Article 4:
The Challenges For Democratic Well-being

Copyright © 2005 Dorian Scott Cole

Welfare 1: the state of doing well especially in respect to good fortune, happiness, well-being, or prosperity.
- © 2005 Merriam-Webster, Incorporated

Is the US medical system sliding into an inevitable sub-standard system?

One of the principal ideas in the forming of the US is the idea of, "What can we do together to make life better for us all?" Well-being is part of that thought: health, prosperity. The Constitutional mandate to Congress is to provide for the general welfare.

Providing for the general welfare seems to be the most dreaded responsibility that Congress has. Congress shunned that responsibility, enacting little of that any kind of legislation, except education, to address social problems until President Roosevelt in 1935. Today, Medicare is known to be close to a crisis, but is ignored. No one can even agree if the Social Security system needs reform. When a crisis looms, Congress is typically dragged, kicking and screaming, into battles over Social Security, Welfare programs, Medicare, and Medicaid.

I'm using the word "well-being" to avoid the negative inferences of the word "welfare." The Welfare program earned a bad reputation as a colossal boondoggle that made many people permanently dependent on State support. I can't foresee repeating that mistake.

When Congress does attempt reform, it is besieged by attacks of special interest groups that stand to lose money, such as physicians fearful of anything like "socialized" medicine. Ideologues also line up to swing a club at any idea that even remotely sounds like a give-away program. As a result of pressure groups, the successful (those with money and standing) are rewarded by maintaining status quo, while the less successful and poor are penalized for their plight by being excluded from a medical system that they can't possibly afford.

Well-being programs are very expensive, typically experimental, and often poorly run. As permanent entitlements that easily get out of control, they can quickly sink the nation's budget in red ink.

Are there ways to help people without dragging everyone down to a nothing level? Many Congressional initiatives to improve well-being have worked, such as the FDA and the National Institute of Health (NIH). There are ways of helping people, and helping people help themselves, without handing out money or causing dependency. Helping them to help themselves is one way. Making programs more accessible to them is another. Subsidizing costs is another. And probably the most effective method for medical care is making education and prevention high profile so that the need for expensive medical care is reduced.

There are few problems that simply educating people will cure. People don't take care of themselves for many reasons that have more to do with attitude than simple lack of knowledge. However, keeping people informed of the choices they have, especially choices for children, would help.

There is, perhaps, a more effective way to deal with these social needs. More about this in the Summary.

What is the State of the Onion?

The story that is told and repeated by all of us is that the US medical care system is the best in the world. Is it?

As an onion is unpeeled, layer by layer it literally disappears. There is nothing at the core. As a container, it holds nothing. The medical system is like an onion - there is nothing at the core of it. Once the medical system had compassion at its core and struggled financially, but now it has financial self-interest at its core and it struggles with compassion. Each component in the system reacts primarily to financial self-interest, with no systemic deference to the patient, particularly the uninsured patient.

The medical system is made up of three primary components: physicians, hospitals and their suppliers, and insurance companies, each with its own interests, and each negotiating with the other for reasonable reimbursement. It should be made up of four components - the fourth being the people who are uninsured, but depend on the system. The uninsured component is steadily growing.

The real story told by government funded studies and independent research groups

In a very comprehensive study of the quality of US healthcare by the Rand Corporation, across the entire US, the study found the following results were consistent across the nation: "Overall, adults received about half of recommended care. The level of performance was similar for chronic, acute, and preventive care." Nearly 124,600 deaths were potentially preventable, as were many serious complications that cause unnecessary suffering and high medical costs.

In another study, over half of those people who have medical debt say that the debt caused them to delay getting needed medical care. It also damages their credit and creates housing and employment problems.
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Over half of uninsured Americans aren't even aware of medical facilities that are available to them.

Prescription drug prices have risen at a double-digit rate for several years. Drug company profits are the highest of any industry in the land. Drug companies try to make minor alterations to their existing medicines to retain patent rights (and high prices); and they refuse to invest in lower profit drugs such as antibiotics and influenza vaccines, which are badly needed. They use unfair trade practices, which are similar to racketeering, but legal, to prevent people who can't afford medications from getting them at cheaper prices from other countries, even though they manufacture the drugs in other countries themselves.

Insurance companies determine which primary care physician you can see, which specialist you can see, which hospital you can go to, which procedures you can have, and which prescription drugs you can use. They either eliminate your freedom of choice, or limit choice to self-pay.

