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Patient-Centered Life-Cycle (PCLC) Value Chain--Process Reform: Universal Health Coverage and Personal Responsibility

Posted Oct 22 2008 6:27pm

Having affordable insurance and comprehensive coverage is a cornerstone of the PCLC Value Chain. Nevertheless, one of the issues generating the greatest debate concerns universal health coverage (i.e., healthcare for all), along with the related issue of "personal responsibility." The argument tends to center on whether the young and the healthy should help pay for care that older and ill persons need, how much they should pay, and the degree of responsibility people have for staying healthy and paying for their care when they get sick. In an earlier series of posts, I made the case that all Americans are worthy of health insurance, and that personal responsibility is a complex issue we must address, but for which there are no quick fixes.

Well, I recently corresponded with two individuals who have ideas about this topic, which I present below.

Person 1 wrote:

Just an idea, but since some here are so determined that Health Care for Everyone should be equal (but not equally paid for) and that everyone is as "deserving" of "good" health care as the next person, and that EVERYONE should pay for this based (somehow) on his or her income (those with more income should pay more than those with less income but EVERYONE should get the same care) I would suggest that these folks move to Canada or Denmark, or Switzerland, or any one of several other countries the next time they need heart surgery.

While we, in this country, do not have the PERFECT health care system, we still have the best. Yes, some of us have better care than others because we PAY more for it than others. But, let me see now... some of us also have better housing than others because we pay for it, some of us have better cars because we pay for it, some of us have better educations because we paid for it, and etc, and etc, and etc.....

I will be the first to admit that there are differences in the level of care provided in this country. But, I do not know of ANY person that has been refused treatment at the emergency room because of lack of insurance or lack of money. No, they do not get individual rooms in the hospital nor do they usually get the services of the most highly qualified and educated doctors and nurses. But they DO get better care than 95% of the rest of the world and that is pretty darn good.

I, like millions of others in this country, have worked very very hard for what I have and I have gone through periods in my life when I did not have much of anything at all. But, I never went without basic health care and I am in pretty good shape for my age. I did, however, work very hard to improve upon my circumstances and succeeded very well. Not as much as many many other people, but everything is relative. I have a nice home, a nice retirement, and well educated and well behaved children and grandchildren. We have our differences, of course, but we have a work ethic that I hope most other Americans have. We truly believe we totally deserve what we have because we have EARNED it. Do I feel sympathy for those that do not have a private room in the hospital or a family doctor that they can see on very short notice just about any time and all of the other things that we pay for? Sure I do. But NOT enough sympathy to want to see the health care system in this country (warts and all) made "universal" and forced to fall down to the systems of much of the rest of the world.

I think we (ALL of us that are willing to work for a living) have it pretty doggone good. And for those that are not willing to work for it, I feel sorry for you but not sorry enough to give up what I have so you can have what you want. Not hardly pilgrim!
I Replied

A logical argument …but I only wish it were so simple. Let's start by examining the premises upon which your case is built.

You wrote: America has the best healthcare in the world.

Here's a quote from a recent article in a leading healthcare journal titled, "Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care," which refutes your premise:

"Despite having the most costly health system in the world, the United States consistently underperforms on most dimensions of performance, relative to other countries. This report…includes data from surveys of patients, as well as information from primary care physicians about their medical practices and views of their countries' health systems. Compared with five other nations-Australia, Canada, Germany, New Zealand, the United Kingdom-the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives. The U.S. is the only country in the study without universal health insurance coverage, partly accounting for its poor performance on access, equity, and health outcomes. The inclusion of physician survey data also shows the U.S. lagging in adoption of information technology and use of nurses to improve care coordination for the chronically ill." (Here's the link).

Other convincing data shows that the US lags behind many industrialized countries in delivering primary care, access and quality. See, for example, the data from this research: "New National Scorecard--U.S. Health Care System Gets Poor Scores on Quality, Access, Efficiency, and Equity, which is available at this link.

You wrote: People who work for a living have it good.

