Thursday, December 26, 2013

The Images of Children

--> It is a truism that we learn a lot from our children, in so many different ways.  Most directly and memorably, we are told what is wrong with us.  It’s often accurate, both what we do wrong in the general world (“don’t tell her that!”); what bad drivers we are (not true in my case, actually); and at times amusingly and at times tragically, our failings as parents.  As Adam Gopnik wryly observes, parents should hope to receive from their children, an probably deserve, are pity and tolerance.

Then, we learn a little more subtly and indirectly.  In the act of being parents we learn about our own parents, and ourselves as the children we were.  We deal with our children’s temperaments and learn about our own.  For some of the kids we have had to give notice, “We are going to leave in ten minutes, so get ready,” because they need that time to prepare themselves.  This is because they perseverate, which means they persevere in what they are doing and have trouble cutting it off.  Then I noticed that this is true of me.  Without thinking about it, I think, my wife Ann has learned to say the same thing to me – she just did it two nights ago! -- “We have to go in about ten minutes.”  3 ½ year old Lola and I need the same warning. 

Even more subtly, perhaps, we can see how they see the world, and then realize how we ourselves used to see the world, and how we probably still see it, but that view is hidden behind a veil of verbal and conceptual constructs that we have learned to use.  Which brings me back to Lola. 

(Just an editorial note: Ann has warned me for my own good that I should watch how much I talk to people about Lola.  It’s OK to talk to her, Ann, about Lola, because she is her grandmother.  My friend Adele said that I can fire away about Lola to her, for which I am grateful.  Now I have to decide, how much can Lola be in the blog?  Here’s my thinking – the big problem with talking about grandchildren is the captive-audience problem.  So, are you the reader a captive audience?  I’m figuring not.  So here goes.)

Lola is very verbal and active – very – so we get to see what she sees and think what she thinks.  Three days ago she was watching Barney, and pretty soon Lola, Ann and I were marching around the coffee table in a “numbers parade,” Lola with a big number 1, Ann with 3, and me with 7, going round and round just like on Barney.  Then the problem popped up – we were in a circle, and Lola likes to be first, “I want to win!”  It’s hard to be first in a circle, so Lola kept catching up to Ann and passing her impatiently, and then me.  It was thus that Lola discovered the psychodynamics of the circle.  (Ann, meanwhile, being a self-conscious sort, perhaps another element of temperament, kept looking out of the windows to make sure no one was watching what was going on in our house.) 

Lola has always been like this, determined.  It has become both determined to achieve, and determined to win.  It’s ingrained.  She’s an only child, no competitors at her level, so she has to beat us – which she does.  It’s just a human variation.

That’s temperament.  Now, view of what goes on around you.  Sometimes, what we see as a means she sees as an end, our process is her prime result.  As an only child, she comes to us to play, so instead of our seeing her play with others, we get involved directly.  A few months ago, she turned to us and said, “Let’s make a list!”

That was a little bit startling – what was she after, going to the grocery store, or what?

“A list of what,” we asked. 

“Hmmm,” she said.  “Let’s see.”

Making the list was the thing.

The same thing happened a few days later.  She was looking around to do something, turned to us and said, “Let’s have a meeting!”

“A meeting for what?” we said.

“A meeting!” she said.

“How do we have a meeting?”

That was easy: she sat us down at the dining room table, took some minutes to arrange various bowls and candles on the table, had me sit at the head on her right side, and sat Ann to her left.  We looked at each other, sat a while, wondered if we should make a list, and then, attention span for 3 ½ year olds being what it is, the meeting was over.  Mission accomplished.  If you think about it, it was probably not much different from most meetings in business, certainly in a hospital from my experience. 

When we were in Hawaii last month she kept bugging us to “make a hotel.”  I didn’t know what that was, exactly – was it arranging the cushions from the couch in the TV room so that there was a little cave underneath, and calling it a hotel, the way we made a castle last visit?  We avoided her making-a-hotel project until she brought it up for maybe the fifth time.  “OK,” I said, “Let’s make a hotel.”

She got to work in the TV room.  First, it turned out, we needed a front desk.  Turning over the magazine basket provided that.  Then the front desk needed a computer – pieces of a wooden puzzle in primary colors served well.  Then we needed rooms.  I was sent to retrieve her sleeping bag and put it on the floor in front of the TV, and I had my room.  I forget what it was that was the closet.  I lay down in my room, and then tried to position myself so I could actually see the TV.  “No, Baba, you need to stay in your room!” she said.

So while I was resting in my room, she became The Front Desk Girl, sitting up alertly and expectantly for any arriving guests.  Truthfully, she was more professional than many who actually fill that role.  So we had our hotel, however abstract and minimalist it might have been.  We stayed in character for a few minutes, and then I heard, “Baba, the Front Desk Girl is getting tired.”  Mission accomplished, it was out to the pool again.

Then when we got home to Berkeley, Lola wanted to play “Hawaii.”  What could that be?  I had no idea.  So in her bedroom at our house we set out to play “Hawaii.”  As before, La Lolls, as I call her, was the construction chief.

“First, we need some palm trees!”  I actually forget what we got to make the palm trees, but there were two of them by the window in her room.

“Now, we need a roof.”

A roof?  What was she getting at?  We got a blanket to top of the two posts at the foot of the bed.

Then we were ready to eat, apparently.  I was sent for a bowl of Cheerios, and then we were having breakfast on the bed, under the canopy (or nearly so), and with two palm trees by the window. 