According to an estimate from the Institute of Medicine, 18,000 adults in the U.S. die each year because they are uninsured and cannot get proper care.

Who gets insured?

Is coverage of children a problem? Virtually all children from low-income families are eligible for Medicaid or the State Children's Health Insurance Program (SCHIP). Yet the parents of about 7.7 million eligible children failed to enroll them. Research by the Urban Institute found that 88 percent knew about the health insurance programs for poor children, but fewer than one-fourth had ever inquired about them.

Medicaid and SCHIP may not be enough to guarantee coverage. Children often don't have access to medical care because they either lack insurance, or the insurance doesn't pay.

Not everyone feels that they need insurance. According to the Census Bureau, 40 percent of the uninsured (15.2 million) are between the ages of 18 and 34, for whom good health seems as certain as sunny days in Southern California. Oops, did it recently rain there?

According to the National Center for Policy Analysis. For those who are insured, most health insurance actually goes for routine care. For those who are uninsured, one-fourth of the uninsured are foreign-born, and 80 percent of those are not citizens. Most of the uninsured realize that they can obtain care from hospitals, since Federal law prohibits them from refusing emergency treatment. They can pay physicians out of their pocket.

Almost 100 million Americans have chronic conditions. The chronic conditions commonly affecting all ages are primarily sinusitis, arthritis, orthopedic impairments [Ed: such as back problems, sprains], hypertension, and hay fever. The cost of medical care for chronic conditions was $470 billion in 1995.

If the emphasis was on prevention and early treatment, $35 billion per year could be saved that the US spends to provide uninsured residents with medical care.

How effective are government programs?

Too often, the piecemeal approach to improving well-being simply creates other problems. The Federal government mandated that hospitals must treat all patients. Many people wait until their condition is critical, so as a result, what may have been an inexpensive treatment turns into an expensive one. Many of these bills created by financially incapable people go unpaid, which passes the cost of these expensive treatments on to other consumers.

Government mandates to make such things as mental health and substance abuse coverage available to everyone, raises premiums for everyone by 6 to 21%, and makes insurance unavailable to about 6% of the people. This fact alone may account for 20 to 25 percent of those who have no insurance, according to a Duke University study.
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Other policies also work against patients. Doctors cite low reimbursement and red tape as reasons not to see Medicare patients. By law, patients are not allowed to make up the difference, so this effectively removes patient access to these physicians. (Perhaps many of these doctors just don't care about seeing Medicare patients anyway, so this may be just an excuse.)

Three factors weigh very heavily in the cost of health care premiums, and a third factor can alleviate much of the expense. One, a very high percentage of the cost is for routine work. Two, those 10% with chronic conditions, such as back pain and sinusitis, are responsible for 70% of the premium cost. Three, if the consumer is educated about the condition, and taught how to manage it, the costs go down. If patient education was mandatory, and routine coverage was pared down, the cost of medical coverage would be significantly reduced for those who need to get basic coverage.
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What is the human toll in being uninsured?

Insurance is the entry point into the medical care system. If you have insurance, you have access to at least some level of medical care. People without insurance typically can't afford the high prices of the medical community. For example, I am recently paying over $3500.00 out of my own pocket for medical testing - since it isn't catastrophic and doesn't involve hospitalization, I have to pay for laboratory tests for which I don't have insurance. Because uninsured people's incomes are limited by low paying jobs, their choices are typically between other life necessities and medical care. Medical insurance is critical to their well-being.

Among those Americans in 2003 who are uninsured, and chronically ill, "four in 10 went without needed care, two in three put off care and seven in 10 did not fill a prescription in the past year because of cost concerns."

Seniors are caught in a Catch 22 situation. Many doctors say they "can't" afford to see patients who are on Medicare. The person can't even pay out of their own funds because that is illegal under Medicare rules.

The number of uninsured Americans rose to 15.6 percent, or 45 million, in 2003, the third straight annual increase, while, the poverty rate rose to 12.5 percent.

While this number is important for any given point in time, it is more important that, according to the Congressional Budget Office (CBO), between 21 million and 31 million people were uninsured for the entire year. Additionally, this figure needs to be seen in context with previously given figures (in this article) that 18,000 people die each year because they are uninsured and can't get proper care, and up to 124,600 deaths are preventable.

Catastrophic medical care is financially disastrous... even if you are insured. According to Economist James Smith, insured households paid an average of $26,957.00 after being diagnosed with a serious new health condition. The uninsured paid a staggering $42,166.00. Financial catastrophe awaits both the insured and uninsured.