Well, this is a big: IT DEPENDS. Consider the following:
  • "Over 8 in 10 uninsured people came from working families - almost 70 percent from families with one or more full-time workers and 11 percent from families with part-time workers.
  • The percentage of people (workers and dependents) with employment-based health insurance has dropped from 70 percent in 1987 to 59.5 percent in 2005. This is the lowest level of employment-based insurance coverage in more than a decade.
  • Nearly 40 percent of the uninsured population reside in households that earn $50,000 or more. A growing number of middle-income families cannot afford health insurance payments even when coverage is offered by their employers." (Here's the link).
And there are many reasons for people not having coverage, including:
  • Health insurance is unaffordable to many, including individuals who are unable to get affordable individual coverage due to cost or pre-existing medical conditions.
  • Many employers do not offer health insurance coverage.
  • People who lose their jobs often lose their health insurance.
  • Some workers are not eligible for health insurance offered by their employer.
  • Workers and individuals do not take-up coverage that is available.
  • People may be poor but not eligible for public coverage, for example, childless adults are generally ineligible regardless of income.
  • Individuals are eligible for public programs, but are not enrolled."
  • (references: Why are people uninsured #1 and Why are people uninsured #2).
And to make matters worse, the uninsured who do pay are typically charged much more for the same procedures and medications than insured folks because they cannot negotiate discounts, which insurance companies do.

About getting care in emergency rooms, about 20 percent of the uninsured (vs. 3 percent of those with coverage) say their usual source of care is the emergency room (Here's the link).

This is not solution to the problem of the uninsured because, for example:
  • Uninsured diabetics go years without any preventive care because lack of ability to pay, but once their feet become necrotic and they're rushed to the ER in need an amputation, we'll pay for the operation in the ICU.
  • Emergency room care does not include treating cancer with chemotherapy or many other life saving therapies.
  • The "charity care" ERs are required to give is money hospitals try to recover by raising costs for all of us, e.g., through higher insurance premiums, deductibles, co--pays, and other out-of-pocket expenses.
Consider the following study showing that, despite access to the ER, the uninsured do NOT get care when they need it:
"Adults without coverage go without needed care. The uninsured are much less likely to receive preventive and routine care, such as mammograms, pap smears, or screenings for colon cancer. Only 18% of uninsured patients reported receiving a screening for colon cancer, compared to 56% of insured patients. While they can obtain care at the emergency department or a community clinic, uninsured adults are more likely to lack a regular source of care and more likely to forgo needed care. According to the Commonwealth Fund Biennial Health Insurance Survey, almost half of uninsured individuals will not seek care when they have a medical problem, compared to just 15% of insured individuals.

Adults without coverage have worse health outcomes. The Institute of Medicine reviewed 130 studies published in the past 20 years and found that uninsured patients consistently have worse health outcomes. For example, compared to patients with private insurance coverage:
  • Uninsured patients with breast cancer have 30 to 50% higher mortality rates;
  • Uninsured patients with colon cancer have 50 to 60% higher mortality rates; and
  • Uninsured accident victims have a 37% higher mortality rate.
Other studies have found that uninsured patients with chronic conditions are almost twice as likely to visit an emergency department or be hospitalized as insured patients.

Short-term stabilization is not the same as long-term care health management. Because uninsured patients lack routine care, their chronic conditions are often poorly managed, increasing the likelihood of serious, acute complications. Once hospitalized, they receive treatment for acute needs but probably don't receive appropriate follow-up care, resulting in worse health outcomes over the long term.

Uninsured children also lack access to care and experience worse health outcomes. Because uninsured patients lack routine care, their chronic conditions are often poorly managed, increasing the likelihood of serious, acute complications. Once hospitalized, they receive treatment for acute needs but probably don't receive appropriate follow-up care, resulting in worse health outcomes over the long term.

The Bottom Line

Health coverage matters. Children and adults without health insurance can receive care from California's safety net or in an emergency situation. However, studies consistently demonstrate that California adults and children without insurance have difficulty accessing needed care and are more likely to have worse health outcomes." (see this link).
Person 1 responded:
There are VAST differences between the overall economies and populations of the countries you name and the United States. Universal health care stands a much better chance of succeeding and actually working in countries with relatively small populations such as Australia and New Zealand. Even Canada and the United Kingdom have systems that are NOT totally "universal" in nature. Private care in these countries is readily available if a person is willing to pay for it. But the horror stories of people that cannot afford it waiting for MONTHS to get in to see a (usually) lower tier health care professional are rampant. THAT is why so many well to do and middle class people from these countries come to the United States so often when quality health care is needed.