Then I realized what the story was.  In the morning at our house in Hawaii, I go get the papers, someone makes coffee, and we go out to sit on the lanai under the roof what we call the pavilion, and have breakfast.  It’s an absolutely favorite part of the day.  Lola then gets her bathing suit on and gets into the pool in the morning sunlight.  Easily recreated in her sunny bedroom in Berkeley.

Finally, Lola as shop girl.  Last year and this we have gone into the City and Sara and Ann leave Lola and me together as they go to Christmas shop.  We go upstairs in Bloomingdale’s.  We look at the mannequins and imitate them, arms akimbo, eyes vacantly on the ceiling.  Lola crawls on the highly polished floors, investigates the fake snow around the mannequins, crawls and pants like a dog.  OK, the commercial motivation is what we think of, but look at it from her point of view.  It’s basically art.  Imaginative clothes to wear, lots of enthusiasm from staff and shoppers, looking this way and that, everyone dressed up, the floors of the wide aisles waxed and cleaned beautifully.  It’s art, it’s a vision, it’s an experience.  Besides being a dog on the floor panting with tongue out, which is fun, what Lola wants to be is a shop girl. 

Last week on Bloomingdale’s third floor in a relatively deserted department with an older lady named Lucy, from Boston originally, I bought Ann a sweater.  Lola then helped Lucy by finding a big brown bag in one of the drawers, and then unwinding about 20 feet of green ribbon behind the desk.  She then swiped the charge card and pressed several buttons on the computer.  Lucy just doted, bemoaning the fact that she had only sons, and called to a young colleague walking by, “She wants to be in retail!”

I started out saying we learn from our kids.  One thing is how to have fun!  My friend Herschel says, “You’re never too old to have a happy childhood.”  I do it vicariously with La Lolls, and Herschel does it vicariously by riding roller coasters – I say vicariously, because I have to think he is enjoying giving such fun to his inner child.

But another thing is looking at how Lola appreciates things.  It is in images.  The hotel desk and computer, the palm trees, the roof of the pavilion.  It’s images.  We live an analog life, no matter how much digital technology we employ to get there, the end result is analog, because that’s how we appreciate it.

Also, just as it was inborn in Lola to be an achiever and a participator, it is inborn in her to indulge in the abstract.  Look at those images and what they were represented by.  We are born abstract artists.

These images of Lola remind me of dreams.  We dream in analog images, sometimes incomplete.  Later in life, if she has a palm tree dream, it will be about her happy life when she was three.  Or about her mommy and grandparents and feeling safe and happy.  It will all be contained in her image of a palm tree.

Budd Shenkin

Friday, December 13, 2013

Five Days at Memorial

I have just read “Five Days at Memorial,” by Sheri Fink.  How a great book can be written by a lady who ends her first name with an “i” I don’t know, but this is really a great book.  Sheri seems to have been a journalist, and writes like a great one, with precision and detail and facts that are presented to be suggestive, but not overwhelming in judgment.  The fact that she is also a doctor, and specialist in disaster medicine, makes her understanding superlative.  You are left to draw your own conclusions – but of course you aren’t, you are drawn along with her on her path, and then have the illusion you have drawn your conclusions.  But it’s a path I was delighted to take.

She follows what happens during Katrina at Memorial Hospital, still called “Baptist” from it’s name before the Tenet Corporation took it over 10 years prior, yet it is filled with Catholics for some reason, I guess because it is New Orleans.  What happened was, in brief, the hospital was extremely poorly led, and there was panic among the doctors and other hospital personnel that they would not be rescued and evacuated and that they would all die there.  They knew they couldn’t leave patients behind to fend for themselves, so they prayed a lot, and then killed a bunch of patients with morphine and Versed and then got out of there.  Then there was an investigation and there were some heroes (I was rooting!) who saw the truth and pursued it – but in the end were defeated by local politics and a thoughtless, clueless, evil medical establishment closing of the ranks nationally to protect a prime miscreant, a murderer, a constant pray-er.  Wow, what a story.

I have always thought that euthanasia was sometimes the most humane procedure appropriate for a situation.  (It might even someday be the best road for me, although I can’t say that yet.  I’m still at the stage where I don’t want to die, ever.  But I’ve always been slow to mature; that’s me.  But that’s a diversion; I’m talking in general.)  But now I’m not so sure.

It seems the Belgians and the Dutch have euthanasia institutionalized pretty well, at least that’s what I hear.  Of course you never know until you see it up close, and when you see it up close, you sometimes lose perspective.  So it’s always hard to know anything; it’s an epistemological question.

So, let’s turn to the usual source of wisdom I consult, my Dad.  He said that every generation needs to have a doctor in a family, if for nothing else to protect the family against all the lousy doctors out there.  I think this is true.  I’m used to a certain level of doctoring, a certain level of ethics, a certain level of objectivity, a certain level of intelligence.  But then I remember what happened around 1980 when I started in practice.  I was at Merritt Hospital in Oakland, not the Harvard hospitals and UCSF where I trained.  I was getting into the local thick of things.  One day I was in the OR and a baby came out asphyxiated, and even though at that time I didn’t have great skills, I was able to resuscitate the baby and take the baby down the hall pumping oxygen into his lungs on the way to the nursery.  Trailing behind me was Vlad, th delivering obstetrician known for inducing labor and producing premature infants.  As I helped the nurse push the crib and kept up the pumping on the ET tube down the baby’s trachea, Vlad announced loudly, “God saved this baby!  You didn’t save this baby, God saved this baby!” 

