Sunday, December 27, 2009

Health Care Reform - Proclaim Victory and Go Home

Call it a victory, and move on. They couldn’t do it in Vietnam, can’t do it in Afganistan, but they’re doing it in health care.

Not that nothing has been done. I don’t agree with the crowing politicos that this is the change of the millennium, but getting 30 million people into the health insurance system is clearly important. I wouldn’t call it a progressive move so much as an anti-regressive move. How America has tolerated this for so long shows the innate pathology of the system and of our politics, the weakness of government and the strength of the corporations with no consciences. Since this is the heart of the health reform legislation, I’d call this not health reform, but inclusion reform. It will be important.

But it’s a lot like the financial bailout. We’ll change some current conditions, but we need to remember, it was the system that got us into this, our set of institutions and practices. We will get more inclusion, but the high-cost low-efficiency high-profit low-fairness system that got us into this will remain. Them that has is them what will get more. More meat on the bones, but the bones still hopelessly misaligned.

What I’m talking about is not the failure of the public option. I thought the public option could have been very helpful, but the main event was always the Health Insurance Exchange. If there had been a good and viable and extensive HIE, one of the pillars of the current system -- the health insurance companies-- would have had to do their business in a different way. They would have had to compete, with their competitive drives redounding to the benefit of the public. (For more details on this, see

The key is this. There are two ways of running a system responsibly, competition and regulation. Most American industries have a combination of both, some more regulated and some more competitive, but most a mixture of both. How do corporations operate within these systems? What it wants to do, what it fights to do, plots to do, is to escape both and either. Any self-respecting corporation will espouse the holy cause of competition and try to escape it to become a monopoly. What any self-respecting industry wants to do is to capture the regulators and make rules that favor business rather than the public. That’s what they are born to do. The role of the government is to prevent both from happening. Capturing the regulators and crushing and excluding the competition is the strategic function of the corporation.

The health insurance companies have not been heavily regulated, despite their claims that they have been, and 90% of the population have had a choice of health insurance companies so sparse that they qualify as either oligopolies or monopolies. That has been part of the tragedy of the health insurance industry. How much will this be changed now? In the service of increased coverage, some important regulation will be introduced – excluding prior conditions, excluding rescissions, etc. That’s not nothing. But the essential conditions of competition will not be introduced, because HIE will apply to so few applicants for insurance, maybe a couple of million. There will be some increased regulation as mentioned, but only a couple of provisions, really. In the end the system will not be essentially changed.

As an employer of about 150 people, I was hoping to cut some exorbitant health insurance costs, and to be able to offer my employees a better insurance plan than we have now, with more choice and value. Now, we’re frozen for the foreseeable future, and the present sucks. Our people would like to choose, but I can’t offer them a choice, because there are very few insurance companies I can contract with, and all of them insist that I make them exclusive to Bayside, so I have to choose one only. I can't choose Kaiser and others, it's either/or. It’s not if you like your present insurance you get to keep it; rather, you’re stuck with your present insurance like it or not. Thanks a lot.

How would anyone be violated if we could just choose freely in a market, where the prices and services were clear to see? Ah, but then the monopoly would be violated, the companies would not be in control. The health insurance industry beat that back, little by little, until nothing was left. They have the money, they have the influence, and the goddamn Senate sucks.

In addition, as a company that is still small but not very small, I think we will be required not only to cover our employees, but also to offer to pay for 65% of our employees’ families’ insurance. Probably the cost of each individual policy will increase, and our corporate responsibility to provide health insurance will massively increase. To me, it’s very discouraging.

Other Notes on the Legislation

The new legislation will establish some pilot projects on Accountable Care Organizations, and boards for assessing comparative effectiveness of treatments. These are bureaucratic arrangements designed by the health policy intellectuals that I am very pessimistic about. They will lead to regulation rather than competition. Not worth the big fight that health reform entailed. Minor.

The nurses have signed on to reform because they got what they wanted, support for more training (jobs and power!) and independent nurse clinics without the need for their nemeses, doctors. Nurses are on the move!

Other big winners are Community Health Centers. They will get $6.5 billion – billion – over five years for increased operations, trying to go from serving 15 million people to over 30 million. They will get $1.5 billion – billion – just for construction. Plus they will be getting over $800 million from stimulus funds to introduce IT.

Many of a liberal persuasion will be tempted to applaud the new money for the CHC’s. Not me. The alternative ways of funding care for the poor are (1) to establish and support various clinics, such as CHC’s, and (2) to give the poor funding to obtain care in the mainstream system. Notice that we are dealing with “separate but equal” arguments here. We at Bayside are providers for Medicaid and every private insurance company you can shake a stick at. Where would our patients and potential patients rather go? Now, that’s good competition.