Your second point deserves some discussion too. "employment-based health insurance has dropped from 70 percent in 1987 to 59.5 percent in 2005." Probably true although I have seen some reports that dispute these numbers. But, granted, the numer of people with EMPLOYMENT based health insurance has dropped. That does NOT mean that those people that have lost their company health card do not have access to health care that, in most cases, is just about as cheap as what they were paying for before. Think about it, MOST people in this country do NOT require expensive and long range health care so therefore must pay for only those routine matters that come up from time to time. Again, granted that those that DO require expensive and/or long term care and DO NOT have employer paid insurance and have chosen to spend their money on other things than private health insurance face formidable obstacles. I would argue, however, that even these people are not thrown out on the street when they go to the emergency room at our hospitals. As I said before, they get care, just (perhaps) not the highest quality care. As far as those households that earn $50,000 or more, just how does this compare to the income levels of families 50 years that did earned enough to have an equivilant standard of living? One of the BIG differences is, of course, the PERCEPTION of what is REQUIRED to live these days. Two cars (or actuallly 2.5 cars), 3 TVS, Cable TV, significantly more expenditures on WANTS rather than NEEDS, and many other similar expenditures. I can argue that the LACK of health care (if it exists at all) is a result of personal CHOICE. Fifty years ago these "middle class families" had a greater sense of what was important and budgeted accordingly. This argument could, of course, be the topic (and it has) of many professional papers and conferences.

The above arguments can apply to the rest of your post as well. In short, much of the problem with health care availability can be attributed to PERSONAL CHOICE. Not ALL, of course. There ARE a lot of people that have legitimate problems, NOT OF THEIR OWN MAKING but our safety nets generally provide a basic level of care. For those whose problems are of their own making (deadbeats, drug addicts, alcoholics, people that refuse to work at ALL, and others) I, and MILLIONS of others, do not feel it is MY obligation to pay for their problems that result from their own personal choices.
I wrote back:

Note that when I refer to universal healthcare, I’m not necessarily speaking of a single-payer system. I believe that in the US a combination of private insurers and expanded public programs is probably most feasible solution to dealing with the uninsured since the 170 million or so people (including family members) currently with comprehensive health insurance--paid in large part by their employers--would be unlikely to give it up for some untested universal healthcare system.

Anyway, when it comes to waiting for care, while people in the US go without needed healthcare because of cost, more often than people do in the other countries, waiting time for specialized healthcare services (e.g., elective surgery) is typically shorter in America than in other countries, at least for insured Americans. However, the US ranks low when it comes to the prompt accessibility of appointments with primary care physicians, often waiting six or more days for an appointment, and having trouble making an appointment on weekends and evenings [ reference ] .

So, waiting time for non-emergency care is an issue in countries with universal healthcare. Nevertheless, things are improving in many of them [ reference ]. And why “medical tourism” to the US is a way for them to get such specialized care more quickly, Americans are going abroad for their care because it’s so much less expensive and the quality is just a good. In other words, there are problems with both systems. I contend that access to excellent primary and specialist care, even if there's a longer wait for elective surgery, is a better option than not being able to afford excellent care.

On to your good point about what people can afford based on their priorities and perceptions.

This is how Jeff Goldsmith, president of Health Futures Inc--a firm specializing in corporate strategic planning and forecasting future health care trends--explains the issue of households earning $50,000 or more and not having insurance:
“Families with incomes above $50,000 a year account for an improbable 93% of the 2.1 million increase in the uninsured, and now represent 38% of the total uninsured in the United States. Two-thirds of the 2005-2006 increase was actually in families with incomes above $75,000! How far up into the middle class these incomes put someone obviously depends on where they live. In Manhattan, $75,000 a year is not a lot of money (consider that just parking your car, if you are foolish enough to own one, can cost $500 a month). In Topeka, Kansas, however, it’s upper middle class.

