In January of this year, the Eastman Kodak Company filed for bankruptcy after 131 years of business. It’s been suggested that Kodak thought they were in the film and chemical industry, when they were really in the business of creating images. When a better way to create these images came along they hadn’t changed and so went out of business.
We’re just beginning to recognize that we have created a similar situation with the business of health. Especially in the United States, we’ve focused on providing health care. What we should be looking for though, is not more and more expensive health care. What we really want and need is our health.
If health care did in fact give us health, then it would be worth continuing our substantial and ongoing investments. What’s becoming more and more apparent though is that health care is only responsible for about 10% of our overall health status. The rest is determined not by the doctor, but by many other factors including our environment, our genetics, our social status and choices we make about lifestyle.
70% of the deaths in the United States and 75% of our medical spending is related to chronic diseases like diabetes, heart disease, and to some extent cancer. Social inequalities have been shown to be much more predictive of illness, disability and death than any amount of health care. Even developing countries are seeing a rising epidemic of chronic disease which now overshadows the old killers of acute infections and injuries. In an aging society, chronic illness becomes the overwhelming factor that determines health and drives health care spending.
Yet, our model of health care remains stuck in the early 20th century when curing acute illness in a predominantly young population was the goal of medical care. We continue to pay mainly for sick visits within our health care system. Only recently have we begun to recognize that what we really should be paying for is prevention and effective management of chronic disease. We pay very high prices to cardiologists who intervene when someone has a heart attack and yet, even now, we fail to pay or pay very poorly for systems of care that deal with the underlying causes of that heart attack.
Medical students today recognize that primary care doctors earn dramatically lower pay than specialists. They tend to work longer hours and their status is lower. It’s no wonder that less than 7% of these graduating students choose careers in primary care. Our entire system is oriented to acute interventions, after disease is already established. Even within primary care offices, we are just now at the very beginning of understanding what we need to do to effectively manage diabetes and hypertension over the long haul, much less how to effectively deal with our current epidemics of obesity, smoking, and a sedentary society. Spending on public health is less than 1% of the total medical budget. And yet we know that effective interventions at this level are the best investment for improved population health.
Meanwhile we are acutely aware that parts of our country which spend more money on the health care industry do not have healthier people. The variability in spending can be as much as 3 times higher in some areas than others, without any noticeable effect on population health or quality of life.
The only reasonable conclusion we can come to is that much of our $2.5 trillion per year spending on health care is unnecessary. It pays for very expensive medical care, much of which we don’t need. That spending instead should be redirected in ways that support prevention and health maintenance.
Yet, despite what we know, this approach comes up against powerful obstacles. Not the least of which is our own social expectations of instant cure and relief of symptoms. The newest drug or surgical intervention is preferred over a careful, steady, and thoughtful approach to diet, exercise, mental health and other prevention activities.
Perhaps eventually, we will come to understand and reward a healthy, community based approach to wellness. Given our current directions, that may still be a long time coming. When and if it does, perhaps like Kodak, our current focus on acute disease treatment rather than health will become a thing of the past.
“What Business Are We In? The Emergence of Health as the Business of Health Care” By Ash and Volpp in The New England Journal of Medicine, September 6, 2012, page 888-9 and
“From Sick Care to Health Care- Reengineering Prevention into the US System” by Marvasti and Stafford in The New England Journal of Medicine, same issue, page 889-91
The re-election of Barak Obama and the Democratic majority in the Senate, including our own Jon Tester, has obvious and major implications for the implementation of the Affordable Care Act, also known as Obamacare.
There will of course be some holdouts, including our new state Attorney General, our federal representative and a variety of others who based at least part of their campaign on repealing this wide ranging law. It’s hard to not at least speculate about this profound and prolonged resistance to change. Does it come from some innate human tendency to put up with a bad system because of complacency? Are there existing financial rewards which will be compromised in a new system? Or is there some deeper mistrust and angst over having a black president with his approach to social fairness?
That our current health care system is broken in many ways should be beyond discussion. We spend twice as much money on health care as the next closest country in the world. Over 50 million people, one in six, do not have health insurance which means that they do not get the kind of health care that they deserve. We are totally alone among all first world countries and most second world countries in not making universal health coverage a basic component of our national agenda. We are last in the developed world for longevity, infant mortality, and preventable deaths. The evidence is profound, obvious, and unavoidable. Never the less, there is also the human tendency to rally for the home team. We’re the best, even when we’re clearly not.
Despite all this, people in the US have indeed spoken. Regardless of what our state legislators want, major changes are headed our way and they are coming soon. The federal government will be operating an exchange for Montana starting in 2014. Other states still have until the end of 2012 to make their own choice. Our legislators declined to address this issue in 2011 and won’t have another chance until 2013, so Montana cannot run its own.
The exchange will be a market place where individuals go to buy health insurance. Insurance companies that offer products on the exchange have to provide health insurance to everyone who buys it there. No one can be excluded because of any existing or future medical condition no matter how severe or costly this condition is. This change is almost too large to imagine, given where we are right now. Of course, this only works because everybody has to participate. It’s no longer going to be OK, except in severe economic circumstances, not to contribute at least something towards health insurance.
