Health Care Reform: Availability vs. Affordability

Now that the Thanksgiving break is over and turkey sandwiches are the rule of the day, it's time to resume our health care blogging. We hope that all our readers had a healthy and happy holiday!

As the U.S. presidential election brouhaha escalates and the candidates get more vicious in their rhetoric, the subject of health care, like so many others in modern America, comes down to money. Over the holiday this has become a recurring theme as more and more analysts, bloggers, and reporters take a look at the out of pocket expense of health care in our nation.

Lets start with the fellow health care blogger Alan Katz, whose Health Care Reform Blog offers a post on this subject from an underwriters perspective:

At the end of the day, access is about affordability. If families can't afford coverage it doesn't matter what's available to them. If the state can't afford its health care programs, all the public proclamations mean nothing. It's about cost.

Most significant for those who would reinvent the health care system is the reality that the rate of health care cost increases has outpaced the growth rate of the economy as a whole since at least the 1970s. Without exception (not necessarily every year, but every decade). The cumulative effect is substantial: from 1970 through 2005, the nation's Gross Domestic Product grew by 7.4 percent; nominal national health expenditures grew by 9.8 percent. Perhaps 2.4 percent doesn't look like much, but over 30 years it means health care costs doubled compared to the economy's growth. That this trend is unsustainable is indisputable. That there's no clarion call for change is disappointing.

Brad Warthen, editorial page editor of South Carolina's The State gives us a personal perspective on the cost vs. income question:

I make more money than most people do here in the wealthiest country in the history of the world, and I live paycheck to paycheck, in large part because of the cost of being an extremely allergic asthmatic, and needing to do what it takes to keep enough oxygen pumping to my brain to enable me to work so I can keep paying my premiums and co pays. My premiums in the coming year - we're going to a new plan - will be $274.42 on every biweekly check, not counting dental or vision care. And I'm lucky to have it. I know that, compared to most, I've got a sweet deal!

I'm in the top income quintile in the U.S. population, and we can't afford cable TV, we've never taken a European vacation or done anything crazy like that, we haven't bought a new car since 1986, and aside from the 401(k) I can't touch until I retire (if I can ever afford to retire), we have no savings.

Yet I will pay my $274.42 gladly, and I will thank the one true God in whom I actually do believe that I have that insurance, and that I am in an upper-income bracket so that I can just barely pay those premiums, and that neither my wife (a cancer survivor) nor I nor either of the two children (out of five) the gods still let me cover is nearly as unhealthy as the people I see whenever I visit a hospital.

While the majority of the debate seems to focus on the uninsured youth of America or the plight of our elderly, more and more editorials and blogs are recounting the plight of the "average Joe." One recent comment left on this blog stated that the person leaving it was in immanent danger of losing her home due to health care costs. This is not an issue that is isolated to any particular demographic.

Another interesting take on the situation is this morning's post on the Huffington Post by GOOD magazine's Daniel Brook. It addresses the health care plight of that quintessentially American entrepreneur: the freelancer.

The people I know who are worried sick about coverage work for themselves, many in creative fields. Most of these freelancers and entrepreneurs are in the cross hairs of our health-care crisis--and you wouldn't know it from watching the presidential campaign...

The problem with our health-care debate isn't just that it glosses over a huge portion of people who are affected by the crisis, but that by not taking them into account, we may end up achieving universal coverage without unleashing the talented and entrepreneurial. Just requiring everyone to have health insurance won't solve the problem. That's what Massachusetts recently did statewide and what some candidates are suggesting on a national level. But under such a system, unless you're very poor, you still pay more if you have a family; you still have to pay a flat fee unrelated to your business income; and you still have the catch-22 of paying more when you get sick and are earning less. Without a solution funded through progressive taxation, simply requiring everyone to get insurance will still hold back our millions of would-be entrepreneurs. Health-insurance payments will continue to act as an "ambition tax."

The issue of health care reform is a large and complex one. It involves many aspects from the economic and the political to the practical and the ethical. For the average American, as these stories point out, health care reform is not just a matter of availability -- it is about affordability as well.


SOURCE: "Some Affordability Data" 11/24/07
SOURCE: "'Health care reform?' Hush! You'll anger the Insurance Gods!" 11/25/07
SOURCE: "Freelancers Need Universal Health Care, Too" 11/26/07
photo courtesy of yomanimus, used under this Creative Commons license

Forbes, HFMA on Improving Patient Billing Practices

Anyone who has had medical care in the United States is already familiar with the large array of forms and bills that can be generated by even a short and simple procedure. This morning Richard Clark, president and CEO of the Healthcare Financial Management Association (HFMA) shares his experiences with medical bills and his thoughts on the subject in a column for Forbes. He begins by recounting the tale of helping his mother handle the mountain of medical paperwork left by his father's demise.

What a mess.

I developed a spreadsheet, downloaded benefit descriptions from my father's supplemental insurance company, visited Medicare's beneficiary's web site, and made a lot of phone calls. In the end, I helped my mother work though the bills (some of which were received for the first time some 12 months after my father's death). In short, I lived the nightmare of our current health care billing system.

It was this unpleasant experience that drove him to begin the project know as "Patient Friendly Billing," which provides tools and data to clinics and hospitals to streamline communication with patients. He reaches many of the same conclusions as our own Mr. Halvorson concerning both the need for unified standards and the impact of economic incentives on health care.

Almost everyone agrees the current method of paying for health care services is broken. It fosters fragmentation of care, rewards inefficiency, and doesn't distinguish between high-quality and low-quality providers. It's a mess. And there is strong evidence that the payment system drives decision making, including the level, frequency, and venue of care. The payment system creates most of this nightmare and must be fixed before any real progress can be made to improve health care in this country.

In Health Care Reform Now! Mr. Halvorson notes that there are over nine thousand billing codes for procedures and yet not a single one to denote an actual cure. He also observes that there are currently no uniform standards or measurements of performance within the industry.

Mr. Clark focuses on revamping the payment system itself as the answer to these woes. Since there seems to be an absence of guiding principles upon which to base this proposed retooling, he has been working through the HFMA to develop some. To do so they have solicited input from many involved sources including government, employers, care providers, insurance agencies, and community groups.

Some of the guiding principles discussed in his column include:

• Quality and safety.


• Simplicity and standardization.


• Fairness and efficiency.


• Community benefits and innovation.


• Transparency.

After noting "most if not all," of these principles are violated by the current system he goes on to briefly examine some possible solutions involving "out of the box" thinking.
All of these potential fixes are aimed at untangling the Gordian knot of our current billing system, with a stress laid on simplification and consolidation.

I believe it is not necessary to move away from our system of public and private insurance coverage, and public and private care providers to improve our health care system. If we design and implement payment methods that achieve a set of principles that are designed to provide high quality, safe, and efficient care, we will go a long way to improving what ills the system. It's time to wake up from the nightmare and fix the mess that is the health care billing and payment system in the U.S.

SOURCE: "The Health Care Billing Nightmare" 11/14/07
photo courtesy of unk's dumptruck, used under this Creative Commons license