June 10, 2009

Ch-Ch-Changes- Time May Change Me

Posted in Health Insurance, Health System Reform, Incentives for good Health, Public Private Partnership tagged , , , , , , , , , at 3:32 am by healthyacrossthenations

It seems to me that people are realising that the existing US Health Care Sstem is in need of change.

The Health Insurance Companies get to select- cream skim they call it- the clients they will offer insurance to- through very complex mathematical formulas that not only acount for previous health events- but future risk.

The benefits of this are that the insurance company can select for clients they will feel secure that will likely not need them to pay out. Moreover- the range of clients included for coverage will be such that there should be minimal risk of any of the similarly healthy clients having to pay for the other similarly healthy clients payouts.

There are a number of problems with this kind of set up. Firstly, life is one whole game of roadrunner and we can never truly know what kind of Anvil will fall on our heads or when. Second, those who have had previous Anvils dropped on them and those whose grandparents had Anvils dropped on them may actually be better prepared to keep themselves healthy than others, moreover- where would they get coverage in any case?
The truth is the Private Health Insurers have been raising premiums in a cumulative manner over several years now to deal with these Uncertain risks.

Health Care is an IMPERFECT market. This is so for a number of reasons, not least of which is the uncertainty of adverse health events, of treatment outcomes, of the type and level of treatment that will be necessary, and of how each actor will respond to these uncertainties.

For some ailments or adverse health events, there might be a way to calculate the average or general costs- this is what the US has perfected in its insurance system with the advent of Diagnostic Related Groups (DRGs). These are categories which Doctors and/or hospitals will use to notify the insurance companies what they are doing- the insurance companies try to assign a monetary amount to each category. The trouble with this is that humans are not generally identical- especially in terms of how each one responds to treatment- and human error in medicine can also exist and thus more often than not it is near impossible to put a monetary value on treatment. More medicine or other treatment might be necessary. Therefore the Medical community often feels safer indicating a DRG that is one level higher, to give hospitals and Doctors some wiggle room in their treatment options.

Private Health Insurance companies have large lobbying influence on legislators as well. This is an enormous conflict of interest in terms of the contract we have with our government to provide corrective solutions to spiraling problems.

Even further, larger companies have the only advantage in the private Health insurance market, as they are the only ones with large enough blocks of potential customers to have a stronger negotiating position to hammer out a decent price for premiums per customer. Medium and small businesses suffer higher premiums and costs of treatment per customer as a result of their respective weaker bargaining positions. Moreover, the self employed suffer even more in these regards. This is at a time in the US economy is experiencing the end of the larger companies and a move to an economy made up of more small and medium firms and the goal of encouraging entrepreneurs. Sadly, a new economy such as this needs healthy productive workers and the lack of access to regular care is antithetical to this situation.

Also, let us not forget that when one changes jobs or moves to another state, one must most often change insurance companies- and often there are periods of time of a lapse in coverage due to bureaucracy or even administrative restrictions (waiting periods) that are unnecessarily creating a riskier Health environment.

This grand combination of exclusionary service provision, an unsuccessful attempt to monetize each treatment event, an over- reliance on individual private contributions from a shrinking population of those who can access health care coverage who are willing and able to pay with increasing premiums, the conflict of interest at the legislative level, the diametrically opposed concepts of generating proper access to care for a growing economy vs charging small,medium, and self employed businesses so much more , and the adverse effects caused by lapses of coverage due to job moves or physical moves has developed into quite a tangled web of destruction for the nation.

A lot of issues need to be addressed here, step by step- to try and deal with the the challenges posed by the imperfections of the Health care market- and the distress caused by the erroneous development of a for profit Health Insurance system gone wild.

To this end, it may be a good idea to try to work within existing infrastructure if possible. Ideally, it might be an idea to create a number of national semi-private Health Funds to which existing state Health insurance companies can associate themselves with. These Semi-private Health Funds should be funded via a small payroll tax to employers, AND a small progressive sliding scale Health income tax. These tax funds distributed to the Health Funds based on a capitation formula based on how many people each Health Fund covers, their ages- and how many have certain types of illnesses that require more care. Moreover, these semi-private Health Funds may offer supplementary levels of service for additional fees paid by the client, Generating more income for the funds.