What we don’t know (and need to know) is exactly why nearly 18 million people whose families earn more than $50,000 a year lack health insurance. We can speculate that some of them are young, and have made what seems to them to be an intelligent gamble to “go bare” and spend the money on other things. Others not so young may be scrimping on health coverage in order to make their car payments, or to afford the suddenly more expensive jumbo mortgage payments on their homes, or cover their installment debt and energy bills. These data could indicate that worsening family cash flow is changing how the health benefit is viewed. The fact that relatively well-off households are having trouble remaining covered is deeply disturbing. It would be helpful to know more.

The average US household presently spends about 6% of its disposable household income on healthcare; the above average income household spends much less. In 2005, Americans spent about $250 billion out of pocket on health services and had another $190 billion taken out of their paychecks for health insurance premiums. In 2005, we spent a comparable amount, about $440 billion, on Christmas presents and about $470 billion on restaurants and fast food. How important is health coverage for middle and upper middle class households in their mix of spending priorities? However stressed financially, these families are not among the hundred neediest cases. …Is it important enough to merit public subsidy?”

…Aging Boomers are a surprisingly large part of the uninsured population. Almost one quarter of the 47 million uninsured are between the ages of 45 and 64. Despite the large reservoir of public sympathy for “the kids”, this older group of uninsured people may be the most expensive and scariest subpopulation because they are aging into the region of expensive chronic illnesses. Their emergency room visits are far more likely to be of the $25,000 variety and lead to hospital admissions. (A surprising 541,000 thousand people over age 65 lack health insurance, despite the smug assumption that we’ve achieved universal coverage for the elderly).

This older group of uninsured is bewilderingly diverse. It comprises homeless people, people who are widowed and divorced, laid off factory workers and computer programmers, free-agent knowledge workers, early retirees and those normal retirees whose companies either dropped retiree health coverage or went broke. (The disabled people in this age band are, of course, eligible for Medicare, though many do not enroll).

Mandating that these folks buy their own health insurance coverage, as “individual mandate” health policies such as Massachusetts’ require, poses three practical problems: the limited number of health insurers that will offer coverage to high-risk, older people; their pre-existing medical conditions (which are increasingly numerous as one ages); and the cost, which can easily exceed $2500 a month (if coverage is available at all). Even families with $120,000-a-year incomes would struggle to pay that type of premium out of pocket. For families at or below the median income of $48,000, realistically, it’s going to be impossible without public subsidy.

This is one reason why Massachusetts’ supposedly universal health plan exempted 60,000 people who could not afford even a “stripped-down” benefit. How many more “high-risk/high-need” uninsured people could have afforded Massachusetts’ health coverage if the state had seriously addressed its expensive health insurance mandates (requiring insurers operating in the state to cover chiropractors, in vitro fertilization, and breast reconstruction after cancer surgery, etc.) will be left to a future generation of doctoral students in health policy.” [ reference ]
Turing to personal responsibility. People who abuse drugs or alcohol start do so for many reasons--often due to psychological problems, bad living environments, genetic predispositions, family problems, marketing & advertising influences, peer pressure, our society’s worship of short-term hedonism and self-indulgence (conspicuous consumption that drives our form of capitalism), and other such factors related to human frailties. And these folks tend to start down that negative path when quite young and more susceptible. A similar case can be made for smokers and even obese people. This doesn’t “excuse them” for their poor decisions, but it does explain why humans sometimes act foolishly. That is, there's a heck of a lot more to it than can be attributed simply to “personal choice,” like choosing a Coke over Pepsi (or visa versa). What we should be doing is working to change the things in our culture that precipitates such self-destructive behaviors, providing more effective psychological and rehabilitative services, investing more in preventive care and ways to motivate adherence to healthy lifestyles, etc. I find it rather heartless to say: “Too bad…it’s your fault you’re sick and can’t afford excellent healthcare…we don’t care why…but since you can’t afford it, you don’t deserve the same level of care that I do!”

Now, I'm not dismissing the claim that there may be some "deadbeats" out there who are psychologically stable and able to work, but wish to live in poverty just to get free medical care and be able to sleep all day, even though their health is more likely to be worse than others and they must do without the pleasures money can buy. But since 80% of our healthcare costs are for 20% of the population (i.e., old people near end of life and folks with certain chronic conditions), I don't think the deadbeats account for much of the utilization, even though you can certainly make a case that they are "playing the system" and ought to be required to pay back any publicly funded care they receive.

