in the cost of health care? Since
it is not due to waste and inefficiency, the only possible answer is that
it is due to an increasing volume of actual health care being delivered
per capita. And this, as we
have seen, is due both to advancing technologies (which is potentially
controllable, but, practically speaking, only with rationing), and to an
ever-aging population (which is not
potentially controllable, save by completely uncivilized methods).
To cut into that growth rate, then, we
have to find ways to reduce not just waste and inefficiency, but more
importantly, ways to reduce the volume of health care services being
delivered per capita – even though many of those health care services
are apparently useful. In
other words, to reduce the rate of increase in health care spending, we
have to ration care.
And as we have seen, we must
reduce the growth in health care spending, and not just because we have a
present-day health care crisis. The economic pressures that will
predictably occur in the next few decades will dwarf any pressures we are
experiencing today. We need to gain control of these costs not just for
our own near-term economic health, and not just to be fair to our children
and grandchildren. Controlling
health care costs is what we must do in order to avoid societal chaos. And
since rationing is the only way to truly gain that control, rationing is
what we must do. It is an
economic imperative. It will
happen (and is happening) whether we accept its necessity or not.
The only real choice we have, then, is
whether to ration openly, or whether to do it covertly. In the next part
we’ll consider why we have opted, so far, for the latter method.
Why covertly? What choice is
there?
Even on the surface it
is easy to understand why our society, faced with the prospect of having
to ration health care, might opt to do it covertly.
Simply put, rationing is unacceptable. No politician with a brain
in his or her head would stand up in public and admit that rationing is
necessary. To do so would
become their last public act. To
a politician, and to every policy maker with an ounce of common sense,
covert rationing looks far less onerous than the alternative.
In fact, just trying to
visualize how we would do it might be enough to convince most reasonable
people that open rationing would be insurmountably awful. Just imagine.
There, on C-SPAN, in some Congressional meeting room, the American Heart
Association is squaring off against the American Cancer Society in the
battle for dollars. Tune in at 2 PM to watch a group of women with breast
cancer testify as to why they should get funding priority over those
children with leukemia sitting at the next table.
It’s hideous to contemplate.
But,
aside from the fact that figuring out how to do it doesn't necessarily
have to be quite that bad, open
rationing actually turns out to be the lesser of the two evils.
To see why, it is necessary to consider the real reasons behind our
decision to ration our health care covertly, and where covert rationing
inevitably leads us.
The American health care myth
A culture is largely
defined by its myths. 
I use the term “myth” here not in its
vernacular form (i.e., not to imply lies or untruths), but in its classic
form. A myth is a story
that describes how a people came to be, and why things are as they are.
So, while myths are simply stories, they carry extraordinary power.
Myths largely determine how a culture interprets the world around it, and
provide a set of guiding principles by which that culture behaves, shapes
itself, and responds to events. Myths impart vitality. Cultures that
forget their myths, or allow them to become sterile, themselves become
barren, impotent, and doomed.
Throughout history, the greatest leaders
have been those who have understood the power of myths.
Such individuals often arise in times of great change, chaos, or
turmoil – times when the old myths are losing their relevance – and
offer a new interpretation. Here is what is happening, and why, they say.
Here is who we are, and here is what we must do. One thinks of
Jefferson, Lincoln, both Roosevelts, and Churchill. Essentially, great
leaders are great storytellers. They
offer new and compelling stories that explain things, that give order to
chaos, impart a sense of purpose, and redefine and redirect a culture. With
such myths great leaders can galvanize a people, and compel them to act in
concert to achieve great things.
Myths can be extremely beneficial.
The ultimate American myth,
laid out succinctly by Jefferson in the Declaration of Independence, celebrates
the autonomy of the individual – all of us are created equal,
and we all have the self-evident rights to life, liberty and the pursuit
of happiness. The power of this myth is manifest in many ways. Consider
that at the time of the Declaration and for decades afterwards, slavery
was legal in America; Jefferson himself was a notorious slaveholder.
Some have claimed from this fact that the founding fathers, and the
myth they promulgated, were cruelly hypocritical. Yet, the power of this
American myth - reconfirmed in the Gettysburg Address - ultimately helped
bring about the abolition of slavery. While largely untrue at the time it
was first stated, the cardinal American myth to a great extent was
responsible for shaping subsequent events.
Ultimately, the reality of American culture came more nearly to
resemble its myth.
Myths can also be extremely destructive.
Adolph Hitler rose from obscurity by telling a story about the German
people that, in that time of great national turmoil, had resonance. The
subsequent atrocities committed by the Germans were horribly logical in
the context of that myth. Recently, it has been argued that the holocaust
could not have happened without at least the complicity of the majority of
the German people, and that therefore, perhaps the German culture is
essentially flawed in some way. The
problem with this facile synthesis is that similar atrocities have been
committed innumerable times throughout history by many different peoples
– the atrocities inflicted upon Native Americans by white Americans is
just one example. In
virtually every case, the culture committing these atrocities felt it was
acting on the side of justice, righting a terrible wrong. In every case
these cultures were behaving in concert with a powerful cultural myth. It
is likely that the actions of the German people in World War II also
stemmed from the myth to which they subscribed, and that therefore their
actions are less reflective of a specific truth about a specific culture
than they are of a general truth about the power of myths to influence
the behavior of any culture.
To a large extent, how
we think about health care in America is defined by a myth. This
myth is a recent one, having taken shape during the last half of the
twentieth century, coincident with the rise of modern high-tech health
care, and with the soaring optimism that came with America’s emergence
as the world’s greatest power. The myth goes something like this: In
America we have and will continue to have the best health care in the
world, the best doctors, the best hospitals, the best technology. Every
American citizen deserves – indeed, has a right to – access to that
best medical care. Since one cannot place a price on human life,
everything that can be done for a sick person must be done, as long as
there is some small hope of a beneficial outcome. Finally, every disease
is potentially curable, and as a matter of policy we will strive to learn
how to cure every disease.
The myth of American
health care can be summarized thusly: where health care is concerned,
there are no limits.
This health care myth is entirely
consistent with the cardinal American myth as articulated by Jefferson,
specifically the self-evident right to “life”.
What better way is there of guaranteeing such a right than to
insist on superb health care? (And, since the rights to liberty and the
pursuit of happiness are also given, self-indulgence that results in
disease does not abrogate one’s right to the very best health care.)
For the most part this myth has been an
extraordinarily useful one. The
essential optimism of our health care myth, and the single-minded efforts
it has engendered, have led to amazing advances in the treatment of many
formerly devastating diseases. Hospitals in almost every major American
city are on a par with the world’s best, our physicians are the best
trained in the world, and our biomedical industry is the envy of every
other country. While no one can argue that all Americans receive the very
best care, on the whole all but our most disadvantaged citizens have
access to some of the best medical care in the world.
While the effect of this myth has been
largely salutary so far, a new question now arises: how can you square
the need to ration health care with such a myth?
And there’s the problem. You can’t.
The need to ration health care is simply incompatible with a myth whose
basic notion is that there are no limits.
The cold fear of going up against that
myth is what freezes politicians and other policymakers in their tracks at
the very thought of rationing. Rationing becomes unthinkable.
Our health care myth leaves us no choice but to do that rationing
covertly.
How we make rationing compatible
with our health care myth
On the surface it might seem impossible to
conduct widespread rationing in a vast industry like health care, which
consumes more than 13% of the GDP and directly affects the lives of most
citizens at one time or another, and to do it covertly, in secret.
Wouldn’t the rationing of such a highly visible commodity be
apparent to everybody?
Actually, it is quite apparent if you look
for it. It’s just that all
of us have more-or-less agreed not to look. 
To a very large extent, those who are
doing the rationing – the doctors, the hospitals, the HMOs, the
pharmaceutical houses, the biotechnology companies, the scientists, and
the governmental agencies – subscribe to the same myth of American
health care as the general public. They
carry out their activities openly and proudly.
Most, in fact, would find the very notion of rationing to be
repugnant, and would no doubt take great offense to hear they are being
accused of doing so.
Thus,
covert rationing is not the result of some vast conspiracy to
deceive the American public. (In fact, I don't believe that large,
sustained conspiracies - anything more complicated than, say, cheating at
bridge - are even possible.)
The covert rationing of health care is, in
fact, a textbook case of subconscious
collusion. In
the case of health care rationing, subconscious collusion operates
thusly: First, the irresistible economic forces that require rationing
line up to foster a certain attitude, a certain way of looking at things.
Then, within every entity in the health care system, those who embrace
such an attitude become ascendant, not by conspiracy or plot, but by
natural market forces.
That certain correct attitude,
the new “right stuff,” is defined by the ability to suggest actions
that have the effect of limiting health care services, while couching
those suggestions in the language of the American health care myth.
In essence, this kind of thinking allows organizations to direct
the rationing of health care, while at the same time advancing the notion
that rationing is unnecessary.
Note that there is surprisingly little
hypocrisy under this scenario. While undoubtedly some of the individuals
who are directing the rationing behavior understand exactly what they are
doing, most continue to subscribe to the myth of “no limits.”
Most honestly believe (or at least, want very badly to believe)
that their actions are not reducing useful services, that instead, they
are reducing waste and improving the efficiency of the system.
Those who do understand the true nature of their actions generally
shield themselves from having to communicate that knowledge.
They are more likely to become the quiet, private CEO’s whose
spokespersons and PR directors (individuals who are entirely sincere about
what they are telling the public) do their speaking for them.
So there is no conspiracy.
The covert rationing of health care is conducted by a myriad of
organizations, all acting quite independently, all simply responding to
economic imperatives. The key
for organizations that want to flourish within the health care system is
to identify leaders who can respond both to the irresistible need to ration
health care, and to the equally irresistible need to rationalize
such behavior in terms acceptable to the rest of us.
Those individuals, men and women of vision, are presently the Most
Valuable Players in the health care system.
The enabling visions advanced by such
individuals – visions that permit covert rationing activities to go
forward openly, freely, and often profitably – can be categorized into two
general schools of thought. We
will be spending some time with both schools of thought in coming
sections, and will be getting to know them well.
A brief introduction for now will suffice.
Battle
of the Titans - Clintonians v. Gekkonians
As noted, there are two enabling visions -
two general schools of thought - that promote the covert rationing of
health care. Both allow rationing activities to go forward openly, freely,
and often profitably, while maintaining a cloak of "no
limits."
School of Thought # 1 -
The Clintonians
This
school of thought is the one most commonly espoused by government
officials, politicians, public health officials, and other health care
policy makers, as well as most liberals. I have taken the liberty of
naming this school of thought after the individuals who have, thus far,
done the most to advance its basic premises.
Clintonians
believe that the root cause for all the problems in our health care system
lies in human weaknesses (specifically, you will recall, in too many
greedy doctors using too much expensive technology).
The fix for these problems therefore rests in setting public policy
and promulgating governmental regulations to hold that greed in check.
From a philosophical point of view Clintonians believe in
Original Sin, in the essential evil in man – if you give a fellow
too much freedom, he’ll probably do something bad.
The
Clintonians’ point of view is amply supported by the undeniable fact
that that the traditional fee-for-service health care system has
institutionalized the natural human greed of physicians. Under that
system, the more technology doctors use and the more procedures they
order, the more money they make. Indeed,
it simply cannot be denied that this system fosters profligacy, waste and
the overutilization of expensive resources.
According
to the Clintonian school, the greed inherent in our health care system is
only underscored by the fact that millions of Americans have been shut out
of the system altogether. Where is the cry of outrage from our
“compassionate” physicians over the high number of uninsured?
The lack of quality in our present health care system is further
underscored by the embarrassingly high infant mortality rate in the U.S.,
and our lagging life-expectancy rate compared to some other developed
countries. Again, where is
the professional outrage? Clearly
there is a fundamental problem with our health care system, a problem that
stems from the misguided incentives and maladjusted motivations of health
care practitioners and other profiteers.
Politicians
and public policymakers naturally gravitate toward the Clintonian school
of thought, since its basic premise is that the problem with health care
results from misguided incentives coupled with human greed. This premise
obviously places the solution squarely in the hands of policymakers, who
can do the job with new, stricter regulations and more enforcement muscle.
School
of thought # 2 - The Gekkonians
This school of
thought is usually espoused by the insurance industry, health care
executives, many physicians, and most proponents of a free-enterprise
economy, including most conservatives. I have named it after Gordon Gekko,
the character in the movie Wall Street, whose chief operating
philosophy was that greed is good.
Its basic
premise is that the open marketplace generally offers the best solution to
society’s problems. Philosophically
speaking, Gekkonians believe in the essential goodness of man – give a
fellow his freedom, and just watch the good things flow.
Gekkonians
assert that the health care crisis stems directly from the fact that,
while doctors may be good at practicing medicine (or maybe they’re not),
they’re no businessmen. And health care is simply a business, like any
other economic enterprise.
Leave it up to
the doctors, and they’ll forever practice medicine the way they did in
1910 – hundreds of thousands of independent guildsmen, each running
their own shop, duplicating expensive services, multiplying
inefficiencies, and shutting out the competition. No wonder the health
care system is such an inefficient, wasteful mess. Instead, the health
care industry should be treated as a market, just like any other market,
and not as some sacred, protected economic sphere.
Let those who
know how to run a business run the business of health care, and let the
doctors practice medicine (under the guidance, of course, of the fiscally
adept). Bring the efficiencies of the for-profit, free enterprise system
to the health care industry, and the health care crisis will take care of
itself.
Clintonians
v. Gekkonians
At first glance,
the Clintonians and the Gekkonians would seem to have little in common.
The Clintonians believe that too much greed is the problem, so the health
care crisis can only be solved by regulations to hold that greed in check.
The Gekkonians, on the other hand, propose to allow market
incentives (or, if you will, greed) to solve the health care crisis by
reducing artificial constraints on the market (i.e., by reducing
governmental regulations).
A closer look,
however, reveals that these two schools of thought actually have very
much in common; certainly enough to explain why Clintonians and
Gekkonians can often be seen forming alliances with one another in their
efforts to reform the system.
First,
both schools of thought are based firmly on the American myth of health
care. There ought to be no limits on what Americans
should ultimately expect from their health care system. Thus, our
health care crisis is due solely to too much waste and fraud within the
health care system. While one
school tends to blame the waste and fraud on greed and the other on
incompetence, the basic problem according to both schools is the
inefficient use of resources. We’ve
already seen the fatal limitations of the “waste and fraud”
hypothesis. But still (as
we’ve noted several times already), it is attractive to suppose that
enough waste exists in the system to make rationing unnecessary.
As a direct
result of the “waste and fraud” hypothesis, both schools of thought
are able to assert that the underlying problem with health care is one of
“system.” For the
Clintonians, the traditional health care system allows, and even
encourages, greedy health care workers to rip off the public.
For the Gekkonians, our medieval, guild-like health care system
discourages competition and stifles efficiency.
Either way, the problem is in the system, so the solution is simply
to fix the system (either through regulatory means, or market-based
means). Since the problem is merely systematic, there is no reason to
question our underlying premises, and thus no reason to question our
American health care myth. Both
schools of thought leave the myth entirely unchallenged and intact.
These two
schools of thought have one more common feature that deserves prominent
mention. In each, the
primary solution to the health care crisis requires limiting the capacity
of doctors to behave as independent agents.
In one case this is to be done by regulatory means in order to
stifle physician greed; in the other it is to be done by the marketplace
in order to eliminate physician inefficiency.
But either way the primary goal, the number one priority, is to
control physician behavior. To
the extent that controlling physicians’ behavior prevents them from
being greedy or inefficient, that’s good. But to the extent that
controlling their behavior prevents them from fulfilling their role as
advocates for their patients, that’s very, very bad.
Thus does each
school of thought provide a serviceable “cover” for activities that,
if subconscious collusion were not the operational imperative, would
quickly be seen for what they are – rationing activities.
Indeed, understanding these two schools of thought allows us to
comprehend the secret language of covert rationing.
For rationing behavior is virtually always couched in terms of one
school of thought or the other.
So far in the
race to control our hearts and minds, neither school of thought has
clearly predominated. In 1993
and 1994, the “heyday” of the Clintons’ health care reform efforts,
the Clintonians were clearly in the driver’s seat.
Then, when the Clinton plan went down to overwhelming defeat, the
Gekkonians rapidly took the fore. Now
it would appear that the public is beginning to sour on health care run by
the ostensible “free market,” and the Clintonians are making a strong
comeback. It isn’t likely that either school of thought will be
vanquished in the near future.
But such a
“horse race” scenario is a gross oversimplification.
As we will see, many forms of covert rationing are supported by
both schools of thought, and the “race” has been characterized more by
collusion than collision. In
any case, for doctors and patients struggling in the trenches, it
doesn’t much matter which school of thought represents the paradigm of
the day. And whichever one is
providing the “cover” at any given point in time, covert rationing in
any guise renders the pursuit of health care exceedingly difficult,
frustrating and dangerous.
The consequences of covert
rationing
We’ve agreed
that rationing in any form is bad. But,
while there’s no doubt that devising a fair system of open rationing
would be difficult and painful, the ultimate consequences of covert
rationing are even more terrible.
Consider just
the most obvious result when health care has to be rationed tacitly. Human
nature being what it is, the special interests (the doctors, hospitals,
insurers, the biomedical industry, and the government) proclaim,
apparently sincerely, that the changes in health care occurring today are
good, and represent their single-minded efforts to become more efficient,
patient-oriented and quality-driven.
Meanwhile (again, human nature being what it is) those same special
interests become embroiled in a bloody competition, between and
among
themselves, for what they realize is a limited health care dollar.
This competition
is incredibly fierce because it is driven not merely by greed, but perhaps
more importantly by the threat to professional and corporate survival. Next
to an all-consuming threat like this, the health care being provided to
the general public (the entity for which the health care system ostensibly
exists in the first place), becomes almost an afterthought.
Consequently, that limited health care dollar, instead of being used to
bring about the greatest good for the greatest number, ends up in the
hands of whichever special interests are best at “playing the game.”
“Oh,” you
may be thinking, “those evil special interests!”
But before calling out the posse, consider the role you yourself
play in all this ("you," that is, the well-informed health
care consumer). For the sad
fact is, covertly rationing health care simply wouldn’t be possible
without your collusion as well, subconscious though it may be.
Indeed, in the covert rationing scheme of things, you and those
like you simply constitute another special interest.
To illustrate,
assume for a moment that, having taken a long look at some of the goings
on in the health care industry, you’ve come to smell a rat.
Perhaps, let’s say, you’ve even begun to suspect there are
forces within the health care system that have lined up to direct the
limited health care dollar their own way, to the detriment of the general
public. This being the case,
what would you do? Would you
cry foul, try to instigate change, attempt to stem the unfair influence of
the special interests, and insist that limited funds be spent to do the
greatest good for the greatest number?
Perhaps. But by doing
so, if you insisted that funds be spent evenly and fairly among the
population, you might personally have a lot to lose. Even if you happen to
be living under a managed care plan with particularly restrictive rules,
for instance, you know that those rules can be bent for the occasional,
vociferously savvy consumer in exchange for silence – silence that keeps
the insurer from having to change the rules for the masses.
So, as long as rationing remains covert, you personally have a very
good chance of getting the health care you need, or, at least, that you
think you need. It makes
as much sense for educated, well-informed patients to silently collude
with rationing as it does for their physicians or their insurance
carriers.
A cynic might
ask: if covert rationing is okay with the health care industry, okay with
well-informed patients, and is truly (as opposed to tacitly) unnoticed by
everybody else, why make a big deal about it?
The answer is, the
covert rationing of health care is more than just selfish, unfair and
deceptive; in the end it is highly destructive not only to each of us
individually, but to our entire society.
For one thing,
by pretending that we are not rationing (and indeed, that there is no need
to ration), we are bequeathing to our children and grandchildren an
enormous and highly destabilizing fiscal burden.
Even more
important than the fiscal burden we are creating for our children is the
political and social burden we are creating for them.
For in order to keep the rationing of health care covert, we are
engaged in a disastrous cascade of compromise and self-deception that
threatens the basic underpinnings of not only our health care system, but
also our American culture. Such
self-deception can be recognized today in every aspect of health care: in
the broad-based restructuring in the business side of health care; in the
sweeping and stultifying changes in the legal and regulatory climate; in
the design, justification, and interpretation of medical research; and
ironically, in the growing call for expanded “patients’ rights.”
These compromises will have destructive effects that range far
beyond merely withholding useful health care from some of those who need
it. Taken together, these compromises constitute
a powerful attack on the most essential ideal of our American society,
namely, the autonomy of the individual.
This ideal is
never completely secure; it always requires a vigorous and ongoing
defense. In fact, we have spent most of the 20th century
defending the rights of the individual over those of society.
The defeat of fascism and of communism (two social orders that each
awarded primacy to society, in the guise of the state), along with the
nearly universal acceptance of the ethical principles embodied in the
Nuremburg Code, was thought by many to have settled the question, once and
for all, in favor of the individual.
But this is a question that can never be answered once and for all.
This question is
deeply challenged by the issue of health care rationing itself.
For if we ration, whether overtly or covertly, we must withhold
from individuals for the benefit of society.
Under even the best of circumstances then, rationing of any kind
poses a serious challenge to the notion of primacy of the individual.
But
while it is at least possible to construct a system of open rationing that
maintains the autonomy of the individual, such autonomy is always
sacrificed under covert rationing. Covert rationing abandons
the individual often as the very first step, and does so without any
discussion whatsoever, and often without any realization as to what is
being thrown away. If we lose
the principle of individual autonomy, we lose everything that is
inherently American. This is
the ultimate price we pay as a society when we quietly, subconsciously
collude with the covert rationing of health care.
It is ironic
that our American health care myth, a myth that derives from our
principled commitment to the primacy of the individual, leads us to
actions that attack that first principle, and virtually guarantee its
destruction. The destruction
of the doctor-patient relationship is merely the earliest, most direct,
and most personal manifestation of this attack.
|
A brief history of American Health Care |
A brief history of health care
The
present state of affairs is difficult to understand for many physicians
and patients who view
the last 50 years as a golden era in health care, and who view the rise of
HMOs as an abomination. But
when viewed from the systems level, it becomes apparent that for much of
the 20th century, our health care system actually has
functioned in a completely unnatural and unsustainable way.
HMOs turn out not to be an abomination to the natural laws
governing the sacred practice of medicine, but a predictable correction to
a way of doing business that was ultimately doomed from the beginning. To
see why this is so, we need to briefly consider how the “traditional”
American health care system came to be as it is.
The
guild-building era
It is interesting to note that such
“modern” ideas as capitation (the providing of medical care for a
fixed annual fee) and the corporate practice of medicine (medical
practices controlled by companies, not by doctors), are actually much
older than we might think. American
companies pioneered the contracting of medical services even before the
beginning of the 20th century.
This innovation came from industries such as railroad and lumber,
whose operations often took place in isolated areas, and for whose
employees medical care would otherwise be unavailable.
Some companies went so far as to build and operate their own
hospitals, and staffed those hospitals with physicians who were paid out
of the company payroll. By
the early 1900s, contract medicine was commonplace in the United States,
and was conducted by many kinds of organizations – not only by companies
(both large and small), but also by multitudes of fraternal orders and
lodges, which began offering subscription medical services to their
members. Soon the federal and
local governments were also contracting for physician services on behalf
of their employees, prisoners, and wards of the state.
It should not be surprising to learn that organized
medicine looked upon these developments with alarm. The mission of
organized medicine was to foster an environment under which their
physician members could practice their profession scientifically and
ethically, while, of course, maintaining favorable fees. Contract health
care placed too much control in the hands of third party payers, thus
threatening all three goals of profit, quality and ethical standards.
In response, in
the early 1900s organized medicine went on the offensive, claiming both
the scientific and the moral high ground.
The practice of medicine, it was asserted, was based in the
sciences. Therefore, the
allegedly poor working conditions suffered by contract practitioners
precluded their upholding the high scientific standards to which
physicians aspired. And thus,
contract medicine was bad medicine.
Further, it was
asserted, contract medicine violated the sacred fiduciary relationship
between physicians and their patients. Such a relationship required
patients and physicians to “contract” directly with one another,
without intermediaries. Any
other party (such as a contractor or the state) inserting itself into this
relationship would end up dividing the loyalties of the physician, and
thus violating the nature of this sacred trust. Contract medicine (and
state-controlled medicine) was therefore unethical.
Medical
organizations strongly lobbied both the general public and state
legislators with the notion that it was in society’s best interest to
prevent middlemen from inserting themselves between physicians and their
patients. Physicians who practiced contract medicine were held out as
being something less than true physicians.
Such unfortunates began to find it difficult to join their local
medical societies, which at the time made it difficult for them to
purchase malpractice insurance and to gain hospital privileges.
In addition, many state legislatures were persuaded to pass laws
actually making most contract medicine illegal.
By
the 1920s the medical establishment had largely vanquished contract
medicine. In essence, the medical profession had successfully created
a classic “guild” – physicians had established a monopoly over an
economic realm, allowing competition to occur only within that protected
sphere. Outsiders had little or nothing to say about how the practice of
medicine was conducted.
Next:
The
economic golden era
The two "golden eras" of
American health care
The "economic" golden
era
Any
health care economist worth his or her salt will tell you that from an
economic standpoint, an ideal health care system is one in which patients
pay directly for their medical care.
In such a system, patients freely choose their own physicians, and
together with their physicians make all medical decisions, mindful that
any costs incurred thereby are theirs to pay.
Cost controls are therefore automatic. During the 1920s and for the
next few decades, this “ideal” system existed in the United States.
Inasmuch as doctors at the time had very little to offer in terms
of expensive (or effective) therapies, and since patients’ expectations
were (appropriately) low, this system worked extremely well from an
economic point of view.
The
"medical" golden era
This economic equilibrium began to falter
in the 1930s, and the disequilibrium rapidly accelerated in the years
following World War II. The
first kink in the armor of direct contracting between physicians and their
patients occurred during the Great Depression, when hospitals began to
suffer from patients’ inability to pay their bills.
Over the initial objections of physicians, financially stressed
hospitals prevailed on state legislatures to legalize the insurance
schemes that became known as Blue Cross.
In order to assuage the moral indignation of physicians, however,
the Blues were created as non-profit, provider-oriented insurance
organizations.
“Provider-oriented” meant two things.
First, Blue Cross (and later, Blue Shield) did not try to tell
physicians how to practice medicine.
Physicians were free to practice as they saw fit, and the Blues
would simply pay the bills on a fee-for-service basis.
Second, the boards of trustees of local Blue Cross and Blue Shield
organizations were loaded with prominent local physicians and hospital
administrators.
Not only did such a system preserve the
direct physician-patient relationship, it also paid the bills more
reliably than did patients themselves. The system worked to so well that
soon physicians became willing to countenance the formation of private
health insurance companies, as long as those companies followed the same
general guidelines set by the Blues.
Health insurance proved to be so popular
that, during the wage and price controls of World War II, companies began
offering it to their employees in lieu of higher wages.
After the war, American labor unions began to demand that employers
provide health insurance as a benefit of employment.
The government liked this idea, too, and in order to encourage it,
tax laws were changed to make the provision of this benefit extremely
attractive to employers.
It is important
to note that this new tax policy created a fundamental change in how
health care was paid for. In
effect, it shifted a huge chunk of the fiscal burden for health insurance
from consumers and employers to the government, where it remains to this
day. Within a few years, the majority of American workers had
employer-provided health care insurance, heavily subsidized by the federal
government.
Then
in the 1960s, the federal government became directly involved in paying
for American health care on a large scale with the institution of
Medicare, and then Medicaid. Since
that moment, the proportion of health care spending directly attributable
to the government has steadily grown – from 24% of all dollars spent on
health care in the 1960s, to 40% by 1990.
Today, when you include tax subsidies for
health insurance, fully 51% of America’s health care spending is
accounted for by the government, and paid for by taxpayers.
Since politicians can tax the people only
so much, a lot of this spending has been piling up in the form of the
national debt, awaiting our children and grandchildren.
But for physicians and their patients
in the second half of the 20th century, the resultant system
seemed nearly perfect. While
patients retained complete freedom of choice regarding which doctors and
hospitals they used, and while the physician-patient relationship remained
largely free of outside influence, somebody else was paying the bills.
There arose an almost complete dissociation between providing (and
consuming) health care, and paying for it.
This economic
arrangement did at least two things that would ultimately spell its own
doom.
First, it allowed the American
health care myth to flourish – the notion that the best possible care
should be provided to everybody, and that where health care is concerned,
there are no limits. It
created expectations that ultimately could not be met.
Second,
this system fostered the development of the medical-industrial complex.
Since any medical advance that seemed useful would be paid for,
powerful corporations arose dedicated to meeting the bottomless demand for
medical advances. The pharmaceutical companies, hospital suppliers, and
medical device companies began turning out a steady stream of improved and
expensive technology. Ironically
(given that this whole system had evolved largely due to physicians’
attempts to shield themselves from corporate influence), these
corporations used their considerable marketing clout to influence the
decisions, the practice patterns, and even the demographic distribution
(such as patterns of specialization) of the medical profession.
The
bottomless expectations of patients and physicians,
coupled with the never-ending meeting (and flaming) of those expectations
by industry, created a rapidly spinning positive feedback loop. The more
health care the doctors and patients got, the more they wanted.
The more they wanted, the more the medical-industrial complex was
happy to provide. It was
inevitable that those paying the ever-mounting health care costs (i.e.,
employers and the government) would eventually reach the breaking point.
While the system that prevailed during this “golden era” came
to be regarded as the norm by (if not the birthright of) American
physicians and their patients, from a broader perspective that system is
clearly an unsustainable aberrancy. At
some point the mounting costs of “no limit” health care had to
generate its own backlash. The
system had to implode.
Era of Reform - the Clintonians have
a go at the health care system
Recognition that such a health care system
could not be sustained did not begin with the Clintons.
Employers and the government initially became alarmed with rapidly
rising health care expenditures as far back as the 1960s and 1970s.
During our more recent national debate on health care reform, few
seemed to remember that President Nixon had first proposed a sweeping
national health care plan more than twenty years earlier. (Yes, Nixon was
a
Clintonian.)
Nixon’s plan, as did the Clintons’ 20 years later, fell victim to the
efforts of the groups most entrenched in the medical-industrial complex:
hospitals, doctors, medical device and pharmaceutical companies, and the
insurance industry.
The failure of Nixon’s reform plan was
followed by two decades of more gradual, stepwise efforts to bring health
care spending under control. Many
of these changes were driven by Congress, whose efforts to regulate health
care were now considered legitimate, since it directly provided health
care funding via Medicare. By
forcing regional planning for expensive medical facilities and by more
carefully reviewing the practices of physicians, Congress hoped to slow
the increase in health care spending.
In the meantime, actions were taken by both the courts and by
Congress to increase competition within the medical marketplace, on the
theory that competition reduces costs (and it does – in almost any other
economic realm). Thus, such
things as legal barriers to advertising, and more importantly, barriers to
the creation of HMOs, were gradually withdrawn.
While doctors chafed over and complained about these efforts
(grumbling, among other things, about the interposition of middlemen
between themselves and their patients), they still got paid, so their
complaints were muffled.