People who can't afford insurance often wait until their condition worsens before seeking treatment. They end up at the hospital emergency rooms. Emergency doctors believe that the uninsured patients they treat are more likely to delay care. They suffer from illness and put their physical and financial health in jeopardy. Nearly one in three have no health coverage. Emergency Room physicians hold that providing health care to all Americans is their number one goal.

Health insurance through employer based health plans is eroding, as companies find it more difficult to provide insurance as plan prices rise and market forces lower profits. According to the Chamber of Commerce, coverage declined from 61% of Americans in 2002 to 60% in 2003. Plan prices are rising around 9% a year, and there is no way that wages are keeping up.

The uninsured aren't slackers. According to Aetna, 6 of 10 have full-time jobs, while 15 percent work part-time. College students and those nearing retirement age make up the rest. This slide in the number of insured has been going on for 25 years.

What is happening to health care prices?

Medical costs drive insurance prices, and as shown, as insurance prices go up, businesses drop offerings and fewer people can afford insurance.

Is the highly touted cost of litigation a major factor in the rising costs of health insurance? Only 7% of the increase is due to lawsuits, "defensive" medicine, and malpractice premiums. According to the American Association of Health Plans, the bulk of the increase is due to other factors.

From 2001 to 2002, inflation drove up medical costs to the consumer by 18% of the increase. Hospitals, principally because of consolidation, drove costs up 18% of the increase. Government mandates were responsible for 15% of the increase in costs. Consumers themselves asked for more, due to an aging population that requires more services with age, and by asking for popularized medications. Consumers drove costs up 15%. The cost of pharmaceuticals, medical devices, and advances in treatments drove medical costs up 22%.

Strong financial self-interest is clearly evident in the corporate influences in the health care system. Anything new costs big bucks. Hospitals themselves have clearly changed from a compassion motive to a purely profit motive. Pharmaceutical manufacturers are raking in every dollar they can grab, while heavily pressuring the government and entire worldwide system to keep prices up. (Efforts by some within the pharmaceutical industry to address those who can't afford medication haven't gone unnoticed. Additionally, those who do the work in the system (physicians, nurses, lab techs, researchers, etc.) are largely caring individuals - it is the business leaders in these institutions that are driving up prices for profits.) It is doubtful that a compassion industry should have profit as its principal motivation.

Missing from the cause of price increases is physician visits. Doctors are not the problem, nor are malpractice premiums, and other studies indicate that the few people who overuse the system are not the problem. As a special interest group, doctors have tremendous influence over legislation, but have little overall financial impact on the system. The importance of insurance on physician visits is clearly evident. Without health insurance, many families, who live paycheck to paycheck, would not be able to afford even physician visits.

Inflation in the health care system far outpaces the rest of the nation's economy, racing ahead at 7 to 9% a year for several years. The US economy is currently flirting with inflation, and eventually the health care system will help propel spiraling inflation. In early 2005, all businesses seem to be taking the restraint off of price increases, partially due to rising energy costs and a healthier economy. With these price rises added to health care inflation, the combo seems likely to fuel inflation.

Inflation aside, rising prices in the health care system are a major factor in preventing people from having insurance, and in taking insurance away from those who do have it. Grabbing money to increase profits is a regressive influence that saps revenue from the system since it boots consumers out. A system in which more people are insured means more money for those in the system.

Summary

The US medical system is a very good medical system for those who can afford to pay high $ for their own care. It degrades not so gracefully after that, and insurance coverage is declining.

Half of all people do not get the recommended care. Four in 10 went without needed care, two in three put off care, and seven in 10 did not fill a prescription in the past year because of cost concerns. Over half of the people with medical debt delay getting more treatment. Catastrophic illness creates massive debt for both the insured and uninsured that is financially devastating. Up to 124,600 deaths are preventable.

Part of the declining insurance coverage problem is that the country looks to industry for providing medical coverage. For the last 25 years, companies have been less and less able to offer insurance. Employer coverage is down to 60%. Employer based coverage is no longer a sound paradigm for providing medical care because of competitive pressure on all business, that is only going to get worse.

Around half of the uninsured are ages 45 to 64, and they badly need health insurance since medical expenses begin to increase for that age group, and many of them find good employment difficult to get. 18,000 people die each year because they are uninsured and can't get proper care.

Health care costs have been rising from 7 to 9% a year, far outpacing wage increases, making it difficult for people to buy insurance plans on their own.