“What an idiot,” I thought.  I was right; he was an incompetent nut.  From what I read, he would not have been totally out of place at Memorial.  The prime euthanist at Memorial was a surgeon named Anna Pou (pronounced “poe,” not “poo”,) who was a very, very dedicated surgeon for difficult facial cancer surgeries, and as far as we know was competent at that.  She went over the top in at least one case we know, where she kept in personal touch with a patient and the family through thick and thin even unto death.  She was admirable, devoted, and she seemed humble enough.  But with all her praying, she apparently got into the God complex and made some mistakes.  She wasn’t Vlad, but on the other hand she gave me enough perspective to rethink my opinion that we should to the way of Belgium and the Netherlands with euthanasia.

Anna is not the only villain in the piece.  Other doctors, many nurses, and the nurse who led the hospital administration are revealed as incompetent and in some cases despicable.  The Attorney General, Foti, who is not the most competent person in the world, and who is politically hobbled by controversy, actually comes out positively.  He realizes the evil that was done and seeks to get it prosecuted.  The local DA, however, is the one in charge, and he succumbs to political pressure and assigns to the case a young lawyer six years out of law school.  This guy could have been a hero, young lawyer rises to the occasion – but he craps out and vitiates the great efforts of an investigative team from the state that ferrets out the facts, gets the witnesses, presents the case, only to have this young guy present a biased case to the grand jury, ensuring that no one with the relevant facts testifies, and the case is dismissed.  No one was enthusiastic about pursuing the case, is his comment.  Jesus.  Maybe every family needs a lawyer, too.

When it’s time for me to go, please have someone attending to me who doesn’t pray to ask for guidance. 

Here’s a review more sympathetic to the personae than I am, by Sherwin Nuland, the great Yale doctor:  He would have voted to pass Dr. Pou and not indict, he says.  Not me.  After all, the staff at Charity, the big public hospital, seems to have done much better.  Apparently, they didn’t kill anyone.

Budd Shenkin

Monday, December 9, 2013

Obama's Possible Technological Legacy

--> In chess,there is something called a “discovered attack.”  It’s one of the most elegant tactics there is, really delightful.  In a discovered attack, one of your pieces is in front of another piece, so the second piece is blocked and not exerting any power.  Then you move your first piece out of the way and your now uncovered piece exerts its power.  Thus, the attack is “discovered.”  An experienced player is not surprised by this, of course, but a tyro can be devastated.

In a way, this is what happened to Obama with the Health Exchange disaster.  He foolishly depended on the bureaucracy to produce the technology of the Exchange.  Until the last minute he simply asked the bureaucrats – sometimes called “public officials,” but let’s not mince words here – if the Exchange would be ready, and they said yes.  Politician Sebelius and nurse Tavenner averred that if would be ready, and technology bureaucrat Chou tried his best, no doubt.  But no one was in charge, nobody put someone in charge, and apparently no one  really knew how to make technology operational.  That was the discovered attack on Obama, and he was devastated when the bureaucratic incompetence was revealed.

He should have known that this was coming, of course. This article in the Fiscal Times makes the point of how horrible the government is in technology: “Of 3,555 federal IT projects that cost at least $10 million, only 6 percent were a success, according to a study by the Standish Group. In addition, 52 percent of large projects were deemed "challenged," meaning they didn't meet user expectations, went over budget, or ran late. All of the remaining projects - 42 percent - were outright failures.

"Things take a very long time to get done because they have to go through such draconian processes," Jim Johnson, founder and chairman of Standish , said in an interview. "The mentality is there’s no penalty to take longer [on a task] than you should. There’s no penalty if you overspend . There’s no incentive to do a good job."

Obama can’t take this on directly now, of course.  He was bitten and all he can do is cure the wound.  Rhetorically, he is astutely highlighting the bigger issues of our time.  Inequality of opportunity and inequality of wealth are certainly very important issues with electoral consequences.  (I wish he would concentrate more on climatic change and environmental and species depredation, but they less electoral consequences, and being the non-scientist that he is, Obama probably does not fully appreciate their implications.)  Certainly, the technological competence of government ranks behind these in salience as goals.  On the other hand, gaining governmental technological competence might be more achievable.

So, here is my suggestion for Obama.  About a year down the pike, when the Exchange issues are resolved and the 2014 elections are over, he should announce that, having been stung by the discovered attack, he is determined that future Presidents (or Kings on the chessboard) will not be skewered by such an attack again.    It’s an inside baseball proposal, perhaps, and won’t win any elections; it’s really pretty wonky.  But how embarrassing is it that the United States Government is so technologically incompetent?

Psychologically, this resolution should fit Obama well.  It would resemble the actions of people who have been struck by tragedy.  They say, I can’t do anything to help my child now, but I can take steps so that it won’t happen again to people like me.  It’s the MADD strategy.

Operationally, it could be great fun for him and for us.  He could assemble an All Star Technology Executive Conference (ASTEC).  Get a Leslie Groves to find the Oppenheimer among the tech All-Stars – I don’t know who they would be, Bezos, Ellison, Luczo?  Ask them to be patriotic.  Don’t reengineer government, just reengineer tech in government.  Piss off the Democrats by establishing a quasi-governmental unit that is outside civil service.  Make public-private partnerships if you need to.  Move it out of Washington and off the East Coast (OK, that’s really utopian.)