But such stepwise reform efforts had
little if any effect. From 1970 until the early 1990s, as we have seen,
health care spending increased from 7.3% of the GDP to approximately 13%,
from $74.4 billion to nearly $752 billion annually.
By the 1990s, health care spending had
reached the crisis level. Things
were so bad that when the Clintons came into office and went about
launching their comprehensive plan for health care reform, they initially
found an enthusiastic ally in what, one would think, would be their
natural enemy – the Gekkonian
insurance industry.
The dynamics of this uneasy alliance are
fascinating. The insurance
industry supported the Clintons’ wide-ranging reforms because those
reforms promised them a vast new market – the millions of heretofore
uninsured Americans whose premiums would be paid, presumably, by the
government. The Clintons, in turn, needed the support of the insurance
industry in order to have any prayer of passing their vast reform plan.
So the Clintonians and the Gekkonians allied themselves in the name
of health care reform, each with entirely different agendas (the
Clintonians: comprehensive regulations; the Gekkonians: profit), and each
meaning two entirely different things by “managed care.”
In this light, the etymology of the new term
they invented for their joint endeavor is instructive.
“Managed competition” is actually a hybrid that embodies the
chief concerns of both camps. “Managed,” ostensibly from the term
“managed care,” actually carries the connotation the Clintonians
attach to the word – here, managed means regulated.
The word “competition” represents the interests of the
Gekkonians – it implies a for-profit, market-driven sort of health care.
So “managed competition” actually means something like
“regulated free markets.” The
contradiction inherent in this term reflected the unnatural alliance
between Clintonians and Gekkonians, and predicted that the alliance would
not hold.
And
of course, it didn’t. It
fell apart when the insurance industry began reading the appallingly
massive book of regulations the Clintons at last produced, and found much
in it they didn’t like. (Essentially, they found regulations that would
plug many of the more productive loopholes traditionally enjoyed by that
industry.) They suddenly
turned on the Clintons, spent millions introducing the rest of us to Harry
and Louise in their extremely effective series of television spots, and
the rest is history.
Rise of the Gekkonians
While the collapse of the Clintons’
reform plan in 1994 caused a sudden deflation of expectations, the severe
fiscal crisis in health care remained. In fact, awareness of that crisis
had been significantly heightened by the Clintons’ campaign to reform
health care, and nobody (except, of course, some of the doctors)
entertained the delusion that we could simply go back to business as
usual.
But as it turned out, a savior awaited.
That savior was, naturally, that same insurance industry that had
first built up then scuttled national health care reform.
Only now the insurance companies had reformulated themselves into
HMOs, had decked themselves out in Gekkonian raiment, and had fully
assimilated the language of managed care.
And here is what they said: “Citizens!
We all – employers, patients, physicians, hospitals,
manufacturers and insurers – have just dodged a bullet.
Thanks to us, the frightening socialist reforms of the Clintons
have been soundly defeated.
“But where does this leave us? We stand
now between Scylla and Charybdis, between the specter of nationalized
health care on one hand, and the continued profligacy of traditional
fee-for-service medicine on the other.
And we cannot countenance either.
“But here,” the Gekkonians continued,
“is a third way. A painless
way, based on the sound principles of open markets and free enterprise.
Let health care become a business like any other business, and the
market forces will find ways not only to cut costs but also to improve
quality, etc., etc., and with no government intervention.”
The offer, in other words, was to turn
health care over to the marketplace, and let the efficiencies of the
marketplace solve our problems. Because
we’re Americans and we know the benefits of capitalism, and because the
other choices we faced looked even worse, we all said: go for it.
The result has been, over the past few
years, perhaps the most rapid change our health care system has ever seen.
While most of the changes have been real, palpable and material,
the biggest transformation of all has been a philosophical one.
For all their faults, the Clintonians have
always held to the age-old notion that the basic underlying purpose of
health care is to maximize the public good.
Indeed, they believe, this fact is what gives government the
ultimate authority to regulate health care. Only the government can
guarantee that the special interests will act in a manner appropriate to
public benefit. (The flaw in
this argument, for those of us who are suspicious of Clintonians, is that
regulatory bureaucracies often wind up behaving as the biggest, meanest
special interest of all.)
What
the Gekkonians have given us is a brand new first premise.
The primary purpose of health care, they say, is not to increase
public benefit. How could it
be, when health care is merely a business like any other business?
What we should be striving for is to build a well-run business.
Since well-run businesses are beneficial to the community, in the end we
can expect plenty of benefits to go around. But the fact remains that
health care is a business. And the primary purpose of business is to make
money.
In
Section 4 we will closely examine the methodologies the Gekkonians have
used in bringing this striking new vision to fruition over the past six
years.
What is managed care, anyway?
In Section 2 we saw why it is necessary
for us to ration our health care, and why we’ve undertaken to conduct
that rationing covertly. Armed
with that understanding, we now embark on a quest.
Like Dorothy trying to find her way home to Kansas, we begin a
journey through a very strange land, where clues are given in riddles and
things are not as they seem.
Our goal is to learn how covert rationing
works, how it threatens us, and particularly, how it destroys the trust
between doctors and patients. To
do this, first we need to understand the machinery of covert rationing -
which means we need to figure out managed care.
Unfortunately, even trying to define
“managed care” presents a problem, because while everyone seems to
know what it means, it means different things to different people.
It means one thing to health care theorists, another to government
regulators; one thing to corporate purchasers of health care, another to
corporate directors of health care plans; one thing to doctors, another to
patients. It even means one
thing to the healthy and another to the sick.
If you were going
to design a system for covertly rationing health care it would be very
useful to have a central concept like managed care, about which everybody
could communicate using the same terminology, but while meaning entirely
different things. It should not surprising, therefore, that
virtually all our covert rationing activities are being conducted under
the commodious umbrella of managed care.
If we are Dorothy, then “managed care”
is the all-knowing, all-powerful, all-wonderful, and completely enigmatic
Wizard of Oz. To get to
Kansas, we’re going to have to pull down all
those curtains and get a good look at that little fellow back there,
desperately working those buttons and levers and knobs and handles.
First, we should clear up one of the most
common points of confusion about managed care.
“Managed care” itself is different and distinct from “managed
care organizations”. Managed
care in its purest form simply refers to an administrative
philosophy, under which certain management principles that have become
standard in other industries are now applied to the health care industry.
In contrast, a managed care
organization is the bureaucratic entity that purports to apply the
techniques of managed care to a population of actual patients. Health
maintenance organizations (HMOs) and preferred provider organizations (PPOs),
for instance, are two types of managed care organizations. To keep things
simple, from now on I will arbitrarily use the term “HMO” as a synonym
for “managed care organization.”
Since it is only an administrative
philosophy – a technique, a tool – managed care is value-neutral. It
is neither “good” nor “bad,” any more than any other tool is good
or bad. What is important is
how the tool is used.
"Pure"
managed care
Managed care is not a recent idea. It is a
concept that has been around for decades, developed largely in academic
circles by health care policy experts, economists, governmental
commissions and industrial management experts. In its purest form the idea
behind managed care is a simple one – it is to bring organization and
accountability to what traditionally has been a chaotic system of
delivering health care.
Managed
care aims to organize, coordinate, and control the chaotic health care
system, thus achieving the twin goals of producing the best possible
outcomes of care, while at the same time eliminating waste and
inefficiency. This
can be done, it is proposed, by applying to the health care industry some
of the basic management principles that have been used successfully in
other industries. Of course,
there are many theories of industrial management, and hence many
industry-derived principles that could be applied to health care.
But the unifying idea behind virtually all industrial management
principles can be boiled down to one word: standardization. Standardization
of process is what defines the difference between a factory worker and an
artisan. In fact,
standardization can be considered a synonym for industry.
The
Axiom of Industry
It is an axiom
of industry that standardization is good. It is good because it provides
the mechanism for optimizing the two
essential factors in any industrial process: quality and cost.
Stated formally as the Axiom
of Industry: The
standardization of any industrial process will both improve the outcome
and reduce the cost of that process.
If you had a
widget-making factory, you would standardize the widget-making process by
breaking that process down into discrete, reproducible and repetitive
steps, then optimizing the procedures and materials necessary to
accomplish each step. Later,
if you wanted to improve the quality of your finished product (or to
reduce the cost of producing it), all you would have to do is improve that
process. You would re-examine
each step of the process, one by one, looking for opportunities for
improvement. To do this, of
course, you would need to understand the process very well, and you would
also need to collect data about how the process works. But with such an
understanding and with the right information, you would probably be able
to identify a few minor changes, often involving only one or two steps,
that would allow you to make your widget better – or cheaper. The beauty
in such a system is that you have only to make one change – to the
process itself – and every single widget that comes off the line after
you make that change will be improved.
So:
standardization is good. It
leads to higher quality and lower cost.
Conversely, variation is bad.
It reduces quality and raises cost.
Proponents of
managed care argue that there is no reason that standardization should not
be just as useful in the health care industry.
In fact, since medical care traditionally has been completely
individualized, highly variable, and without any semblance of
standardization, there must be a huge opportunity to improve the processes
of care, and to make them both cheaper and more effective.
Without a doubt, there is merit in this idea.
Critical pathways
The best illustration of how
industry-derived principles have been applied to clinical medicine is in
the use of “critical pathways.” Critical
pathways were developed as a means of helping those in the health care
system to study the process of delivering health care, to standardize that
process as much as possible, and to use that standardized process to
improve outcomes and reduce cost.
In practice,
critical pathways are blueprints for delivering care to patients with
certain specific medical problems. 
Consider, for instance, a critical pathway
for patients having hip replacement surgery. A surgeon following such a
critical pathway would have a blueprint of what services he or she is to
provide for the patient from the date of admission until the date of
discharge (which is, of course, predetermined). The surgeon will have a
checklist telling which laboratory tests to order and when, what
medications to administer at which times, and what complications to watch
for. The nurse and all other health care workers involved in the
patient’s care will have their own checklists.
They will know from the moment of admission, for instance, when to
take vital signs, when to get the patient out of bed, when to begin
physical therapy, and what sort of instructions to provide to the patient
before discharge. All this is pre-determined by the critical pathway.
All the while, the care each patient
receives under the critical pathway is being monitored by a “case
manager.” The job of the
case manager (usually a nurse), is to track how well the doctors, nurses
and other health care workers involved in the patient’s care are
sticking to the prescribed pathway. Every
deviation from the pathway (for instance, the patient with a hip
replacement might begin physical therapy on Day 3 instead of Day 2), is
tabulated as a “variance.” The
idea of tracking variances is not to mete out punishment, but to identify
areas within the process of care that need improvement.
If too many instances of a particular variance are seen within a
critical pathway, then either medical personnel need to be given further
instruction on following the pathway appropriately, or the pathway itself
should be changed to reflect more realistic expectations.
The case manager is also responsible for
tracking the medical outcomes of patients cared for under the guidance of
a critical pathway. If a pathway is shown to be leading to suboptimal
outcomes of care, that pathway needs to be revised.
It is said, therefore, that a critical pathway is never static.
It is a “living” document, constantly being monitored and
revised in order to produce an ever-improving process of care.
Critical pathways
thus do at least three things that traditionally have been beneficial in
industry. First, the mere
act of developing a pathway requires one to develop an understanding of
the process being managed. Prior
to managed care, insights into the processes of care were rare.
Often when developing a pathway, one or more “routine” clinical
practices are immediately identified as being obviously wasteful.
So the very act of creating a critical pathway often leads to a
rapid improvement in the efficiency of medical care.
Second,
critical pathways provide a means of standardizing the processes of care.
To the extent that health care is like other industries, standardization
can be very effective in improving outcomes and reducing cost – mainly
by assuring that all patients enrolled in a critical pathway receive all
necessary items of care, and do not receive any unnecessary ones.
Third,
critical pathways provide an organized means of defining, acquiring and
tracking data related to the process of care.
As we have seen, data collection and data analysis are the keys to
improving any repeatable process. Critical pathways thus illustrate how
vital to good managed care is the science of information management, and
the sound, logical application of well-formulated information.
For many kinds of medical processes,
critical pathways have helped hospitals and physicians to achieve the twin
goals of managed care – improving outcomes, and doing it more cheaply. While
critical pathways are only a small part of “managed care” itself, they
can, in fact, be seen as the embodiment of the main principles by which
managed care aims to organize, coordinate and tame the health care system.
It quickly becomes obvious to most individuals
participating in the development of managed care procedures that much can
be gained by applying these principles. In fact, it is largely due to the
success of critical pathways that many within the health care field have
come to embrace managed care with enthusiasm.
The ability to systematically reduce the cost of care without
worsening the quality of care is a very attractive proposition in these
difficult economic times.
Two limitations of managed care
Unfortunately, there are
at least two inherent limitations to the use of industrial management
principles in medicine. The first
is that not all medical processes are suitable for
standardization. The second is that
the Axiom of Industry simply does not hold true when you are treating
patients.
Not all medical
processes are suitable for standardization
The methodologies of
managed care work best – indeed, they only work at all – when you’re
dealing with a process that can be broken down into a predictable series
of reproducible tasks that will generate reproducible results.
In other words, industrial management tools work best when the
process of care is similar to the process of making widgets. And to the
extent that the health care “task” being managed is widget-like,
managed care tools such as critical pathways can be highly effective.
Hip replacement surgery,
for instance, tends to be reasonably widget-like.
To a
large extent it is standardizable. We
know, for instance, that on Day 1 the hip replacement operation itself
will take place. We also know
that since hip replacement is usually an elective procedure, the
patient’s other medical conditions will have been stabilized prior to
surgery, and so should not present unexpected problems during the
hospitalization. Thus the
critical pathway can concentrate on steps (such as early ambulation) to
minimize the risk of complications of surgery, and to maximize rapid
recovery. For hip replacement and many other elective surgical procedures,
the use of critical pathways has resulted in reduced lengths of hospital
stays, less cost, and more rapid (or at least, no worsening in the time
of) recovery.
In contrast, developing
critical pathways for many medical illnesses (as opposed to surgical
procedures) has proven extremely problematic.
For medical illnesses, both diagnostic procedures and treatments
can be difficult, if not impossible, to standardize.
For instance, consider what happens when we try to develop a
critical pathway for congestive heart failure (CHF). CHF can be caused by
a multitude of underlying conditions (such as coronary artery disease,
valvular heart disease, or a viral infection of the heart muscle), and
each underlying cause can produce a unique set of potential diagnostic and
therapeutic options. Patients
presenting with CHF also display a wide range of severity of illness (from
being mildly ill to moribund), and often have related complicating
disorders of one or more additional organ systems (such as kidney failure
or peripheral vascular disease). These
factors, along with a multitude of others, ultimately determine what
diagnostic and therapeutic maneuvers one will need to perform.
Knowing only that a
patient has CHF tells you nothing about whether that patient will require
cardiac catheterization, angioplasty, bypass surgery, valve replacement, a
pacemaker, an implantable defibrillator, a mechanical ventilator, a
prolonged and complicated stay in the intensive care unit, or just a
couple of diuretic tablets and overnight observation.
No two patients with CHF are alike; and there is no such thing as a
“standardized” patient.
For medical conditions
like this, in which every patient tends to be unique (that is, in which
they are very un-widget-like), managed care techniques tend not to be very
useful. Unfortunately, the
majority of medical illnesses fall into this category.
The
Axiom of Industry does not apply to people
The second
inherent limitation in applying the principles of managed care, and the
one that is more pertinent to our discussion of covert rationing, is that
the Axiom
of Industry simply does not hold true in medicine.
In health care, standardization does not always both improve
outcomes and reduce cost.
It is inarguable
that in health care, better is not always cheaper. Sometimes, highly
effective treatments are extraordinarily expensive, and applying such
treatments to every patient who needs them can be extraordinarily costly.
Other times, the cheaper of two acceptable medical therapies will be
measurably less effective than the other. Therefore, standardizing medical
processes in order to optimize outcomes will sometimes increase overall
costs; and standardizing medical processes in order to optimize cost will
sometimes lead to diminished outcomes.
Like it or not, at least occasionally you will have to choose one
goal over the other.
It is
instructive to consider just why this is so. What makes the Axiom of
Industry apply to other businesses, but not to health care?
The answer is: patients are not widgets.
While this fact is obvious to everybody, its implications,
apparently, are not.
If you’re a
widget maker, deciding between two manufacturing processes is purely a
matter of economics. Nobody expects you to consider the widget itself.
Thus, if a new process will mean that an extra 15% of the widgets
coming off the line will fail to pass quality inspection, that’s okay
– discarding 15% of your widgets is not a problem – as long as your
bottom line is more favorable as a result.
The outcome by which you are judged is not the individual widget
itself – it’s that bottom line. So for a widget maker, the outcome
always moves in concert with cost (or rather, with profit), because the
two are identical.
If you’re
running an HMO, on the other hand, the outcomes in which you’re supposed
to be interested concern how things turn out for the patient. Thus, an
extremely expensive process of care that yields a significantly better
outcome is one you’re supposed to use, even though it only gets you a
healthier patient; it doesn’t make your money back for you.
Furthermore, a process that increases patients’ mortality rate by
15% is one you should disregard, even if it is substantially cheaper than
the alternative. The outcomes with which you’re supposed to be concerned
may move in the same direction as costs, or in opposite directions.
But because you’re dealing with patients, the Axiom of Industry
doesn’t hold.
In summary,
“pure” managed care has given us some very useful ideas about how to
make health care delivery more efficient without diminishing medical
outcomes. The principles of
managed care are being widely and profitably used in most large hospitals
in America today, and without a doubt have the potential of even broader
applicability. However, contrary to the dogma, these principles are not
always applicable in health care and do not always yield favorable
results.
Managed care - two faced?
Actually, it has many faces.
By which I mean there are several variations in what the many
entities within the health care system mean by the term “managed
care.” All the variations are based, more or less, on the “pure”
ideas we’ve just discussed, but none conceive of, promote, or apply
managed care in its purest form. “Pure” managed care does not exist in
the wild.
Fortunately,
the most prominent variations in managed care fall into two major schools
of thought, which, as it turns out, happen to be those same schools
we’ve already had the pleasure of meeting – the
Clintonians and the Gekkonians.
Clintonian managed
care
As you will recall, the
Clintonians believe that the problems in our health care system can be
traced to human weaknesses (specifically, physician greed).
Thus, fixing these problems depends on setting public policy and
promulgating governmental regulations. One can readily see how a
theoretical construct like managed care might appeal to such an outlook,
since managed care offers to remove some of the choices humans have to
make in delivering health care (choices which are easily colored by
greed), and to replace them with externally-generated processes and
procedures. Philosophically, it’s a good fit.
Because Clintonians
genuinely like the ideas behind managed care, the people who conceived of
and developed those ideas – the academics, health care experts,
government commissions, economists and editorialists –– tend to
gravitate to the Clintonian camp. Thus
fortified, Clintonians espousing the ideals of managed care tend to sound
like very much like purists. They
are proselytizers, who truly believe in applying continuous quality
improvement, critical pathways, information management, and other
efficiencies of industrial management to health care. Because of their
obvious sincerity, and because many of their ideas have considerable
merit, it is easy for right-minded folks to fall in with this crowd.
What differentiates the
Clintonians from true managed care “purists” is in what they mean by
the word “managed.” In
classic managed care, “manage” merely refers to the application of
management principles such as standardization. To Clintonians, manage
means “regulate.” Managed
care is, to a large extent, simply a convenient tool for advancing their
basic belief in policies and regulations to control human behavior.
Invariably the specific recommendations put forth by Clintonians
have much more to do with establishing a centralized regulatory structure
for health care than they do with classic managed care principles.
To them, an envisioned system of regulations has become synonymous
with managed care.
Gekkonian managed
care
The Gekkonians come at
managed care from an entirely different direction.
The chief problem with health care, they believe, has always been
that it is treated as something other than the business it is.
The solution, therefore, is to open up health care to the
marketplace, to let competition and the free market solve its problems.
Historically, the
Gekkonians have little claim to the managed care peerage. In fact,
Gekkonians spent decades decrying managed care as socialist heresy.
Freedom and competition is their battle cry, and managed care
smacks too much of social engineering.
In recent years,
however, the Gekkonians have co-opted the term “managed care” to their
own ends, and in so doing have utterly changed its meaning.
Their tie-in to managed care is quite tenuous; indeed, it is almost
brazen. Since managed care
techniques derive from industrial management principles, they hold,
managed care is actually a child of the open marketplace.
Thus, Gekkonians seem to be saying, what managed care is really all
about is applying the principles of free enterprise to the business of
health care. Managed care to Gekkonians means managing the finances of
health care. It means
dog-eat-dog, compete until you die, for-profit health care.
Any actual relationship between Gekkonian managed care and classic
managed care is purely incidental (i.e., sometimes standard managed care
techniques can be useful, but only if they give you a competitive
advantage.)
What
we really mean by "managed care"
Both faces of managed
care, then, have co-opted the terminology of “pure” managed care in
order to advance their own goals. Managed care is a means of establishing
a stronger system of regulation on one hand, and a means of seeking profit
on the other. Both schools of
thought are prominent today, and both are actively and loudly advancing
their respective points of view. A
lot of the turmoil we have seen over the past decade, in fact, can be
explained by the competition and interplay between these two schools of
thought as they each try to advance their visions for American health
care.
In Section 3 we saw how
the Clintonians took a stab, in the early 1990's, at promulgating their
version of managed care, and how, as a result, for the rest of the decade
the Gekkonians have had nearly free reign to advance their
version.
In the next section, we
will paint a portrait of the modern Gekkonian HMO, as it operated for the
latter half of the 1990s.
The chief aim of capitalism
The chief aim of
capitalism, as we all know, is to increase capital. Of course, needing to
make money isn’t really new for any health care organization, whether
it’s for-profit or
not-for-profit. Both
varieties have always had to be vitally concerned about where the money is
coming from. Forget that, for
even a moment, and you’re lost forever, no matter what sort of good
works you may perform.
What’s new for
contemporary HMOs is that making money is no longer something to be
whispered about, or a topic unsuitable for public discussion, or a
necessary evil. Making money is now more than okay. It’s expected,
celebrated and rewarded; it’s become why HMOs exist in the first place.
In fact, making money is the means by which HMOs will save the
American health care system. And the better they are at making money, the
better they are for society.
This new
paradigm is uniquely American. Every
other western nation has bent the market to accommodate the needs of
health care. We are bending
health care to accommodate the needs of market.
And it’s drastically affecting the way HMOs operate.
To
see how, let’s create a portrait of an imaginary, modern-day HMO called
“For the Patient” (FTP).
For
The Patient (FTP) - 1995
It’s 1995.
The Clinton health care reform plan has just gone down in flames,
and it’s a new era for HMOs – HMOs like FTP.
FTP, established
in 1993, has already gained a foothold in eight cities along the eastern
seaboard. Following the
original business plan, FTP was taken public last year.
But FTP is in
trouble. Earnings, and consequently stock prices, have been stagnant.
Enrollments have not grown to expectations; the physicians on
FTP’s panel (most of whom are new to managed care) have been reluctant
to change their inefficient patterns of practice; and it’s been
difficult to get hospitals in the FTP system (some of which have been
rivals for decades) to cooperate with one another. The shareholders are
restless, and in response the board has just fired the old CEO (a
physician and one of the FTP’s founders) to bring in a hard-nosed
businessman who will know how to put things right.
That
new CEO is Gregory Gekko (no relation to Gordon). He doesn’t know much
about health care – but then, the last CEO knew plenty about health
care, and look where it got him. Besides,
Gekko didn’t know anything about greeting cards either before he
developed a tiny greeting card company called Greetings-Schmeetings into a
multibillon dollar corporation that’s giving Hallmark a run for its
money. What Gekko does know
is business. And health care, everyone now recognizes, is just a
business like any other business.
Gekko
immediately sizes things up. He begins with the three fundamental steps
that must always be taken when building a business: First, define your
customers. Second, define the
scope of your business (i.e., decide what it is you do to make your
customers happy). Third, figure out
how to maximize your revenues and minimize your expenditures, while
applying your scope of business to your customer base.
Defining the
customers
To Gekko, making
money is everything – but not because conservative Republicans have
recently swept Congress, or because it’s the new paradigm for health
care. Making money is everything to Gekko because that’s what the
stockholders of FTP have put him on this earth to do.
Thus, Gekko is
acutely aware that, from the his own personal standpoint, his primary
customers are, and can only be, the shareholders of FTP.
Every last decision he makes must be geared toward pleasing those
shareholders.
Gekko knows this
is where FTP's original CEO had made his big mistake. The poor man had
considered his primary customers to be the patients enrolled in FTP, and
the doctors who took care of them. It wasn’t until his final
shareholders’ meeting that the old fool had finally got it.
Of course, it had been too late for him by then.
The shareholders
are always the ultimate customer for any corporation, Gekko realized. At
the same time, to keep those shareholders happy, Gekko also had to
identify the business customers - the ones who purchase the product sold
by FTP.
Gekko’s
predecessor had blown this one, too, because he had thought the patients
who enrolled in FTP were the purchasers.
But patients don’t really choose health insurance. They just sign
up for whatever insurance product is chosen by their employers.
The people who
actually make the decision to buy FTP, Gekko knows, are the V.P.s in
charge of benefits - the corporate officers who negotiate the employee
health insurance contracts for their companies.
Gekko fully understands how important this relatively small and
easily identified core of people is to FTP, and he will do whatever is
necessary to convince them to offer FTP to their employees as one of their
insurance options – or better yet, as their only
insurance option. Gekko is not
worried. He knows these people - they're corporate executives, like
him. He knows what he needs to do to get their business.
At some level,
Gekko supposes, the doctors and patients of FTP also have to be considered
his customers. But this feels
wrong to him. The
doctors and patients, after all, are the ones who spend
his money.
Keeping them happy implies that he’s letting them spend more
money than they might otherwise get to spend.
Keeping them happy therefore feels counterproductive.
As he learns more about the business of health care, Gekko tells
himself, he’ll have to figure out ways to make it matter as little as
possible about keeping doctors and patients happy.
Defining the scope
of business
This is also
pretty straightforward for Gekko. FTP’s
main business is to take in money in the form of health insurance
premiums, and in return, to arrange for the provision of health care to
the individuals for whom the insurance is paid.
How FTP should go about providing that health care is a completely
open question for Gekko. There
are a lot of ways to do it, and he’s not married to any one of them.
The only criterion is that whatever method he uses needs to satisfy
his customers (i.e., the shareholders and the corporate V.P.s).
Since his main
goal is to make money for the shareholders, Gekko also understands that he
needs to be alert to any other opportunities that may present themselves
for increasing the value of FTP. Focusing
only on providing health care
may prove to be a disservice to his ultimate customers.
Deciding how FTP will make its money
Having
identified his customers and his scope of business, Gekko is now ready to
decide how FTP is going to make its money.
There being nothing unique about the business of health care, Gekko
again returns to the fundamentals.
In any business, maximizing your profits requires you to a) charge
as high a price as possible for your product; and b) minimize the cost of
producing that product.
Charging
what the market will bear
This is the easy
part of the profit-making formula. Gekko needs to set the price of his
health insurance premiums as high as he can get away with. And that’s
whatever price is low enough to induce employers to switch to FTP, but not
a penny lower.
Since
high-priced indemnity insurance plans are still active in all the cities
in which FTP operates, all he has to do is to beat their prices by a
little bit. So Gekko sets his
rates to a fixed proportion – 90%, in fact - of the indemnity rates, and
he’s in business. The beauty of this methodology is that, since FTP’s
rates are fixed to the highest rates in the market, whenever the
indemnities are forced to increase their rates, FTP automatically gets a
raise, too.
Gekko
understands, of course, that the reason everybody’s pushing HMOs in the
first place is that they’re supposed to reduce the cost of health care.
And most people assume that what HMOs charge for their premiums are
tied somehow to that lower cost of delivering care.
Gekko just shakes his head. Why
would people assume that? Why
would anyone expect Gekko, a businessperson, to pass his savings on to the
consumer (unless doing so results in a clear-cut competitive advantage)?
Businesses are supposed
to make as much profit as they can. That’s how it works. To do anything
else would be unfair to FTP’s shareholders; indeed, it would be
unethical in Gekko's frame of reference - not to mention fatal to his job.
Gekko’s
insight here deserves some elaboration.
Despite the aggressive cost-cutting measures taken by HMOs (which
now enroll over 80% of insured Americans), the health insurance premiums
paid by employers haven’t really fallen.
In fact, after a few years during the mid-1990s in which the
inflation rate for insurance premiums dropped to below 5%, the rate of
inflation has reached double digits again.
This resumption in health care inflation is inevitable, of course,
due to the demographic considerations described in Section 2.
But with the drastic cuts in services being made by HMOs and the
resultant lowered costs, we should have seen, at least, a rather sizeable
one-time savings in health care spending.
Where did it go?
Gekko has
already answered our question. The
dollars that HMOs squeeze out of the system are not returned to the payer
in the form of reduced premiums; nor are they plowed back into the health
care system in the form of improved or widened services; rather, they are
pocketed by the HMOs in the form of administrative costs, huge bonuses for
top HMO executives, and profit for the shareholders.
In fact, the best estimates suggest that an average of 25% of all
health insurance premiums paid to HMOs goes for administrative overhead
and profit.
In contrast, by
the way, only 20% goes to doctors.
But I’m not
complaining.
Minimizing the cost of doing
business
When you bring in the bucks, how do you
keep them?
This is the hard
part. Gekko knows the health
care crisis has persisted despite the strong efforts that have been made
for decades to reduce health care spending. But he is confident.
The key element that was missing from those prior efforts has now
been supplied – the profit motive.
Gekko – or rather, FTP – gets to keep whatever money it saves.
What a wonderful way to concentrate the mind!
He is sure he can find ways to cut costs.
Furthermore,
the health care crisis itself will be very helpful to him, in that it
provides him with some very useful cover.
The need to trim the cost of health care gives him an acceptable
reason to make cuts that might otherwise be unacceptable.
And the mandate not to reduce the quality of care gives him an
excuse to keep his premiums as high as he can.
(If we cut our premiums too much, he can say, quality will suffer.)
Confident that he has a lot of latitude, Gekko develops a strategy
for minimizing his cost of doing business.
Right
off the bat, Gekko can think of three general strategies for keeping the
money he collects. He can grow FTP in order to take advantage of the
economies of scale; he can act to avoid as much financial risk as
possible; and he can act to gain control of the behavior of the physicians
on FTP's physician panel.
Using
economies of scale
Gekko
resolves to grow FTP rapidly by acquiring major health care facilities
(hospitals and nursing homes) in all its key cities of operation. Then,
using the clout that goes along with being big, he will negotiate very
favorable purchasing agreements with all his major vendors.
He will be able to reduce pharmacy costs, for instance, by having
the major pharmaceutical houses “bid” to have their drugs included on
the limited FTP drug formulary (a list of drugs approved by FTP).
And, he will be able to save on management costs by firing the
layers and layers of old-fashioned administrators in FTP hospitals, and
replacing them with streamlined management teams made up of his own
people, using standard FTP operating policies and procedures. There are so
many advantages to being big that Gekko resolves to expend a lot of energy
in becoming as big as possible as quickly as possible.
Acquiring community
assets
Along the road
to becoming big, Gekko stumbles upon a gold mine.
