President's Page

President's Page
September 2007

Simply boarding up the house of medicine won't be enough to prepare
for this next storm in health care

by James T. Norwood, MD
2007 DCMS President

We all saw the weather maps showing Hurricane Katrina approaching the gulf coast just 2 years ago. TV and radio stations reported from the coast as the storms made landfall. First came the higher tides. Then the wind increased as reporters talked with experts about what would happen and how to prepare. You know the rest of the story—the storms were massive and destructive. They took lives and caused damage far beyond what was anticipated. Even those who thought they were prepared were caught short.

Another storm is coming and its name is Healthcare Reform. We already are experiencing the increased tides and winds of this approaching storm. And, like people getting ready for a hurricane, everyone interested in healthcare reform has an opinion on how to survive this storm. Just last month I heard a radio commentary praising universal, government-sponsored healthcare. The speaker felt this was the answer for quality, affordable, universal coverage, and that it would force providers to compete and bring costs down. The American Association of Retired Persons has launched its “Divided: We Fail” campaign encouraging members to participate in fixing the healthcare problem. Consumer Reports magazine dedicated its August issue and its next three issues to health care, and encouraged readers to raise their voices on healthcare. We are seeing just the fringe of the storm. As presidential campaigns crank up, healthcare reform will loom just as important as the war in Iraq. Ironically each one has a projected price tag of $2 trillion.

Now that I have warned you about the coming storm, let’s look at the two general solutions that have been proposed. There is a strong push for universal healthcare through a single-payer system. Proponents point to the low administrative costs for Medicare as an example of how efficient a government system can be. Their champion is Arnold Relman, MD, former editor-in-chief of the New England Journal of Medicine. He proposes a single-payer government system that is supported by a federal healthcare tax. He recommends that all hospitals be not-for-profit, and physicians be salaried employees of these nonprofit hospitals or of separate nonprofit group practices. He professes that by taking the “profit” out of medicine, there would be no need for a bottom-line orientation, no CEOs to pay, and no stockholders to please. Several major corporations have advocated this plan because it immediately relieves them of the responsibility and cost of providing healthcare coverage for their employees.

What a disaster this plan would be. The touted low administrative costs for Medicare result from how the administrative burden has been shifted from the government into our offices. We all have seen how the hospital lobby and insurance lobby have out-flanked physicians in the politics of healthcare. Hospitals receive federal money for unreimbursed care, and insurance companies receive financial incentives to offer Medicare supplemental plans. Physicians receive no incentives. And don’t forget the pharmaceutical industry that is taking a bigger portion of the Medicare budget, and now does not have to worry about competitive bidding in the Medicare prescription plan. The nationalization of health care equals the complete politicalization of healthcare. Tax revenue earmarked for health care too easily could be shifted to other priorities. The Dallas Morning News last month reported that two scholars from Harvard and Columbia calculated the total cost of the Iraqi war at $2 trillion. Add that cost to our existing deficit and include the cost to fix our aging infrastructure (our deteriorating bridges and highways), and soon we physicians will be competing with the military, road crews, concrete companies, and other special interests. With this model it becomes all too easy to deny benefits in order to save money.

The other camp for reform advocates is consumer-driven healthcare. This involves using market forces to provide universal health coverage from a variety of sources. The biggest advocate for this plan is Regina Herzlinger, DBA, a professor at Harvard Business School. In this system, the patient and the provider (hospital or physician) negotiate directly for health care. The role of the government is to make health premiums that an individual pays to his insurance companies tax deductible. The government is responsible for the system’s transparency. Providers and payers are required to provide information on their prices and outcomes. The government will form an organization similar to the SEC to oversee the “transparency” of the system. This transparency is key, for that is what patients will rely on in making their choices.

In this plan, the government also will oversee a system for risk adjustment where those who take care of sicker patients receive a higher reimbursement. Lastly, the government will provide funds for those who could not afford to purchase insurance. This plan includes competition among physicians, hospitals, and small insurance plans to control costs, maximize efficiency, stimulate innovation, and enhance quality.

Just like the single-payer system, this plan has weaknesses. We all have seen examples where the profit motive undermines quality. The lynchpin of this system is the consumer/patient making an educated choice. The potential for benefits to be oversold and then underdelivered exists. The governmental system for risk adjustment could be just as politicized as the single-payer system. There is no guarantee that a smaller insurance company will behave any better than the current larger ones.

We need to educate ourselves on both these philosophies. I find it ironic that the advocates of each of these plans never have been in private practice. They never have had to file a Medicare claim, explain a benefit to a patient, take a loss on a procedure just to get the patient taken care of, figure out a managed care contract, or listen to a patient describe how he takes his medications every third day so they will last longer. These physicians never had to explain to their family why they are getting home later than they used to. It bothers me that so many people with the answer to the healthcare crisis are nonphysicians or never have had a physician-patient relationship.

Here are a few resources for you. If you have time to read a book or two, consider: “Who Killed Health Care?” by Regina Herzlinger and “Second Opinion: Rescuing America’s Healthcare,” by Arnold Relman, MD. They are pretty quick reads— at least they’re not like reading a medical journal. If books are not for you, then type either of these author’s names into Google and you’ll find many papers they have written. So far John Edwards is the only presidential candidate to put out a detailed plan for healthcare reform. Check his website and you can see the whole plan. If you read his plan, you will see a mixture to the two proposals I discussed above. I am not advocating this plan, but it is the first detailed plan presented by our current crop of presidential candidates. It definitely will not be the last.

We physicians must educate ourselves and be prepared for this imminent storm. We must be active if not militant in preserving that most important relationship—the one between a patient and his physician. Just “boarding up” the existing house of medicine will not work in this storm.

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