This will help remove the challenges of lapses in coverage when switching jobs or moving states. This will also help create the environment where most all applicants will be accepted to a Health fund- with a wider risk sharing pool and a large bargaining unit for every interested applicant. The National Semi-private Health Funds will work with Customer groups, Physicians, Hospitals, pharmaceutical companies and the like in order to negotiate a more cost effective and customer beneficial system.

There will need to be an alignment of IT Systems throughout each health fund (and if we are having to start from scratch in this manner- we may as well make the IT infrastructure uniform throughout). This will be important in helping to minimise lapses in coverage when moving, and save time in emergency situations when patient history is so vital. Moreover, this will help local, regional, and national committees and necessary parties to be able to review care practices and allow relevant parties (Health Researchers) to put forward best practice guidelines and evidence based medicine accessibility in order to help Doctors and other health personnel keep up to date with new knowledge and practice. Even more- Health IT can help minimize the risks of malpractice due to lacks of pertinent patient information- and can also sometimes help identify points of possible incorrect treatment intersections in past cases- thereby avoiding future mistakes that could be a risk of malpractice- thus minimizing risk of malpractice closer to the source. In addition to his, an improved Health IT system might be able to be used to gather information about outcomes of care, efficiency of service, and perhaps even quality of care of Doctors, Clinics, and maybe Hospitals that can be posted for the community so they can shop for the best ones- the best Health Fund, the best Clinic- etc. This would provide competition within the internal market- and could help improve service at all of the funds.

Another important idea, has been mentioned in these comments, and has been undertaken by a number of other countries in recent years. The addition of medical personnel categories to create a multi-layered Medical Personnel structure is not only necessary, but also desirable. In the 1960’s medical assistants in the form of health care workers in developing countries, and emergency service personnel in the US began to be incorporated into the organized medical profession to deal with growing public demand and limited supply of medical personnel. Increased Public Demand called for Increased and stratified Supply of personnel then, and will do also now. In other words, there can be a triaging of medical care at the primary care level which delegates jobs. Prevention Education and some preventive Services can be delievered by a Qualified Health Care Worker or a nurse or other qualified medically trained staffer. Basic run of the mill primary care can be triaged by a nurse practitioner or physicians assistant or medical resident.  Using the different strata of medical pesonnel can be a very cost effective way of managing the Health Syste. Crucial to this, however, is that there be adequate and spportive supervision available on site- in other words at least one attending GP needs to be on site and within easy reach depending upon the size of the practice.  Even Specialists can do well to hire a nurse or even a nurse practitioner to help triage clients as they come in.

In 1964 in the US the first Physician Assistant (PA) program is established in the US. Since this time, the US and then the UK have continued to train PA’s and eventually Nurse Practitioners (NP), while in the developing world continued to train and make use of Health Care workers as their front line service providers and care coordinators.

In an environment of increasing population, and an increasing demand for multiple types of differing health and social services- Auxiliary Health Personnel can be an enormous help in offering a multitude of differentiated services that are appropriate, necessary, and timely. In other words, NP’s and PA’s can often be adequate front line caregivers for more basic health care needs- while General Practitioners (GP) can serve in supervisory roles and as next level point of care. After this, Medical Officers (MO) could act in supervisory roles and/or serve as the next level of service. This differentiation is important, as each level has a different education level requirement, different level of responsibility, and thus a different salary designation. This can help bring care giving closer physically to the consumers, sometimes even having health care workers do home visits (as in to new mothers)- and to improve the timely manner of care given. Moreover, this will help make Health Care Services more cost efficient.