It is a gold mine not directly related to FTP’s scope of
business, but it’s close enough.
The
first time Gekko acquires a community hospital for FTP, he notices that
within a week of the transaction the price of FTP’s stock rises by 5%. What
he has just done, he realizes, is to cash in on a publicly-owned asset. So
Gekko tries it again, and this time the stock rises by 7%.
Gekko’s head spins. This
scheme threatens to become such a windfall that Gekko momentarily worries
that it might overwhelm the real business of FTP.
The profits promise to be so astounding, however, that he decides
not to worry about it.
Gekko is right.
It’s a great scam, and completely legal to boot.
Non-profit
hospitals exist in the first place because their communities decided they
were needed for the public good.
Accordingly, these hospitals were established under the nonprofit
laws, which required them to be used solely for charitable purposes.
Over the decades and in return for their service to the community,
these hospitals have operated under the public largesse, in the form of
their blanket tax-free status, their ability to raise tax-free bonds, and
their ability to raise tax-free charitable contributions. Their boards of
trustees, made up of prominent members of the community, were charged with
guarding the accumulated public value represented by those institutions.
The widespread transfer of not-for-profit
public assets (such as a community hospital) to for-profit corporations
(such as an HMO) is a relatively recent phenomenon, fueled by the
Gekkonian notion that for-profits are inherently more efficient.
Such transfers only occur at the urging of the community
hospital’s board of trustees, and must be overseen by either the state
insurance commissioner or the state Attorney General.
That state official, if he or she approves the conversion, is
expected to put a formal dollar value on the hospital.
The HMO then must reimburse the community for that amount, usually
by establishing a charitable foundation.
It is a procedure that might be acceptable
in theory. In practice,
however, all too often the hospital’s board (the entity that recommends
the transfer in the first place) might permit, or even encourage, a low
valuation for their hospital. Also,
state insurance commissioners seem congenitally unable to establish an
accurate value for non-profit hospitals. In doing those valuations, for
instance, they consider only the tangible property values.
They ignore (and neither the hospital’s board nor the HMO insists
on pointing out to them) the value of many of the assets owned by the
hospital such as trademarks, reputation and name recognition, provider
contracts and subscriber lists. The
commissioners don’t insist on going through a competitive bidding
process or conducting a formal market valuation. In fact, only the
hospital’s value as a charity, and not as a business, is considered.
And for some reason insurance commissioners often also seem quite
happy to do the negotiations behind closed doors, and with no public
disclosure.
Within six
months Gekko establishes a routine for acquiring community hospitals, and
it works like this. First,
the hospital’s board of directors see fit (often induced by stock
options or offers of directorships with FTP) to severely underrepresent
the value of their institution to the insurance commissioner.
The insurance commissioner then approves the transfer to FTP at a
low valuation rate. Then, after the hospital becomes a hard asset of FTP,
its true value is established by the open market as reflected in the price
of FTP’s stock. Almost
invariably, that value is orders of magnitude greater than the value set
by the insurance commissioner. So,
without doing a thing to improve the quality of care or to reduce the cost
of care, FTP’s market value soars – and all at the expense of the
public.
It’s a
win-win. During Gekko’s
first 12 months at the helm of FTP, not only does the company’s stock go
through the roof, but also Gekko acquires key medical facilities in all
his cities of operation (which he’s now expanded to 15). He is able to
begin instituting all his efficiencies of scale.
More importantly, he finds he is able to begin significantly
influencing the health care markets in most of those cities, and
consequently controlling the behavior of even the most recalcitrant of
physicians (who find they now have to deal with FTP whether they want to
or not).
Avoiding risk
While risk-taking is a
fundamental activity of any aggressive business, that risk taking must be
measured, and must be accompanied by a reasonable probability of paying
off. A tenet of any business is to avoid any unnecessary financial
risk, that is, risk that offers little or no likelihood of increasing
revenue.
A glance at the
dynamics of the HMO industry is enough to convince Gekko that the
biggest risk he faces is sick patients.
They are extremely expensive these days. The sickest 10% of the
population, in fact, account for over 70% of all health care spending, and
one really sick subscriber can wipe out the potential profit from twenty,
thirty, or even fifty healthy subscribers.
Sick patients are to be avoided like the plague. 
There are two
obvious ways of avoiding the sick.
First, don’t sign them up. Second,
if you do have to sign them up, make it unpleasant for them to stay with
you.
Fortunately, the
system Gekko has inherited helps immensely.
Since FTP’s coverage is only available through employers, only
employed people can sign up for FTP.
And employed people are, on average, far healthier than unemployed
people. There are good
reasons for this. In most of the cities in which FTP is active, a
substantial proportion of the unemployed do not have jobs precisely
because of some chronic illness, disability, or addiction. And because
employers are loath to employ the obviously ill, there’s an invaluable
screening process that takes place before anyone even becomes eligible for
FTP. You can’t buy prescreening like that at any price, and Gekko’s
getting it for free.
Not all of
Gekko’s options in this regard are purely passive. He notes that several
of FTP’s new hospitals run specialty centers that are clearly
counterproductive – two hospitals, for instance have Congestive Heart
Failure Centers, and five have Cancer Centers.
Why should he support clinical programs that go out of their way to
attract patients with chronic (and therefore expensive) illnesses? Gekko
orders his Medical Director to shut these programs down immediately.
In addition,
FTP’s new size gives Gekko some clout where it counts.
When he learns that Congress is considering legislation that would
require insurers to make health insurance available to people who are
“between” jobs, he directs FTP’s high-paid lobbyists to keep any
such bill from even reaching the floor.
Despite his best
efforts, Gekko realizes, FTP will get its share of patients with chronic
illnesses. He’ll deal with
these simply by allowing layers of obstacles to form between those
patients and the care they want. Gekko
realizes he doesn’t have to ask anyone to create such barriers –
they’ll form naturally within FTP’s bureaucracy.
What he needs to do is to let the system bog down in red tape for
the ill, while, at the same time, work hard to keep the system squeaky
clean for healthy subscribers.
It won’t be
long before the chronically ill begin switching to another plan out of
sheer frustration. Even
better, the healthy (who are receiving benefits like free memberships to
health clubs) won’t know what the malcontents are complaining about –
FTP seems pretty good to them. And as a result, when FTP does its periodic
consumer surveys, at least 70-80% of its subscribers (i.e., a proportion
representing a large majority of its healthy subscribers,) will rate its
service as excellent.
The practice of attracting only healthy
patients to one’s HMO is called “skimming” or “cherry-picking,”
and it’s a true art form. HMOs
make a lot of money by enrolling healthy young families and avoiding the
old or chronically ill – especially since their revenues are not based
on the cost of delivering care, but instead on a fixed proportion of the
premiums of higher-priced insurance plans.
So skimming actually makes money for the HMOs twice – once by
enrolling only patients who probably will not need medical care; and again
by driving the sick into high-risk plans – causing the premiums of those
plans to rise, and thus pulling up the HMO’s premiums automatically.
The
practice of discouraging usage of expensive services, and thus making
health care particularly inconvenient for the ill, is openly discussed as
a legitimate technique among health care managers.
A 1994 article in Journal of
Health Care Marketing is particularly interesting in this regard. This
article praises several useful techniques that HMOs have developed for
discouraging the use of (or “demarketing”) costly health care
services. To quote:
“Decreasing
accessibility to services . . . . can be accomplished by “managing”
the information distributed to patients regarding services available and
how to access them. For
example, an organization might excessively promote less-costly preventive
procedures . . . .and repress information about other elective and/or
expensive services. In
addition, providers can strategically locate and number specific services
to make them easy (e.g., primary care) or difficult (e.g., specialists) to
utilize. Furthermore, lag
periods . . . . also serve as
containment strategies. Lags
may be affected by the need for referrals, limited number of contracted
specialists, restricted or inconvenient appointment availability, and
increased office-visit waiting periods.” Borkowski NM. Demarketing of
health services. Journal of Health
Care Marketing 1994;14:12.
So as you can
see, the professional literature has laid out a roadmap for Gekko.
Nowhere has the
practice of skimming been more profitable for HMOs than in the
government’s push to get Medicare patients into HMOs.
A Medicare HMO gets paid a flat amount per enrollee. If it spends
less in delivering health care than it takes in, the HMO keeps the
difference. The amount
Medicare HMOs receive is set at 95% of what it costs to care for a
Medicare patient on a fee-for-service basis, which currently is about
$5000 per year.
HMOs are plenty
smart enough to figure out what Congress apparently can’t –
cherry-picking is especially profitable with Medicare patients.
If HMOs can recruit from the healthiest 75% of Medicare patients
(who use only 9% of the Medicare health dollar), the sickest 25% of
patients then continue using fee-for-service plans, thus driving cost for
those plans through the roof. The
HMOs continue to receive 95% of those higher premiums.
HMOs have to
work a little harder to cherry-pick Medicare patients (since employers
don’t do the dirty work for them), but they’re more than up to the
task, and it’s especially worth the effort.
Watch how your local Medicare HMOs do their recruiting.
It’s likely you’ll see them advertising recruiting drives in
affluent suburbs, or at country clubs, or on the third floor of a building
without elevators. They want the
active, vibrant, "youthful" oldsters, like the ones who frequent
the denture commercials. Medicare HMOs assiduously avoid the less
affluent parts of town. They
not only avoid recruiting patients in such locations, they (and
non-Medicare HMOs for that matter) also avoid contracting with doctors
whose offices are located within two bus transfers of those areas.
As an added benefit, this practice punishes doctors who choose to
work in such economically deprived areas.
Shedding
risk
In early 1996,
one of Gekko’s vice presidents hands him a report entitled “Risk
Sharing – the ultimate means of reducing FTP’s fiscal risk.”
The report details the practice of risk sharing, recently taken up
by several HMOs, whereby the HMOs’ patients are “assigned” to a
specific consortium of doctors and hospitals (called a Physician Hospital
Organization, or PHO) which agrees to go “at-risk” for those patients.
Thus, for a fixed payment, the PHO will provide all medical care
for those patients, and assume the financial risk of doing so.
“It’s
beautiful,” says the V.P. “We keep, say, 27% of the premium off the
top and give the rest to the PHO, along with the risk. I mean, we dump all
the risk. We’d actually make more money than we are now, and we
wouldn’t have to worry at all about those pesky details of health care
management. The PHO worries
about all that.”
Gekko likes the
idea. A lot.
The name is wrong, of course, since it’s not sharing risk at all
– it’s shedding the risk. It
would remove any uncertainty about FTP’s earnings – all Gekko would
have to know is how many subscribers he had, and automatically he’d know
FTP’s earnings to the penny a year ahead of time.
FTP’s shareholders would like that very much.
And since it wouldn’t matter any more how sick his subscribers
were (since the risk of caring for them would no longer be his), he could
stop his expensive cherry-picking practices and just sign up anybody who
could pay the premiums. And
if he encouraged the formation of competing
PHOs, then he could let them bid against each other for the patients
FTP signed up. If he played
his cards right, FTP could walk away with as much as 30 or 31% of the
premium dollar.
But it’s still
risky. It would reduce FTP to
a mere middleman. It’s not
likely that employers or the government would let a practice like that
continue forever. Sooner or
later they’d catch on and cut FTP out altogether. Risk sharing is
attractive, but it’s attractive as an end game.
Gekko
thanks his vice president and promises him a small bonus for his fine
work, but says, “Not yet.” He
puts the report in his top desk drawer, where he can find it when he needs
it.
Doctors and their
patients
One night
shortly after becoming CEO, Gekko has a nightmare. A doctor and a patient
are sitting together in the privacy of the doctor’s office, and just
between the two of them are deciding how much of Gekko’s money to spend
on the patient’s medical problem. Nobody is in the room with them.
They are alone. And
all they talk about, as they ponder their options, is what the patient
wants or needs. Then, the
decision at last made, the doctor takes out his pen, and with a few
strokes bends the will of the vast medical-industrial complex to suit his
patient’s needs.
Gekko awakens in
a sweat, and considers his dream. He suddenly realizes that all you have
to do is to multiply the one encounter he’d dreamed about by the
millions of similar encounters that take place every day, and you’d know
why health care is so expensive.
It frightens
Gekko to think that this is how his money is being spent.
But the fear motivates him powerfully, and focuses him on what he
has to do to control his expenses.
Simply, he has
to control the behavior of his physicians. There is no way he can allow
them to carry on as if the patient is their only concern. When FTP
physicians are counseling their patients, deciding how much of FTP’s
money to spend, they’ve got to consider something other than the
patient. They’ve got to consider the needs of FTP.
Gekko knows
there are many, many ways to do this.
Some involve making the physicians loyal to FTP; others making
physicians frightened of FTP. Some
involve subtle intimidation; others heavy-handedness.
Gekko needs to pull out all the stops on this one.
This, he knows, is where the money is.
He decides to use every means at his disposal to become an unseen
presence in that office with that doctor and that patient.
Controlling the flow of
patients
Physicians are
nothing without their patients. So Gekko’s number one priority is to
rapidly gain control of a substantial proportion of patients in each of
his cities of operation. Purchasing
key community hospitals is a major step toward this goal, but Gekko leaves
nothing to chance.
So he institutes
his “18 Month Plan,” aimed at nothing short of bringing the physicians
to heel within 18 months:
THE
FTP 18 MONTH PLAN
Phase 1
(Months 1- 6): Open the gates. Allow
any willing licensed physician in the area to join FTP’s physician
panel. Actively and aggressively recruit all the largest and best known
physician practices. Purchase
a few key practices, if necessary, to break physician resistance to
joining FTP.
Phase 2
(Months 7 - 12): Get control of the
patients. Armed with an
impressive physician panel that promises not to limit the choice of any
patient, aggressively market FTP to all large and moderate-sized
businesses in the area. By
the end of month 12, FTP should be offered to every employee of every
company in the area employing 250 or more. Undercut prices of every other
insurer in the market, if necessary, to achieve this goal.
On Day 1 of month 13, FTP should control at least 30% of all
insured patients in key medical practices.
Phase
3 (Months 13 – 18): Collect the
data, make the first cuts. Track every FTP dollar spent by every FTP
physician. Drop at least
several prominent and highly-visible physicians from the FTP panel –
these physicians will have spent more than the threshold value (threshold
to be determined). (Note: The letter sent to the dropped physicians should
not give cause for termination.
It should simply thank them for their services, and say those
services will no longer be required.)
(Note: This step will be most effective if those physicians dropped
from the panel are not only well-known to their colleagues, but also lose
a substantial proportion of their long-time patients as a result of their
being dropped.)
Thus, Gekko’s 18
month plan is designed to rapidly and efficiently assume control of the
physicians’ very means of livelihood – their patients – and most
often accomplishes this goal even before the doctors even realize what is
going on. The plan is vital to the mission of FTP, and fortunately, it
works well (although in three cities it takes up to 24 months to
complete).
Once
the 18 month plan has achieved its goals, Gekko institutes Phase 4. Phase
4 lasts forever.
Phase
4 (Month 19 and beyond): Turn the
screws. Let the FTP
physicians know what is expected of them.
A) Revise the terms of their contracts with FTP.
New contracts will lay out terms of capitation and associated
incentives and disincentives, and will add nondisclosure language.
B) Begin a quarterly “review” of each practice, showing
physicians in detail where they are spending dollars, and comparing their
expenditures to target values and to those of their colleagues.
C) It will be necessary to continuously reinforce who is in charge.
Periodic issuance of without-cause termination notices to selected
physicians will be important. Handing out rare but highly-visible
performance awards will also be helpful in this regard.
In other words,
now that Gekko “owns” the physicians, it’s time to let them know
what their new boss wants.
Controlling the flow of dollars
Before beginning
Phase
4 of his plan, Gekko continues paying his physicians on a discounted
fee-for-service basis (i.e., they get paid for every service they provide,
at a somewhat lower fee schedule than for Medicare).
But for any HMO in the mid 1990s, the pot of gold at the end of the
rainbow is capitation. And
Gekko institutes capitation with great relish during Phase 4.
Under his
capitation plan, FTP primary care physicians (PCPs) get paid a fixed
amount per month for every FTP patient they follow in their practice.
No matter how much or how little medical care they provide for that
patient, the PCP makes only the capitated amount.
But Gekko doesn’t actually pay them the full capitated rate up
front – they get only 90%. He
keeps the last 10% as a “withhold,” which he fashions as an additional
incentive.
Thus, at the end
of the year, if FTP meets its financial goals and the PCP meets certain
performance requirements, Gekko distributes the last 10%.
If not, FTP keeps the money. It
is possible, of course (if FTP’s financial goals are exceeded and the
physician’s performance is rated “excellent,”) for the PCP to
receive a bonus in addition to the 10% withhold.
And Gekko sees to it that at least a few PCPs get such a bonus each
year, just to let his physicians know that such a thing is within the
realm of possibility. Capitation
fee schedules are renegotiated each year with each PCP, based on how
“well” the PCP has done in the previous year.
It’s a shame
Gekko’s accountants can’t yet figure out a way to capitate specialists
as well, but so far it’s too complicated. The accountants cannot
guarantee him that he’d make money capitating specialists.
Some day they’ll have sufficient data to pull it off, but for now
he continues paying his specialists on a modified fee-for-service basis.
Gekko knows he needs alternative measures to control the behavior
of the specialists.
The performance
measures that determine whether the PCP does or does not get the 10%
withhold at the end of the year are a vital part of Gekko’s plan. There
are a few token “health care performance measures,” of course, that
monitor whether the doctors are aggressively treating hypertension and
screening for high cholesterol and the like.
But Gekko wants to make sure his doctors know what he really means
by performance, so he doesn’t try to disguise the fact that the
bulk of FTP’s performance measures have to do with fiscal performance.
Each quarter, a
dark-suited FTP representative (a “Practice Consultant”) visits each
PCP with a “Performance Report.” The
Performance Report accounts for every dollar that FTP has had to spend
during the past quarter on patients enrolled in the PCP’s practice.
“Your patients
cost us a mean of $439 apiece during the past quarter, Dr. Smith,” the
Practice Consultant might say. “That
compares unfavorably with the mean of $348 achieved by your peer PCPs, and
even less favorably with the target of $264 that would be required for you
to receive your portion of the year-end withhold. Now, Dr. Smith, let’s
examine this report in more detail to see if we can figure out where all
that money is going.”
So Dr. Smith and
the helpful Practice Consultant look things over.
They notice that Dr. Smith referred four patients to cardiology
practices during the past quarter. The
Valley View Practice ended up spending $3429 on the two patients Smith
sent them, but the Cormatic Practice only spent $2453 taking care of the
other two. They both agree
that substantial savings could be realized by referring more patients to
Cormatic, and fewer to Valley View.
“Of course,”
the Practice Consultant says, “we
would never ask you to send FTP patients to an inferior group of
cardiologists.”
“Of course,”
Dr. Smith replies.
It is a thing of
beauty. Look what Gekko has
accomplished here. By rapidly gaining control of physicians’ means of
livelihood (i.e., their access to patients), he is able to essentially
dictate the terms of their surrender.
Those terms put
fiscal pressure on doctors at several levels.
Since they are
paid a capitated rate, there is financial pressure on the PCPs to keep
patients out of their office. Office
overhead is often figured on an hourly basis, so the more time a patient
spends in the office (i.e., the more office overhead that patient
consumes) the less profit (or the more loss) the physician realizes on
that patient. Under many
capitation rate schedules, more than two office visits per patient per
year will result in a net loss for the PCP.
This is why doctors now take great pains to head off office visits
by requiring patients to go through a screening process before letting
them in the door.
Over and above
capitation, however, is the pressure on PCPs not to refer patients to
specialists unless absolutely necessary.
While the specialists themselves are paid on a fee-for-service
basis, the PCP is ultimately held accountable for whatever the specialist
ends up spending in caring for a referred patient.
It will affect their end-of-year “bonus,” and will impact on
next year’s capitation rates.
Since doctors
really do want to take good care of their patients, most PCPs will refer
when they think it’s necessary. But
to whom do they refer? In the
old days, they referred to the specialists they thought gave the best
care, or who were the most congenial, or who invited them to the best golf
outings, or who were their brothers-in-law.
The new fiscal incentives are so powerful that they tend to
override any of these considerations.
And
this is also how HMOs exert their control over specialists. A
cardiologist whose referrals have fallen drastically is all ears when the
friendly FTP Practice Consultant shows up in her
office with facts and figures. Learning
that she is spending a lot more money than her peers in providing patient
care (and that her referring PCPs also have been provided with the same
data), leaves her with two choices. Either
cut out some of the services she is providing, or go out of business.
After all, she is forced to consider, coronary artery stents may
give better results than just routine angioplasty, but routine angioplasty
is probably okay too, and it’s a lot cheaper.
Gekko’s
operational plan has at least one other major benefit.
Visualize what happens, if you will, when a patient with a chronic
illness shows up for the first time in the office of a PCP.
Most likely the PCP immediately has visions of $100 bills flying
out the window. He gets paid
no more for delivering care to that sick patient (who may require office
visits at least on a monthly basis), than he does for a healthy 18 year
old he will not see at all. And,
odds are he’ll end up having to refer the patient to at least a couple
of specialists during the course of the year. The PCP has already seen his
income fall by more than 10% each of the last two years, and has had to
lay off office personnel to boot. He
just can’t afford to absorb any more cuts.
So, is he happy
to see that patient? Or is he
frustrated, and maybe even angry (at the patient, at the system, and at
himself)? Under such
circumstances, it would only be human nature to begin sending the patient
subtle messages that indicate she’s not really welcome. During office
visits the physician is more likely to seem disinterested, distracted, or
rushed – off-putting. He
may be a little less accommodating when she needs to schedule an
appointment; he may drag his feet when she sends him a stack of disability
applications to fill out. He
may be a little slower than necessary to return her calls.
And after a while, the patient is likely to get the message and
switch PCPs, or better yet, to switch health plans altogether.
By appropriately
incenting his physicians, Gekko has thus established a highly effective
adjunct to his cherry-picking program.
His physicians want just as badly as he does to avoid the sick,
and by their words, actions and deeds are able to directly discourage the
more expensive patients from staying with FTP.
Making destruction of the
doctor-patient relationship legally binding - The Gag Clause
Gekko is happy with the results of his 18
month plan, but wishes to reinforce and formalize the message he has
successfully delivered to FTP’s physicians.
He wishes to make that message legally binding.
When it is time for him to rework his physician contracts, Gekko
asks his attorneys to come up with language that does just that, and they
are happy to accommodate him:
“The
physician agrees not to take any action or make any communication with
patients or patients’ families, potential patients or potential
patients’ families, employers, unions, the media or the public that
would tend to undermine, disparage, or otherwise criticize FTP or FTP’s
health care coverage.
The physician further agrees to keep all proprietary information
such as payment rates, reimbursement procedures, utilization-review
procedures, etc., strictly confidential.”
Gekko likes the
language. It is plain and
straighforward.
His physicians,
completely without choice, sign the new contracts with nary a peep of
complaint.
Gekko has made
an assertion to his doctors. He
has asserted, “You work for me, and me alone. You’re all mine.”
His doctors, by their legally-affixed signatures, have acknowledged
that assertion.
Gekko has sought
a place at the table with FTP doctors and patients, and now he has it.
In fact, he is at the head of the table.
What Gekko has
just done is to add a classic “gag clause” to his physician contracts.
The final insult to a doctor’s professional integrity, a gag
clause prohibits the doctor from disclosing certain types of information
to his or her patients. The
forbidden information is likely to be material to the patient’s ability
to accurately assess the doctor’s medical advice, and therefore the lack
of that information may impact on the patient’s health.
So from a purely practical standpoint, gag clauses are a threat to
patients.
But from a more
philosophical standpoint, what the gag clause represents – by the fact
that HMOs use them with impunity and physicians sign them with little more
than a whimper – is a formal death certificate for the physician-patient
relationship. It officially
and legally certifies that the doctor’s first loyalty is to the
integrity and reputation of the HMO, which supercedes any loyalty that
might exist toward the patient.
Gag clauses have
attracted a fair amount of criticism in the past few years, but
essentially only from the standpoint of whether they really “gag”
physicians from telling their patients what they need to know.
Little has been said about the implications of HMOs including and
physicians signing such statements in a legal document.
In response to
the voiced concerns over gag clauses, HMOs now say they have done away
with them. Indeed, the
General Accounting Office recently conducted a study to assess their
prevalence in HMO contracts, and concluded that gag clauses are not a
problem, and for the most part they don’t even exist any more.
The
reason “gag clauses” don’t exist anymore is that the HMOs, feeling
the heat, have converted them to “business clauses.
Generically,
business clauses require the signee (usually an employee) to agree not to
disparage the business, not to encourage clients to use some other
business instead, and not to break confidentiality with the business.
In other words, business clauses are merely gag clauses relabelled.
In this manner,
HMOs have asserted that, since they are a business, they have a right to
the same protections as any other business.
And if assertion of those business rights require the business’
contractors (i.e., doctors) to forego previous arrangements and
understandings (i.e., the doctor-patient relationship), well, that’s
business. The GAO, apparently, was swayed by this argument.
Various proposed
Patients Bills of Rights require striking gag clauses from HMO-physician
contracts. Presumably (now
that they are just business clauses), that has already been accomplished.
But even if all such clauses – whatever they are called – are
struck from every contract tomorrow, the damage has been done.
For
HMOs have asked physicians for a declaration of loyalty that superceded
all other loyalties. Removing
gag clauses from contracts at this point doesn’t change the fact that,
when asked, physicians gave. The
HMOs have more than made their point.
Outcomes? Well, what about them?
The fact is,
nobody in our FTP scenario has any incentive to really want to know about
clinical outcomes – except as they may be incidentally useful as a
marketing tool.
Gekko, for one,
doesn’t have any reason to care about clinical outcomes.
His outcome is measured
by his profit. So as long as
he’s making money, his outcome is good – and data on clinical outcomes
would only serve to threaten what is now a nice, clean picture.
Unless pushed, he sees no reason to invest his resources in
collecting such data.
What about Dr.
Smith – the PCP who has to decide whether to refer his patients with
heart problems to cardiologists in the more expensive Valley View group or
those in the less expensive Cormatic Group?
Wouldn’t he want to know which group has the better clinical
results? Certainly he would, on a professional level.
But he doesn’t have the resources to collect data like that
himself; he’d need FTP’s help. And
he just hasn’t seen fit to push FTP for the data.
Subconsciously, he realizes that if he had that data, it might give
him the wrong answer – the more expensive group might indeed turn out to
achieve better results. That
would certainly complicate his referral decisions.
And what about
the cardiologists of the thrifty Cormatic Group?
Do they really want outcomes data? Well, why should they?
They’re already getting the referrals.
Members of the
"profligate" Valley View Group are the only ones who really have
a good reason to care about clinical outcomes since, if they turn out to
have more favorable outcomes, it might help to exonerate their expensive
ways. But (even if they can
even avoid being thrown off FTP’s panel altogether), they have become
virtual pariahs, and have no clout at all with Gekko.
So, while there
is plenty of talk about
outcomes in the Gekkonian HMO world, when you analyze the mechanics, it is
difficult to find anyone slogging away in the trenches who really wants to
know about them.
But surely, you
might be thinking, somebody
wants to know about quality. What
about the patients? What about the employers who are paying the bills?
Gekko knows
about patients. When patients are faced with a choice between an HMO
that’s “free” or an indemnity plan that might cost them an extra $50
or $100 a month, he just knows
they’re going to pick the HMO. And while they’re picking it, they want
to feel good about it. They deeply, sincerely, and desperately want to
hear that they’re making a good choice.
They want to hear what a high quality HMO they’re being forced to
join. And that’s where quality and marketing come together. To
Gekko, quality is marketing.
“It’s like
this,” Gekko says one day to his Marketing Director. “When a young man
walks into a car dealership with his heart already set on a sleek red
convertible, both he and the salesman know what is needed to close the
deal. That young man
doesn’t want to hear about that model’s safety record or repair
history or its miles per gallon. What
he wants is for the salesman to tell him what a smart choice he’s
making. So the salesman does,
and – even though they both know that beige sedan over there would be a
safer, more reliable car – the deal is made. And they’re both
happy.”
The
Marketing Director understands. When the enrollees don’t really have
much choice about their health plan, then simply make them feel good about
the plan they've been given. It’s easy to do; they want
to feel good about it.
This is why HMOs
over the past few years have gotten away from advertising (and implying
ready access to) their fancy, state-of-the-art, high-tech services.
Instead, they’ve gone all fluffy, emphasizing warmth, concern, and
caring, through filtered lenses and soft music.
When you join this HMO,
it’s like joining a family. What
a good choice you’ve made.
Okay, you might
reply, but what about employers? Don’t
they want to offer high-quality health care to their employees?
Well, sort of. What
most of them really want is to offer adequate health care without losing
their shirts on it.
My eyes were
opened on this issue a few years ago when I attended a retreat, sponsored
by my hospital, that featured a panel discussion by a group of prominent
local employers. When asked
how they go about assuring themselves that the health coverage they buy
for their employees provides high-quality care, the captains of industry
responded thusly: “We make widgets, we don’t assess health care
quality. We don’t know how,
and we don’t want to know how. So we’ve got to be practical about it.
To us, quality means quiet. As
long as we don’t hear more than the average number of complaints from
our employees, the health coverage we provide is, by definition, good
enough.”
Men and women
like Gekko long ago figured out what their paying customers (i.e., the
businesses that purchase health insurance for their employees) want.
And because of what his customers want, Gekko can define quality
simply as keeping the volume of complaints down to an acceptable level
(and, of course, keeping FTP out of the newspaper). Gekko even suspects
that a complaint level that became too low that might become a
problem - employers might begin to suspect that they were paying too much
for their employee's health care if there were no complaints at all.
Now, to be sure,
efforts are being made on several fronts to actually measure quality in
health care, and some of these efforts are having an impact. But in
general these efforts are not coming from Gekkonian-style HMOs, or even
from health care providers.
FTP 2000 - The end game approaches
Things have gone
well for Gekko. Five years
after assuming the helm, he has established FTP as the dominant HMO in 22
cities and is gaining ground in nine more.
FTP’s stock has split twice, and Gekko’s yearly personal
bonuses have been rumored to be in the 10’s of millions. 
But Gekko sees
the writing on the wall. The
vast preponderance of FTP’s growing market valuation has come from
expansion into new cities, and especially from the acquisition of public
assets. But it’s getting
harder and harder to find new areas in which to expand, and worthwhile
community hospitals ripe for takeover are no longer growing on trees.
Worse, pressure groups have begun to make it difficult to negotiate
favorably with state insurance commissioners.
Consequently, the valuations of public assets set by commissioners
these days more nearly reflect their true market value.
It’s growing very difficult to make a killing through expansion.
Which means that
if FTP is to continue making money, it will have to do so by delivering
health care to actual patients.
This has turned
out to be a lot harder than Gekko thought it would be.
Despite the fact that he continues to turn up the heat under his
physicians – cutting their reimbursement schedule every year and raising
the bar for getting their end-of-year payouts – FTP’s revenue from
patient care is stagnant, and even shows signs of dropping.
HMOs have
penetrated the health care market so thoroughly that, in most of FTP’s
cities of operation, the indemnity insurance plans are no longer players.