Make something about American government a model for the world for a change.  Wouldn’t that be remarkable?  And wouldn’t it be remarkable if Obama, so inexperienced and running things, would have a legacy of a breakthrough in running a modern government?

From my lip’s to God’s ears.

Budd Shenkin

High Deductible Health Plans

"Deductibles Fuel New Worries Of Health-Law Sticker Shock," headlines the WSJ today.  Indeed.  Here is a High Deductible Health Plan article I wrote one year ago - if only I could get published once in a while!  I write well, think well, and publicize poorly.  Oh, well.

High Deductible Health Plans – An Argument Against


HDHPs are attractive to employers because of lower premium prices, as costs are shifted to employees.  With “skin in the game” for primary care, patients use fewer services and overall health costs are shifted downward.  Nonetheless, HDHPs might not be a good answer to the American healthcare puzzle.  Patients often make poor medical decisions when they try to be their own primary care doctors.  HDHPs weaken primary care in several ways, lead to adverse selection, and exacerbate economic discrimination in access to care.  If HDHPs are to be retained, they will need to be profoundly revised to remedy these weaknesses.

In our search for ways to cut health care costs, we thrash about.  There is no shortage of strategies and plans, but as everyone knows, one person’s inefficiency is another’s paycheck.  Power is diffuse.  Most reforms require multiple players to cooperate in complex plans, and many need to legislation to enact.  In our inclusive system of government, “stakeholders,” composed mostly of those with paychecks emanating from somewhere in the industry, have great ability to block reforms that would gore their ox.  Therefore, for many years before PPACA reforms, few serious efforts emerged.

The end-purchaser of health insurance is most often an employer.  What was the employer to do as increasing policy premiums continually presented themselves?  What could the employer’s health insurance agent produce to preserve the account?  What could an insurance company devise, acting on its own?

One prominent answer was the High Deductible Health Plan (HDHP).  Its attraction to insurance companies was obvious – HDHPs are supremely simple to devise, needing the cooperation of virtually no other participant in the industry.  Patients are already familiar with deductibles, copayments, and coinsurance, and raising the limit would represent just continuation of a trend.  Raising the deductible would satisfy the purchaser’s need for cost reduction by lower premium cost by transferring costs for initial care to the employee – a stakeholder with little power. 

So attractive have HDHPs been to purchasers that they were offered by 15% of employers in 2010 and 23% in 2011, and 40% of workers who are offered coverage were offered HDHPs in 2011.[i]  Recently there has been particularly vigorous growth in HDHPs in small businesses with relatively low paid workers.[ii]  Further growth seems inevitable, since HDHP’s will be offered on the Health Insurance Exchanges mandated by the PPACA.

Not only have HDHPs been successful commercially, but, since they increase the price of initial care, consumers have reacted as economic theory predicts they would: HDHP patients have sought less care than patients with conventional health insurance, and thus overall health care costs for this group have been reduced.  Indeed, Haviland and colleagues have projected that if half of the country had HDHPs, the total cost savings to the system would be $XXX, an astounding amount.  

Despite the fact that HDHPs were adopted because there were so few politically practical alternatives, one has to ask, are HDHPs the answer?   Should we as a country want them to be widely adopted as an important component to our fight for lower health care costs?

To answer this question it is not enough simply to observe that they lower costs.  One has to ask, do they preserve access to care, do they foster high quality health care, do they comport with the direction in which we want the health care system to go, and (perhaps most importantly) does it represent a philosophy of health care that the country should endorse?


Although readers of these pages will be familiar with HDHPs, the basic outline needs to be mentioned.  Sanctioned by the federal government in the Medicare Prescription Drug Improvement and Modernization Act of 2003,[iii] HDHPs must currently have a deductible of at least $1,200 for individuals or $2,400 for families, and a total annual out-of-pocket maximum, including deductible, copays, and other cost-sharing, not to exceed $6,050 for individuals and $12,100 for families.[iv]  Because pure HDHP policies could dampen use of preventive services, HDHPs have been required to provide basic prevention – well patient visits, immunizations, screening tests – with no deductibles and no copays.

In addition, employers may provide a Health Reimbursement Arrangement (HRA) or a Health Savings Account (HSA).  While they differ from each other in details, both consist of tax-free funds, contributed by the employer (HRA), the subscriber (HSA), or both (HSA), to pay out of pocket costs not covered by the HDHP.  The hope of these accounts would be for patients to be rewarded for not using services by having funds available to cushion the effects of future expenditures – rainy day funds, in effect. 

Besides lowering premium cost, the theory of involving the consumer in making a cost-conscious choice is attractive to market advocates. The theory is that with “skin in the game,” patients will think twice before seeking care, might price shop for less expensive options, and might take better care of their health by exercising, avoiding obesity, not smoking, etc.  Thus, the plans are “consumer driven health plans (CDHPs).”

Some HDHP proponents also justify the plans on a more general philosophical basis.  They argue that it is a political and economic virtue to give people the freedom to choose an insurance plan that fits their own individual dispositions.  If patients feel that they can navigate the system of care well by themselves and make good choices, and that they can sustain the hazard of large, unforeseen expenditures, these people should have the freedom not to obtain more comprehensive coverage if they don’t want it.  Others assert that citizens who achieve wealth in their lives deserve the fruits of their labor.  If there is inequality of access to primary care because some families can better afford that care than others, this is a justified inequality because of achievement.

