Helping the Medically Needy, Part One

By Greg Scandlen

In an earlier posting I said that health reform needs to be broken out into several discrete topics, with each one debated on its own. I listed them as –

— Medicare payment reform
— Insurance regulation
— Assistance to the needy
— Management technology upgrades
— Workforce initiatives
— Quality improvement initiatives
— Professional liability reform

These are just top of the head. There are certainly other topics that need discussion. But these are a pretty good beginning. It was nonsensical for the Democrats in Congress to lump them all together in a single package, and think there could be any rational understanding or even discussion of the proposal. As I said, ObamaCare was simply too big to ever succeed.

Now that we’ve spent some time on the last item on the list, professional liability, let’s introduce a new topic – assistance to the needy.

In my opinion, by far the most elegant idea was developed by John Goodman and written about in many places but perhaps most comprehensively ten years ago in Characteristics Of An Ideal Health Care System.

I call it elegant because it is simple to understand, can be applied universally with a minimum of administration, and will actually get the job done.

The two basic ideas are these:

  1. People should be insured if at all possible, but they cannot really be required  (“mandated”) to do so. All that can be done is fine them if they fail to do it. Let’s assume the fine is $2,000 per person. Fining non-compliers $2,000 is precisely the same as rewarding compliers $2,000. So giving a voucher in the amount of $2,000 for every person who has health insurance is exactly the same as placing a $2,000 fine on those who fail to have it. In either case, non-compliers are $2,000 worse off than compliers.
  2. We already know how much our society values health coverage. We know that by how much our society spends to provide care to the uninsured. This isn’t part of John’s argument, but I would add we also know by how much we currently subsidize those with employer-based coverage. Curiously that number is about the same in both cases. In 2007, the Congress’s Joint Committee on Taxation reported that the value of the exclusion for employer-based coverage was $143.3 billion in foregone income taxes and $100.7 billion in foregone payroll taxes, or $244 billion in that year alone. Assuming 160 million people receiving employer-sponsored benefits, that is $1,525 per person in 2007. Goodman estimated that in Texas in 2001, each uninsured person received about $1,000 in free care. So, our ballpark estimate of $2,000 per person today is probably not far off the mark.

So, John’s proposal is to provide a voucher of $2,000 (or so) to every person who buys health insurance. Those who do not choose to buy it would have their voucher deposited in a safety net program. This would be financed by eliminating the employer exclusion, as well as other existing free-care programs for the uninsured.

Before we get into the politics (winners and losers) of this idea, let’s supplement it with some additional thoughts.

  1. It is clear (at least to me) that some not-small number of people cannot handle coping with any kind of insurance program. They may be mentally ill, drug addicted, illiterate, or in some other way dysfunctional. There are people with poor impulse control who are simply unable to plan ahead even for a few weeks. They don’t keep appointments, don’t fill prescriptions, don’t understand the difference between an optometrist and an ophthalmologist. It is simplistic to think that sticking an insurance card in their wallet will do anything positive for them. It will not. These folks need the direct provision of services, not insurance of any kind. The Goodman proposal is the only idea out there that accounts for their needs.
  2. Very low-income people’s needs could be supplemented with state funds, especially if this idea supplanted Medicaid – and it should. Medicaid is a very poor insurance program that looks great on paper but pays so poorly that many enrollees can’t find a doctor to see them. Hence, about one-third of the uninsured are already eligible but haven’t bothered to enroll. Rather than corralling people into a Medicaid ghetto, this proposal would enable them to have real insurance, just like their neighbors. It also accounts for frequent changes in eligibility, as people get and lose jobs.
  3. Similarly for SCHIP. It has never made sense to divorce children from their parents to obtain health insurance. One policy is hard enough to understand without having several different programs for different family members. It would also be more affordable for children to be covered as dependents on their parents policy than to farm them out to a state program. I mean, ObamaCare is allowing independent “children” to age 26 to stay on their parents’ policies. Why in the world should an 8-year old be treated differently?
  4. The current punitive approach in ObamaCare is so full of holes that it will never actually work. Most of the uninsured are too poor to pay taxes, so a tax penalty will have absolutely no effect on them. Goodman’s approach rewards everyone equally, regardless of their income level.

I’m going to leave it there for now, but there will be much more to say about all this in future postings.


Docs in a Skinner Box

By Jane Orient, MD, Association of American Physicians and Surgeons

Behavior modification for physicians, as through pay for performance (“P4P”), is a central feature of “healthcare reform.”