This means FTP isn’t competing against indemnity plans any more,
so much as it is against other HMOs.
Consequently it has become very difficult for Gekko to keep his
premiums as high as he’d like. In
a couple of cities, FTP has actually gotten into some very nasty bidding
wars. Gekko can’t count on
artificially high premiums any more.
And now that the
vast majority of Americans are already enrolled in HMOs, cherry-picking
the healthy enrollees has become virtually impossible.
Even making the chronically ill feel unwelcome is no longer
effective, since most sick people have finally realized that one HMO is
pretty much like another. There’s no point in changing plans any more.
Patients in
general are becoming more vocal, as are Congress and the state
legislatures, about HMOs conducting themselves dishonorably.
Gekko fears that one or more of the various iterations of Patients
Bill of Rights may end up taking away some of his remaining prerogatives
for making money.
Even if the
doctors can figure out how to actually manage health care efficiently, FTP
will never be able to turn over the kinds of profits it’s enjoyed to
this point.
Then there are
the rumblings Gekko is hearing in high places about for-profit health care
robbing society of its precious health care premiums.
It may be a long way off, but Gekko now thinks it’s possible
that, some day, for-profits will be outlawed. That wouldn’t be fair, of
course but Gekko’s a realist. He
doesn’t insist on providing fairness, nor does he insist on receiving
it. This is business, after
all.
Gekko opens his
desk drawer and pulls out that old report on “Risk
Sharing.” He has always
felt risk sharing to be a dangerous game. If HMOs reduce themselves to
serving only as middlemen – taking a
big cut of the health care dollar as a “finder’s fee” but providing
nothing of substance to health care itself – it will be only a matter of
time before they are cut out of the industry altogether.
But Gekko is
rapidly coming to the conclusion that FTP and most other HMOs are reaching
a point of diminishing returns. If risk sharing can garner for FTP three
or four years more of high profitability before the end comes, he should
go for it.
Gekko picks up
the phone and calls a meeting.
HMOs - the end of
the line?
No, not really.
But I personally wouldn’t buy any more stock in FTP.
I believe that
HMOs will be around for a long time.
But I also believe that the heyday of the for-profit, Gekkonian-style
HMO is coming to an end.
Some of the most
prominent for-profit HMOs, organizations that were the darlings of Wall
Street a couple of years ago, have been fading badly of late. In some
cases, their failings have been attributed to poor management or even
fraudulent practices. If this
were the whole story, there might be more hope for their recovery – bad
management can be replaced, and fraud cases can be settled.
But I maintain
that whether or not their proximate difficulties can be worked out, the
long-term prognosis of for-profit HMOs is grim.
Just considering the demographic facts of life outlined in Section
2, it is inevitable that, sooner or later, society will find it
unconscionable for these organizations to continue siphoning off large
proportions of the health care dollar as profit – especially when it is
debatable whether they are contributing anything substantial to the actual
delivery of health care. Sooner
or later, we will become very indignant about the for-profits.
But my guess is
that the for-profit HMOs will fade from the scene on their own accord,
well before the rest of us get exercised enough to do the job ourselves.
Gekko has shown us why.
It is looking
more and more as if there is a natural life cycle to for-profit HMOs. In
their early years, their meteoric rise was not attributable to their
managing health care, but instead to their rapid growth and subsequent
consolidation, and to the acquisition and privatization of public assets.
As the opportunities for rapid growth dries up, as the
opportunities to select the most desirable enrollees fades, and as public
officials, government agencies, and the general public becomes wise to
their ways, for-profit HMOs will find that their traditional methods for
making money will no longer be feasible.
They will have no choice but to finally attempt to make a go of it
by managing health care (that is, to go legit) – or to get out of the
business altogether.
As is the case
for FTP, very few for-profit HMOs have ever done well financially by
managing the health care of their subscribers. My prediction is that
they’ll find it so difficult to make a profit in this way
– at least enough of a profit to keep their shareholders happy
– that that they’ll eventually get out of managed care on their own.
This is
especially likely, in my view, when you consider that the Clintonians have
never gone away – they’re still there, still as active as they can be
while waiting for their chance to assume their rightful, regulatory
control of the health care system. Imagine,
if you will, the for-profits – seeing that their days are numbered –
whispering in just the right places that, for the right price, they would
be willing to consider selling their business to the government.
It wouldn’t be the first time the government assumed control of a
formerly powerful industry, nor would it be the first time the owners of
that fading industry would get one, final, huge windfall for their
troubles. Remember the railroads?
So,
if I'm right, we the taxpayers will get one last chance to contribute to
the welfare of Gekko and his brethren.
If so, we should probably consider it a small price to pay for
bringing the era of the for-profit HMOs to a close.
The
meaning of the Gekkonian era
While
acknowledging that the demise we’ve just predicted for the Gekkonians
may be a bit premature, let’s examine their accomplishments over the
past few years.
On the positive
side, the Gekkonians have focused the attention of everyone within the
health care system squarely on the issue of costs.
Today, in any health care organization, no purchase of any sizeable
item is made without first carefully considering how badly the item is
needed, calculating the full cost of ownership, and defining clearly who
will pay for the expanded services made possible by the new item.
This is a fairly radical departure from just a few years ago, when
hospitals often purchased high-cost equipment of marginal value just to
keep up with the rivals across town.
Similarly, the
fiscal pressures brought to bear on health care providers by the
Gekkonians have resulted in many new efficiencies. This is because, when
hospitals and doctors are squeezed financially, not all the cutbacks they
make are in useful or worthwhile services.
A lot of wasteful endeavors are cut too. In fact (despite
perceptions to the contrary), when providers are forced to cut back, they
usually try preferentially to eliminate the inefficiencies.
Further, it’s
not just the for-profits that are growing bigger in order to take
advantage of the economies of scale – the non-profits are learning the
fine art of merger and/or cooperation as well.
The general prospect of having to compete in the marketplace with
the profit-mongers has made the remaining non-profit HMOs (which still
account for approximately one-third of all HMOs) much more fiscally fit.
(The imperative for non-profits to behave like for-profits extends
beyond merely having to compete with them for enrollees.
These days, non-profits must raise most of their funds not through
community charity, but through the bond market.
And pleasing the bond market is very much akin to pleasing
shareholders.)
So the
Gekkonians have driven our health care system to become leaner, meaner,
and more in fighting trim than we’ve ever seen it before.
We eventually would have made the same strides without the
Gekkonians, of course, but it probably would have taken much longer.
On the negative
side, Gekkonians have greatly expanded our capacity for covertly rationing
health care.
It has been
argued by several commentators that, despite the perfidies of modern
managed care, egregious examples of rationing (i.e., providers blatantly
withholding obviously needed health care) are still relatively rare.
I generally agree with this observation, but disagree with its
implication. Just because
rationing is still practiced mainly on the margins, where it’s difficult
to recognize, doesn’t mean that it isn’t significant. Besides, the
economic pressures for rationing, as we have seen, are just beginning to
build. The problem with the Gekkonian way of life is not so much that it
already has caused egregious rationing to become rampant, but that it has
caused us to abandon the principles that would prevent such egregious
rationing.
I'm talking, of
course, about the primacy of the individual.
Under the Gekkonian paradigm our resistance to violating this first
principle has been significantly reduced.
This fact is best illustrated by looking at what we have already
allowed to happen to the doctor-patient relationship.
Destroying that
relationship was a requirement for Gekko; it was his number one priority.
His basic operating rule, in fact, was that if you control the patients,
you control the doctors; and his
18 month plan was designed to accomplish just that. The moment Gekko
controlled the flow of patients, he himself replaced those patients as the
doctors’ chief customer. The
doctors instantaneously became obligated to Gekko, just as Gekko was
obligated to his shareholders. And
all the “gag
clause” did at that point was to rub the doctors noses in the new
reality. Gag clause or no gag
clause, Gekko owned them.
The patients
themselves have not been entirely innocent victims of the carnage.
They had a choice to make, too, and they made it.
As health care expert David Mechanic has said,
“Enrollment
in an HMO is really an agreement between the enrollee and the plan to
accept a situation of “constructive rationing”. . . .For a lower
premium, more comprehensive benefits, or both, the consumer implicitly
agrees to accept the plan’s judgment as to what services are
necessary.” Mechanic D. Trust and informed consent to rationing. The
Milbank Quarterly. 1994;72:217.
Patients may not
realize at a conscious level that they’ve made this implicit agreement,
but we can be sure that the health care economists, academics, and HMO
directors all realize it. And accordingly, patients and their health have
become fair game.
So what’s
happened here? What’s
happened is that both patients and doctors have allowed themselves to be
shunted aside. The individual doctor and individual patient, together, no
longer comprise the basic nuclear unit of health care.
Doctors and patients have been separated from one another;
separated and marginalized, reduced to ciphers.
They have become mere commodities in the vast health care
marketplace.
And when a
commodities trader is dealing in pork bellies, she’s only concerned
about buying, selling and thus maximizing her profit on large quantities
of pork bellies. Concern for
the careful handling of the individual pig never crosses her mind.
The change in
focus from the individual to the group is more than just tacit.
While most professional codes of ethics and legal doctrine still
hold the physician’s primary responsibility to be a fiduciary one to his
or her patient, many health care experts and even ethicists are now
explicitly proposing that this ideal be changed.
For instance, a 1998 article in the Annals
of Internal Medicine had this to say about the physician’s
traditional fiduciary role:
“It
is untenable for the medical profession to continue asserting an
idealistic ethic that is contradicted so openly in clinical practice. . .
. We propose that devotion to the best medical interests of each
individual patient be replaced with an ethic of devotion to the best
medical interests of the group for which the physician is personally
responsible.” Hall
MA, Berenson RA. Ethical practice in managed care. Annals
of Internal Medicine. 1998;128:395.
So, it would
appear, sticking to ethical principles is supposed to be easy.
If it becomes difficult, you’ve got to get yourself some new
principles.
When (if) the
Gekkonians withdraw from the field, they will leave both us and our health
care system very different from the way they found it.
They will leave us more cost-aware, more efficient, and less
wasteful.
But
they also will leave us much readier to sacrifice the individual for the
sake of the group. And, with our principles softened by the Gekkonians,
the inexorable escalation in health care costs will lead us to far more
flagrant violations of individual rights and individual welfare than any
we’ve seen to date.
Introduction
Considering
the recent doings of the Gekkonians, by now we might feel quite
sympathetic toward the Clintonian notion that our health care problems
would best be resolved not by free market economics, but by new and better
regulations. We might even be cheered by
the fact that the Clintonians have not just been sitting idly by these
past few years, wringing their hands in despair and wishing things had
turned out differently. Indeed,
this time has been very busy and fruitful for them.
Unfortunately,
in practice the Clintonians threaten to do as much damage to our health
care system, to the doctor-patient relationship, and to fundamental
American principles as do the Gekkonians.
The regulatory imperative, like the profit imperative, tends to
takes on a life of its own, and to completely overwhelm the health care
system’s mission to operate for the public good.
The
anti-fraud imperative
In his
1994 State of the Union Address, President Clinton, still fighting hard
for passage of his health care reform initiative, declared dramatically
that that our health care system “is riddled with inefficiency, with
abuse, with fraud, and everybody knows it.”
This line gained him a huge bipartisan round of applause. And why
shouldn’t it? Everybody
hates abuse and fraud in health care.
The
mandate to root out fraud in the health care system is an extraordinarily
powerful one. Everyone agrees
that health care fraud is an inexcusable crime, and believes that
perpetrators of real fraud should be tracked down vigorously and
prosecuted fully.
Until
recently, however, federal programs like Medicare were very lax about
fraud detection, and did not have the will or the systems in place to look
for fraud. Thus, it was
relatively easy for unscrupulous individuals to get away with even the
most obvious fraudulent practices. Many
scam artists, organized crime syndicates, and drug-related money launders
saw the $250-billion-a-year doled out by Medicare as a huge pot of
unguarded money. This
historic laxity with public funds is inexcusable, and efforts to get tough
with fraud should be and are a priority.
Unfortunately,
the anti-fraud imperative also presents an irresistible opportunity for
the Clintonians to gain control of physicians’ behavior, and thus of the
health care system, through the regulatory process. The anti-fraud program
that is being put into place today is virtually guaranteed to prevent
doctors, whether they’re committing fraud or not, from making the
patient’s needs their paramount concern.
Physicians who don’t keep the wishes of the regulators at the top
of their list of priorities are risking everything.
Why
fraud sells
There are good
reasons that the very idea of health care fraud provokes a visceral
reaction in most of us. First,
fraud is dishonest, deceitful, and illegal.
Especially at a time when the costs of health care are
skyrocketing, anything that takes money out of the health care system,
money that is supposed to be used for caring for the sick, is particularly
reprehensible.
Also, fraud is
expensive. Ten percent of what the government spends on health care, the
government argues, is being siphoned off by fraud.
Even if the actual proportion is not actually ten percent, fraud is
still contributing to the threatened bankruptcy of Medicare, among other
things.
Finally,
there’s an even more compelling reason for much of the angry talk about
fraud – namely, the idea that if we don’t root out this fraud, we
may have to ration health care. This
notion follows directly from the fact that, as we saw in Section 1, there
are only two ways of reducing the amount of money we spend on health care;
eliminating waste and inefficiency (e.g., eliminating fraud), or
rationing. So if we don’t
want to ration, we’d better find lots of fraud to eliminate.
In fact, because
finding fraud and rationing are inversely proportional (i.e., the more
fraud we find, the less rationing we’ll have to do), we have a deep and
abiding need to find fraud under every rock.
We are more than ready to believe there is a lot of fraud out
there, and more than ready to use drastic measures to find and punish it.
The Clintonians,
of course, are ready to match our zeal ounce for ounce.
Accordingly, fraud has become their focal point for instituting
aggressive regulatory action in health care.
For physicians
like myself, this scenario has some very ugly overtones.
For there’s a substantial difference between trying to identify
and root out real fraud, and defining fraud in such a way as to be able to
find as much as you can (because the more fraud you find the better off
society is). Unfortunately,
the Clintonians’ anti-fraud efforts are shaping up to look more like the
latter than the former.
The Regulatory
Speed Trap
The Clintonian
philosophy, as we have seen, was not invented by the Clintons, nor is it
exclusively a philosophy of the liberals or the Democrats. The first
easily recognizable application of Clintonian anti-fraud methodology, in
fact, occurred during the Reagan administration, in its crack-down on the
defense industry.
When the Reagan
Justice Department began its attack on fraud in the defense industry, that
industry was slow to realize what was happening to it.
The industry did not understand for a year or two that the
government had suddenly become deadly serious about regulations it had
always treated quite benignly. “Business
as usual” had suddenly become felonious behavior.
Formerly tolerated activities were pursued relentlessly by federal
prosecutors, who liberally applied sweeping new federal statutes – such
as mail fraud and money laundering statutes – that were originally aimed
at stopping racketeers and drug pushers.
By the time the defense industry had fully awakened to the danger
– and began protecting itself by instituting expensive “compliance
programs,” and spending billions on lawyers, consultants and accountants
– the government had gained criminal convictions on more than 60 firms
and individuals in the defense industry.
In this effort
the government recovered a lot of money in fines and penalties that, it
said, had been misused. But
the defense industry simultaneously began spending huge amounts of new
money on regulatory compliance, and that cost was quickly passed on to the
consumers (i.e., to that same government). How much the feds actually
“saved” at the end of the day is questionable.
Clearly there
was fraud in the defense industry, and clearly it needed to be
investigated and prosecuted. Is
there less corruption now? Perhaps.
But it’s instructive to note that the famous $450 hammer incident
that set the whole thing off resulted from a silly accounting practice
rather than graft. The Army
actually paid only $5 for that hammer.
The other $445 was a standard unit charge for administrative
overhead that the Army bookkeepers added to every item they purchased,
whether a $5 hammer or a fifty million dollar tank. Likewise, a good bit
of the fraud and abuse that was uncovered during the government’s
crackdown on the defense industry was not fraud in the classic sense, but
rather was misinterpretation of, ignorance of, or simply ignoring
regulations that didn’t make much sense in the first place.
The
methods used by the government in their crackdown on the defense industry
suggests a pattern. We call this pattern the Regulatory Speed Trap:
|
The
Regulatory Speed Trap -
1) Over
a long period of time, regulators promulgate a confusing array of
vague, disparate, poorly worded, obscure, and mutually
incompatible rules, regulations and guidelines.
2)
Individuals or industry, faced with the necessity of having to
provide a service despite difficult to-interpret regulations,
necessarily render their own interpretations (usually with
assistance from attorneys, consultants, and the regulators
themselves), and act according to those interpretations.
3) By
their apparent concurrence with (or at least by their failure to
object to) the providers’ interpretation of the rules, over time
regulators allow de facto
standards of behavior to become established.
4) After
substantial time passes, regulators reinterpret (or “clarify”)
the ambiguous regulations in such a way that the de
facto standards now constitute grievous violations.
5)
Regulators aggressively prosecute the newly felonious service
providers. |
It is my
contention that this five-step Regulatory Speed Trap represents an easily
recognizable blueprint, a virtual modus
operandi, for Clintonians (whatever their political party).
At the moment, it is the chief methodology by which they are
attempting to wrest back control of the health care system.
Basic to the
Regulatory Speed Trap is an underlying set of complicated and often
contradictory rules and regulations. This requirement, of course, is
virtually a given, since regulations over time naturally evolve away from
clarity and toward complexity. Societies
have functioned reasonably well despite complex regulations only because
traditionally, bureaucrats allow de
facto standards to form under their purview, thus preventing paralysis
and allowing society to function within the bounds of normalcy.
Fundamentally,
what the Clintonians have discovered is that the tangle of vague
regulations underlying this “business as usual” provides them with an
ample opportunity to achieve an end that otherwise might be unachievable.
By suddenly enforcing strict new interpretations of inherently
confusing and traditionally ignored rules (“here
is what we meant all along, and you should have known it”), they
have found a powerful means of pressing their own agenda – and a means
of doing it without all the inconvenience of having to advance a platform,
pass a legislative program, or engage in public discourse.
The Clintonians
know that when people have learned to survive within a system of complex
and contradictory regulations, then everyone is always guilty of
something. All they have to
decide is whom they would like to be guilty, then go get them. Whether
you’re a solid citizen or a felon, therefore, depends largely on whether
the controllers of bureaucratic arbitrariness have decided to look in your
direction.
HIPAA tales
One of the
things that frightened doctors the most about the Clintons’ failed
Health Care Reform Act was the Draconian program it proposed for combating
health care fraud. It offered a very broad definition of fraud, arguably
broad enough to include almost every practitioner. And the punishment it
offered for perpetrators of fraud ranged from massive monitory penalties
to hard time. So the largest sigh of relief when that bill was defeated
emanated from doctors, who now thought the threat of overzealous
punishment for innocent mistakes had passed.
Many physicians
remain unaware to this day that the Health Insurance Portability and
Accountability Act of 1996 (HIPAA, otherwise known as the Kassebaum-Kennedy
Bill), resurrected many of those same anti-fraud measures, lifting large
blocks of language from the Clinton’s original plan and making them the
law of the land.
The laws
themselves are accompanied by a clear mandate for the Department of
Justice (DOJ) to make health care fraud a top priority.
This the DOJ has done; indeed, only violent crime has a higher
priority today. Further, in
their zealous pursuit of fraudulent physicians, the DOJ has the strong
support of the American people. Some
of the more notable provisions of HIPAA follow.
Creation
of new federal health care crimes
HIPAA creates a
new series of federal crimes, together called “health care fraud.”
These offenses make it a federal crime to defraud health care
benefit programs – any benefit program, not just Medicare.
Defrauding
health benefit programs may be accomplished by theft or embezzlement,
obstructing a criminal investigation of health care offenses, making false
statements or misrepresentations relating to health care matters, using
the mail in the act of doing any of the above (mail fraud), or processing
the proceeds gained from doing any of the above (money laundering).
These crimes are punishable by up to 10 years in prison, or even
life in prison if a patient dies as a result of fraudulent activity.
These new
statutes give the Feds some very sharp teeth for rooting out real health
care fraud, such as running phony medical clinics or laundering drug money
through medical facilities. Prosecutors will have tremendous leverage in
investigating and prosecuting criminals, thanks to the severe penalties
mandated by sentencing guidelines for federal crimes, and by their new
ability to immediately paralyze suspected violators by freezing their
assets.
On
the other hand, these new statutes also mean that, potentially, any doctor
who makes a simple misstatement to an HMO can land in jail.
New
monetary penalties for civil offenses
It is likely
that pursuing felony charges against doctors will only rarely serve the
purpose of the feds. Instead,
the feds more likely will be interested in extracting monetary penalties
for the violation of civil prohibitions.
HIPAA provides for such penalties in spades.
For instance,
HIPAA prohibits billing for medical services “that a person knows or
should know are not medically necessary.”
Anyone vaguely familiar with the practice of medicine understands
that there are many gray areas in which experts will disagree about what
is or is not medically necessary. Ordering
a mammogram in a healthy 38 year old woman who thinks she perceives a new
breast lump that the physician cannot really feel, for instance, would be
considered prudent by some, entirely wasteful by others. HIPAA apparently
invites the feds to become the final arbiters of such disagreements, and
provides for severe monetary penalties for those who wind up on the wrong
side of the decision.
Such penalties
include up to a $10,000 fine plus up to three times the dollar amount of
the overpayment for each item.
Any more than a handful of violations will be prohibitively
expensive for most physicians, thus creating a powerful incentive to
“settle” with the feds at the first sign of an investigation.
Creation of a
coordinated anti-fraud program and account
HIPAA
creates a new anti-fraud program that has its own trust fund, the Health
Care Fraud and Abuse Control Account, within the Medicare Trust Fund.
This provision in effect establishes a powerful new anti-fraud
bureaucracy from units of the OIG and FBI, and provides it with all the
money it needs to fund its efforts. The
fraud trust fund will receive appropriations of up to $2.5 billion over
the first few years, but this is only seed money.
The anti-fraud units will be allowed to receive into this account
the penalties, fines and settlements they collect as a result of the
anti-fraud activities. In other words, what they collect, they keep.
Encouraging
qui tam suits - The False Claims Act
Qui
tam provisions, more commonly known as whistleblower provisions,
empower private parties to sue in the name of the
United States for “false claims.” These provisions were originally
enacted during the Civil War to protect the government from bad horse
trades, and were largely forgotten until the 1980s.
At that time, qui tam provisions
were resurrected, strengthened and given new emphasis in the False Claims
Act to bolster the DOJ's crack down on the defense industry. Whistleblower
suits are now being actively encouraged as a way of finding health care
fraud.
The
False Claims Act provides powerful incentives for suing providers – in qui
tam suits, the whistleblower gets to keep up to 15% of whatever is
collected. As one might
expect, whistleblowers often
turn out to be disgruntled employees, ex-spouses, or competitors seeking
either revenge or to get rich quick.
An entire industry has developed to encourage such suits – a
simple search on the Internet readily turns up a host of law firms that
now specialize in qui tam
actions.
The proof is in the using
Anyone who may
be inclined to criticize the anti-fraud activities of the government runs
into a problem right away; namely, the existence of health care fraud is
undeniable, it is inexcusable, and vigorous efforts to eliminate it are
appropriate. The provisions
of HIPAA themselves can easily be viewed as simply giving prosecutors the
weapons they need to go after the criminals that are robbing all of us.
The
proof of the pudding will be in how these regulations are finally used.Will they be used to seek out and destroy those providers who are
truly guilty of fraud in the classic sense (that is, the intentional and
willful effort to procure funds illegally)?
Or will they be used as a Regulatory Speed Trap, to hound and
intimidate the typical, honest practitioner who is confused about the
regulations but who dearly wants to avoid even the appearance of
impropriety?
To me, a
physician whose self-interests incline me to paranoia on this issue, the
answer seems clear. I have
already made the argument that our society has a deep, underlying need to
find as much fraud as possible in the mistaken belief that doing so will
allow us to avoid rationing. Whether
you buy that argument or not, however, a sober examination of how various
provisions of HIPAA are actually being applied ought to reveal their true
purpose.
Lack of clarity,
and lack of desire for clarity
The best way to
get rid of fraud is to promote clear and logical rules.
If the objective of an anti-fraud campaign were truly to eliminate
fraud from the system, then the first job of the enforcers would be to
make sure that the rules and regulations are simple enough that honest,
well-intended people would know how to behave.
Admittedly, this
is easier said than done. It
is the nature of regulations to become constantly more complex over time.
“Thou shalt not kill,” for instance, is a pretty straightforward
regulation, but civilization cannot leave it alone.
Within a few thousands of years we find ourselves factoring in
issues such as warfare, capital punishment, abortion, frozen embryos,
withdrawal of life-support, physician-assisted suicide, the insanity plea,
the definition of “brain-dead,” and cloning.
Pretty soon deciding (in a regulatory sense) whether it’s okay to
kill, or whether one is even killing, becomes next to impossible.
So it is
certainly unfair to blame the Clintonians for failing to provide us with a
simple code that immediately simplifies all health care regulations.
Insisting on the impossible is never very useful.
Health care is inherently a muddy field of endeavor, and the
regulations that have evolved to govern health care are necessarily even
murkier than, say, banking regulations.
On the other
hand, especially when they’re talking about punishing violators with
massive financial penalties or hard jail time, it is
fair to expect the Clintonians to clarify specific areas of regulatory
confusion. They should act as if they are interested in helping the
essentially honest to stay on the straight and narrow, not in entrapping
them.
In this light,
it is instructive to note that when Congress was deliberating on HIPAA,
the only fraud-related provision that produced significant debate was the
stipulation that the government should provide “guidance” to providers
regarding the legality of certain proposed activities. Under this
provision, providers could seek advice prospectively from the OIG on, for
instance, what is prohibited remuneration, or whether a proposed
partnership structure meets safe harbor provisions under the anti-kickback
law. Providers would be
saying, in other words, “We don’t want to break the law, we want to be
solid citizens. Here’s what
we propose to do. If we do
this, will we be in compliance with the law?”
The Clinton
administration, the DOJ, and the OIG vociferously opposed this seemingly
reasonable proposal. Their
objections were based on the fear that issuing opinions before the fact
would impinge on their ability to prosecute cases.
This argument seems to complain (revealingly) that clarifying the
regulations would lead to more compliance and therefore less fraud to
uncover. In the end, the
advisory opinion requirement became part of HIPAA only after Congress
agreed to a compromise – the provision will automatically “sunset”
after four years. And even
then, President Clinton himself called for rapid repeal of these
provisions just a few days after signing the bill into law.
Obviously, the
Clintonians do not consider the clarification of health care regulations
to be a worthwhile endeavor. Instead
they see the requirement to do so as being burdensome and
counterproductive to their true goal.
In
any case, providers counting on these advisory opinions to keep them out
of trouble are likely to be disappointed.
Submitting a question for an advisory opinion to the OIG is time
consuming and expensive, and when the reply is finally obtained, it can be
less than helpful.
To
see how the OIG handled its first
advisory opinion, click
here.
Establishment
of an anti-fraud bureaucracy
Nothing captures
the true spirit of the HIPAA anti-fraud provisions more than the creation
of a coordinated anti-fraud
bureaucracy which gets to keep the penalties, fines and other recovered
monies it collects, in order to fund ever greater enforcement activities.
In considering
the implications of such an arrangement, one needs first to consider the
nature of any bureaucracy. A bureaucracy is an organism that utterly
depends on growth to sustain life. Every individual within a bureaucracy,
whatever else she may be doing, strives every day to increase the number
of people reporting to her. She must do this; it is how her worth is
measured, and therefore it is her lifeblood.
This growth is accomplished by expanding work roles, or better yet,
by subdividing work roles into ever more specialized components, each of
which requires its own staff. Bureaucracies
accumulate layers as naturally as trees; you can age them by taking core
samples.
The anti-fraud
program creates a new federal bureaucracy with a unique new twist. Since
it keeps what it collects, its rate of growth (i.e., its life-force) will
be determined not by how much funding it can wheedle out of Congress, but
by how much fraud it can uncover. This arrangement virtually guarantees
that its fundamental motivation will not be to root out fraud, but to
identify as much fraud as possible. Stamping
out fraud, in fact, would be to commit bureaucratic suicide.
Descriptions of
how success will be measured within this new bureaucracy reflect this
fundamental reality. While
lip service is given to wiping out health care fraud, the real enthusiasm
within the anti-fraud units comes from their projections of the expected
rate of return from their anti-fraud efforts, which is expected to be
between $10 and $23 for every dollar spent.
One suspects they will do whatever is necessary to achieve and
maintain these projections.
If further
incentive were needed, the anti-fraud bureaucracy can expect to enjoy
significant public support for a long time. Especially in light of the
notion that the more fraud we uncover, the less rationing we’ll have to
do, it will be exceedingly difficult to incur the wrath of the people by
uncovering too much health care fraud.
To go along with
these powerful motivating influences, the anti-fraud bureaucracy has been
granted sweeping investigative and enforcement powers.
It has been given broad subpoena powers.
It can acquire virtually any and all financial and medical records
in existence, and can immunize those supplying the records (to assuage
their fear of breaching physicians’ or patients’ confidentiality).
It has the ability to freeze the assets of individuals suspected of
health care fraud. Providers
suspected of fraud can now be threatened with tough new federal sentencing
guidelines for “white-collar” crimes. Federal prosecutors will
routinely add to their list of charges such white-collar crimes as mail
fraud and money laundering, both of which carry extraordinary sentences
and have extremely broad applicability.
Both of these charges could apply, for instance, if a provider
mails to an HMO a bill containing a misstatement, then deposits the
resultant check in a bank.
The anti-fraud
bureaucracy will not really want to send very many doctors to jail, since
jailing perpetrators will not directly benefit their anti-fraud account
and thus will not contribute to their continued growth.
They’ll want to send just enough to jail to make their point,
then they’ll be happy to negotiate settlements with most of the other
doctors who come under their scrutiny.
(Most doctors who find themselves under the spotlight will be
strongly incented to settle since, given the confused state of the
regulations, it is almost inconceivable that the feds would come up
entirely empty-handed after a reasonably thorough audit of any
physician’s records.) The
settlements themselves are likely to be astronomical in magnitude, given
the extraordinarily high fines and penalties stipulated for health care
abuse.
Meanwhile,
the False Claims Act will assure that the anti-fraud bureaucracy has many
leads to pursue for a long time to come.
A year after HIPAA was passed, the American Hospital Association
(AHA) was compelled to send a letter to the Secretary of HHS and the OIG
asking for a cease-fire on whistleblower actions, pleading that almost
5000 hospitals were already under siege by federal law enforcement and
investigative personnel. The
climate of accusation and allegation, the AHA said, was out of control.
They asked for a six-month moratorium on further actions under the False
Claims Act, and to use the time to initiate a joint effort with the
government to institute voluntary compliance programs, and to establish
clear criteria for distinguishing simple error from genuine fraud.
The OIG did not
see fit to grant the Association’s request.
When federal
investigators went after the defense industry in the 1980s, they conducted
a sufficient number of prosecutions to get the industry’s attention,
then squired the industry through the development of an adequate
compliance program, then finally moved on to something else (many of these
investigators moved on to health care, as a matter of fact).