The actual effects of HDHPs have just begun to be studied, so only limited information is available.  From what we know, it does appear that patients with HDHP’s make fewer visits to clinicians for episodes of illness, make fewer visits within an illness episode, are prescribed generic drugs more often than other patients, make fewer specialist visits, and are less frequently hospitalized.[v] [vi]  Overall costs appear to be lowered for these patients, at least in the short run.[vii] 


A deeper look at HDHPs, however, brings the deleterious effects of HDHPs to light.  Objections focus on the nature of the market for medical care, the wisdom of targeting primary care for cost savings, the untoward effects of HDHPs on primary care, the connection between HDHPs and the national strategy on health care organization and policy, the effects of adverse selection in the insurance market, the effects of HDHP on quality of care, and the implications of HDHPs for the social philosophy of medical care.

Appropriateness of using the market mechanism

Using the market mechanism is appealing because the market functions automatically and without the need for conscious regulation and design.  But for a market to function well, consumers need adequate knowledge and information to make intelligent choices.  Medicine requires so much special knowledge and education that many doubt the applicability of the market for medical care.[viii] 

Indeed, studies show that some sets of patients consistently make misjudgments in their medical choices.  For instance, while HDHP patients incur fewer medical costs for illness care, they also have lower rates of well visits, immunizations, and preventive screens than those in traditional plans, despite the absence of out of pocket costs.[ix]  Patients are notoriously poor at judging quality; for instance, they frequently equate high cost care with high quality care.[x]  One of the most important functions of the primary care practitioner, in fact, is to guide the patient and to help the patient choose.  Thus, it seems counterintuitive to encourage lay people not to use the professional knowledge and judgment of a primary care practitioner, particularly when a primary care visit is perhaps the least expensive encounter in the entire spectrum of health care services.

HDHPs probably affect different categories of patients differently.  Better-educated and/or more sophisticated patients might well be able to make simple decisions for health care in a skillful manner despite their lack of medical training.  Higher-income patients will be less affected by high deductibles and copays than the less wealthy for obvious reasons.  It is no surprise, then, when patients have a choice, it is the better-educated and higher-income patients who are the most likely to enroll in HDHPs.[xi] It is dismaying, then, to see that recent trends are for lower income workers to be offered the HDHPs by their employers. 

Fuchs reflects the opinions of many when he states that “the idea of sick patients shopping for the lowest-price medical care … is a fantasy.” [xii]   Likewise, there is no evidence that HDHP patients adopt better health habits.

Appropriateness of targeting primary care for cost savings and use reduction

It is well known that the United States suffers from too little primary care.[xiii] American medical manpower distribution is already dysfunctionally skewed toward specialties and becoming more so.[xiv] Two prime reasons for this skew are the imbalance of specialty/primary incomes and the difficulty of running primary care offices.  By targeting primary care for economies and reduction of use.  HDHPs will only exacerbate this skew.

Appropriateness of targeting primary care for cost reduction

Just as the best fishermen go where the fish are, cost-reducers need to search where costs are most excessive.  Although no doubt savings can be found in every aspect of health care, primary care is probably the source where there is the least excessive costs to be found, and the least significant overuse.  Primary care visits are relatively inexpensive; some lead to treatment, others to early detection of significant disease, and even those that don’t reveal pathology provide worried patients the benefit of a caring clinician, the value of which no one doubts.

It makes more sense to find cost reduction by fishing in the high cost ocean of high tech medical interventions and hospitals than targeting primary care.  As Emanuel states: “Nearly two-thirds of health care costs are concentrated in 10% of patients, so to control costs, the focus needs to be on these patients, not the 50% of the population that is relatively healthy, and uses just 3% of the health care dollar.”[xv]  These patients need more primary care, not less.[xvi]  Innovations in care delivery around the hospital setting could save from 20%-35% of current expenditures.[xvii]  Changes in pricing competition and larger scale organization would also be a better focus for savings.[xviii] 

In fact, one important cost savings effort would be to increase the use of primary care through the Patient Centered Medical Home (PCMH).  The PCMH is essentially a strengthened office with highly personal care, more nurse outreach, an emphasis on prevention and patient registries, attention to self-care, and guidance through the medical care system.[xix]  The PCMH can target the high utilizers and prevent ER visits and hospitalizations through enhanced interventions.  If the idea of PCMH is correct, then the idea of HDHPs, which would discourage visits and economize at the expense of primary care offices, must be incorrect.

Effects on the primary care office functioning

HDHPs harm the primary care office in other ways that are frequently overlooked.  To avoid the cost of a visit, patients often seek to replace visits with telephone calls, thus increasing practice overhead, decreasing practice income, and decreasing the quality of the patient-clinician relationship.  Patients also tend to save up all their ills to be addressed at the “free” well visits, thus compromising the quality of the visit – well-care requires a lot of time and effort, and one cannot easily wedge illness issues into the visit without compromising one or the other -- and curtailing office income.  

HDHPs also confound primary care offices from the sheer complexity of the billing process.  Collection of the fee at the time of the office visit is impossible, since neither the office nor the patients will know the state of the patient’s deductible.  Thus, a bill is sent to the insurance company, a denial of payment is sent to the practitioner’s billing office with the discount indicated, then another bill is sent to the patient, who will frequently be reluctant to pay, the patient and/or the clinical office can find tapping into the HRAs and HSAs mysterious, payment is thus further delayed.  As a result of this process, both office overhead and bad debt are increased.  Many offices view HDHPs as a nightmare.