Overall, fifteen percent (45 million) of Americans are uninsured. Around half of those remain uninsured from year to year. Most of these people are employed, but can't afford insurance. Forty percent of the uninsured (15.2 million) are between the ages of 18 and 34. They rarely get sick, and not having insurance may be a choice for them. However, if these people were covered, the cost would be minimal to the insuring system.

Lack of knowledge about health care, and lack of insurance, are costly to the system. A significant number of people do not know what health care alternatives are available to them. They don't even know what is available to their children. They delay getting medical care until their condition is very serious, and then go to the emergency room. So, these people are treated by emergency room doctors, often don't pay their bills, and don't get the follow-up treatment and medications that they need. The United States spends about $35 billion per year to provide uninsured residents with medical care, often for preventable diseases or diseases that physicians could treat more efficiently with earlier diagnosis.

Insurance is necessary, but not a panacea. While some insurance plans offer a lot of choice, a high portion of those who can afford insurance, or have it provided to them, have every one of their medical choices dictated to them by insurance companies. This is a rapidly growing trend as medical costs increase. This standard of care is no different than other nations, which provide medical care, but limit options or have long delays for services.

For 15% or more of the population without insurance, the US medical system is much worse than in other countries. It can be particularly bad for those who have catastrophic conditions - if they can afford medical services at all, they will be wiped out financially. Compared to other countries, this is a disaster.

As medical system costs spiral out of control, both the quality of "available" medical care is declining due to insurance restrictions, and access to medical care is declining, which can eventually lower the quality of the US health system to that of other countries, or even make it overall substandard to other countries. Government programs that try to make medical care more available and control costs, often create denials of service to others as insurance companies try to remain profitable. Single interventions, such as government mandates, exacerbate systemic problems.

Where can we go from here?

Fear and ideological disputes dominate the Congressional approach to well-being legislation. The result is piecemeal legislation that often creates problems as it tries to cure them. It doesn't have to be this way. Just as Insurance Commissioners in States have the power to set and implement policy, Congress has the power to create a Well-being system with similar powers that can address problems more effectively. I think that it makes sense to establish a "well-being" system, sanctioned by Congress, but with the operating autonomy of the Federal Reserve System.

Medical system costs are a systemic problem which we have to learn how to control. The medical system is like an onion - there is nothing at the core of it. It is now made up of components that react primarily to financial self-interest. If the entire medical system is confronted by a strong governmental initiative to get health insurance to those who need it, so that it influences many portions of the system at the same time, it is much more likely to stabilize the system, and then respond to needs. So I think that the time has come to make a Federal "well-being" System (a core of caring) - to take this nightmare off the backs of Congress, remove it from special interest pressures and political rhetoric, and independently monitor needs and responses on a continuing basis, set policy, and implement.

In my own mad view (remember, I'm having medical tests), the Federal Well-being System would have responsibility for ensuring well-being by monitoring the well-being of the population, formulating policy, and implementing policy through outside organizations. Its first responsibility would be people and their well-being. Its secondary responsibility would be the well-being of the organizations that serve people.

It would be advised by invited testimony, and studies of the population, not lobbyists and political rhetoric. It would be funded through taxes on common product sales that are separate from the governmental revenue stream and business-to-business sales. The Federal government doesn't need the constant funding battle over well-being programs, and business needs less tax to be competitive. As tax reform is currently being considered, separating funding streams from the political arena would put the organization on sound footing.

In its primary responsibility to the people, it would establish minimum baselines of family income, catastrophic medical care, development of necessary (targeted) medicine, identification and control of disease, loss of income (less work in retirement, loss of job), and long term care... and find the ways to best address these problems with concerted efforts.

Physicians would largely be paid directly by consumers for office visits, and stay subject to consumer market forces, not system influences. Those who can't afford products and services, would be supplemented in their needs by need based aid (plastic cards). The focus would be on preventive medicine and preventive education, which could sharply reduce the cost of treatment for chronic disease (one of the major costs to the system). Everyone would be seeing the right doctors and getting good medical care. Those physicians who want to charge exclusive rates that are higher than covered amounts, would continue to operate as they always have, and not be bothered with the mainstream.

There needs to be a strong shift in focus to prevention and early detection, as opposed to treating whatever condition presents itself. Can the medical system do this itself? Currently the medical system puts very little emphasis on education and prevention, although this is gaining. Current Physician treatments emphasize "evidence based medicine," which means physicians principally treat what is known to be "treatable," staying within customary disease profiles, and seldom bothering to look beyond the stereotypical indications of the symptoms that they are treating.