Given the unique structure of the new anti-fraud efforts in health
care, however, it is difficult to imagine any scenario in which this
powerful new federal bureaucracy would be willing to declare success and
move on.
The exact shape
the anti-fraud bureaucracy will eventually take has yet to be determined.
But the will, the weapons, and the public support are in place to
allow the formation of a bureaucracy so powerful as to make the IRS look
as benign as the local visitor’s bureau – at least, to doctors.
A case study - The PATH audit
The first
large-scale application of the new provisions of HIPAA is now underway in
an OIG operation deemed the Physicians at Teaching Hospitals (PATH) Audit.
The PATH Audit
will almost certainly serve as a model for future federal operations aimed
at fraud and abuse in health care. The methodology being used in the PATH
Audit serves as a stark warning to doctors and hospitals as to how deadly
serious, and how far-reaching, these anti-fraud efforts will be.
In mid-1996, the
feds adopted a new set of regulations governing how physicians should bill
Medicare for services performed in teaching hospitals.
These new regulations indicated that in order to bill Medicare for
a service provided to a patient, an attending physician must either
provide that service directly, or must be physically present when the
resident physician (the “trainee”) performs the service.
Furthermore, the new regulations spell out strict requirements for
documenting that physical presence in writing.
At the same
time, the OIG announced a series of nationwide audits of how well
physicians at teaching hospitals complied with those rules.
The audit would cover the six-year period from 1990 – 1995.
Alert readers
will spot the problem right away – the audit
was to be conducted to check compliance with rules that had not yet been
promulgated.
Prior to 1996,
the rules governing when a teaching physician could bill Medicare for
patient services performed by residents were extremely ambiguous.
The most authoritative document prior to the new rules was
Intermediary Letter 372 (IL372), written in 1969.
IL372 appeared to require the physical presence of the attending
physician for billable services only
“when a major surgical procedure or a complex or dangerous medical
procedure is performed.” Regarding
the required documentation of billable services, IL372 was ambiguous.
One paragraph states that adequate notes documenting these billable
services could be “either written or countersigned by the supervising
physician.” In a different
paragraph, however, billable services must be “substantiated by
appropriate and adequate recordings entered personally by the physician. .
. ”
(This discrepancy is just one example of how even a single
regulatory document can give conflicting advice on a key issue.)
Over the years
the ambiguous nature of these regulations was acknowledged by teaching
physicians, medical schools, and the government, all of which talked about
(some day) initiating clarification efforts. But life must go on, so a de
facto standard of behavior was established.
In most teaching institutions that standard was as follows: for
routine (i.e., non-surgical and non-emergency) services performed by
residents, it was okay to bill as long as those services were clearly
overseen by an attending physician. Further,
the attending physician’s countersignature of the resident’s note was
considered adequate evidence of such oversight (and of acceptance of legal
responsibility for the resident’s actions).
This de
facto standard was adopted not only as a matter of convenience, but
also as a vital part of the teaching process.
In training good physicians, it is important to allow trainees some
degree of independence – with oversight, of course, by an experienced
clinician. A resident must
learn to assess patients’ problems and to reach tentative clinical
decisions on his own. Committing those assessments and decisions to
writing in the medical record forces him to carefully consider all the
important clinical parameters, and to concisely summarize the patient’s
clinical problems, the objective findings, the assessment, and the plan
for diagnosis and therapy. The attending physician, after performing her
own assessment of the patient, then discusses the case with the resident
and reviews his progress note. If
there is a deficiency in the resident’s analysis, it is corrected.
If there is a discrepancy of opinion regarding the diagnosis or the
management of the patient, the discrepancy is discussed and a resolution
negotiated (keeping in mind that the attending physician has the last
word). The attending physician’s countersignature of the resident’s
note (most often with an addendum that makes corrections or underscores
issues of importance) indicates that all of the above has occurred.
This has proven
an extremely effective training method for decades.
Thus, the de facto
standard was adopted not only because it appeared to comply with IL372,
but also because it was philosophically the right thing to do.
When the new
“clarified” regulations became effective in June, 1996, the
resident’s independence was significantly reduced.
Under the new guidelines, the attending physician now has to be
present for even routine patient services. Further, only the attending
physician’s own progress note can legally describe those services.
The need for the attending physician to write her own extensive
progress note (essentially duplicating the resident’s note)
automatically devalues the efforts of the resident, and also reduces the
attending’s motivation (and time) to carefully critique the resident’s
efforts. This requirement
dilutes the opportunity for teaching and learning. But rules are rules,
especially when violating them constitutes a felony.
So, while most teaching physicians viscerally disagree with these
new regulations, at least they are clear enough.
The obvious
problem with the PATH Audit is that not only does it apply these newly
“clarified” regulations retrospectively to events that took place
during a time when the existing rules were ambiguous and unclear, but also
that the new rules require actions that stand in marked distinction to the
“usual operating procedures” used in the nation’s best teaching
institutions prior to 1996.
The audit
“model” being established by the feds in their PATH initiative,
therefore, is none other than the Regulatory Speed Trap.
The first four steps of the Speed Trap were successfully completed
with the publication of the new 1996 regulations; 1) formulation of
ambiguous regulations; 2) establishment of de
facto standards; 3) long-term acceptance of those de
facto standards by the feds; and 4) sudden reinterpretation (i.e.,
“clarification”) of ambiguous regulations.
Up to this
point, of course, the motives of the feds might still be viewed as being
essentially benign. It is only the aggressiveness of the retrospective
application of the new regulations (the fifth and most telling step of the
Regulatory Speed Trap), that reveals the true motivation of the OIG.
That level of
aggressiveness became apparent immediately. The first audits occurred at
the University of Pennsylvania and Thomas Jefferson University.
After conducting these audits, the OIG extracted settlements from
these two prestigious institutions of $30 million and $12 million,
respectively.
The amount of
these settlements grabbed the attention of the academic community, which
then listened in stunned silence as the OIG explained its plan for the
broader PATH Audit (both in writing, and in a particularly chilling
videotape distributed to academic centers).
Those plans were, to say the least, extremely intimidating:
1)
All academic centers in the U.S. would be audited during the next
few years.
2)
Centers would have a choice between two methods of conducting the
audit, neither of which was attractive.
“PATH 1” would involve the OIG itself conducting an on-site
audit. The potential danger
here, the OIG pointedly warned, was that many times federal auditors will
notice things – peripheral issues aside from the main event – that
will cause one thing to lead to another.
Once a federal auditor arrives at an institution, the OIG implied,
no telling when he or she will leave.
“PATH 2” would allow the teaching hospital, at its own expense,
to engage an external auditing firm that is acceptable to the OIG.
However, the hospital electing this method would surrender certain
legal and accounting privileges (such as attorney-client privilege), and
would be required to see that a representative of the OIG be present at
all meetings related to the audit.
3)
Whichever method was selected, only approximately 100 charts would
be audited from each hospital. The
“error rates” in billing (based on the new standards retrospectively
applied) would be determined from this sample, and extrapolated across all
billing from the hospital during the six-year period in question, to
calculate the total amount “overbilled.”
(Any underbilling that is discovered, of course, would not be
deducted from rates of overbilling.)
The False Claims Act would then be invoked to allow the OIG to
recover up to three times the extrapolated overbillings during this
six-year interval. Because
the total likely to be owed to the government can easily run to the tens
of millions of dollars, institutions, it has been suggested, may want to
consider an early settlement.
Step five of the
Regulatory Speed Trap thus has clearly been fulfilled in the PATH audit,
and in a distressingly aggressive and unforgiving manner.
The
Association of American Medical Colleges and other organized groups have
tried to appeal to reason, and have gotten some response. Two former
Secretaries of HHS (Bowen and Sullivan) wrote in a letter to Congressman
John Porter (R-IL) that, “Really since the inception of the Medicare
program HHS has had a difficult time in setting forth a bright line
standard that could be used to separate the services provided by an
attending physician that are strictly teaching in nature and those that
involve care to a specific patient. . . . Given the contorted history of
[IL372] through the years, it would appear to be an unlikely candidate for
an OIG investigation." Background
Paper – Physicians at Teaching Hospitals (PATH) Intitative. American
Medical Association and Association of American Medical Colleges, October
20, 1997.
Harriet
Rabb, General Counsel of HHS, has stated in a July, 1997 letter that
“the standards for paying teaching physicians under Part B of Medicare
have not been consistently and clearly articulated by HCFA (Health Care
Financing Administration) over a period of decades." Letter
on PATH Initiative from Harriet S. Rabb to Jordan J. Cohen, President,
Association of American Medical Colleges and P. John Steward, Executive
Vice President, American Medical Association.
Yet,
the PATH Audit goes on unabated, and the OIG continues harvesting tens of
millions of dollars from a succession of financially strapped medical
schools. The nature of the PATH Audit speaks for itself.
And what is says is that the feds are not fooling around.
They’ve got the weapons, as well as the motivation and the public
support to use those weapons, and they will use them to the fullest extent
possible.
The
PATH Audit can properly be considered merely a shake-down cruise for the
new federal anti-fraud bureaucracy. It
has gone well. Despite
organized efforts to stifle the PATH initiative, despite congressional
ears sympathetic to those efforts, and despite statements coming from even
HHS officials (present and former) decrying the essential unfairness of
the process, the OIG has pressed
forward to great effect. Having
set this precedent, the anti-fraud units will be very difficult to stop,
or even slow, as they initiate their future “operations.”
This is an
important point, because the PATH Audit affects only a small minority of
physicians and institutions. Most
physicians are not teaching faculty, most institutions are not medical
schools, and most have given only passing attention to what is happening
to their academic colleagues. Most
of them don't understand yet what is coming.
Criminalizing health care - the
downside
Once again we
see the irony of trying to avoid the rationing of health care by
eliminating waste and fraud. Whether those efforts are made through market
forces or through federal regulations, the result is simply to increase
covert rationing. Just as the
HMO incents physicians to withhold services by threatening loss of income
or loss of jobs, the anti-fraud initiatives incent physicians to withhold
services by threatening potential fines or jail terms.
Either way, the physician is compelled to withhold services.
All signs point
to the continued escalation of the use of the Regulatory Speed Trap.
The Clintonians have amply demonstrated their zeal for using this
tool to bring physicians to heel, and if the public and Congress continue
cheering them on, there is no reason for them to stop.
We're not
saying, however, that the feds will allow their pursuit of physician fraud
to accelerate to orgiastic proportions.
That would be counterproductive.
When a shark is preying on a school of mackerel, it does not allow
its feeding to become so frenzied as to wipe out or disperse the school.
It makes quick, terror-inducing strikes, grabs a few fish, then
retreats, allowing the mackerel to re-form themselves in serene,
piscatorial calm. The shark
is thinking long-term.
We believe
physicians will have to resolve themselves to a mackerel-like mentality.
“The 
shark probably won’t get me.
But it’s always out there, and it’s always hungry.
It will continue to strike now and then, viciously and at random.
I’ll try to stay in the middle of this school, away from the edges, and
do nothing to draw attention to myself.
And I’ll always be alert for it, always watching, even as I try
to fulfill my own mackerel-needs.”
We can almost
hear a few of you dear readers saying something like, “Nuts to the
doctors. Couldn’t happen to
a nicer bunch.”
I’ll be the
first to admit that doctors have probably – by virtue of their
longstanding and exuberant embrasure of a runaway fee-for-service health
care system – lost much of their moral authority.
It is partially the ostentatious and avaricious behavior of many
doctors, the outright fraudulent behavior of some others, and the
inability or unwillingness of the profession to police itself, that has
made the feds’ fraud argument sound so persuasive in the first place. So
if doctors have to rely on the sympathy of the public to relieve them of
the burden of excessive fraud and abuse charges, they’d better pack
their toothbrushes. They’re
going to jail.
The reason the
general public should be concerned is not because of what is happening to
the poor doctors. It is
because of what is happening to them.
For what can
more effectively separate the interests of doctors from the interests of
their patients than the threat of a career-ending federal conviction, loss
of all personal assets, and hard time in a federal prison?
Consider – what is a physician to do when faced with a decision
on whether to offer a medical service he believes is needed, but which he
knows to be controversial? In
the old days a disagreement with the payer over such a service might
result in a withholding of payment. Now
it might result in federal charges.
The
physician’s wariness of the feds is not merely an occasional thing,
either. It promises to become
an ever-present and pervasive concern that colors each and every meeting
between a doctor and a patient. The
desire to avoid the scrutiny of the anti-fraud bureaucracy will become as
important to every health care decision as avoiding the scrutiny of the
IRS is to every financial decision. The major impact of the E&M
regulations, in fact, will be that they guarantee
the physician will have to spend substantial time thinking about how to
avoid a fraud rap with each and every patient encounter. It’s
the law.
Avoiding fraud
is not what patients want their doctors to be thinking about when
they’re describing the characteristics of their chest pain, or asking
advice about mammograms. It
is no more in their best interest than it is in the doctors’ best
interest.
What we have to
do, we patients and doctors, is to figure out how to rededicate ourselves
to our commitment to each other. Until
we do, the wedge wielded by the anti-fraud and abuse crowd will continue
driving us apart, leaving each of us to flounder on our own in a health
care system that has marginalized us, commoditized us, and criminalized
us.
Coincidence?
Is it merely a
coincidence that the first state to approve a program of explicit health
care rationing is also the first state to approve physician-assisted
suicide?
Perhaps this is
not a fair question, especially if you’re an Oregonian.
Oregon is the only state
whose citizens have had the courage to openly address the issue of health
care rationing, (their efforts in this regard are discussed in detail in
the Section 8), and perhaps it is not surprising that such a people would
also have the nerve to take up a second highly contentious issue related
to health care. So we concede
the possibility that Oregon’s passage of laws related to both of these
issues may indeed be a coincidence of courage.
At the same
time, coincidence or not, one must admit that it is at least interesting
to find the first operational assisted suicide law so plainly juxtaposed
against the first openly acknowledged system of rationing health care. I
believe that this juxtaposition neatly illustrates the relationship
between the increasingly urgent “end-of-life” movement and the need to
limit spending.
There are
actually three areas of hot contention related to “end-of-life”
medical care (the care of patients at or near the time of their death) –
these issues are advance directives, physician-assisted
suicide, and the delivery of futile
care. All three
areas of controversy involve legitimate ethical dilemmas, about which
respected ethicists have argued and continue to argue on either side.
In each case the ethical point of
contention is the same – that of individual autonomy.
In essence, all three ask this question – how much control will a
patient have over the events that surround his or her own death?
The
end-of-life controversies - Autonomy, or cost?
As we have seen,
the autonomy of the individual – a person’s right of
self-determination – is the cornerstone of the American belief system.
Yet, individual autonomy is not perfect even in concept; it has
inherent limitations. For
instance, in the pursuit of life, liberty and happiness, no person has the
right to limit or jeopardize the rights or welfare of other individuals
(i.e., of society.) This
limitation creates an unavoidable tension between the rights of an
individual and the rights of society.
Indeed, the general problem of how to protect individual autonomy
without sacrificing the legitimate needs of society accounts for many of
the domestic conflicts that have taken place during our nation’s
history.
Not
surprisingly, the issue of autonomy is central to the end-of-life
disputes. Returning the authority to make end-of-life decisions to the
dying patient can restore a measure of control, and add a final measure of
dignity to his or her life. To
the “end-of-life” movement, the battle is for affirmation of the
individual autonomy of the dying patient, and against a technocratic
health care machine that seems geared toward extending life by all
possible means.
But also central
to these disputes, though much less openly discussed, is the issue of
cost. In virtually every plea
for the expansion of end-of-life autonomy is an aside (often in
parentheses) as to how much money is being spent today caring for patients
in the last few months of life. Up
to 35% of Medicare expenditures in any given year, they might say, will go
to the 6% of enrollees that die within that year.
The clear implication is that, by honoring individual autonomy, as
an extra bonus we also stand to save countless millions of dollars.
It is therefore not surprising that those who cut the checks,
health insurers and the government, have generally expressed sympathy and
support for the end-of-life movement.
In
this Section it is my intention to demonstrate how, in all three
end-of-life controversies, the ethical issue of autonomy is inextricably
entwined with the practical issue of cost, and how society's insistence on
operating in a milieu of covert rationing sweeps away any hope of
resolving these issues equitably.
The purpose of advance
directives
Advance directives allow patients to
establish beforehand (usually by means of a written document), what kinds
of medical treatment they would want and not want, should they fall victim
to a serious, life-threatening illness that leaves them unable to express
their wishes. Advance
directives can be either a statement of very general desires (e.g., “I
do not want my life prolonged by any artificial mechanical means”), or a
list of specific wishes (e.g., “I do not want to be attached to a
mechanical ventilator”).
Advance directives and autonomy
By allowing
patients to make such choices ahead of time, advance directives
potentially can spare them from being subjected to treatments that they
would consider demeaning, undignified, painful or otherwise undesirable,
should they become incapacitated at a later date.
Thus, well-constructed advance directives should always operate in
the direction of preserving individual autonomy, and there should be
little ethical argument against them.
Accordingly, the
dispute with advance directives is not so much ethical, but practical –
what have advance directives actually accomplished, and what can they
realistically be expected to accomplish?
For, while advance directives sound like a very good idea, and
while they indeed can be very helpful in some circumstances, they have
proven to be much less so than one might think.
Advance
directives are supposed to work by providing guidance to physicians who,
in their fiduciary capacity, are charged with acting in their patients’
best interests, even if the patient can no longer express a preference.
Unfortunately, however, advance directives only go part way in determining
what actions the physician should take to best honor the wishes of the
incapacitated patient at the time they are incapacitated. The problems are
twofold; advance directives express imperfect knowledge, and they are
imperfectly expressed.
It is virtually
impossible for a healthy, robust individual to know precisely how he or
she will really feel several years from now when illness strikes, and it
becomes time to actually exercise an advance directive. Every doctor who
cares for critically ill patients has seen more than one who, despite
advance directives to the contrary, unhesitatingly choose to be attached
to a ventilator (for instance) when the time comes, rather than face
certain imminent death. Experienced doctors know that advance directives
do not always indicate what a patient will actually choose when the time
of choice is upon them. They
also know that, while conscious patients have the opportunity to repeal
their advance directives, unconscious patients don’t.
So in executing an advance directive in an incapacitated patient,
the conscientious physician will also take into account many other factors
– her personal knowledge of the patient, the opinions of the family as
to what the patient would want done, and the chances of long-term recovery
if the therapy being considered is used.
Let us illustrate with a case study.
Bruno's
advance directive
Bruno, a
previously healthy man of 68, has just suffered a stroke. He becomes
comatose, and two hours later he develops respiratory distress.
Dr. Smith, Bruno’s neurologist, expects his respiratory condition
to improve over time. But
right now Bruno needs to be attached to a ventilator or he will die within
hours. The problem is, Bruno has signed an advance directive that appears
to prohibit ventilators under most circumstances.
Dr. Smith is not
sure what to do. How much
weight should she give to Bruno’s advance directive? If she withholds
the ventilator, Bruno will die. If
she puts Bruno on the ventilator, chances are he will recover, but with at
least some permanent neurological deficit. Which would Bruno choose if he
were able to express his choice now?
Dr. Smith talks
to Bruno’s family about the situation.
Bruno’s daughter says the advance directive speaks for itself and
should be
honored, but his son expresses doubt as to whether this
was precisely the kind of circumstance Bruno meant when he indicated he
didn’t want the ventilator. Bruno’s
wife is simply distraught, and while she cannot offer advice about the
advance directive, she obviously is not ready for Bruno to die.
Then, of course,
there’s the interpretation of the language in Bruno’s advance
directive. Bruno’s daughter
had downloaded it from the Internet for him, and it’s pretty
boilerplate. In fact, Dr. Smith has seen this language before; she
doesn’t believe that Bruno changed anything in it – apparently he just
signed it. For Dr. Smith,
this calls into question how much Bruno had even thought about it before
signing; maybe he was just trying to please his daughter.
In any case, this particular directive is distressingly vague about
its prohibitions. Regarding
the ventilator specifically, it appears to prohibit its use “unless
there is a reasonable expectation of a meaningful recovery.”
Dr. Smith tries
to evaluate the wishes expressed in Bruno’s directive in light of his
current situation. With aggressive therapy she expects that Bruno has
perhaps a 60% chance of surviving this hospitalization.
Is that a “reasonable expectation?”
If Bruno does survive, he may be permanently paralyzed and unable
to talk. Is that a
“meaningful recovery?” She
has seen many patients with devastating strokes eventually achieve a level
of satisfactory, often happy, recovery. Yet, she knows, few of them would
have predicted ahead of time that they’d be willing to live with such a
condition. The definition of a “meaningful recovery” depends heavily
upon whether one is a robust young man thinking about a stroke in the
abstract, or an elderly man actually living it and whose only other option
is death.
Bruno’s three
family members intently study Dr. Smith’s face, awaiting her
recommendation – the wife pleadingly; the son expectantly; and the
daughter challengingly. What
will Dr. Smith do?
Before Dr. Smith
tells us, let’s examine some of the other considerations she might have
to entertain.
Advance directives and cost
The federal
government, under the Patient Self-Determination Act, requires
Medicare-certified hospitals to inform all patients about the availability
of advance directives at the time of hospital admission.
All 50 state governments have passed statutes that further
encourage this effort. HMOs
have jumped on the bandwagon, encouraging patients to adopt advance
directives and incenting doctors to discuss them with patients.
One would have
to be very credulous indeed to believe that the enthusiasm with which HMOs
and state and federal governments have embraced advance directives arises
primarily from a fervor for increasing patients’ autonomy.
Most patients, apparently, are not that credulous, as the majority
have withstood the onslaught of encouragement to adopt advance directives.
Perhaps they feel the big payers protest too much about their lack
of end-of-life autonomy. My
guess is that patients are suspicious.
It is next to
impossible to catch the government or HMOs coming right out and saying
that their enthusiasm for advance directives actually has to do with
saving money. But if autonomy
were their chief concern, would they really designate the hospital
admissions clerk as the point person for soliciting advance directives?
We have already seen how critical it is for patients to carefully
consider the circumstances under which they would want therapy withheld,
and to carefully spell out those circumstances.
Clearly, it would be better not to have an advance directive at all
than to have one that misleads doctors about something as important as
one’s wishes for end-of-life care. Asking someone to fill out an advance
directive at the time of hospital admission, likely without appropriate
guidance and possibly under duress, is a clear indicator of whether the
true motive is guaranteeing the patient’s autonomy or cost-cutting.
HMOs have been
disappointed so far by the lack of cost savings from advance directives.
This failure is due both to the low percentage of patients who have
adopted them, and to the fact that, apparently, physicians insist on
“interpreting” advance directives when they do exist.
To address this latter problem, it has been suggested that perhaps
HMOs should support patients’ autonomy by simply refusing to reimburse
providers who provide care against the expressed wishes of an advance
directive. Such a policy,
obviously, would save the HMOs money directly.
It would also have the effect of making the advance directive the
final arbiter of a patient’s wishes – wise patients would then have to
think even harder before adopting one.
Advance
directives - role of the physician advocate
The easy way out
for Dr. Smith would be to “honor” Bruno’s advance directive, and
withhold ventilator therapy. That
decision would certainly fall within the parameters of the directive,
would be acceptable (albeit reluctantly) to Bruno’s wife and son, and
would be welcomed by Bruno’s daughter.
It would also be welcomed by her hospital and the HMO that owns it.
And Dr. Smith realizes that she certainly invites less official
scrutiny by following an advance directive than by going against it.
But she takes a
deep breath and tells Bruno’s family she thinks they should use the
ventilator. “I think he has a pretty decent chance of making an
acceptable recovery,” she says, “although I can’t guarantee
anything. But the way I read the situation, I think he’d want us to
try.”
Bruno’s wife
and son are clearly relieved that the doctor thinks it would be okay to
keep trying. Bruno’s daughter is angry, and mutters something about how
Dr. Smith had better hope her father doesn’t end up as “a
vegetable,” but she doesn’t try to veto the ventilator. As Dr. Smith
leaves Bruno’s family, she prays that Bruno himself will agree with her
decision when he recovers – if
he recovers.
Most people, one
suspects, would want a physician like Dr. Smith, who takes her patient’s
advance directive seriously, but does not treat it as a binding legal
document. For many reasons,
advance directives can never be perfect representations of a patient’s
future desires under all circumstances.
They need to be interpreted according to the situation at hand.
They can offer strong clues as to how to honor a patient’s autonomy, but
cannot be the only arbiter.
The appropriate
use of advance directives requires the physician to act as a true
advocate, to selflessly place the desires expressed in the directive in
context with everything else that might affect the patient’s wishes, and
then make a recommendation that, to the best of his or her ability, honors
that patient’s autonomy.
For our
purposes, the important point is this: To the extent that doctors can no
longer act primarily as their patient’s advocate, advance directives
become less an instrument of autonomy and more an instrument of covert
rationing.
A compelling question
Aside from
abortion, no there is no controversy in medicine more contentious or
polarizing today than the controversy over physician-assisted suicide.
Yet, it is not immediately obvious why this issue has become so
acutely important.
Proponents of
assisted suicide usually invoke a prototypical scenario to illustrate
their position: Consider the patient riddled with widely metastatic
cancer, facing imminent death, and suffering from severe, uncontrollable
pain. Does not such a patient
have a right to ask his or her physician to give them the means to end
their suffering once and for all? And
does the physician not have the right to respond without committing a
crime?
It is an
extremely compelling question. Accordingly,
this scenario is the one that has been posed to the public in most polls
whose results appear to show that the majority of Americans are in favor
of physician-assisted suicide. Few would argue that this terminal,
pain-wracked patient does not have a right to expect his physician to do
whatever it took to relieve his suffering.
Few would expect that physician to deny the desperate pleas of the
patient. Most would believe
it unethical for a doctor to deny those pleas.
But in real
life, this very difficult clinical problem is dealt with frequently and
effectively without having to invoke assisted suicide.
What most knowledgeable and compassionate physicians do in such
cases is simply to give as much pain medicine as it takes to make the pain
go away, even if doing so runs the risk of hastening the patient’s
death.
This course of
action is not only ethical, it is also legal. Aggressive pain control in
terminal patients is almost always effective in reducing pain to tolerable
levels. It is entirely
consistent with professional standards. It honors individual autonomy, and
does so without impinging on the rights of society. Furthermore, the
Supreme Court, which in 1997 unanimously struck down a constitutional
right to assisted suicide, took that opportunity to stipulate specifically
that physicians are encouraged to use aggressive pain control measures in
terminal patients when necessary, even if those measures have a chance of
hastening death.
Granted, there
will be occasional cases where even extremely aggressive pain management
fails to adequately control pain, and leaves the patient asking for death.
So current medical science, laws and ethics do not adequately
answer all possible situations. But
fortunately, with adequate management these cases are very rare. (And in
cases where management is not adequate, the solution is to better educate
the physicians, not to kill the patients.)
So, given that the prototypical scenario is uncommon, this leads us
to wonder – why all the passion, at this particular time, about
legalizing physician-assisted suicide?
Why
all the passion?
In examining
this question we should look at how assisted suicide is actually
practiced. Consider the
clinical practice of that celebrated pathologist, Dr. Kavorkian. For the
most part patients with unrelenting pain are not the ones who have
requested his assistance. Most who have sought him out wanted to end their
life for other reasons, commonly because they suffered from
disease-related depression, loss of control, or fear of becoming a burden
to their families. Few had
intractable pain, and some did not even have terminal illnesses. This is a
pattern that holds up in Holland, too, where assisted suicide and
euthanasia are acceptable as a matter of public policy.
Pain is the motivator in a decided minority of Dutch patients who
ask for assisted suicide.
Seeing this, one
must conclude that the passion in the end-of-life movement for assisted
suicide cannot reside primarily in the desire to relieve pain in
terminally ill patients. One
suspects that instead, the prototypical pain-wracked patient is invoked
primarily to garner sympathy for their position.
Their passion more likely derives from a general sense, within that
movement, that individual autonomy needs to be rescued from the clutches
of the unrelenting, unfeeling, smothering bio-medical-technical machine.
But these
sentiments have been rumbling along in the background for decades, and
never drew more than amused glances from the “establishment.”
What’s new is that, for some reason, the “establishment” has
seen fit in recent years to give voice to these sentiments, and to bring
the issue of physician-assisted suicide (and its mate, euthanasia) to the
fore. Obviously, I am suggesting that the reason for this is financial.
So in examining
the assisted suicide issue, we need to consider not only the ethical
debate (i.e., the rights of the individual to demand assisted suicide
versus the rights of society to hold such activity illegal), but also what
it means that this issue has become so urgent at this particular time.
The
ethics of physician-assisted suicide
On the surface,
the issue of physician-assisted suicide does appear to be a simple
question of individual autonomy. But
while I have stressed the importance of individual autonomy throughout
this discussion (indeed, one of my major themes is that individual
autonomy needs to be saved from the ravages of covert rationing), close
examination of the ethical question in this particular case suggests that
here, the unbridled endorsement of end-of-life autonomy threatens to lead
us where we don’t want to go.
I am not trained
in ethics, so my qualifications for interpreting the ethical arguments
here may be legitimately questioned.
At the same time, I believe that, since the rest of us are expected
to act in accordance with what is deemed ethical, one of the jobs of
ethicists is
to render ethical arguments that are intelligible to the masses.
To couch ethical opinions in jargon and arcane twists of logic
places the rest of us in the position of having to accept the ethical
bottom line without understanding how that bottom line was reached.
It reduces ethics to “received knowledge,” and the brotherhood
of ethicists to a priesthood. Advancing
unintelligible ethics is, well, unethical.
So here, to the
best of my understanding, is how most ethicists regard the issue of
end-of-life autonomy:
Point 1) We
as a society have already decided that autonomy is a deciding factor in
making decisions on ending life. We
did this formally when we asserted the individual’s right to refuse
treatment for medical problems, even life-sustaining treatments, and even
if the disease for which treatment is being refused is curable. This was
the critical ethical choice for us, and we have made it.
Point 2)
There is no ethical distinction between assisted suicide and euthanasia.
Handing the patient the switch that triggers the suicide machine, and
actually flipping the switch for patients who may be too weak to do it for
themselves, are ethically the same act.
In fact, once it is agreed that hastening a painless death is the
proper course of action, then it would be unethical to deny patients such
a painless death just because they are too weak to flip the switch
themselves. Physician-assisted
suicide and euthanasia are ethically identical acts.
Point 3)
Likewise, there is no ethical difference between “passive” and
“active” euthanasia. That
is, there is no difference between “letting nature take its course”
and helping nature along a bit. In
one case, the doctor acts to remove or withhold life-sustaining therapy,
thus hastening death. In the
other case, the doctor acts to administer the means of hastening death.
In either case, the doctor has taken an action that hastens death
– the two acts are ethically equivalent.
Conclusion)
Since we have already asserted the right of the patient to refuse
life-sustaining therapies (Point 1), then it follows from Points 2 and 3
that ethical consistency also requires us to allow both physician-assisted
suicide and euthanasia. In
other words, if withdrawal of life support is deemed ethical, then
physician assisted suicide and euthanasia are ethical.