Effect on primary care/specialty investment

Another overlooked possible effect of HDHPs is on innovation.  While we are all used to and welcome high tech innovations for procedures, innovations in primary care could benefit from innovations as well.  Innovations, however, migrate to where the money is, and the effect of HDHPs is to curtail expenditures in primary care but not in higher end care.  While many high tech innovations lead to better care, others do not; it is certain, however, that most of these high tech innovations lead to higher costs.  Innovations in primary care, however, could well lead to lower costs – as with the PCMH, for example.

Effect on other patients not choosing HDHPs

HDHPs are a virtual recipe for averse selection.  When given a choice, patients who think they will not be using services, because of good health prospects or a disinclination toward prevention, will be the ones to choose HDHPs.  HDHP’s will also attract patients who could weather a surprising yearly bill of $6,000 or $12,000.  That leaves those with chronic diseases, those fearful of impending poor health, those who believe in prevention, and those with fewer means to withstand a large health care bill, for the non-HDHP policies.  As a result, the latter pay higher premiums since the former will not be contributing to the common pool.

Quality of care with HDHPs

Many aspects of the discussion above have implications for health care quality under HDHPs.  Patient decisions in a medical care marketplace are often not well informed.  Continuity of care and the doctor/patient relationship suffer as primary care visits are discouraged.  HDHPs could well lead to delays in diagnosis and treatment of illnesses, although this question has not been studied.


In the end, a country needs to choose among alternatives.  It is seductive to believe that the concept of freedom compels us to allow the healthy, well educated, and financially stable to forego excess insurance contributions, even if it harms those who are less healthy and less financially stable.

It is increasingly clear, however, that to be well and well-off is highly related to the luck of one’s birth and genetic makeup, rather than entirely a result of specific merit.[xx]  Of course, luck is not always at work – obese smokers and heavy drinkers, for instance, cannot attribute their bad health experience entirely to “bad luck.”  Nonetheless, good or ill fortune is often at the root of illness and seeking care.  It is one thing to embrace a philosophy of rewarding merit; it is quite another to embrace one of rewarding luck.

To what extent are we as a nation willing to endorse unequal access to health care?  We might well countenance financial resources dictating the choice of a semi-private vs. a private hospital room.  But it is very different to decide that a worried high-income family with a sick child can seek care with little financial impediment, a poor family on Medicaid can do the same, but a middle-income family will face a significant financial barrier for that very same primary care visit.  And it is yet another unpalatable decision to require a family with a chronic illness to pay higher premiums and/or more out of pocket than a family blessed with good health.

These are clearly the philosophic stakes as we imbed HDHPs more deeply into our medical lives. 


HDHPs can lower costs for purchasers, lead subscribers to be more abstemious consumers of care, and even lower costs for the health care system as a whole.  Nonetheless, by targeting primary care, HDHPs look for savings in the wrong places.  HDHPs undercut the strength of primary care; penalize the less-well, the less-well educated, and the less-well off by increased costs and adverse selection; and likely lead to lower quality of care.  HDHPs are policies that contribute irrationally to the further discrimination of access to care on the basis of wealth.

With all these negatives, the nation would be well advised to examine the proliferation of HDHPs more critically, and adopt instead alternative cost-savings approaches that strike at the highest cost areas.  If HDHPs are to be kept on the menu of alternative plans, they need to be wholly revised so that adverse selection does not occur, that the advantaged are not favored over the disadvantaged, and that primary care does not bear the brunt of the cost reduction effort.  How to revise HDHPs to decrease their negatives to a tolerable level would be a major challenge.

[i] Employer Health Benefits 2011 Annual Survey, Kaiser Family Foundation – accessed at on August 13, 2012
[ii] recent article of growth of HDHPs in Kaiser Family Foundation 2012 health insurance survey, New Release Sept 12, 2012
[iii] ibid.   
[iv] Mulvey J. Health Savings Accounts: Overview of Rules for 2012;  December 20, 2011, Congressional Research Service 7-5700,  RL33257   
[v] Haviland AM, Sood N. McDevitt RD, Marquis MS. The effects of consumer-directed health plans on episodes of health care; Forum for Health Economics & Policy 2011:14:issue 2, Article 9:1-26.
[vi] Haviland AM, Sood N. McDevitt RD, Marquis MS. How do consumer-directed health plans affect vulnerable populations?; Forum for Health Economics & Policy 2011;14:issue 2, Article 3:1-23.
[vii] Haviland AM, Marquis MS, McDevitt RD, Sood N. Growth of consumer-directed health plans to one-half of all employer-sponsored insurance could save $57 billion annually: Health Affairs 2012; 31:1009-1014.
[viii]Retchin SM. Overcoming information asymmetry in consumer-directed health plans, American Journal of Managed Care 13: 173-176, 2007.
[ix] Haviland et al. Health Affairs.
[x] Hibbard JH, Green J, Sofaer S. et al. An experiment shows that a well-designed report on costs and quality can help consumers choose high-value health care. Health Affairs. 2012. 31: 560-568/
[xi] Haviland et al., Health Affairs, op. cit.
[xii] Fuchs VR.  Eliminating “Waste” in health care.  JAMA 2012;302:2481-2.
[xiii] Starfield et al.
[xiv] Iglehart JK.  Primary care: light at the end of the tunnel?  N Engl J Med 2012; 366:2144-2146.
[xv] Emanuel EJ.  Why Accountable Care Organizations are not 1990’s managed care redux.  JAMA.  2012; 307 (21):2263-2264.
[xvi] Gawande A.  The hot spotters.  The New Yorker.  January 24, 2011.
[xvii] Milstein A, Shortell S.  Innovations in care delivery to slow growth of US health spending.  JAMA 2012;308 (14):1439-1340.
[xviii] Robinson JC, MacPherson K.  Payers test reference pricing and centers of excellence to steer patients to low-price and high-quality providers.  Health Affairs 2012;31:2028-2035.
[xix] Braddock CH, Snyder L, Neubauer RL, Fischer GS.  The patient-centered medical home: an ethical analysis of principles and practice. J Gen Intern Med, published online: 25 July, 2012.
[xx] Zakaria F.  The downward path of upward mobility.  November 9, 2011, The Washington Post.