And here's a related conversation I had with a second individual.

Person 2 wrote:
Any solution to the multiple facets of the healthcare problem MUST consider human nature which is that if people do not have direct control over paying for services with real money out of their pockets, they will not consider the costs. No different from anything we purchase.

The start of health care insurance out of World War 2 wage and price freezes has caused us to get to this point. Most people consider health care as something for which insurance pays. They do not look at buying food, cars, homes, rent or mortgages, vacations, clothes, college tuition, etc. as something that which some kind of insurance pays. When the money comes from the person directly, they are more involved with getting as much quality for as low a cost as possible. Health care will eventually have to go back to the status of anything else we buy.

Catastrophic health care insurance could be purchased or offered to people based on income or assets. Normal market forces would keep costs reasonable and people would have the direct incentive to care for their own health--exercise, proper diet, weight control etc., for fear of spending their own money. Any other supposed solutions will keep the problem and make it worse over time with poorer care and higher costs.
I Replied:

I agree that people should consider cost-actually, cost-effectiveness (i.e., cost AND quality). This means they must have the knowledge and tools to determine when care is needed and what kind of treatment is most cost-effective, as well as to self-manage chronic conditions. Furthermore, they must be motivated to stay as healthy as possible, be able to afford the care they need, and have access to such care when it's needed. For many reasons, this is not the case today, so my point is that each of the causes should be addressed and remedied. For example:
  • Before a person can go to a cost-effective provider, he has to know where to find one, and that information doesn't exist!
  • For people to self-manage chronic conditions, which can be quite complicated and require multiple medications and lifestyle changes, many need to be educated, counseled to change maladaptive beliefs and emotions, and assisted in other ways, as well as have the resources (money, transportation, access to specialists, etc.) to carry out their care plans effectively.
  • We have to develop better ways to educate, motivate and enable people to take better care of themselves, despite the weaknesses of human nature (this is something my company is focusing on). Unfortunately, this is made more difficult by our culture, which makes some people wealthy by promoting poor eating habits (e.g., corn fructose excesses, hormones in animals, pesticides, etc., as well as making healthy organic foods very expensive), laziness (couch potatoes), excessive drinking of alcohol, tobacco use, etc.
  • We have to change the way we pay providers, from pay for volume to pay for delivery of high-value care.
  • We have to invest in better health IT systems for providers and consumers.
So, until that happens, healthcare is NOT like buying anything else, and thus market forces alone aren't the answer.

Providing catastrophic health care insurance to all based on ability to pay is a reasonable thing to do and wouldn't be overly expensive, but it fails to address the problems above and thus will not slow down spiraling healthcare costs or poor quality. The commercial insurance companies offer a choice of benefit packages with calendar year deductibles between $500 and $10,000, along with cost-sharing in which the covered individual pays anywhere from 20% to 50% of the cost of a service, as well as a lifetime maximum (of $1-3 million dollars). Under catastrophic health insurance plans, you tend to pay out-of-pocket for doctor's visits and prescription drugs, but major hospital and medical expenses above a certain deductible are covered. Most catastrophic health insurance plans cover hospital stays, surgery, intensive care, diagnostic, X-ray and lab tests, but not other services, like doctor's visits, preventive care, dental, vision, maternity care, prescription drugs, and mental health visits. And if you have certain pre-existing conditions, you often won't be eligible for a catastrophic health plan (or have a long waiting period). Examples of such conditions are AIDS, diabetes, emphysema, heart disease, multiple sclerosis, schizophrenia, and many more (see this link).

The problem with having only catastrophic coverage only, rather than comprehensive coverage, is that very high deductibles plus co-pays can be devastating to lower income folks, and many aspects of essential care are not covered, which means people will become more ill and thus require more costly care, and the uninsured will continue to crowd emergency rooms for care that could have been provided much less expensively in a doc's office.

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Your comments are welcomed.

In my next post in this series, I'll discuss how the Whole-Person Integrated Care solution.
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