As nearly as I
can tell, many if not most ethicists believe the Supreme Court was wrong
in 1997 when it denied a constitutional right to assisted suicide (saying
that each state should decide the issue for itself).
Some were scandalized that the Court made a clear distinction
between “letting nature take its course” and hastening death,
especially since it did so in the face of strong arguments from the ethics
community to the contrary.
Is there an
ethical argument that allows withdrawal of life-supporting therapy without
also legitimizing euthanasia? Yes,
but it is decidedly a minority opinion among ethicists.
As long as the withdrawal of life-supporting therapy is made by the
same actor who provided that life-supporting therapy in the first place,
the argument goes, the withdrawal of therapy would not really constitute
killing. The patient would be
losing only that which was provided by the continuing support of another
individual, and no one has the right to demand the continuing support of
another individual (since it would be a violation of that person's
autonomy). Unfortunately,
accepting this argument also requires accepting something called a
“nonempiricist notion of causality.”
I have no idea what that means, but to your average ethicist
accepting it is apparently equivalent to a physicist accepting cold
fusion.
The bottom line
is that, if you're waiting for the ethicists to tell you
physician-assisted suicide is not permissible, you'd best prepare for a
long wait. From the standpoint of most ethicists, the preservation
of the individual autonomy that rendered the refusal of life-sustaining
therapy ethical also renders physician-assisted suicide (and euthanasia)
entirely ethical.
The
cost-saving aspects of physician-assisted suicide
Just as in the
case of advance directives, the cost-saving aspects of physician-assisted
suicide are rarely discussed openly. Yet, these aspects reside just
beneath the surface of many passionate arguments for legalization of
assisted suicide. It’s
purely an issue of autonomy, these arguments go, but hey, as it turns out
it’s also a win-win for both sides.
The individual gets his autonomy, and society saves a little money
to boot.
In this case,
the government and the HMOs have wisely stayed on the sidelines.
It would be unseemly for them to become big boosters of assisted
suicide, and besides, so far the ethicists are doing a good job of
carrying the ball. Patience
is the order of the day.
It would be too
much, however, to expect that such reticence would persist even after
assisted suicide became widely available.
After all, once our society decides that assisted suicide is a
legitimate means of expressing autonomy, wouldn’t it be the duty of
government and insurers to establish smooth processes by which such
autonomy could be expressed?
Already
the enthusiasm for potential savings occasionally bubbles to the surface.
In an article in The American
Journal of Economics and Sociology
(1993;52:275), for instance, Fung (citing the familiar statistic that
35% of Medicare spending goes to the 6% who are about to die), argues that
tremendous cost savings could be realized by using financial incentives to
induce patients with terminal
illnesses to end their lives.
His plan, blandly called “physician-assisted death with benefit
conversion,” would pay such patients a very nice sum (based on a
percentage of what otherwise would be spent on their health care), to
instead opt for a voluntary, painless, and dignified death at the hands of
their doctors and at a time of their choosing.
Thus, it is not enough that we make voluntary physician-assisted
suicide legal; to save as much money as possible we also ought to do
everything we can to encourage patients to make this choice.
While such a
proposal might look totally outlandish to many of us, it simply places a
logical Gekkonian spin on what is more typically a Clintonian issue. The
only reason such a scheme may seem shocking to us is that our thinking has
not yet “evolved” sufficiently. We
just need a little time to get used to the idea.
This example
points out the corrupting influence that covert rationing will have on
what otherwise is an issue of ethics. In weighing the relative merits of
expanding individual autonomy in end-of-life decisions against the effect
that expansion of rights will have on society, the influence of rationing
has a heavy hand. Physician-assisted suicide as an occasional and
extraordinary solution to a rare, intractable clinical dilemma is one
thing; institutionalized and encouraged as one of several health care
options, however, it will be quite another.
Without going
into flights of imagination, one can easily visualize the promotion of
assisted suicide as an attractive choice, as a new individual freedom,
hard-won from the paternalistic health care system.
Magazine adds and pamphlets (included with your hospital admission
packet) will tell how you have the power to save yourself from the
clinching grasp of the medical automatons, to be rescued from their
needles, biopsies and scans, to take control of your destiny, and remove
yourself to a place where, free from pain and enveloped by peace, you can
be eased into the next life. You
no longer have to suffer. You no longer have to worry about being a burden
to your family. It’s in your power to do one last thing for yourself and
for the ones you love. It’s
your choice, you are told lovingly – and expectantly.
And you can be
sure that, even if you choose not to listen to this stuff, your children
and grandchildren will. And
even if they don’t say it, sooner or later they’ll be thinking, “
Well, it’s sort of getting to be about that time, isn’t it?”
And before you
know it, the choice for assisted suicide will become the duty
for assisted suicide.
Devaluing end-of-life care
In our health
care system today, we pay a lot of attention to those who are dying.
The hospice movement is strong, and medical research in the past
decades has helped immensely with caring for the physical and emotional
needs of the dying. Resolution
of many personal, emotional, and family issues are facilitated in the last
days of life, thanks to the recognition that these things are of vital
importance not only to the patient, but also to those the patient will
leave behind. Yet, such
efforts are expensive and emotionally taxing, even for those who have
developed expertise in end-of-life care.
If
an easier (and cheaper) way were available, careful and compassionate
end-of-life care would be de-emphasized.
“We don’t need it any more,” HMOs would say.
“People are choosing suicide, in celebration of their
autonomy.” And by making good end-of-life care harder to come by, they
indeed would be rendering assisted suicide a more attractive choice.
Making
society callous to suffering
While nobody
likes to talk about it, suffering people are, to at least some extent,
insufferable. In their emotional and physical pain, they can be demanding,
self-absorbed, and sometimes abusive.
They often need constant, difficult, and highly unpleasant care. No
matter how compassionate we caretakers may be – health care workers and
family alike – there is always some element of wishing the sufferer
would be gone.
Insightful
health care workers recognize this “dark side” impulse as a natural
one; and this recognition helps them to work through their own ambivalence
about the suffering patient. More importantly, it also helps them to
council members of the patient’s family, who often have deep feelings of
guilt because of the same kinds of ambivalent feelings. The prohibition
against euthanasia and assisted suicide makes the bedside a “safe”
place to work through these issues – we can recognize and deal with our
darker impulses, knowing that, no matter what, we don’t have the option
of acting on them.
And working
through such impulses is ultimately healthy.
By doing so, we learn to understand and live with the suffering of
others; we learn compassion for the human condition; ultimately, we learn
to be more accepting when it is our own turn to suffer.
But if there
were an alternative, if we didn’t really have to deal with watching our
loved ones suffer, or with the feelings their suffering caused within us,
then wouldn’t it be easy to simply to take advantage of that
alternative? Over time, it would become difficult for us to understand why
anybody would tolerate suffering (and why they would be so unfeeling as to
expose the rest of us to the discomfort of having to watch them suffer),
when there was such an obvious, painless and commonly-used alternative.
After a while we would learn to apply this solution to more and more forms
of suffering, and our tolerance for any form of suffering, real or
perceived, would erode. Suffering would no longer teach us compassion for
the human condition; it would merely provoke disgust.
This is not just
a prediction. It has,
you’ll remember, happened before.
Inviting
lawyers to the bedside
There’s no way
we’ll ever tolerate physician-assisted suicide without “safeguards.”
The legal safeguards, in fact, are the main reason proponents give
as to why assisted suicide will never be abused. Consider what such laws
will do, however. They will directly inject lawyers, for the first time on
a routine basis, into the process of end-of-life care. And when we remind
ourselves that the only other model we have for legal killing in our
society (outside of warfare) is capital punishment, we get a flavor of
what such legal wranglings might mean.
Coming
to terms with death is hard enough on everybody as it is.
Do we really want to add lawyers to the mix of family, friends,
medical personnel and clergy at the bedside?
Do we really want to turn the process of dying into just another
(particularly difficult) legal process?
The
slippery slope argument
The slippery
slope argument is dismissed out of hand by most in the end-of-life
movement. It simply doesn’t
hold water, they say. It is
illogical to argue that something as affirming of individual autonomy as
assisted suicide can ever lead to the abuses of individuals by society.
And if, in reply, one tries to describe to them how it already has
happened in recent memory, they tend to become horribly indignant and shut
off all conversation. “If
we can’t discuss this without you calling me a Nazi, then we have
nothing to talk about.”
People in the
end-of-life movement are not Nazis. The
vast majority are good, compassionate, well-meaning people who have the
best interests of dying patients at heart. But if you examine the facts
coldly and logically, and if you factor in the depth of our increasing
economic crisis in health care, the slippery slope argument, I believe,
becomes compelling.
Let’s deal
first with the Nazis. The
Nazis were obsessed with the purity of race, with removing all imperfect
humans from the breeding pool. That was their ideology, and we don’t
have that ideology.
Yet, the
evolution of the arguments advanced by the Germans to justify their
actions sound eerily familiar. Long
before the Nazis came to power, German scholars were calling for legal
euthanasia as a means of promoting mercy and personal choice in the face
of intractable suffering, using language identical to the language we are
hearing today. This movement
steadily gained steam, and during the economic crisis of the
post-World-War-I era it was recognized as a way of controlling spending on
individuals who were seen as burdens to society.
Eugenics nicely added the imprimatur of the scientific community to
the humanitarian and economic arguments made by proponents of euthanasia.
By the time the Nazis came to power, the groundwork had been laid
for their handiwork. It had
been laid not by fiends, but by scientists, doctors, lawyers, and
economists.
To dismiss those
events as irrelevant to our culture is foolish.
The arguments the Germans used in beginning this process were identical
to the arguments for legalizing assisted suicide in our country today.
Also relevant to
the slippery slope argument is the Dutch experience with euthanasia.
The Dutch have not actually legalized euthanasia, but have
developed an official policy under which laws governing euthanasia will
not be enforced as long as certain guidelines are adhered to. These
guidelines require intolerable suffering on the part of the patient,
suffering that leads them to a persistent request to be allowed to die;
the patient must have a good understanding of what he or she is
requesting; no other reasonable solutions can be apparent; and at least
one other physician needs to be consulted and must concur that euthanasia
is the only good choice.
Recent reports
on the Dutch experience have been mixed.
Proponents of assisted suicide see a shining example of the
societal benefits of permitting end-of-life autonomy of choice.
Opponents see a series of terrible abuses, including an utter
disregard of the prescribed guidelines.
To me, the most undeniably striking feature of the Dutch experience
(and the most relevant to the slippery slope argument) is the admission
that thousands of cases of “active involuntary euthanasia” are
occurring each year. In other
words, patients are being killed at the hands of their doctors and without
their permission. All, it is
said, are leading insufferable existences, and all are being euthanized
solely for humane reasons.
What do
ethicists say about such a thing? Not
all agree, of course, but it turns out that it is fairly easy to derive an
ethical argument for involuntary euthanasia from the starting point of
upholding individual autonomy. It
goes like this: the principle of autonomy demands that patients be allowed
to refuse therapy; refusal of therapy is the ethical equivalent of
voluntary euthanasia (as we have seen); since voluntary euthanasia is a
right of individuals with intractable suffering, it follows that it would
be unethical to withhold euthanasia from suffering individuals who are
incapacitated, just because they are unable to give their permission.
Hence, involuntary euthanasia is ethical for suffering patients who are
unable to give their permission.
Where this
leaves us is at a place where others can decide for an individual both
what constitutes intractable suffering, and when that individual is too
incompetent to make such a determination for him or herself.
Where these “others” end up drawing the line on whether a
person’s existence is of value or whether a person is competent, of
course, can be influenced by all sorts of external factors.
In Nazi Germany,
those external factors included a belief in the purity of the Arian race,
and that belief led to horrible excesses.
We don’t have that belief here.
What we do have
is an imperative to ration health care, which means that potentially
beneficial care is going to have to be withheld from somebody,
somewhere.
Can we be sure that, once we start down the road of allowing
patients to choose death, we will be able to withstand our
external influences, and stay our hands from ending the suffering of some
who might not be so sure of their choice or who are incapable of making a
choice – especially when, by so doing, we will make more health care
available to others?
I
believe the slippery slope argument holds a lot
of water.
Erosion
of the doctor-patient relationship
Imagine yourself
at age 75 in a hospital bed with a critical but potentially treatable
illness. Your doctor walks
in, smiling.
If
physician-assisted suicide and euthanasia are still illegal, you can be
reasonably sure he’s smiling with confidence. He thinks he can cure you,
and his smile tells you so. You relax. You feel better already.
But what if they
are legal?
What would his smile mean then? He still might be smiling with
confidence, of course. But
maybe he’s smiling as a means of beginning a conversation with you about
some choices. Maybe he’s
about to pull up a chair, shake his head a bit, and say, “Well, you
know, things don’t look so good this time, Charlie.”
He’ll pause, smiling wider now. “But the good news is, we can
make it all pretty easy on you.”
Or worse, he
might not say anything. He
might leave you guessing about how hard he’s really working to make you
well. You’ve even heard – well, you’ve heard they don’t always tell
you beforehand.
It’s hard to
imagine anything more destructive to the trust between a doctor and a
patient than knowing that your doctor, at some point, may shift from
trying to cure you to trying to usher you into the next life as cheaply as
possible (by encouraging suicide, by offering euthanasia, or by simply
doing the euthanasia because you’re so incompetent you can’t see
it’s the only thing to do).
If people want
to commit suicide, and if the ethicists agree that assisted suicide is
entirely okay, then let the ethicists do the assisting. I
have relatively little to say against ethicist-assisted suicide. But leave
the doctors out of it.
So what should we do about
physician-assisted suicide?
It is very
revealing that we should be so ready to create a universal right to die
before we’ve created universal access to health care.
That fact, if nothing else, should tell us how deeply we’ve
embraced the covert rationing of health care.
We should keep
physician-assisted suicide and euthanasia illegal.
The potential for abuse is simply too high, especially in the
milieu of covert rationing. Institutionalizing and popularizing these
procedures will carry too high a price for society, a price that would not
be outweighed by the supposed expansion of individual autonomy they would
bring. Society has a right to refuse to start down this path.
Does this mean
we’ll need to abandon our suffering patients? On the contrary, as we
have seen, turning our backs on the “easy way” will cause us to
redouble our efforts to find ways of relieving the physical and emotional
suffering of patients approaching the end of their lives. Indeed, we’ve
already made a lot of progress in this area.
But what about
those rare cases where terminal patients really do have intractable pain
despite all efforts, and are begging to be given final relief?
I think there clearly will be times when assisting suicide (or even
performing voluntary euthanasia), is the correct course of action.
In those cases, the physician’s fiduciary duty to the patient
should cause him to act for the patient’s benefit, despite the law and
despite potential consequences. A substantial minority of American
physicians admit to having taken such action on a patient’s behalf at
least once.
This sort of
heroic action, of course, depends on a trusting relationship between the
doctor and the patient. It is
ironic that covert rationing, which is clearly one of the forces behind
the push to legalize assisted suicide, is destroying the trust between
doctors and patients that makes such moral actions possible.
The
ethical flip side
Those who still
believe that the rise of the end-of-life movement is solely due to the
quest for increased patient autonomy, and that it has nothing to do with
cost, need look no further than the issue of “medical futility.”
From the standpoint of autonomy, medical futility is the flip side
of advance directives and physician-assisted suicide. For medical futility
is the issue of what to do about the patient who is demanding care that
the medical establishment has deemed “futile” (i.e., extremely
unlikely to be beneficial).
For medical
futility to have become an issue at all, then obviously there must be
reasonably frequent disagreements between the medical establishment and
patients as to when medical care is really futile. The majority of these
disagreements occur in critically ill patients with little chance for
recovery, and typically the treatment in question is very expensive.
Furthermore, in most cases that treatment is not absolutely 100%
unquestionably futile, but merely extremely unlikely to be effective. Yet,
the patient (or the patient’s family) in these cases feels as strongly
about not giving up as the patients requesting assisted suicide feel about
dying. Accordingly, the patient asserts her autonomy by insisting that
“everything” be done.
If autonomy were
really the only issue, then the people who stand foursquare behind the
autonomy of the patient when urging her to establish an advance directive
or when she seeks physician-assisted suicide would also strongly support
her when she wants to express her autonomy by asking for more
care. But that’s not what is happening. Many supporters of the
end-of-life movement are strangely silent on the issue of medical
futility.
When autonomy
and cost both support the same side of an issue, it’s easy for everybody
to say they’re supporting autonomy.
It’s only when autonomy and cost are on opposite sides of an
issue that we can see what’s really the principle motivator.
The cost
considerations of medical futility are not subtle.
Every struggling hospital has the facts and figures to show that a
substantial proportion of their losses come from taking care of patients
who are critically ill and who have relatively little chance of a full
recovery. While it’s easy
to tell in retrospect how much of that care was futile (the money spent on
patients who died was money spent futilely), hospitals and HMOs are
extremely anxious to come up with ways of predicting ahead of time which
patients are unlikely to survive, and to establish the legal and ethical
basis for withholding care from those patients.
The money at stake is enormous. In fact, some have argued
explicitly that medical futility is the ideal method for covertly
rationing health care, because the savings potential is so high.
So doctors,
hospitals, insurers and the government are all very anxious to limit
spending on futile care. I'm
not saying this is unreasonable. We
shouldn’t spend millions on
futile health care (if we’re sure ahead of time which care is really
futile). It’s just that
their strong pronouncements supporting autonomy in the other two
end-of-life issues makes things a little awkward for them when they come
out against autonomy on the issue of medical futility.
Once again,
covert rationing and the lack of trust between doctors and patients
preclude a solution to this problem.
For it is the duty of the trustworthy physician, whose first
obligation is to be his patient’s advocate, not to offer futile care.
Offering futile care presents the patient with a false choice, a
choice that can only raise erroneous hopes, and subsequently keeps the
patient from making truly appropriate and meaningful personal decisions.
The trustworthy physician understands that giving the patient false hopes
in this way, therefore, is itself a violation of the patient’s autonomy.
Further, since the physician is trustworthy, the patient accepts his
opinion that no useful therapy exists, and moves on to the next phase of
her illness. In the healthy doctor-patient relationship, futile care is
not offered, nor is it requested.
But this sort of
relationship is becoming more rare by the day, thanks to covert rationing.
Patients are becoming ever more reluctant to accept the doctor’s
pronouncement that there are no useful therapies for their condition. How
do they know the doctor isn’t just trying to save money by limiting
their choices? They are much more likely to demand that no stone be
unturned. And the only way
they can be sure that everything reasonable is being done is by demanding
that everything possible be done.
The end-of-life controversies – conclusion
The issues
surrounding end-of-life medical care are of vital importance both to
individuals and to society. Perhaps more than any of the other issues we
have discussed in this exposition, the way we handle end-of-life care will
determine what kind of a people we will become in the 21st
century.
Insisting on
autonomy in end-of-life decisions presents something of a paradox.
For what is death if not the ultimate reminder that the right of
self-determination is, at best, a temporary gift? Wherever feasible, we
should allow the dying person to make decisions about the kind of medical
care he will receive during his final days, but for us to declare autonomy
the overriding concern during this time ignores reality and calls into
question our real motives. (Are
we really trying to help the dying individual by insisting on his
autonomy, or are we trying to prove to ourselves that, despite all
appearances, humans actually do have control of their own destiny?).
Instead of
worrying so much about autonomy in the dying patient, we should strive to
provide the things that patient really needs – relief from physical and
emotional pain, help in resolving remaining issues of family or personal
conflict, and spiritual support. We should let the dying person know that
he won’t be abandoned, that we will be there for him until the end.
We should let him know that, because dying is part of the human
condition we all share, the fact of his dying does not make him different
from us. We are embracing him, not culling him from the herd. It is by
such an affirmation of that person’s continuing importance, and not by
coercing him (overtly or subliminally) to exercise false autonomy by
taking the easy way out, that we truly honor his value as an individual.
Covert rationing
precludes any such trust-based end-of-life care. It destroys the trust
between doctors and patients, and makes any solution to end-of-life care
that is dependent on mutual trust utterly impossible.
We have just
completed our brief survey of The Problem.
First, we looked at why the rationing of our health care is
necessary in the first place (whether we want to admit it or not); and
then we examined some of the consequences of our decision to do that
rationing covertly.
We have seen
that covert rationing – whether manifested by Gekkonian HMOs, the
Clintonian Regulatory Speed Trap, or the appropriation of “individual
autonomy” to the hastening of death and devaluing of life – is causing
us two significant problems.
First,
it is slowly eroding the basic principles on which our culture is based,
especially the primacy of the individual. If we lose that, we lose our
cultural identity – and what sort of a people we may become if that
happens is frightening to contemplate.
And second,
it has caused virtually every aspect of our health care system to become
geared toward separating the interests of doctors from the interests of
patients. For doctors, the
loss of their advocacy role removes them from the rank of professionals,
and retrospectively justifies their subjugation by the Gekkonians and the
Clintonians. For patients, the loss of their advocates, just at the time
when they are most vulnerable, places them at the mercy of powerful forces
whose only motivations are cost, profit and power.
This all sounds
pretty bad, and it is. That’s
why we need to figure out what we can do about it.
In Section 8, we
are going to consider the only possible alternative we have to covert
rationing (since ration we must). We
are going to consider open rationing.
First, we will
examine the proposition that that a well-designed system of open rationing
ought to have inherent benefits that stretch far beyond merely vanquishing
the perfidies of covert rationing.
Then, we’ll
discuss six principles we need to consider in designing such a beneficial
system of open rationing.
Next, we’ll
look at what we can do today, both to encourage a more general public
discussion on the rationing of health care, and (in the meantime) to
protect the health and safety of our loved ones and ourselves in an
increasingly hostile health care environment.
Finally, for
those who are interested, in the Appendix we will discuss in more detail
how we can actually develop a workable methodology for open rationing.
Open rationing?
The open
rationing of health care (i.e., adopting an official public policy
requiring the rationing of health care, and an official methodology for
conducting that rationing) tends to be a very scary prospect.
It certainly scares the bejeebers out of those who ought to be
discussing it publicly – economists, health policy experts, politicians,
and medical thought leaders.
The scariest
thing for public officials about initiating a discussion on rationing is
the prospect of having to admit that we need to ration in the first place.
It may not be very long, however, before some smart politician
figures out that the roiling public discontent with the current health
care system, a discontent that is growing every day, is at its root caused
by covert rationing. And
perhaps an increasingly angry public is almost ready to listen to a
logical explanation of what’s really causing all the problems within our
health care system.
If the day
arrives when the public finally understands that rationing is already
happening, and will continue to happen no matter what, then (after
they’ve strung up a few hundred public officials) they may even be ready
to listen to a well-formulated proposal on open rationing. To gain the
support of the public, however, such a proposal would have to provide
substantial benefits, and those benefits would have to be clearly
articulated.
Before
embarking on a discussion of what those benefits might be, we need to list
six basic principles that must be taken into account by any system of open
rationing. Unless these
principles are explicitly considered and decided upon, open rationing
would likely end up being as bad, if not worse than covert rationing.
|
Principles
for designing a system of open rationing
Principle
1: The goals of health care (and therefore the scope of services
that society expects from the health care system) are clearly
spelled out.
Principle
2: The amount of money that society spends on health care is
decided upon in an open process that prioritizes health care
services in relation to all other essential public services.
Principle
3: As many rationing decisions as possible are left to the
patients who are directly affected by those decisions.
Principle
4: Coverage for essential health care services is universal to all
Americans.
Principle
5: The rules for rationing are determined through an open, public
process, and are made as explicit and as clear as possible.
Principle
6: Prioritizing health care services for inclusion in the
universal health plan is done according to clearly articulated
ethical standards. |
Soon,
we’ll examine these six principles more closely, and discuss why they
are so vitally important in designing a rationing plan. Right now, let’s
examine what we stand to gain in the first place by adopting such a
rationing plan.
Benefits of open rationing?
How can there possibly be benefits
to open rationing? As we conceded at the very beginning of this
exposition, rationing health care is bad, and ought to be avoided
if at all possible. So how can we talk about open rationing as if
it's a basket of goodies?
The answer is, open rationing, like all
rationing, is indeed something we'd want to avoid if at all possible. But
since rationing is impossible to avoid, what we really need to do is
compare the pros and cons of rationing openly versus rationing covertly.
Only in comparison to covert rationing and its consequences can the
"features" of open rationing be considered benefits.
We've looked at covert rationing already.
To me, it looks very, very bad. When viewed in this light, open rationing
(if conducted according to the six principle introduced on the previous
page, and to be discussed in detail on the next page) actually shows
considerable promise.
Potential benefits to open rationing are
listed here:
Recognizing
limits
We have seen the
problems we have caused ourselves by holding to our American health care
myth. This myth was founded
on an inherently unstable system of health care reimbursement that hid the
cost of health care from both doctors and patients.
Because nobody saw the costs, inefficiencies went unpunished.
Abandoning
our health care myth, by explicitly recognizing that there are indeed
finite limits to what we can afford to spend on health care, will itself
have immediate and far-reaching effects.
Once we recognize that every wasted health care dollar means that
some person (perhaps even you or I) will have to go without a potentially
beneficial service, many “routine” behaviors that we now take for
granted suddenly will be seen in a whole new light.
Shining
a bright light on nefarious activities
Imagine how a typical Gekkonian HMO will
look to a public that has accepted the need to ration health care.
Will the public continue to tolerate diverting insurance premiums
(dollars meant for health care) to shareholder profit, to marketing, or to
multi-million dollar salaries and bonuses for executives?
Imagine how a typical set of cumbersome, expensive Clintonian
regulations (the E&M
guidelines discussed in Section 6, for instance) will look to a public
that understands the ramifications of any requirement that reduces the
productivity (and thus increases the expense) of the health care system.
Making
efficiency a moral imperative
The health care system is extraordinarily
complex, and in any complex system there will always be wasteful efforts
and inefficient processes. Doctors
and hospitals, squeezed from all sides, have been making an effort in
recent years to eliminate as much waste and inefficiency as they can.
But given all the other pressures upon them, this effort is not
their top priority.
Under open
rationing, however, everybody
will have a major stake in reducing the number of wasted dollars spent,
since those wasted dollars will now be seen as directly and personally
detrimental to everybody in our society. The incentive to dig deeper to
reduce waste, and the expectation
that waste will be reduced, will grow exponentially.
The
imperative toward efficiency would especially apply to our government.
Since the amount of money available for health care under a system of open
rationing would need to be balanced against all the other services
provided to society, the relationship between wasteful government services
and health care rationing would become immediately apparent.
Waste in the defense department, or in transportation, or in
education would suddenly be seen as more than just a problem with
inefficiency in that particular area – it would also be seen as reducing
the amount of money available for our rationed health care. Waste in
government would immediately take on new moral overtones.
Emphasizing
mutual responsibilities
Under a system
of open rationing, George’s health habits would be seen to impact on
Sally’s for more reasons than just second-hand smoke.
People who engage in bad health habits, by voluntarily placing
themselves in a position of needing more health care resources, would be
reducing the resources available to others.
Of course, that’s true today (since we’re already rationing).
But under open rationing, the relationship between one’s personal
habits and the effect of those habits on everyone else would immediately
become clear.
Admittedly, this
“benefit” could go either way. The
community would now have an impetus to institute laws for good health
habits (or disincentives for bad habits), thus encouraging the “behavior
police.” More
optimistically, the realization that our personal health habits impact
everyone around us would increase the sense of mutual responsibility we
all, in fact, have toward one another, and encourage the strengthening of
our moral code (as opposed to our legal code) of behavior.
More
fairness
A system of open
rationing (if designed according to the six principles listed above) would
be inherently much more fair than the system we have now. Consider that
under our current system, the most effective rationing measure we have is
the exclusion of growing millions of Americans from the health care
system, by virtue of the fact that they do not have health insurance.
This medical
disenfranchisement is an artifact of the method by which Americans receive
their health insurance – through their employer.
If you are between jobs, if your employer chooses not to offer
insurance, or if you’re self-employed, chances are you’re not able to
afford insurance.
Such a system
was not planned; as we have seen, it simply evolved.
There is no a priori reason that your health insurance should be
related to who you work for. In
fact, when you think about it, it’s not even a very logical way of
providing insurance.
But it is well
entrenched – though not because employers are inherently magnanimous, or
even because of the power of labor unions.
It’s well entrenched because that’s our public policy – the
federal government encourages the practice by offering huge tax breaks to
employers who provide health insurance for their workers.
What
this means is that anybody who pays taxes to the government is buying
health insurance for workers lucky enough to receive that insurance
through their employers. And
what that means is that workers
who do not receive health insurance (and who therefore are essentially
shut out of the health care system) are helping to buy insurance for the
rest of us who do (not to mention that they’re also buying insurance for
the elderly through their Medicare payroll taxes).
That’s
unfair. Any family that is
paying taxes has a moral claim to health care coverage.
The fact that we have allowed the present system to persist is a
moral outrage. An inclusive system of open rationing, with everybody
sharing the benefits and risks, would be infinitely more fair than the
system we have now.
Refocusing
our research agenda
Open rationing
of health care would do two immediate things to our research agenda.
First, it would induce us to redirect research dollars to carefully
studying the short term and long term outcomes we can attain with various
treatments, and the cost of achieving those outcomes. Such studies, which
are necessary if we are to figure out just what we’re getting for our
money, are sorely lacking today. Outcome studies are vitally important in
an era of health care rationing; open rationing would force us to refocus
our research efforts in this direction.
Secondly, open
rationing would induce the biomedical industry to take costs into much
greater account when developing new or improved therapies.
Open rationing certainly will change the rules of competition
within the biomedical industry. To successfully bring a new therapy to
market, not only will that therapy need to be effective, but also it will
(more than ever before) need to be cost-effective.
But American ingenuity in pursuit of profit is a wondrous thing to
behold. The competitive
advantage afforded to a company that comes up with a cheaper way of
treating a medical problem will be a powerful motivator.
It is likely
that biomedical companies have significant resources they could divert to
this endeavor. Such resources might come, for instance, from the massive
efforts now being expended to develop expensive “me-too” drugs. This
new, more productive endeavor would promise to be much more rewarding both
to the industry and to society.
More
specifically, the biomedical industry would suddenly see the immense
rewards that await them if they were to come up with truly effective
treatments for the chronic illnesses that plague our elderly, and break
our health care budget. Finding ways to prevent stroke, Alzheimer's,
osteoporosis, and other chronic debilitating illnesses will not only make
the last years of our increasingly elderly population immensely happier
and healthier, it will also make those years immensely cheaper. Such
breakthroughs will save countless billions of dollars - which, in turn,
will dramatically reduce the amount of health care rationing we actually
have to do. There would be rich rewards for the companies whose
research efforts achieve this end.
Encouraging
benefits of "classic" managed care
Under a system of open rationing, managed
care can return to its roots – applying, where appropriate, the
efficiencies of standardization and continuous quality improvement to the
processes of health care. The
term “managed care” has received such a black eye under its
bastardization by the Gekkonians that we may need to come up with a new
name for it, but its basic underlying premises are still valid.
Encouraging
a more balanced view of life
This is
admittedly a “soft” benefit, but it is a potentially important one.
There is nothing more discouraging than to see a 75-year-old who is
struck with utter terror at the prospect of his or her own approaching
death. Aside from the fact
that such a state of mind produces unreasonable demands on the health care
system, it also reflects an attitude that devalues life.