I say, give me a level playing field. But what the legislation does is give gobs of money to the CHC’s and starve us in the private sector. Not only do the CHC’s get all that money, they get paid two or three times what we get per visit, as they always have (outrageous!) But also, Medicaid eligibility is expanded, and the dreadfully low payments to doctors will not be raised, according to the Senate bill. (The House bill actually raises payment to the level of Medicare – that’s right, even though Medicare rates are quite low, Medicaid is considerably lower! But I doubt the House Medicaid levels will survive the conference committee.)

Thus, the private sector will continue to be excluded from serving the poor, simply because they won’t be able to afford to do so. The CHC’s, on the other hand, will be funded separately and thus relied upon. The die is thus further cast – there will be separate systems for the poor, clinic care. Forget the vision of Medicaid, to serve everyone with the same system. Gone. Two classes of care, more than ever. Those of us who try to serve all with one class of care, adios!

Well, these last are just my personal observations of some of the less noticed aspects of the legislation. There are others I won’t mention, all tending in the same direction.

This is what the systems now allows to be done. So what can the Democratic Party do? Proclaim success and move on. It’s pathetic, really.

Budd Shenkin

United Health Care and Telehealth

What does a corporation do when it is wildly successful financially and has lots of cash?

We in the medical field have looked on bemused at the plans of United Health for “telehealth.” I understand that United even set up demonstrations in the halls of Congress during the recent health care reform activities, wowing the Congress people.

What is telehealth? The use of communication and other technology to have a virtual visit with a patient. The patient is seen at a distance, miles or hundreds of miles away. It’s a pretty glitzy prospect, and who knows, maybe useful in some instances. Rural and remote areas, perhaps, if they can’t be manned by real people. Specialist visits, perhaps. We already have interpretation of imaging studies on line, so that doesn’t count as a new phenomenon.

Naturally my primary care colleagues are upset. It attacks our business, and it demeans what we do, in a way. People who think telehealth substitutes for a real caring person are unclear on the concept – but that’s so typical these days, techno-types think they can deconstruct and understand, when they can’t.

I understand this from a corporate point of view. United is an ultra-successful health insurance company, and has amassed billions. No wonder they didn’t want to be reformed, and the prospect is for even more billions under the health care non-reform legislation. When this happens to a company, they look for the next "disruptive technology," or they find a way to buy other companies in their field and make themselves bigger and even more predominant and successful.

Apple was good as far as it got, but what does it do for an encore? Ipod. Iphone.

Microsoft and Google were excellent, what do they do for an encore? Buy other adjacent companies, compete in adjacent markets like the iphone, for instance.

So what will United do to maintain its dynamism? It's hard to go around buying hospitals, medical groups, other insurance companies, etc. So instead it looks for a disruptive technology, and it thinks telehealth might be it. Gotta do something.

Personally, I think it will be a big failure. I think an insurance company cannot be the linchpin of medical services. Seems to me that it will be very hard for what is essentially a fiscal intermediary to make real substantial improvements in the medical care system, and if they were to do so, it wouldn’t be through technology. I think that transformation and disruption need to come from real providers of care, docs and hospitals, not financial intermediaries. But of course, first they have to get the money.

Budd Shenkin

Friday, December 18, 2009

The Moral Pain of Health Reform

First, a caveat about this post. I’m 36 hours post left knee arthroscopy with partial meniscal removal, and just took my first oxycodone and it’s about 2 AM. The first 24 hours were pretty good pain-wise, but now I’ve got some ache, enough to drive me to the pills. So here I am awake and a little alert, enough to drive me to blog. So, we’ll just have to see how it turns out.

I’m so mad I can’t see straight or think straight. The subject – health care reform, which, as you know, I’ve been paying a fair amount of attention to. I’m just so mad at the industry payoffs that the Senate bill has in it. Pharma, hospitals, and health insurance companies, such an unholy trio. The first two do some good, the last one not so much, but all three then become what they call “stake-holders.” My god, what a term. Stakeholders. As in, I’ve got my claim to possession of a territory that yields money. Why does that offend me? Is it my mother’s and father’s voices from their Commie past in the 30’s that eroded to realism, but an idealism of “should’s” that never did really recede? I try to think, “That’s the way people are” and not use the term “should,” because I see how that moves quickly to anger. But I guess this is the operative process as I get so mad I agree with Howard Dean, and I say “Pull the bill – don’t pay the ransom.”