This is so much of a help, that about 6-7 years ago, a high level delegation form South Africa’s Department of Health attended meetings at George Washington University in the US in order to learn more about PA training programs, the roles of the PA and more. They then began to plan for the development of their own PA training programs to help South Africa deal with ha critical shortage of Doctors, particularly in the rural areas. Even more, it was found in SOuth Africa that Doctors and other health personnel that grew up in rural areas were the ones to be more likely to come back to serve in rural areas. At the time, 6-7 years ago in South Africa, they were also experiencing challenges retaining quality and necessary health care workers- particularly in rural areas, and the addition of the role of PA to the Medical milieu helped them to strategize on a grander scale the career aspirations of a health care worker to be able to move up through the career ladder to PA and even possibly from there further. The Addition of Auxiliary health personnel improves the functioning of the Health System that can be otherwise overburdened, it can help bring basic services closer to consumers in all areas, it can help bring services to under-served areas, and it can help improve the cost efficiency of the system.

All the above will be necessary to harness in order to move toward a more inclusive form of Health Service provision like the rest of the world has.

This service NEED NOT be mandated. In fact, the country of Israel had a Health system that developed into a number of national Health Funds that ran mostly-privately and selected their clients. The government covered the Older and the more infirm in their own one or two funds. It was shown at this time that while coverage was not mandatory, about 95% were covered. In 1995 new legislation was passed (National Health Insurance Bill) which charged the semi-private health funds with having to accept all applicants in exchange for commensurate reimbursement based on the number of consumers, their ages, and how many had certain health conditions. It also turned the former government funds that cared for the old, poor and the ill into normal funds able to collect the same reimbursement based on the same formula. The 1995 Bill also made it mandatory to join a health fund.
Perhaps the US too can refrain from making membership mandatory for a number of years- I am quite certain if an affordable and decent program of coverage was available that most people would voluntarily sign on.
This would help lessen any strong arms of influence the Health Funds may have.

In short, The changes are necessary, but very possible- particularly withe the use, where possible, of existing infrastructure. Existing State based Health Funds should align themselves with one of about 10 National Health Fund Administrations. Health financing should come from both payroll taxes and direct income taxes earmarked for health, from co-payments for specialists and Associated Health and Medical services, and from supplemental fees for supplementary levels of service from Health Funds. Health coverage should not be mandatory, at least not for a number of years. Health IT Systems should be created and/or aligned throughout the Health System so that treatment at all points is smooth. The training and use of Auxiliary Health Practitioners, such as NP’s and PA’s, should be increased and more locally deployed in order to be able to deal with the growing demands for health Services at the front lines of service.


1 Comment »

  1. healthyacrossthenations said,

    In my reviews of comments on a number of sites with articles about US Health Care Reform, I noticed a few people bringing up their concern about the possible easier abuse on a more publicly available system, via consumers who have poor health habits (smokers, heavy drinkers, drug addicts etc) and the desire to not have to cross subsidize treatment and care for those who have poor health habits.

    I imagine that once a reformed system begins to take shape, like the one I describe above, we might be able to adopt a few incentives for the public to develop better health habits.

    For example- each Health Fund might make a deal with a Fitness chain- and consumers who swipe their fitness card into the Gym 3 times a month at least will get benefits such as renewed Gym Membership at a highly discounted rate- or for free- and discounts on car rental or travel- or to alternative health services not offered through the fund- and so on.

    And perhaps every year at the annual physical of the consumer (and when they start coverage) they will have the opportunity to sign a pledge of being free from smoking cigarettes and/or drinking more than 2-3 drinks a day. If they do sign, they can get some benefits- perhaps like those above- or some other added value items- perhaps a voucher towards the cost of school books…..

    The idea would be to create an environment where not smoking and not being otherwise self destructive has both immediate AND long term perks and benefits- while those who continue to do so will have less or no perks at all- and be left on the fringe-

    If they sign the document, and are then caught smoking or otherwise- they will be fined quite a fee. Those who do not sign will be noted as so and the funds will factor that into their capitation formula. Moreover, those who do not sign the pledge can be expected to pay a moderate fee every year until their next physical and they are given another chance to sign.

    The main idea is the carrot and the stick. Encouraging people- and then recouping the potential losses.

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