At some point in
the maturing process, people are supposed to realize that death is the
currency that gives worth to life. The
knowledge that some day we will die forces us to prioritize, to strive, to
notice that some things are precious and others are not, and to cherish
the precious and ignore the rest. It
causes us to seek to find meaning in life, to seek to make our own lives
meaningful, and to respect the lives of others.
It allows us to try to avoid death as long as possible, but when
death comes, to accept its inevitability and its ultimate validation of
that which has gone before. And by so accepting, we show those who come
after us “the secret.”
For a person,
especially a person who has reached a certain age, to face death with
stark existential panic is a real tragedy.
It suggests much more than the emotional discomfort of the moment.
It suggests a life that has not been lived fully.
Such
an unhealthy attitude – that there should be no limits to life, that
death is ultimately unnecessary – is, of course, entirely reflective of
the American myth of health care. It
is, in fact, its ultimate manifestation.
Abandoning that myth will encourage us to lead lives that are
fuller, more reflective, and more valuable to us and to those we love.
Restoring
the doctor-patient relationship
Perhaps the most immediate benefit
afforded by a system of open health care rationing is that it will no
longer be necessary for the health care system to drive a deadly wedge
between doctors and patients. Rationing
decisions either will be made up front, as a matter of public policy, or
the bedside with the full participation and knowledge of both the doctor
and patient. Doctors will be
able – indeed, will be expected – to resume their traditional role as
patient advocate. Within the
rules and constraints imposed by the rationing system, doctors will be
able to advocate for the maximum benefits due to their individual
patients, without any conflicting influences.
Given that such a lack of conflict was never present even under
fee-for-service medicine, open rationing, in fact, may allow the
doctor-patient team to achieve a “purity” it has never seen during
modern times.
The four arguments against open
rationing
Those
who insist that open rationing can only be disastrous have used four major
arguments.
1.
Rationing is unfair
This argument
implies that we have a choice about whether to ration health care at all.
We don’t. We’re
rationing right now, and as I have tried to make plain, covert rationing
is as unfair as it gets. What
we’ve got today is an “every man for himself” mentality, with every
faction within the health care system in a mad scramble that rivals the
great Oklahoma Land Rush in its desperate grab for turf.
Patients, meanwhile, are left at the starting line with nothing but
empty assurances.
Open rationing,
of course, also has the potential to be unfair.
But it presents us with an opportunity to devise, openly and
publicly, a health care system that strives for fairness – as opposed to
a secretive system of covert rationing, that systematizes unfairness.
2.
We shouldn’t ration until we’ve eliminated all the waste and
inefficiency
This is a
typical response when the issue of health care rationing is raised. It
rests, first of all, on the fallacy that eliminating waste and
inefficiency would allow us to avoid rationing.
As we have seen (in Section 2), it wouldn’t.
Further, open
rationing itself will become a powerful motivator – possibly the
ultimate motivator – for identifying and eliminating inefficiencies
within the health care system (and also outside the health care system,
since waste within all social programs will impact on the health care
budget). With open rationing, in fact, we should be able to achieve a
level of efficiency we could never achieve without it.
3.
Open rationing means the Clintonians will win in the end
It may seem as
if our discussion so far has implied that a single-payer, government-run
(i.e., Clintonian) rationing plan will be the only viable option for
developing a system of open rationing.
Fortunately, this is not the case.
Indeed,
according to Principle 3, an optimal rationing plan will minimize the
amount of rationing that must be “imposed” by third-party bureaucrats,
and instead will maximize the amount of rationing done “voluntarily,”
by the patients who are directly affected by rationing decisions.
Such a system of open rationing can be founded on changes in
governmental policies that eliminate the bizarre incentives that exist
today, that empower individuals and provide them with incentives to
consider for themselves the cost/benefit ratio of optional medical
services, and that encourage the health insurance industry to provide new,
fairer and more efficient products. The
details of how this can be accomplished is discussed in the Appendix.
Suffice to say here that open rationing does not have to represent
an ultimate victory for the Clintonian school, and indeed, if we adhere to
Principle 3, it cannot.
4. Open rationing will be too disruptive to society
It’s difficult
to make a definitive statement refuting this one.
There is no doubt that any debate on how to do open rationing will
be painful and difficult. And
any process that requires abandoning basic premises (such as the American
health care myth) tends to be disruptive.
But the choice
here is not between open rationing and no rationing at all.
It’s between open rationing and the covert rationing we’re
already doing. We’ve seen
how covert rationing does many things that are destructive to us as a
society and as individuals. It
is difficult to visualize any way in which covert rationing can be made
significantly less so.
Open rationing,
on the other hand, at least has the potential of becoming a force for
good. It is inherently honest
instead of inherently dishonest. It
openly acknowledges a limitation that truly exists, and places trust in
our citizens to find a way of dealing with that limitation fairly and
equitably. Accomplishing a just system of open rationing will require us
to acknowledge our duty to one another.
It will require us to reaffirm the importance of the individual,
but at the same time to acknowledge that our own freedoms, rights and
well-being are interconnected and dependent on the freedoms, rights and
well-being of the other individuals in our society.
It will require us to re-articulate our basic principles and to
re-establish communal priorities.
Goaded on by the
reality of having to acknowledge rationing, we may even find that we can
actually improve the level of health within our society. Open rationing
will require us to enfranchise those who are now disenfranchised from the
health care system. It will
require us to work together to assure that the money we have available to
spend is, to the fullest extent possible, used to deliver effective and
efficient medical services to patients who need them.
With single-minded efforts to this end, we may even find that
beneficial health care services will actually not be restricted nearly as
much as we may think. By
acknowledging rationing, we will actually be able to minimize rationing.
If we can figure out how to do it well, open rationing may lead us
to become a stronger people, and a healthier people, than we are today.
Designing a system for rationing -
where to start?
Designing a
system for openly rationing our health care will be difficult. By
definition, rationing requires us to deny beneficial medical therapy to
some individuals. So right up
front, open rationing forces us to create “winners and losers.”
Of course, covert rationing also creates winners and losers, but by
not noticing the rationing we also afford ourselves the luxury of not
having to notice the losers. (That,
of course, is what makes covert rationing “less disruptive.”)
With open rationing, on the other hand, we will not only have to
recognize the losers, but we will also have to explicitly decide on the
process that selects them. There’s
no way we can reduce this to an easy and painless operation.
In fact, it
sounds so awful that we ought to remind ourselves right now what we are
trying to accomplish with open rationing.
In addition to eliminating the sins of covert rationing that we
have discussed at length, we hope to achieve, to the furthest extent
possible, a fair distribution of health care resources and a maximization
of the overall health benefit our money can buy.
Thus, our
primary concern in designing a plan for open rationing should be to
distribute our health care resources fairly, while at the same time
optimizing the benefits we achieve with those resources.
Previously, we listed six basic principles that, we asserted, ought
to be followed in achieving this goal.
We should now take a closer look at those principles.
Most of them are debatable, at least to some extent.
But while ultimately we may chose not to adopt one or more of these
principles as we present them here, we need at least to consider each of
them explicitly before any methodology for open rationing becomes
feasible.
|
Six
Guiding principles for a system of open rationing
Principle
1: The goals of health care (and therefore the scope of
services that society expects from the health care system) are
clearly spelled out.
Principle
2: The amount of money that society spends on health care is
decided upon in an open process that prioritizes health care
services in relation to all other essential public services.
Principle
3: As many rationing decisions as possible are left to the
patients who are directly affected by those decisions.
Principle
4: Coverage for essential health care services is universal to
all Americans.
Principle
5: The rules for rationing are determined through an open,
public process, and are made as explicit and as clear as possible.
Principle
6: Prioritizing health care services for inclusion in the
universal health plan is done according to clearly articulated
ethical standards. |
Principle 1 – We need to define clearly the purpose of “health care.”
Until now, our
American health care myth (i.e., that there are no limits) has made it
unnecessary for us to agree on a definition of the purpose of health care.
But as soon as we admit that there are
limits to what we can spend, it suddenly becomes important to define such
a purpose very clearly. We
will need it in order to decide on the range of activities that our
limited health care dollar will have to cover.
I will approach
this problem by proposing what I believe to be a reasonable definition of
the purpose of health care, then considering the implications of this
definition as it relates to rationing.
The purpose
of health care is a) to maintain or restore health when
possible, and b) to optimize functional capacity and compensate for
restrictions in the face of disease or disability that cannot be cured or
prevented.
What this definition does
This definition
implies that the overriding goals of health care are to prevent and treat
disease, and to provide individuals who cannot be rendered disease-free or
disability-free with the optimal opportunity to enjoy the fruits of life.
It charges “health care” with a public health task (searching
for ways to prevent and treat diseases that afflict humans), and with an
individual health task (to optimize the health and functional status of
individuals, whether or not they have diseases that can be “cured.”)
What this definition does not do
This definition
would be considered subversive by some, for it removes from the province
of health care certain activities that many would want to include.
For instance, it does not require doctors to prolong life as long
as possible, whatever the cost in dollars or in suffering.
It does not charge health care with the task of altering the normal
progression of life (e.g., halting the aging process). It does not charge
health care with seeking out or administering treatments that enhance the
lives of people in the absence of disease or disability (e.g., face-lift
surgery or hair transplants). And under this definition, health care would
not be expected to compensate individuals for certain social ills, such as
poverty. This definition
acknowledges limits in what health care can do, and in what it should be
expected to do.
Many would like
to see a broader definition of the goals of medicine that might include
all these things and more. For
instance, many would propose a definition that includes the imperative to
provide individuals with complete physical, mental, and social well-being.
Such an
inclusive definition actively encourages the growing phenomenon of the
“medicalization of society,” whereby various ills not traditionally
considered diseases are being redefined as such. Medicalization presents a
real difficulty for us in the context of rationing. For instance, shyness
might be considered (and is, by some) an illness that reduces a person’s
capacity for complete social well-being.
But do we really want people with cancer to have to compete with
the shy for health care resources? (Not that the shy are all that
competitive.)
If we must
ration health care, in my opinion we ought to try to limit the scope of
health care to real, honest-to-goodness diseases and disabilities, and
resist including the growing list of “boutique” illnesses our society
has been creating lately.
You may or may
not agree on this issue, and I respect your opinion either way.
The point is, before we can even begin devising a fair and
equitable system for open rationing, we have to establish a clear
definition of the scope of health care, whether restricted or expansive.
Principle 2 – There should be open competition for resources between “health care services” and all the other services society must provide.
Having defined
the goals of health care, we now need to prioritize those goals in
relation to all the other services society is expected to provide its
people. These include, among
others, national defense, the interstate highway system, education, the
criminal justice system, and garbage collection.
For those who tend to think in terms of the American health care
myth, it can be difficult to regard health care as having to compete with
the B1 bomber for our limited public resources.
Yet, that is exactly the way it is, and optimal rationing requires
us to recognize it.
Prioritizing
services should be accomplished through an open budgetary process, in
which dollars allotted to health care are considered in relation to all
other necessary expenditures. We
can always increase health care “benefits” by allotting more dollars
to health care, but only at the expense, for instance, of increasing the
class sizes in elementary schools. Having
to consciously make such trade-offs will cause us to reevaluate all our
priorities. It will also, as we have noted, powerfully incent us to reduce
waste across all public services.
Principle
3 – To the greatest extent possible, rationing decisions should be
left to the patients who are directly affected by those decisions.
Rationing
decisions will be inherently more fair, and inherently more acceptable, if
they are made by patients themselves instead of imposed by a distant
bureaucracy.
As
we have seen, “traditional” post-World-War-II American health care
insulated both doctors and patients from the cost of their health care
decisions. Thus, there was no
incentive whatsoever for patients to forego the most expensive testing or
the very newest therapy available, whatever the cost, and no matter how
little the expected marginal benefit.
A
system of open rationing should remedy this “disconnect” by incenting
patients to take the cost of medical services into account when making
health care decisions. The
more cost-efficient the decisions patients make, the less rationing will
have to be forced by a third party.
One way to
provide such incentives would be to integrate Medical Savings Accounts (MSAs)
into our rationing system. MSAs
provide a strong incentive for individuals to reduce nonessential health
care spending, and will thus reduce the overall level of imposed rationing
we will have to do.
Under MSA plans,
subscribers (or their employers or the government) pay premiums for a
health insurance policy that carries a high deductible amount (several
thousand dollars), and that is therefore relatively cheap.
The money that is saved on insurance premiums is deposited (either
by the individual, the employer, or the government) to each subscriber’s
Medical Savings Account (deposits to which would be tax-deductible).
An employer who
today spends $5000 per year on health insurance for a worker might, under
an MSA plan, spend only $2000 to buy the worker a catastrophic insurance
policy with a deductible of $3000. The
money the employer has saved by buying cheaper insurance (i.e., the extra
$3000) would be deposited into the worker’s individual MSA.
The worker would then use the money in his MSA to pay for his own
non-catastrophic health care needs; in other words, he would pay any bills
falling under the $3000 deductible of his policy.
If he spent less than $3000 for the year, the money he did not
spend would accumulate in his MSA. And,
after his MSA grows to a certain amount, the money would become his.
He could then withdraw some of the MSA money to use as personal
income, for instance, or to deposit into an IRA.
Because patients
would have to pay out of their own accounts for any non-catastrophic care
they received (and because they would get to keep the money they did not
spend), they would have a strong incentive for demanding efficient care,
and would have a real incentive not to insist on care that wasn’t truly
necessary. Thus, MSAs would
eliminate the disconnect that exists today between the health care that
people demand, and paying for that care.
MSAs would restore to the health care system many of the checks and
balances of the normal marketplace, and erode the notion that health care
is free and limitless. In so
doing, MSAs would reduce society’s overall health care expenditures.
They would render much of the rationing we have to do “rationing
by individual choice,” and thereby would reduce the amount of
externally-imposed rationing that would be necessary.
Later
we will see how MSAs might be integrated into a system of open health care
rationing.
Principle 4 – Coverage for essential health care services is universal.
This is more
than just a matter of fairness (though it is that).
All citizens, and all tax-paying non-citizens, have the right to be
included in our new health care system. The reasons for this should be
clear by now. First, all
taxpayers support the health care system with their dollars, and deserve
to participate in it. Second,
under open rationing the limitations that the health care system imposes
on all other public services, as we have just seen, become quite explicit.
All citizens have to live with those now-obvious broader
limitations, and so they clearly deserve to participate in the health care
system that produces those limitations.
Furthermore, all
citizens (even the rich – and even Congressmen!) should be required
to participate in our system of rationing. Only by including the rich and
influential will the rationing system be designed with the care and
consideration it deserves.
This is not to
say, however, that we should prevent the rich from purchasing health care
services outside the rationing system.
We should not; any system we devise simply will not work if we
artificially restrain people of means from exercising their fiscal
freedom. However, we can
mitigate any disruption that might be caused by such a freedom. First, we
can strive to assure that truly “essential” services will be included
in the rationing program, so, to the furthest possible extent, those who
choose to go outside the system will be doing so for services that really
are “non-essential.” If
it appears that the rich are, in fact, receiving essential health care by
going outside the system, that fact would be an incentive to increase the
priority of those services within the rationing system, or to increase the
health care budget to allow coverage of those services. In this way, the
rich can function as volunteers for “testing” the efficacy of services
that society has deemed “borderline.”
Second, we would be entirely within our rights to charge
individuals a stiff “external care tax” whenever they choose to go
outside the rationing system. The
dollars thus collected could be added to the health care budget, and used
to expand the services available for everyone else.
This tax would provide a disincentive for individuals to go outside
of the system (so while they are not forbidden, they also will not be
particularly anxious to do so). Such a disincentive should keep everyone,
including the rich and influential, interested in assuring that truly
“essential” health care services are covered under the rationing
program.
Principle 5 – The rules for rationing should be decided upon in an open, public forum, and should be as explicit and as clear as possible.
Decisions on the
rules of rationing health care should be made from the perspective of
patients (that is, of the public), not of experts.
Experts of every stripe will be inherently conflicted. Health care
economists will be conflicted in wanting to sacrifice fairness in favor of
maximizing good (more on this below).
Medical experts will be conflicted in wanting to include whatever
services and procedures they perform for a living.
Policy makers will be conflicted in wanting to include services
they can easily regulate. And who knows what the ethicists will want to
do?
Only the public
has the right to make these determinations.
This right derives from two facts.
First, they are paying for the services (through insurance premiums
and tax dollars). Second,
they are the ones who will have to live with the results.
Thus, whatever
rationing methodologies are to be used, they will have to be open, widely
discussed, and based on a broad consensus.
Principle 6 – Prioritizing health care services should be done according to clearly articulated ethical standards.
The open
rationing of health care must be grounded in ethics, since, if we were not
primarily concerned with maintaining our fundamental ethical principles,
we might as well let the “every man for himself” milieu of covert
rationing persist. So it is
important to clearly articulate the ethical precepts we will strive to
adhere to as we do the actual “dirty work” of rationing – that is,
as we prioritize services to determine what will be covered and not
covered.
The problem is,
rationing itself creates ethical dilemmas.
Specifically, as we consider how to ration ethically, ethical
precepts, instead of giving us clear guidance as to how to go about
prioritizing health care services, create conflict.
When we articulate our ethical standards for rationing, then, we
are going to have to make some difficult decisions.
These ethical decisions will be the most difficult step we’ll
have in devising a system for rationing, and potentially will be the
strongest determinant of our success or failure. We should therefore
consider them in some detail.
Fundamental
ethical precepts
There are three
basic ethical precepts that are supposed to guide the activities of health
care professionals: individual autonomy, beneficence, and distributive
justice.
Individual
autonomy we have discussed at length.
The right of self-determination is not only an important principle
of medical ethics, but also is the founding principle of our culture.
But autonomy has its limits. When
a patient demands that “everything be done,” for instance, he is
exceeding the bounds of autonomy if doing everything means that some other
individuals would be deprived of what otherwise would be rightfully
theirs. Hence, the principle
of autonomy itself does not negate the legitimacy of rationing, as some
have claimed. This principle
merely indicates that, within a system of rationing and bound by the
limits of that system, individuals have a right to self-determination.
Beneficence
is the precept that requires health care professionals to assure that
their activities provide benefit for patients.
In terms of rationing, beneficence implies that rationing ought to
be done in such a way as to maximize the good (i.e., the total public
good) that can be achieved from the limited health care resources
available.
Distributive
justice is the precept that requires the benefits of health
care to be distributed fairly, that is, in such a way as not to
discriminate against individuals or groups based on who they are.
Distributive justice implies that under rationing, all individuals
ought to have equal opportunities to receive medical services, and that
such opportunities should not be withheld on the grounds of race, ethnic
group, gender, or any other feature that could be used to create a unique
category of individuals.
Assuring
fairness v. maximizing good
The first thing
we need to recognize is that the rationing of health care immediately
presents us with a difficult ethical dilemma.
(Ethical dilemmas occur when two or more ethical precepts appear to
be in conflict.) In the case
of rationing, the conflicting precepts are those of beneficence and
distributive justice.
If we have to
ration health care, we want the rationing process to do two things.
We want it to be fair (i.e., we want to adhere to the precept of
distributive justice), and we want it to yield the maximum amount of
health care benefit for the dollar (i.e., we want to adhere to the precept
of beneficence.) Unfortunately,
maximizing these two goals is mutually exclusive.
To see why,
consider the following illustration.
Two men, both age 50, are diagnosed with the same rare form of
cancer. We have the means to
cure this form of cancer, but unfortunately, we can only afford to treat
one of the two men. The first
man is otherwise healthy and if cured can be expected to recover fully.
The second is bedridden with severe multiple sclerosis, and if cured of
cancer will still be severely disabled and will almost certainly have a
reduced life expectancy due to that disability. Which man do we treat?
Some would say
that, obviously, we should treat the man who is otherwise healthy, since
we would be buying him a high-quality life of substantial duration. This
would clearly maximize the good we achieve with our money.
Others would
point out that the second man (the one with MS) wants to live just as
badly as the first man, and that withholding therapy from him just because
of his MS is unfair. It is
unfair because it would be exposing him to double jeopardy (first jeopardy
– he was afflicted with MS; second jeopardy – his MS precludes his
receiving cancer therapy). And it is unfair because discriminating against
people with MS is, a priori, a violation of the principle of distributive
justice. Fairness dictates
that all individuals should have an equal claim to the benefits of
therapy.
How we decide to
distribute our resources in this case (and in every case) depends on how
we prioritize these two conflicting ethical principles.
Say we were determined to completely maximize fairness.
The only way to do this would be to withhold therapy from both men
(since this would be the only option that would “equalize” the
results). But then they would both die, and our method of distribution
would reduce the good we’ve achieved to zero.
On the other hand, if we decided to maximize beneficence we would
obviously treat the otherwise healthy man; but choosing to do this (since
we would be removing the patient with MS from all consideration) would
reduce fairness to zero.
Or, we may
decide to choose which man to treat by lottery (perhaps even a weighted
lottery, giving the man who is otherwise healthy a higher probability of
being chosen, in proportion to his better quality of life.) This would
split the difference between maximizing fairness and maximizing good. But
we would need to understand that, spread out over a large population, this
solution (while preserving a degree of fairness) would significantly
reduce the overall good we would be able to achieve with our health care
dollars.
No matter what
we do, then, we cannot both maximize good and maximize fairness.
We’ve got to choose between them.
The
individual vs. society.
The essential dichotomy between maximizing fairness and maximizing
good perfectly reflects the conflict we’ve touched upon many times in
this book – that between the individual and society.
To emphasize fairness is to emphasize the essential worth (i.e.,
the essential equality) of individuals.
To emphasize the overall public good is to emphasize the claims of
society. The conflict arises
because the claims of both the individual and of society cannot be
absolute. Somehow, we need to
strike a balance.
In any case, it
should be apparent that the basic ethical dilemma inherent in devising a
rationing scheme is more than just of theoretical importance.
How we deal with our choice of fairness vs. good will go a long way
in determining whether open rationing ends up being a significant
improvement in what we have now, or whether it ends up as badly as many
fear it might.
An
argument for giving primacy to fairness
While we
certainly ought to try to get as much bang from our health care buck as
possible, we should not do so the expense of sacrificing distributive
justice. In rationing health care we should strenuously avoid
discrimination against individuals or groups by virtue of (in addition to
the traditional discriminatory factors of race, gender, nationality, etc.)
their genetic makeup, or diseases and disabilities imposed on them by
nature.
Why should
assuring fairness predominate over maximizing good?
Because once we set the precedent of assigning comparative values
to human lives based on disease or disability, it will be difficult to
turn back but easy to advance. Especially
since the stakes are high, the temptation will always be to expand the
categories of individuals whose lives are judged to be relatively
valueless. We should not assume that we will be significantly more
resistant to such behavior than other advanced cultures have proven to be
in the recent past.
On the other
hand, if we limit good in the name of fairness, we can always come back
later (when new data is available, when new treatments are available, when
new efficiencies arise, or when budgetary constraints are eased) to expand
the list of covered services, and thus expand the good.
Since withheld
“good” can be returned whereas “fairness,” once gone, is
extraordinarily difficult to regain, the precept of fairness should take
precedence. We should try to
optimize the benefits our health care system provides to society, but only
within the constraints imposed by our belief in the primacy of the
individual.
The
FCEO standard
We would like to
propose, in light of the foregoing, an ethical standard upon which to base
our rationing decisions. We
will call it the Fair Chance, Equal Opportunity (FCEO)
standard:
All
individuals should have a fair chance for an equal opportunity to enjoy
the fruits of life, within the constraints imposed on them by nature.
This proposed
ethical standard is a reformulation of the principle of distributive
justice, dressed up for the purposes of rationing.
It is designed to allow us to optimize the good we obtain for our
health care dollar, but only within the constraints of fairness.
Thus, while we
ought to let “fairness” (i.e., the needs of the individual)
predominate, we also ought to constrain it to allow society to accrue an
optimal amount of good. The
FCEO standard constrains the individual’s claims on society in the
following ways.
It acknowledges
that the principle of fairness does not require equivalent outcomes (i.e.,
equivalent enjoyment of the fruits of life) among individuals.
It strives only to gain for individuals an equal
opportunity for those good outcomes.
Further, it
recognizes that not even an equal opportunity is possible among all
people. Opportunities are
limited by the vagaries of nature. A
boy born with a shriveled arm does not have the same opportunity to become
a major league pitcher as a boy born with two normal arms. If the
one-armed boy decides to become a pitcher, we can encourage him and cheer
him on, and if he succeeds we can rejoice with him. But we are not
obligated to change the rules of baseball to accommodate him, nor are we
obligated to divert whatever health care resources we must to provide him
with sufficient physical compensation to allow him to compete effectively.
Similarly, there will be circumstances where a person’s illness or
disability will significantly reduce their opportunity to respond to a
therapy. Society is not
obligated to spend whatever it must to provide them with such a therapy.
Finally, equal
opportunities are limited by chance.
A person born in Watts certainly doesn’t have the same
opportunities in life as a person born in Brentwood.
But society is not obligated to move the child from Watts into
Brentwood, or the child from Brentwood into Watts in order to provide
equal opportunity. What
society is obligated to do is to offer a fair
chance (not an equal chance) at an opportunity to enjoy the fruits of
life. Thus, for instance, society is obligated to assure that both
children have access to a reasonable public education.
In summary,
under this formulation of distributive justice, a system of health care
rationing is not obligated to assure that all individuals have equivalent
outcomes, or even that they have equivalent opportunities, but merely that
they have a fair chance at equivalent opportunities within the constraints
imposed on them by nature. In
rationing under the FCEO standard, then, the distribution of resources
would not be based on either attempting to maximize the overall good
produced to society, or attempting to equalize outcomes among all
individuals. Instead, it
would be based on attempting to attain a reasonable equalization of
opportunity for individuals.
Thus, while we
should aim to optimize the opportunities of those who are burdened by
disease or disability, we are not obligated to strive to return them to
“normalcy” at any cost. On
the other hand, the presence of a disease or disability does not diminish
in any way their claim to a fair chance at an equal opportunity to
optimize their enjoyment of life, within the constraints of that disease
or disability.
The FCEO
standard would imply, for instance, that if we were able to restore
eyesight to a blind woman, but only at a cost equivalent of performing
coronary artery bypass grafting on twenty others, we are not obligated to
do so. We are only obligated
to consider it fairly, as we would any other medical procedure.
The FCEO
standard does not make the problem of maximizing fairness vs. maximizing
good go away, but it changes the question.
Instead of saying, “Saving which of these two individuals will be
better for maximizing overall good,” we will be saying, “Given these
two equally worthy individuals, how can we best achieve a fair
optimization of opportunity?”
Some implications
of the FCEO standard
The FCEO
standard would also present us with other opportunities, admittedly
controversial, to optimize beneficence without compromising fairness.
For instance, we
may decide that patients whose diseases or disabilities are self-induced
have a less compelling claim to health care resources than those whose
illnesses are caused by “nature.”
Patients who choose to smoke, for instance, choose an action that
predictably will require expensive medical care, thus potentially causing
other patients who chose not to smoke to forego beneficial care. It would
not be unethical, therefore (nor a violation of the FCEO standard) to ask
smokers to sacrifice a degree of their priority for medical care.
Such a provision, if chosen, to be fair would have to be enacted
prospectively – that is, we may choose to apply it, say, only to smokers
born since 1985, so they would most likely have plenty of time to
“unchoose” smoking before they developed smoking-related illnesses.
Even more
controversial, but still consistent with this principle, would be to use
age as a factor in determining priority for health care resources.
The use of age
as a rationing parameter has been widely debated among ethicists. Most who
argue for it base their arguments on the principle of maximizing public
good. The duration of benefit of a life-saving procedure, they would say,
would be greater in a younger patient than in an older patient (since
saving the life of a 70 year old might “buy” only 10 years of
additional life, whereas saving the life of a 20 year old might buy 60
years of life at the same cost.) This
reasoning, clearly, is in violation of the FCEO standard.
It also opens up the slippery slope argument – if you can devalue
the elderly in the name of maximizing good, then you can devalue the
handicapped, the chronically ill, and virtually any other group you can
think of in order to maximize public good.
Yet, the FCEO
standard still allows a rationing system to prioritize according to age.
Under this standard, saving the life of a 20 year old might take
precedence over saving the life of a 70 year old not to increase overall
good, but simply because the younger person has had relatively little
opportunity to enjoy the fruits of life - an opportunity we should strive
to optimize. By giving
priority to the younger person, we come closer to achieving a “fair
chance for an equal opportunity” between these individuals than if we
had given priority to the elder.
Further, the
“discrimination objection” to age-based rationing does not hold here,
because under the FCEO standard, every
individual should have a fair chance at an equal
opportunity to enjoy the fruits of life, and the 70 year old has already
had 50 more years of opportunity than the 20 year old.
Nor does the slippery slope argument hold. That argument, you will
recall, says that if we differentiate between individuals based on age, we
can differentiate based on anything we choose. But under the FCEO
standard, rationing by age does not, in fact, differentiate among
individuals at all. What it does do is attempt to equalize opportunities
between individuals over the course
of their lives. Thus,
each individual, during the course of their lives, will at some point
enjoy the priority of the young, and (if they are lucky) also the priority
of the old. Unless early
death ensues, every individual over the long term will share the same
distribution of age-related risk.
We are not
saying here that we must use age as a factor in determining rationing
priority, or even that we should. While
my own belief is that optimizing “fairness” implies taking age into
account when rationing health care, we are merely arguing here that we
could use age as a factor if we chose without violating the principle of
distributive justice as formulated under the FCEO standard – and without
starting down a slippery slope. The
Appendix shows how the FCEO standard can be used in calculating priorities
for health care services.
A possible rationing scheme:
A system of open health care rationing
based on these six principles might take one of several forms.
This figure shows one possible rationing scheme that takes into
account all of the features we have discussed so far.
A
brief outline of this scheme, for illustrative purposes, will suffice for
now. A more detailed
treatment of such a plan, and how it might be developed without provoking
street riots, will be presented in the Appendix.
The hallmark of this illustrative
rationing system is that it is tiered, and the tiers are established
according to cost-effectiveness scores of the medical services provided.
Every individual will be covered for health care services lying
within the first two tiers of this system; coverage within the third tier
is optional.
Under such a plan, Tier 1 therapy is
provided through a Medical Savings Account (MSA), which will be
established for every individual. The
first several thousand dollars of a person’s yearly health care expenses
($3000 in this example) will be paid for from her MSA.
If a person spends less than $3000 on her health care in a given
year, the money remaining in the MSA will accumulate, and the amount
remaining at age 65 will be treated as an Individual Retirement Account
(IRA).
Once an individual’s health care
expenses during a given year exceed Tier 1, the Universal Basic Health
Plan kicks in to provide coverage of expenses within the Tier 2. The
Universal Basic Health Plan will cover every health care service that has
a sufficiently favorable cost-effectiveness score.
(In the example shown, all health care services will be ranked
according to the gain in Quality Adjusted Life Years [QALY] they provide.
Tier 2 will provide all services that cost less than $50,000 per
QALY. QALYs
and how they can be measured are discussed in detail in the Appendix.)