The P4P idea, while now becoming explicit for physicians, is actually pervasive in society. “Do this, and you’ll get that” is the core of pop behaviorism, writes Alfie Kohn in his 1993 book Punished by Rewards. American managers are fundamentalists in their adherence to the Skinnerian model of motivation, he states.

When an influential idea is so widely shared that we no longer even notice it, it is time to fear its hold on us. Quoting Arthur Koestler’s The Act of Creation, Kohn notes:  “For the anthropomorphic view of the rat, American psychology substituted a rattomorphic view of man.”

CMS Director Donald Berwick, M. D., a great admirer of the Japanese industrial model and its potential for standardizing physician behavior, is apparently not aware of the conclusion of W. Edwards Deming, who was sent to Japan to study that model.

“Pay is not a motivator,” says Deming. And the system for appraising and rewarding merit “is the most powerful inhibitor to quality and productivity in the Western world.”  He adds that it “nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry, and…leaves people bitter.” Kohn notes that it is also simply unfair when it holds people responsible for factors beyond their control. One variation on the behaviorist theme that practically guarantees enmity is the collective (“shared”) reward. Since one troublemaker can spoil it for all, it calls forth a particularly noxious form of peer pressure. “This gambit is one of the most transparently manipulative strategies used by people in power.”

P4P, in Kohn’s view, is “an inherently flawed concept.”

Nevertheless, the current Administration has launched “one of the most ambitious behaviorist-style policy projects in American political history,” writes Christine Rosen (“Now Behave,” Commentary, July/August 2010). Regulation czar Cass Sunstein is a member of the behavioral brain trust that intends to bring about profound changes through specifications and regulations.

Accountable Care Organizations (ACOs)

The main difference between ACOs and HMOs is size—5,000 enrollees versus hundreds of thousands, writes Kip Sullivan for Physicians for a National Health Program California. Accountability for cost will be achieved by shifting insurance risk to providers, who are required to achieve “measured quality improvements.” The “defined population,” derived from fee-for-service Medicare recipients, apparently is assigned by the HHS Secretary, based on rules about who provides the majority of the patient’s primary care. Each primary practitioner is supposed to be part of only one ACO (NEJM 10/7/10). A booming industry has arisen to advise on ACO formation, even though the rules and information infrastructure still do not exist.

One problem to be ironed out is how to get around antitrust law, anti-kickback law, and restrictions on physician self-referral.

In an ACO, doctors are “double agents playing the dual role of caregiver and insurance underwriter,” writes Robert Geist, M.D. “ACOs are gatekeeping organizations to serve the purposes of ‘payers’…under the guise of the grander purposes of ‘society.’”

The AMA Board has apparently decided to do everything it can to promote ACOs, writes David McKalip, M.D. AMA president Cecil Wilson, M.D., told the House of Delegates that he would work to get small practices networked into ACOs—and didn’t seem to think that there is any role for any doctor to ever work outside an ACO. P4P is a mandatory and integral part of ACO implementation, Dr. McKalip adds. Yet AMA leaders continue to ignore the directive to actively oppose P4P programs that are not compliant with AMA principles.

For hospitals, ACOs offer another opportunity to garner money and power in the developing feudal medical system. “Global” payments for “episodes of care”—perhaps lasting 6 to 12 months—will guarantee skimping on payment to the serfs for the care of sick livestock, writes Lawrence Huntoon, M.D., Ph.D. Companies that specialize in investigating “disruptive” physicians seem to be springing up everywhere, he notes. One found 8 “independent” physician members of the medical executive committee guilty of being “intimidating.”

Docs out of the Box

In George Orwell’s novel Animal Farm,  the initial success of the socialist experiment depended heavily on the efforts of the loyal, strong horse Boxer, who responded to every setback with the resolve to work a little harder, and who had unquestioning faith in Napoleon, the leading pig. What will happen if Boxer retires early, or defies Napoleon—or if doctors decide to stop pushing the little lever to get their reward of a food pellet?

Of physicians responding to a 2010 Physicians Foundation survey, 40% said they would drop out of patient care within the next 3 years. About 60% said “reform” would compel them to close or significantly restrict their practice to certain patients. While more than half thought that patient volume would increase, 69% said they did not have the time or resources to see more patients while maintaining quality. About 16% said they planned to switch to a cash-based on concierge practice.

“Reinforcement” is a negative for excellence, even when cast in the form of an incentive rather than a punishment.