In other words, throw a medication at it, and if it goes away, then you got it right. Well, 80% of conditions will go away without any medical attention at all, proving nothing. Which means, if it returns, only then do you actually have to identify the underlying disease, and even then, thanks to insurance companies and lack of experience, only certain medications are available to treat the disease. Physicians rely on drug companies, insurance companies, peers, experience, and journals to tell them what can be treated and what to treat it with. These comments aren't meant as criticism. Without doing extensive testing, most of the time physicians can identify the cause and treat it.

If the condition causing the visit gets an abbreviated response from the physician, what then for preventive medicine? The average physician, seeing 100 to 150 patients a week, has little time to do anything else. Education and prevention are novel ideas with a low priority - they might hand you a pamphlet on the disease that you are dealing with, or tell you to lose weight. Everyone needs to "cut down on salt, lose weight, exercise more" - these are platitudes that we tell ourselves, whether effective for the individual or not. Yet, a preventive and early detection approach, properly communicated to people, will have lasting effect on controlling costs and improving the well-being of the people.
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There should be three immediate Well-being priorities:

One, educate to make sure that the poorest and least educated know what types of medical assistance are available to them. This will save the US money by treating conditions before they become expensive emergency room visits. Educate to sharply cut the cost of insuring and treating chronic conditions.

Provide some backup for those people in the 18 to 34 age group who think that they are invincible and don't need medical insurance. Speaking from experience, they hurt their backs, fall off roofs, discover they have cancer, accidentally get pregnant...

Three, target medical assistance for the group in most need: the uninsured age group nearing retirement (age 45 to 65 - my estimate is around 10 to 20 million uninsured people) so that medical conditions don't have the catastrophic impact of suffering, financial ruin, and death.

An 80/20 contribution ratio for purchasing insurance would probably work. Don't cover office visits, unless specifically requested. Office visits account for around 80% of the cost born by insurance. I don't have accurate numbers, but if 10% of these people had catastrophic conditions, this would create a program with direct costs of around $50 billion annually. Subtract 35 billion that it currently costs the government to pay for uninsured problems that could be treated more effectively if treated earlier, and you have a $16 billion cost. Perhaps we could just end the Iraq war a week early. : )

Make sure that people know. One of the biggest complaints against the coming prescription drug program for Medicare is that the elderly often have trouble understanding complex issues and can't determine which choices are best for them. They need informers. They especially need competent advisors who can look at their total care situation and help them make competent choices. This was also a big complaint about prior VA medical care. It's almost as if these programs are kept secret so that no one will use them.

Suggestions:
• Put a hold on government mandates until most of the population is insured - make that the mandate.
• Emphasize education to both the physician and consumer so that conditions are prevented and reduced, and proper treatments are selected.
• Emphasize Health Savings Accounts that carry over savings from year to year - these will cover physician visits and lab tests.
• Take the "well-being" system out of the political arena where it is subject to political ideologies and rhetoric, and band-aid programs that backfire.
• Emphasize assisting people with getting medical insurance, based on their need.
• Focus first on those age 45 to 64 who more desperately need insurance and can't get it.
• Emphasize first response units for people, to educate, assess, advise, and keep medical expenses low.

(Most of the numbers in this article are from respectable institutions. Please take those numbers that are obviously mine as examples, not fact - much more knowledgeable people than I need to assess these.) : )

Other articles on this Web site about issues that involve medical care:

Health Care Crisis in the US - Do we want a world in which only the wealthy can afford medical care?

Unaffordable Health Care - Do we want a world in which medical care is in chaos?

The Challenges For Capitalism. Article 7: Strategy and recommendations - some ways of creating a better capitalistic world for ourselves

Article 5, Responsibility, Leadership, and the Social Contract

The Challenges For Capitalism. Article 3: Competing against ourselves - destructive pressures

The Challenges For Capitalism. Article 2: To Regulate Or Not To Regulate?

(The tyranny of not having medical care) The Challenge For Freedom - Do we want a world in which freedom is a quaint word reserved for the privileged?

Time For Constructive Political Change - Do we want a world in which only the most powerful party wins?

The Challenges For Democracy. Article 1: Winner takes all. Do we want a world in which "winner take all" is the hallmark of democratic representation? An occasional series.

NY Times OP ED Columnist, Krugman: The Medical Money Pit

- Scott

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