Friday, November 22, 2013

Obamacare and Insurance Companies - the Oped

The Affordable Care Act (Obamacare) designers were compelled to make the health insurance companies part of the deal.  No industry so rich and powerful can just be abolished. 

But the risk was high.  The behavior of insurance companies was part of the health care problem.  They profited by denying policies to those it judged poor risks, by revoking policies when subscribers got sick, and by tailoring policies with exclusion after exclusion, among many other tactics.  Under the ACA those practices would be outlawed – all applicants would be accepted at one price, with standard provisions, and no cancellations allowed.  Plus, importantly, profit and overhead rates would now be capped; if exceeded, the companies would need to rebate premium dollars to subscribers.  Companies would retain the power to enter or exit markets at will and to price every product freely, but they couldn’t cherry-pick their subscribers anymore.

The ACA, however, left the insurance company-provider relationship untouched.  The companies for years kowtowed to powerful high-priced hospitals, pharma, and large physician organizations, while dividing and conquering smaller physician groups, particularly primary care.  Thus arrived the increasingly prevalent High-Deductible Health Plans (HDHPs), which will continue under the ACA.  HDHPs represent terrible health policy: higher patient payments, disincentives for relatively inexpensive primary care, but continued support for high priced hospitals, procedures, and end of life intensive care.

With the new rules of the road, economists predicted the insurance companies would compete on the basis of efficiencies, service, and lower prices.  But were the changes enough?  Corporate behavior experts observed that a company’s culture tends to be persistent.  Would the predicted beneficent behaviors indeed emerge, or would other unpredicted ones, sly explorations of design flaws perhaps, take their place?  And also importantly, would the government be able to adjust rules and regulations nimbly as needed? 

The eventual outcome is unpredictable, but the early transitional period is alarming.  The insurance companies at this stage need to avoid catastrophic mistakes, even at the cost of initial market share.  So they cancel grandfathered policies for their own convenience; enter only selected exchanges to decrease risk; and charge high prices for profit safety, even if they might need to rebate consumers at the end of the year.  Moreover, they have created “narrow provider networks,” paying the included providers miserably, even if that leaves out the best doctors and compromises doctor-patient continuity.  Needless to say, the high-priced areas remain untouched. 

Obama erred in giving up so easily on the Public Option, which could have provided a safe haven for many in this interim period with uncertain choices.  He also erred in not providing a transitional plan of incremental changes for those who would be facing higher prices.  That would have been better than ignoring the problem.  He also erred severely in not altering the insurance company-provider axis.  Above all, he erred in not assembling a united, high-quality health care executive team.

While the short-term challenge is coverage, the long-term challenge will be reducing costs in the high-priced areas.  Progress is difficult under the best of circumstances.  Incompetence and venality are constants of life.  The key for progress will be for the government to finally assemble a first-class team, to recognize facts on the ground unstintingly, and to develop a willingness to confront entrenched interests.

budd shenkin

Thursday, November 14, 2013

Obamacare -- What A Transition!

Early on, the Obama Administration made a decision that was probably correct, although they probably did not understand how compromising it was.  They decided to keep the vested health interests intact as they pursued reform.

How could they have done otherwise?  Who could be more powerful than the vested interests in health -- insurance companies, hospitals, academic centers, pharma?  It was bring them into the solution, or do nothing.  That’s just reality.

But the bargain could be Faustian.  How could the ACA bring in the health insurance industry and still accomplish reform?  The answer was, while they kept the players, they would change the rules of the game.  Up to that time, insurance companies made money by strict underwriting (declaring many people uninsurable, and others insurable only with very high premiums, and yet others insured with exclusions); by enforcing rescissions (revoking insurance when illness struck); by clever marketing and much small print that ended up denying coverage for care in many instances; by negotiating very low rates of payment with primary care physicians (who are consequently an endangered species;) and by many other nefarious tactics.  Many.  There was insurance company competition (inadequate in many markets, however), but collectively insurance companies had few incentives to reduce prices or utilization of care, because their profit was simply a percentage of premiums. 

In addition, to clinicians like me, health insurance companies became a loathed and reviled industry, both for how they treated patients and how they treated us.

The ACAs calculated that a change in rules would motivate a change in behavior.  The ACA got rid of specific underwriting by mandating community rating and abolishing exclusion for prior conditions.  The ACA also regularized terms of insurance so that they were open and fair to patients and wouldn’t contain hidden small print exclusions.  The ACA also set a limit on insurance company overhead and profit.  The intent was to harness competition so that insurance companies would compete on service and price, rather than who could fool the public the most.