Finally, individuals may choose to buy
optional, additional health insurance that would cover health care
services in Tier 3. Such
optional insurance would be privately administered and competitively
priced, based on the QALY scores that are covered under the policy.
Thus, as shown in the figure, Optional Health Insurance Plan A
would cover health care services costing up to $70,000/ QALY; whereas
Optional Health Insurance Plan B would take the coverage up to $90,000/
QALY. The premiums for these
optional health insurance plans would include an “affluence
surcharge,” which could be used to help fund (or to expand) the
Universal Basic Health Plan for the less wealthy.
Such
a scheme would a) provide universal coverage, b) include both private and
public sectors in its administration, c) minimize the cost of insurance
premiums, d) give individuals control over as much of the rationing as
possible, and e) minimize externally applied rationing.
Deciding on the
basic principles for a scheme of open health care rationing is the most
important, and possibly the most difficult, step.
Without explicitly considering each of the six principles discussed
in this chapter, any attempt at developing an open rationing plan would
dissolve almost immediately into chaos.
On the other hand, armed with these principles – fully considered
and widely agreed upon – an equitable and civil system for openly
rationing health care becomes eminently possible.
In the Appendix, I consider in more detail just how these
principles might be used to forge a workable methodology for open
rationing,
For now,
however, we have a more important question to address.
Namely, even if you and I (and perhaps a few others) are now
willing to explore the notion of openly rationing health care, just how
are we to engage the rest of our society – the huge majority still
paralyzed by the American health care myth – in such a discussion?
This is perhaps the most intractable issue of all, and it is the
one we will take up now.
So where do we stand?
Let’s say
that, after reading this far, you’re willing at least to consider the
notion of openly rationing health care.
Of course, that even if this were the case, it wouldn’t
necessarily mean you’re completely convinced that a fair and workable
system for open rationing is possible, or even desirable.
More likely, it would merely indicate that you realize how truly
destructive covert rationing – the only other alternative – really is.
We’ve taken a
long look at how it’s destructive. We’ve seen how, in attempting to
avoid openly addressing the need to ration, we’ve placed our health care
in the gentle hands of the Gekkonians, thus changing the driving mission
of our health care system from “doing good” to “making profit.”
All of the seemingly counterintuitive and counterproductive
behaviors of modern HMOs make eminent sense when viewed in light of their
true mission. Covert rationing has caused us to bend health care to the
needs of the market, instead of the other way around.
We’ve seen how
covert rationing has lent itself to the natural inclinations of the
Clintonians as they attempt to gain control of the health care system
through stifling regulations. Our
determination not to notice the rationing permits them much latitude.
The result, among other things, is their rapidly expanding use of
the Regulatory Speed Trap to distract and intimidate the health care
workers who decide how our health care dollars are spent.
We’ve seen how
covert rationing is causing us to start down the dangerous road of
assigning value to human life, ironically under the banner of
“autonomy.”
Thus, we’ve
seen how covert rationing is undermining the basic precepts of our
society.
We’ve seen
something else, too. We’ve
seen how covert rationing is placing each of us and our loved ones in
imminent danger, any time we get sick.
For when we do get sick, every aspect of the health care system we
rely upon to make us well is concerned only with not having to spend too
much money on us.
To some extent,
of course, a deep concern about spending is to be expected – and, it is
necessary. We want the
regulators to be concerned about maximizing the benefits of health care
for society. We want HMOs to
be concerned about maximizing benefits for their subscribers.
We want everybody to be concerned about spending our limited
resources wisely.
What we don’t
want is for our doctors – as they sit at our bedside and make decisions
about our health – to be primarily concerned about the needs of society,
or about their continued ability to earn a living if they spend too much.
We want them to be primarily concerned about our
needs. Just like the citizen accused of a felony, we need that highly
trained professional who takes up our cause, and jealously protects our
rights and welfare in the face of all opposition. For, as long as our
doctors fail to assume their traditional roles as our personal advocates,
we will be completely at the mercy of a vast and complex health care
system that is geared primarily toward saving (or making) money. Thus, the
deterioration of the doctor-patient relationship occurs only at our own
immediate peril.
It should be
clear by now that the destruction of this relationship is not merely one
of the many unfortunate side effects of covert rationing.
In fact, it is not a side effect at all – it is absolutely
central to the process. Covert
rationing, by all its mechanisms, operates primarily by separating and
marginalizing patients and doctors within the health care system.
What needs to happen
So, let’s say
we’re ready to support a general public debate on the open rationing of
health
care.
How do we get such a discussion started?
Any movement
toward open rationing certainly won’t be initiated through the political
process. A politician would
probably be in less trouble for standing up at an AARP convention and
endorsing Social Security cuts than he would be for speaking out publicly
about rationing health care. The process
of changing the health care system, of course, will have to be largely
political. But before politicians will ever initiate or even permit such a
process, they will have to understand, on no uncertain terms, that change
is necessary, desired, and demanded by the people. Politicians won’t
lead us there. They won’t
even be led there until they know it is safe.
Nor will a
public discussion on open rationing be initiated through the market
forces. As long as the
Gekkonians are making money running health care, there is no reason for
them to push for some other system. And
when they stop making money, they’ll just get out of the business.
The medical
profession won’t be able to get things started, either.
I am convinced that most doctors, deep down, understand fully that
we’re rationing our health care, and that the way we’re doing it is
wrong. Many doctors are
greatly disturbed by this, and would be quite ready for a radical change
in the health care system that restored a measure of equity and sanity.
But doctors have been systematically marginalized within the health
care system, and today have little authority on policy matters.
Worse, by virtue of the fact that they actively participated in
driving up the costs of health care over the past several decades (by
adopting and encouraging the use of expensive therapies and technologies
without insisting on reasonable scientific rigor, helping to create
unreasonable expectations on the part of patients and society, and, in
many cases, engaging in extravagant, ostentatious, out-and-out
profiteering), they have lost much of their vaunted moral authority.
When doctors complain today about the state of the health care
system, their motives, understandably, are highly suspect.
Just whose welfare are they concerned about, anyway?
Ultimately, any
real impetus to change the health care system can come from only one place
– from patients, that is, from the public. Only the public has the real
power to demand change. The
public is paying for the whole show (and the government and the employers
that normally get the “credit” for paying for health care merely serve
as agents for passing along the public’s money).
And it’s not only the public’s money, but also the public’s
health that is at stake. So,
while patients have been systematically marginalized just like doctors,
they have retained both the fiscal and the moral authority to demand
change.
If the public
should ever begin really clamoring for change, their power would be
utterly irresistible.
How can such a
public passion be engaged? How
can we even begin to bring “the public” around to any sort of
consensus on health care? What
will cause the public to demand the sort of open discussion we really need
– a discussion that genuinely addresses the real problems of the health
care system, and what we should do about those problems?
There is
probably only one way to begin to accomplish this. First, the public needs
to be made aware of what already has been lost.
And then, once aware, they will need to demand the return of what
is traditionally, legally, morally and rightfully theirs – they will
need to demand that their doctors be allowed to return to acting primarily
as their advocates.
That demand, if
firm enough and persistent enough, will bring the entire house of cards
crashing down. Covert
rationing relies utterly on rationing at the bedside, and simply will not
be able to survive a restored doctor-patient relationship. And if covert
rationing falters, then we will have no choice but to finally, openly and
explicitly decide how we really ought
to ration our health care. That all follows naturally.
Firmly demanding
restoration of the doctor-patient relationship is all it will take.
So the answer,
in concept, is really quite simple. Patients and doctors will have to
forge a new pact with one another, a pact based in mutual need and mutual
trust – like allies fighting a deadly mutual enemy. Patients will need
to insist that doctors act primarily as their advocates, guarding their
personal rights and welfare to the best of their abilities, within the
bounds set by society. They
will need to demonstrate their willingness to protect the medical
profession’s advocacy role from external attack, whether from Gekkonians
or Clintonians. And doctors,
in return, will need to agree to return to their primary role as their
patients’ advocates, leaving all other professional concerns to only
secondary importance. These
secondary concerns include income, job security, and prestige.
Both doctors and
patients will have to embrace anew the sanctity of the doctor-patient
relationship, and place it at the center of all health care.
And any earthly power that tries to drive a wedge between them will
have to understand it will have hell to pay.
It should be
clear that such a new pact between doctors and patients does not have to
(nor will it) arise from civic-mindedness, moral outrage, or a belief that
openly rationing health care is the right thing to do. The new pact, if it
occurs, will arise out of a very primitive (and very reliable) instinct
– the instinct for self-preservation.
For without such a pact, the rights and welfare of each of us as
patients, and the very survival of medicine as a profession, are doomed.
So, if I'm
right, all that needs to be done is to get the message out: The
doctor-patient relationship is being systematically destroyed, and if it
is destroyed, each of us individuals is in big trouble.
To get that
message out, I have a modest proposal.
Personal Health Care Advocates
My proposal is
this.
A cadre of
doctors from around the country needs to quit the practice of medicine in
order to establish a new profession, the profession of Personal Health
Care Advocates.
Personal Health
Care Advocates (PHCA) will fill the advocacy vacuum that now exists within
the health care system. They
will provide individuals with an opportunity to retain their own personal
advocates – professionals who work for them, and who place their
interests above all others – on matters related to their health care,
just as they might retain an attorney on legal matters.
In fact, based
on the premise that patients have just as much right to a strong advocate
as do accused felons, PHCAs will model themselves not after the medical
profession, but after the legal profession.
Accordingly,
PHCAs will not practice medicine. Instead,
they will practice medical advocacy, doing whatever is necessary to guard
the rights and welfare of their clients in all their interactions with a
hostile health care system.
How PHCAs would work
Before we
consider the specific services that PHCAs might offer, or even why
successful physicians might be willing to quit a steady-paying job to
embark on such a venture, let’s speculate on a possible mission
statement, and a potential code of ethics, for this new profession.
Personal Health Care Advocates – A Suggested Mission Statement
Personal
health care advocates will perform the same service within the health care
system that attorneys perform within the legal system. We will be our
clients’ advocates and advisors, assuring that a dedicated and
knowledgeable professional is representing them, protecting them, and
advancing their rights and welfare within the health care system.
We will accomplish this by: a) assisting our clients in choosing,
understanding, and interacting with their health insurance providers; b)
educating and “coaching” our clients to become more effective health
care consumers; and c) at the discretion of our clients, monitoring the
decisions of and negotiating directly with health care providers on their
behalf.
Our relationships with our clients will be built on trust; we will
hold their confidences in private, will assiduously avoid conflicts of
interest, and will work directly for them, and for no one else.
Personal Health Care Advocates – A Suggested Ethical Code
1.
We will always work to protect the
rights and welfare of our clients within the health care system
2.
When engaged as PHCAs, we do not practice medicine, nor do we
represent ourselves as practicing medicine.
3.
We will avoid actual or apparent conflicts of interest; as PHCAs
our clients are our only professional interest.
4.
We will keep the content of all interactions with our clients
strictly confidential.
5.
We will work to see that our clients are fully informed at to their
medical options, and that they are offered all medical services that are
reasonably likely to benefit them.
6.
We will not encourage false or miniscule hopes, nor nurture
unreasonable demands, nor engage in deception on our client’s behalf.
We will not work to gain medical services for our clients that are
highly unlikely to benefit them.
7.
Our purpose is to strengthen, not weaken, our clients’
relationship with their physicians. We will always aim work with our
client’s physicians, instead of against them, in assuring that our
clients’ best interests are fully protected.
8.
We will charge rates that are within the grasp of the average
working family, and will strive to make our services available to those
who cannot afford to pay.
This mission
statement and code of ethics establish several things. They establish that
PHCAs do not practice medicine, but instead serve in an advisory and
advocacy role aimed solely at protecting the rights and welfare of their
clients. They establish that PHCAs will model themselves after lawyers,
rather than doctors. (Note: “Client” is used instead of “patient,”
both to reinforce the “attorney-client” paradigm, and specifically to
reinforce the notion that PHCAs do not practice medicine.)
They establish a fiduciary relationship between the PHCA and the
client, assuring that the PHCA will always act with the client’s best
interests in mind.
What
services will PHCA's provide?
The potential
services of PHCAs can be divided into at least three categories.
Category
1 Services – Dealing with HMOs and insurance companies.
We have seen how
HMOs systematically make it difficult for patients who need expensive care
to get that care. Their goal in making it difficult is twofold.
First, of course, they don’t have to pay for care they deny.
Second, by discouraging and frustrating sick people, they provide
incentives for the sick to leave their health care plan to seek “greener
pastures.”
While doctors
truly want to act as their patient’s advocates in dealing with insurance
companies and HMOs, the process is often so frustrating and time
consuming, and the consequences so onerous if they make a habit out of
fighting too hard and too often for their patients, that in practical
terms they cannot. PHCAs,
on the other hand, can fearlessly assist their clients in dealing with
health insurance companies. They
can help clients to assess their insurance options before choosing a plan,
so that they fully understand the limitations of their plan and are less
likely to be surprised when they become ill.
PHCAs can help in expediting the approval of visits to specialists,
and of tests and procedures to which their clients are entitled.
And if their clients are denied reasonable services, PHCAs can
argue their case as aggressively as is necessary to see that justice is
done. HMOs are likely to pay
attention if they know that a well-informed and persistent professional
advocate is operating on the patient’s behalf.
PHCAs can also
assist their clients in interpreting medical, hospital, and insurance
bills, and assuring that the charges that appear on those bills are in
line with the services that were actually provided.
Category
2 Services – Education and administrative services
The best way to
minimize the impact of covert or bedside rationing on a particular patient
is for that patient to know what ought to be happening with his or her
health care. This is because,
obviously, bedside rationing is easiest when patients don’t know what to
expect. The most common way for a doctor to conduct bedside rationing is
simply not to mention an available option that he doesn’t want to
provide. With relatively uninformed patients, doctors can do such
“rationing by omission” without raising any suspicion.
In this regard,
PHCAs can assist their clients not only by helping them to become truly
informed about their diseases, but also (and equally importantly), to seem
informed. Doctors will be more likely to review all
therapeutic options with patients who display significant knowledge about
their disease and/or the health care system in general.
Thus, PHCAs should aim to educate their clients to understand their
diseases, the health care process, and how the two interact.
Using a combination of personalized instruction, literature,
references, videos, audio tapes and web sites, PHCAs can train their
clients to anticipate what their doctors ought to be thinking about and
what they ought to be doing for them, and to demonstrate to their doctors
that they are well-informed.
PHCAs can
conduct brief “coaching” sessions with their clients prior to
important doctors’ visits, so the client will be entirely clear on what
should be accomplished during that visit.
For instance, clients should know what questions need to be
answered during the visit, and what medical decisions ought to be made.
Similarly, PHCAs can offer “debriefing” sessions following
these doctors’ appointments to critique what happened, to make sure all
the essential goals were met, and to assess the need for the client to
follow-up with their doctor prior to the next scheduled appointment.
PHCAs can engage
their clients in discussions of living wills, advanced directives, and
organ donor options, so that such decisions can be made leisurely, with a
full understanding of all the implications, and not under duress.
PHCAs may also
serve as a centralized clearing house for maintaining complete copies,
from all sources, of their clients’ medical records. By this means, they
can assure that when their clients are seeing new doctors, they will be
able to provide them with a complete set of their records. Such services
can be provided 24 hours a day, so that, for instance, emergency room
doctors will not make serious errors in treating their clients simply
because they were unable to access records.
Category
3 Services – Monitoring and negotiating health care
PHCAs will be
available to monitor, in person, the care their clients receive during a
“health care episode” (such as a hospitalization or a visit to the
emergency room). PHCAs will
not supervise or oversee the care; rather, they will observe it, monitor
it, assess it, and advise their clients as necessary.
On request and with the client’s permission, the PHCA can
communicate or negotiate directly on their behalf with physicians,
hospitals, or insurers.
The function of
the PHCA during these health care episodes would be entirely analogous to
the function your sister would serve if she were a doctor and you were
hospitalized. She would not
manage your care, nor would she be actively involved in your care. But she
would be watching everything that was done to you, and would be quick to
step forward (with a gentle question, a probing question, or a firm hand,
depending on the situation) if she saw something amiss.
She would make sure you understood everything that was going on,
and that the decisions you made regarding your care were well-informed
decisions. She would be a knowledgeable, dedicated advocate, concerned
only for your safety and welfare. And
the mere fact that your doctors knew she was there would cause them to
take that extra little bit of care, to make sure they consider all the
appropriate alternatives, and are doing the right thing.
Having a PHCA
would be like having a doctor in the family.
Where
will PHCAs come from?
Take my word for
it. There will be plenty of
PHCAs once the concept catches on.
Doctors like me
– the middle-aged kind, the kind who once were able to practice medicine
relatively unencumbered by MBAs, intimidating federal regulators, and
high-school graduates reading from lists of covered procedures – are
ready to leave the practice of medicine in droves. If we’re not actually
leaving at the moment, it’s not because we’re not frustrated enough to
leave, or because we think the problems the profession is having now are
temporary. It’s because we can’t afford it yet, or we don’t want to
abandon our patients to the tender mercies of the Gekkonians or
Clintonians, or we’re not quite ready to leave medicine (the center of
our lives for decades) altogether.
Why are doctors
so unhappy? There are lots of
reasons, including all the ones you’ve heard – the drop in income, the
mounting paperwork, the oppressive regulations, and the loss of control
over our practices. They’re
all good reasons, too.
But without a
doubt, the major reason doctors are frustrated is their keen sense that
the doctor-patient relationship is being destroyed due to factors out of
their control. Doctors
understand, deep down and better than patients, that without that
relationship, their worth as professionals is fatally devalued; their
profession is, in fact, ended.
Plenty of
doctors will be attracted to the PHCA profession, and soon.
PHCAs will be able to shed all the encumbrances of modern medicine,
and to concentrate on the one thing doctors ought to be concentrating on
but cannot – advocating. Many,
many conscientious doctors will find this prospect extremely attractive,
even at a substantially lower income.
Where
will the clients come from?
This is actually
a greater concern. How many
patients sufficiently understand the danger in their increasing isolation
within the health care system? How
many would be willing to pay, out of their own pockets, for a dedicated
personal advocate?
Certainly it’s
a minority of patients. It is
frustrating to many doctors that, as concerned as they are with the state
of the doctor-patient relationship, survey after survey show that patients
themselves are much less concerned. A
majority of patients think they have a good relationship with their
doctors, and most actually do.
But problems
with the doctor-patient relationship do not become manifest until patients
become sick, often until they become very sick or chronically ill.
That’s when the health care system ratchets up the pressure on
doctors, and that’s when the problems begin to occur.
That’s when patients begin to feel that perhaps concerns other
than their well-being are driving their doctors’ thinking.
The surveys that
show how famously doctors and patients are getting along are similar to
the polls that show that most patients love their HMOs.
The vast majority of insured patients are healthy, and HMOs
specialize in keeping healthy patients happy.
So when you ask all the patients in an HMO how they like things so
far, most of them turn out to like things just fine.
The doctor-patient relationship is a big part of that equation.
It tends to look pretty good when the patients are healthy and the
doctors are getting paid.
The clientele of
PHCAs will not come from the majority of healthy patients, at least not at
first. Initial clients, for
the most part, will be from the minority who have battle scars.
They will be the ones that understand their precarious position
from personal experience. Only
after PHCAs demonstrate their worth to these patients will the larger
population of patients begin to consider them seriously.
What will happen
when the health care system notices the PHCA movement?
Two guesses.
If the health
care system is entirely geared up to covertly ration health care, if
covert rationing requires destruction of the doctor-patient relationship,
and if PHCAs are a sneaky way of re-establishing that relationship outside
the present system, then there is only one way for the health care system
to respond.
The threat will
be recognized immediately, and everything possible will be done to kill
the PHCA movement.
There will be a
battle. Attempts will be made
to declare PHCAs’ activities illegal, to block PHCAs from having access
to their client’s medical records and from maintaining a bedside
presence. PHCAs will be
threatened with liability suits. Attempts will be made to assert that
PHCAs are actually practicing medicine, and therefore their activities
fall under the same guidelines, regulations, laws, and constraints as
“real doctors.” If any of
these attempts take root, the PHCA movement will die on the vine.
Those attacking
PHCAs will be many, and they will be powerful.
They will likely include every entity threatened by such a thing
– the insurance industry, the government, and organized medicine.
While these
entities are exceedingly potent and may appear to hold all the cards, they
have a potentially fatal flaw. For,
in order to kill the PHCA movement they will have to argue, in effect,
that allowing patients to hire their own advocates is a very dangerous
thing, a thing that needs to be stifled – or at least regulated and
controlled (like the medical profession) to the point of uselessness. The
whole point of creating this new profession, of course, is to move the
doctor-patient relationship – rather, the PHCA-client relationship –
to a new realm, to allow that relationship to flourish again, unencumbered
by all the things designed to encumber it within the present health care
system. When all the great
powers argue that such a thing is bad, well, that will be a very risky
argument to make.
What ultimately
happens will depend on one thing. It
will depend on how patients react when they see all the mighty forces
aligning to rob them of their right to hire their own, private, personal
consultant on health care matters. It will depend on how patients react
when they see the vigor with which their attempt to protect their own
safety is attacked. If
patients understand the stakes, and if they become outraged enough at a
crass attempt to eliminate what ought to be a simple consumer’s right
(not to mention a simple patient’s right), then all those powerful
forces will be vanquished. For
an aroused public will be invincible.
And the battle
will expose, once and for all, and for all to see, the extent of the
systematic destruction we have permitted of the doctor-patient
relationship, and the extent of the covert rationing that has required it.
And once the
people recognize this fact, once the veil of subconscious collusion is
lifted, we will have no choice but to soberly and objectively address the
root problems of health care, and to begin an attempt to design a system
that fairly and effectively distributes the resources we all own together.
In the end, it
doesn’t much matter whether the PHCA movement survives intact in a
redesigned health care system. Indeed,
it would be much preferable for that redesigned system, by restoring the
sanctity of the doctor-patient relationship, to render PHCAs obsolete. The
important thing is that the public, by clearly and firmly insisting on
their right to an advocate in matters related to health care, will start a
chain of events that can do no less than cause us to finally and openly
address all the problems we have been studiously ignoring.
And the doctors
who begin the PHCA movement, who leave their profession in order to save
it, will provide the catalyst, the centering point, the means of focusing
and concentrating the attention of the broader public on where exactly we
are going with our health care system, and what we need to do to bring it
back to where it ought to be.
A basic structure
In Section
8, we examined in some detail the six basic principles we need to take
into account in devising a system for open rationing.
Based on our discussion of those principles, we proposed the
following basic structure for open health care rationing:
Our
scheme has three tiers. Tier
1 incorporates Medical Savings Accounts (MSAs), which strongly incent
patients to weigh the relative benefit of a medical service against its
cost before asking for that service.
Thus, MSAs encourage voluntary
cost consciousness among consumers, and
thus limit the amount of health care rationing that will have to be
imposed externally.
Tier 2 consists of a
Universal Basic Health Plan. All
Americans are entitled to receive health care services that are covered
under this universal health plan. The
services to be covered are determined by establishing a ranking order of
all possible health care services, according to their cost-effectiveness.
All medical services that achieve a specified target level of
cost-effectiveness will be covered.
Tier 3 consists of
optional health plans that individuals may purchase if they wish.
These optional plans will allow individuals to receive, if they
choose to pay for it, health care services that are less cost-effective
than those provided to everyone under Tier 2.
In the three sections
of this Appendix, we will consider in more detail how we might develop
such a methodology for the open rationing of health care.
In Appendix A, we will discuss the policy changes we need to
make in order to establish a basic structure for rationing.
In Appendix B,
we will consider some of the nuts and bolts of rationing, namely, specific
methodologies for prioritizing health care services under a rationing
plan. Prioritizing health
care services, of course, ultimately establishes which of those services
are covered and which are not.
In
Appendix C, we will take a closer look at the cost-effectiveness
calculations that allow us to rank health care services in the first
place, emphasizing how those calculations depend explicitly on the ethical
precepts we choose to follow.
Why we need to make policy
changes
As we saw in Section
3, dysfunctional public policies have contributed greatly to the
problems we are experiencing in our health care system, especially now
that we are faced with the need to ration.
Those policies have maintained an almost complete dissociation
between the consumption of health care services on one hand and the paying
for those services on the other. They
have fostered the now-counterproductive American health care myth,
encouraging a “no limits” attitude by both patients and doctors at a
time when limits are more and more necessary.
Paradoxically, those same “no-limit” policies have contributed
greatly to the ever-growing numbers of Americans with no health insurance
at all, and who therefore face severe personal limits on what the health
care system can offer. Our
policies have encouraged an expansive view of health care, bringing an
ever-widening circle of life’s annoyances and disappointments under the
purview of the health care system, along with all the expectations that
such inclusion implies. And,
as we have seen, our policies have systematically eroded the
doctor-patient relationship.
Establishing a basic structure for health
care rationing will therefore require many explicit and difficult changes
in our public policies.
What policy changes are
necessary?
Clearly
and publicly acknowledge the need to ration health care.
The necessity of publicly acknowledging health care rationing
may seem obvious to some of us, but it will not be obvious to many policy
makers. Their natural
tendency will be to continue to assert that rationing health care is
entirely unnecessary; that all we need are some “changes” to our
health care system. This, of
course, is what we are doing now. It’s
called covert rationing, and we have seen its fruits.
The public needs to understand that what we
are really talking about here is deciding how and from whom to withhold
beneficial medical services. Acknowledging
this painful fact clearly and publicly is a necessary first step.
Without this acknowledgement, we cannot even begin to make the
kinds of radical changes in our thinking and in our actions that are
necessary in devising a fair and equitable way to ration health care.
Fortunately, Americans are not as delicate
as some public officials and health care economists seem to think.
We’ve risen to meet serious challenges throughout our history,
and we’ll do it again. After
hearing the truth, once we get through an initial period of anger and
denial, we can begin to find ways to deal fairly with the real limitation
we face, to stabilize our health care system, to optimize our public
health, and to re-commit ourselves to our bedrock belief in the worth of
the individual.
Acknowledge
that health care is not an independent societal need. The
American health care myth treats health care as if it is completely
independent of all other societal concerns, that has (or at least, ought
to have) unlimited scope and unlimited resources.
We must make it our policy to acknowledge that, on the contrary,
health care is merely one part of our social structure, and not an entity
unto itself. We must, in
other words, formally abandon the American health care myth.
Only in this way will we find the impetus we need for two
prerequisites to a fair system of rationing: a) to define clearly the
purpose (and therefore the limitations) of “health care;” and b) to
prioritize the needs of the health care system in relation to all the
other services our society must provide for its citizens.
These two prerequisites constitute the first two principles for
rationing discussed in Chapter 9.
Make
a non-negotiable commitment to universal health care coverage.
A formal commitment to include every American in the new health
care system ought to be the first step in actually designing a system for
open rationing. One way or
another, every American today is paying for health care, whether they have
access to it or not. We pay
insurance premiums, we are subject to Medicare payroll deductions, we pay
other taxes and fees, and we sacrifice services and benefits that would
otherwise be forthcoming if our tax structure were not so committed to
supporting a runaway health care system.
Thus, every American has a legitimate claim to be included in a
universal health care system.
Perhaps from a more practical viewpoint,
universal coverage also will be the primary rallying point for encouraging
citizens to buy into a new health care system.
The realization that no one will be excluded from the benefits of
this system, nor excluded from its inherent risks, will create a sense of
investment. Every citizen
will be vitally interested in creating a system that is as fair as it can
be – and the resultant sense of community, that “we’re all in it
together,” will be extremely important (as we will see) in devising a
means of prioritizing health care services.
Establish
governmental fiscal policies that create powerful incentives for
efficiency, fairness, and as much “voluntary rationing” as possible.
It is unlikely that a rationing system completely imposed by the
government (or any third party) will ever be acceptable to Americans.
As much as possible, the government’s aim should be to create
fiscal and tax policies that encourage behaviors that will minimize the
amount of imposed rationing that is necessary.
Governmental policies are needed to create
a program of MSAs for each individual, in order to render as many
rationing decisions as possible voluntary instead of imposed.
Further, governmental policies ought to
encourage the participation of the insurance industry in the new health
care system. Not only will
inclusion of the powerful insurance industry bring pricing competition
into the picture, but also it will help enlist the support of that
industry (and of certain key politicians) for the needed changes in health
care.
Under the basic structure for rationing we
have proposed, private insurance companies would be invited to offer Tier
2 Universal Basic Health Plans. These
Tier 2 plans will have to include a specific, prescribed book of benefits,
in order to assure that all Americans had the same basic coverage. (How
these prescribed benefits will be determined is taken up in Section B of
this Appendix). Any company
offering Tier 2 policies, however, will also be invited to offer the
additional, optional insurance plans included under Tier 3.
Companies could become as creative as they wanted in devising these
optional plans.
John
Goodman and Merrill Matthews of the National Center for Policy Analysis
have recently proposed a complete set of policies designed to align
governmental incentives and tax programs to optimize efficiency within the
health care system. (Goodman J and Matthews M. Reforming the U.S.
Health Care System. National Center for Policy Analysis, Policy
Backgrounder 149.
April, 1999.)Their proposals are quite comprehensive,
and taken together constitute nearly a complete reform of the American
health care system. Such
proposals deserve careful consideration, as they would go a long way
toward reducing wasted expenditures and minimizing the amount of rationing
that will have to be imposed by third parties.
Clearly
articulate the ethical standards under which rationing decisions will be
made.
In Chapter 9 we surveyed the possible ethical standards under which
we can develop a system of open health care rationing.
Whether we finally adopt a standard similar to the Fair Chance,
Equal Opportunity set out in that chapter, or some other set of precepts,
it is vital that we decide explicitly what our ethical standards will be.
A formal public debate on ethical standards, and a formal decision
on them, will be mandatory.
Only clearly stated ethical standards can
provide an adequate justification for the rationing decisions we make.
Without explicit standards, rationing decisions will be considered
by many to be arbitrary – and with good reason.
But it is important to realize that our choice of ethical standards
goes far beyond merely being philosophically useful.
In Section C of this Appendix we will see how, as we make the
cost-effectiveness calculations that establish which health care services
will be covered and which will not, our ethical standards actually
determine how we do the math.
Re-sanctify
the doctor-patient relationship.
A major theme of this book has been the vital importance of the
doctor-patient relationship. Under
any system of rationing, patients have a particularly acute need for an
advocate, a trained professional who is primarily concerned with their
rights and well-being. Open
rationing merely makes the competing needs of society more evident; it
does not eliminate those competing interests.
The covert rationing we have done so far
has significantly harmed the doctor-patient relationship.
A generation of physicians has been trained under the notion that
their obligation to society supercedes their obligation to individual
patients. We should not
assume that adopting an open rationing system will automatically repair
the damage.
We
need to publicly and explicitly re-sanctify the doctor-patient
relationship, to make it clear public
policy that the primary role of physicians is to ensure the well-being of
their individual patients. Our
system of open rationing will set out the
him. You quickly clean out the register and head for the door – where you
run smack into two burly police officers who happen to be entering the store
right then for some of that good Seven-Eleven coffee.
environment, and placing each at the mercy of powerful interests whose only
real concerns are costs, profit and power.