Realistically, I know it has to be passed. It’s more than deeply flawed, it’s morally offensive, and offensive in a practical way as well, because we know from history that any angle that can be played, any trick that can be conjured, any grand hypocritical avenue that can be traveled, these industries will do it. “Public good” never passes their lips that it is betrayed before hitting the listener’s ear.

Still, it needs to be passed, because people need the coverage, some of the insurance tricks are done away with, and the logjam of health care organizational stasis is broken. OK, I know that. But it is so outrageous to see the players, preening, representing so few thinking people, paid off in so many ways. What a system.

Maybe in the end this is what it takes. We know the Churchill quote that it’s a terrible system, but there is no better. Plato called for wise men, and anywhere that something like that has been tried it hasn’t worked. Maybe moving millions of people in a direction takes this. Maybe watching sausage or legislation be made is not for the weak of stomach.

But it’s hard, it’s just so hard.

Budd Shenkin

Saturday, December 12, 2009

Financial populism

I've been predicting that the big election cycle push by the Democrats will probably have to be over financial reform, faut de meilleur issues. The fact that Wall Street has lacked remorse is just so tempting. The problem has been that they have been watering down and watering down what they are prescribing. But it appears that the Republicans are falling into the trap. From the Washington Monthly blog:

"Not one Republican voted for the financial regulatory reform and consumer protection bill in the House. Not one," Woodhouse said. "One year after nearly the worst financial collapse in our nation's history -- a collapse brought on by the excessive greed and risk taking of Wall Street and by the anything goes regulatory environment put in place by Republicans -- not one Republican in the House thinks that consumers deserve additional protections or that the practices of Wall Street should be curbed. Do the Republicans not get that one of the reasons they lost so badly in 2006 and 2008 is because the public believed that the GOP had just become shills for oil companies, Wall Street financiers and insurance companies? Apparently not -- because here they go again."

The goal, apparently, is for Republicans to actually suffer some electoral consequences for this one. DCCC Chairman Chris Van Hollen (D-Md.) told reporters that GOP opponents of reforming the way Wall Street does business "are going to pay a very heavy price."

And in his weekly White House address this morning, President Obama reminded Americans, "Just last week, Republican leaders in the House summoned more than 100 key lobbyists for the financial industry to a 'pep rally', and urged them to redouble their efforts to block meaningful financial reform."

Is this the issue on which Democrats take the offensive?

I'll stick with my prediction and analysis. At least for now.

Budd Shenkin

Friday, December 11, 2009

Obama Nobel

It's never quite clear what the Nobel Peace Prize means. Remember that Arafat got one? When I lived in Sweden, my friends there explained it by pointing to the awarders: "They're Norwegians, don't forget!"

Unlike the science prizes, the Norrmen use their prize as a way to influence events, not just recognize past achievement. I'm sure this is part of what the Norrmen tried to do here, that and as others have said, to compliment America in finding someone who is not George Bush.

But more profoundly, this year I think the Norrmen have made another error - they have forgotten that they are the MVP committee, and instead found the Rookie of the Year.

Budd Shenkin

Tuesday, December 1, 2009

Nutrition is the way to good health

First a quick note on the ongoing health reform debate. Can you believe that a plus for the Senate bill is that premiums will not go up??? The mind boggles. After the unthinkable rises in health insurance costs, we're supposed to feel good that the exorbitant current costs for employer provided health insurance will not rise?

OK, it brings in the uninsured; OK, it gives needed support to many of what we used to call the "medically indigent," too much money to get Medicaid, not enough to buy insurance. OK, that's good, very good and very important, well worth doing. But "no rise" in health insurance costs is supposed to be good? Our group got hit by 20% rises two years running, and "only" 4% this year for Kaiser HMO insurance, or really lousy Kaiser sponsored POS insurance -- where is our relief, Mr. Man? Stinko, guys, just stinko.

OK - now the meat of this post. Nutrition - that's really the road to lower costs! If we ate right (and exercised right, and took our statins and blood pressure meds right), we'd really lower costs. See the Safeway plan, commented on many months ago here as I undertook the serious job of health reform analysis probably last spring.

But for nutrition, it's not just eating at home. Americans like to eat out - just look around the city, and if you're looking for it, you can't help but be struck by how society has built itself around the biological imperative that we need to eat. We have found a way to make it a social glue, and an economic boon.

So, how do we domesticate this proliferation of places to eat? How do we turn it to our advantage? How do we make these places Mecca's of good nutrition and good health, yet not abstemious?

Here, in lowly Fremont, California, is the modern answer to our nutritional and social needs.

I rest my case.

Budd Shenkin