So this was the ACA’s great gamble – could a company and an industry be changed by new rules of the road?  Or, since the companies themselves and the personnel in the companies would remain unchanged, would the essential culture and characteristics of the industry prevail in the end?  Would they find a way to perpetuate their old behaviors even with new rules?

And, to fill out the picture, note this: insurance companies stand between two entities in the health care world, patients and providers.  The ACA would change the rules on the one axis, patient to insurance company.  But the rules on the other axis, insurance company to provider, would not be changed at all.  Sometimes the power in that axis rests on the side of the provider, as with powerful hospitals that would be mandatory to have in a network, or large specialist groups.  But sometimes the power rests with the insurance company, as when they deal with the typical small physician group.  Negotiations on the provider side would remain as before.

Given this bet, which way would you go?  Change the rules and change the behavior, or change the rules and see the ways that culture persists?  The economists typically go with rules and change, looking for “rational behavior under changed conditions.”  Me, I generally go with culture, and given my years of experience in the field, I go with my by now well ingrained mistrust of insurance companies. 

Also, think of this: what does change require?  Certainly, it requires a new set of incentives, which were delivered by the ACA.  But change also requires the use of new techniques, either invented or adopted from elsewhere.  What are the odds that any invention or adoption of new techniques by insurance companies will redound to the benefit of the public, or clinicians, or efficiency?  These companies have been imaginative, all right, but beneficently imaginative?  Not so much. 

Many in the field shared my skepticism.  This was the basis for the “public option,” a governmental plan that would compete against the private health insurance companies.  If the private companies sought to game the system, the public option would keep them honest by its competition. 

There is another argument for the public option that I didn’t see made at the time, but which in retrospect seems obvious: even if the privately competitive system would in the long term deliver an efficient result, what about the short term?  Under conditions of severe change, many insurance companies would be very conservative, seeing as their prime concern that they not make a catastrophic mistake.  Many companies would want to stay out of many exchanges, letting others take the risk and planning to ease in afterwards.  Many companies would also want to charge very high prices at first, even if they had to return some of it to subscribers at the end of the year, just to give themselves a cushion.  Companies would want to take the opportunity to divest themselves of policies that were of poor value to them, and thus would simply discontinue that line of business. 

In the short term, then, for transition, there was an argument for a public option as the transitional object for patients without employers.  But to my knowledge no one thunk it.

What We See Now

We won’t know for some time whether or not the ACA achieves its desired results.  We are now at transition, and what we see is the very short-term effects of the ACA. 

In transition, fear and stories of loss will predominate, and that’s what we are hearing.  Most obvious, of course is the catastrophic mishandling of the Exchanges produced by the incompetent Obama health team – they weren’t great in producing the law; they were horrid in standing up to Republican criticism of “Obamacare,” just horrid, which led to their avoidance of making timely progress in implementation for fear of further Republican talking points; and they have been at least as bad in implementing it (see the Cutler memo at

Also prominent are the stories of losers, those who will pay more.  The ACA failed to account for these souls who would suffer – there should have been a plan for transition, so that they could have their policies stepped up year by year instead of all at once.  The policies they had and didn’t want to leave benefited them in many instances by not paying for services they would not use – obstetrical care, pediatric care.  They are not now persuaded by the need for a community to support these services much as the general public supports public education.  Chickens of incompetence in both design and messaging coming home to roost.  It is indeed so tragic that Obama never assembled a truly competent health team, and continued to stick it, but change of team is an executive skill that is hard-won.

In transition, we also see on the provider side a continuation of the tactics that have so embittered clinicians against insurance companies.  The insurers have been busy constructing “narrow networks.”  These are plans that enroll as providers on those clinicians who are willing to sign up for 70% or 80% of Medicare fees, which are themselves already less than adequate for primary care.  Thus, with only a few misguided practices signing up as providers for these plans, patients are often prevented from keeping their doctors.  Why?  Because this is what insurance companies do.  The independent practicing clinicians are the weakest political actors in the game – after patients – so they are the weak link that insurance companies go after.  Constructing such networks is the least-risky path for insurance companies, as they keep their costs down and premiums still high.

Less noticed at transition is the continuation of the basic insurance plans that we have gradually been accustomed to – high deductibles and high copayments, leading to high out of pocket costs.  These are very regressive plans that economize in the least inflated of all medical services, primary care and other outpatient care services, while leaving intact payment to the very inflated services of hospitals and procedures – see

As fear predominates, the absence of the public option is not mentioned.  In fact, however, that is just what is necessary.  In time it would be expected that private plans would be able to out-compete the public option; but right now, what we wouldn’t give for that safe haven.  If only the Obama team had been able to think that through.

In time, we don’t know what will happen.  It is possible that insurance companies will team up with provider groups, all of whom become more efficient together and are able to increase revenues through higher enrollments with reduced prices and higher quality.  Capitalism generally outperforms socialism.  One can hope, and I do hope.  I’m hoping that my pessimism about persistent culture in companies is proved wrong.  I’m hoping that the whole thing does not just land kerplunk.  I’m hoping that the Obama Administration’s having lain down with dogs does not wake up with too many fleas.  I’m hoping.

After all, there is always hope.

Budd Shenkin