Individuals and families who now can’t afford health insurance, will be able to afford it by using the exchange. The federal government will pay a major portion of the cost of health insurance for those with lower incomes. Many of these are currently uninsured. But it won’t end there. Lots of people who are now insured through their employers will also be eligible for financial help when buying through the exchange. Businesses with less than 50 people can simply give their employees a little more money to buy a policy on the exchange. They can stop providing employee health insurance with no federal penalty. Businesses with more than 50 employees can do the same thing, but will have to pay something into the insurance pool. Each business will have to do its own calculations based on level of pay and number of employees. But the upshot is that many more than the currently uninsured are likely to be purchasing insurance through the exchange. They will be doing this as individuals and not as part of their place of employment.
Employer based health insurance is mostly a historical accident anyway. It’s beginning to look like this part of our current system is on the way out. Instead of the owner or a benefits manager making the decision, now the actual consumers will start having a choice about what kind of health insurance they want to buy. The health insurance policies offered on the exchange will be easy to compare in terms of cost and coverage. The insurance companies that provide the best coverage at the lowest cost are the ones who will prosper.
Of course, this means that the insurance companies will be asking doctors, hospitals, and others to provide medical care that is based on high quality and reasonable cost. Imagine that! A system that is based on efficiency and best outcomes. Maybe, just maybe we’ll eventually find ourselves in a society where everybody’s’ health and illness is addressed in an organized and thoughtful way. It shouldn’t be too much to expect, and it looks like we are finally on our way there.
Tom Roberts is a physician in Missoula
Costs for providing health care in our country have continued to climb at rates that are unsustainable. The evidence is not hard to see. Employers have had to make significant changes in insurance benefits for their employees. Families and individuals are increasingly asked to pay a larger portion of their health care bill. Many employers have been forced to stop providing health insurance at all. Our federal budget is increasingly strained by rising costs and our own state budget is under similar pressures. So called charity care, which our hospitals provide, is continuing to climb. Those of us still fortunate enough to be able to have private health insurance pay for this charity care through higher health care premiums, which only exacerbates the cycle.
It doesn’t take a deep understanding to realize that our current system is out of control. Change in one form or another is inevitable. We cannot continue to pay more each year for services that are no better and in some cases worse.
Dr. Don Berwick noted recently that over one third of our spending on health care is avoidable through better provision of services. He outlined a number of areas where we fall short. We spend too much money doing things to some people that have no benefit on their health or well being. For others, we spend very little on prevention or early treatment, but wait until they are really sick and need expensive hospital care. We tend to have very poor coordination of medical care. People often see multiple doctors in different locations without any communication between them. No one is able to take responsibility for overall management. This leads to repetitive testing, complications, and excessive spending; often on just a small number of chronically ill people. Our administrative complexity and costs are too high in comparison with all other developed countries in the world. And we pay way more than other countries for our medicines, medical devices, and procedures.
We have already started to see some changes in how we finance medical care. Preventive services are now covered 100% in almost every insurance plan. Insurance cannot be cut off retroactively. And the amount of money that insurance companies can keep for overhead is now more closely regulated. Unless there is a dramatic shift in Congress and the White House next year, starting in 2014 nearly everyone in the US will be expected to purchase medical insurance. For those whose employers do not provide insurance, it will be available with federal subsidies which vary depending on income. This medical insurance will be sold on a state based market place, known as an exchange. We’ll have one here in Montana in about a year. Although the Montana legislature decided not to develop our own, there will be opportunities to partner with the federal government in the running of our Montana exchange.
Massachusetts embarked down this same path 6 years ago. They have found that providing near universal insurance improves health, but by itself this does not control costs. In order to deal with the cost side of the equation, additional efforts need to be made. Massachusetts is now moving ahead with other significant reforms. It seems very likely that most of the rest of the states will eventually be following their lead, one way or another. The Massachusetts legislature has just passed a bill which will closely monitor any increase in health care spending. Their goal is to not let health costs rise any faster than overall economic growth.
To do this, a commission will monitor spending. By understanding where the money is going and who is spending it, this commission will be able to apply fines to hospitals and medical groups that have high spending growth. For the first time, many of these organizations will need to look at how they can provide the most efficient medical care. They will have to focus on providing high quality care at prices that consumers can afford. Dr. Atul Gwande, from Harvard, has an article on this topic in last week’s issue of the New Yorker magazine. It’s well worth reading.
But, this is not just a topic for easterners. Montana too is coming to the place where we need to understand what we are getting for our medical spending. As Dr. Berwick and many others have pointed out, spending more does not mean better medical care and better outcomes. We have to create a system where we spend our health care dollars wisely; something we are not doing very well today. Slowly and awkwardly, we may be finding our way there.
It would be hard to overstate the importance of the Supreme Court ruling yesterday, supporting the constitutionality of the Affordable Care Act. Commonly known as Obamacare by its detractors, this complex piece of legislation aims to do nothing less than transform the provision of health care in our country. The somewhat surprising ruling written by Chief Justice John Roberts assures his place in the history books of our country. Instead of supporting the ability of Congress to mandate the purchase of health insurance, Justice Roberts did affirm the ability to impose a tax on people who chose not to purchase health insurance. With this component of the Affordable Care Act in place, essentially the entire law is left intact.
The only piece left in question will be the potential expansion of Medicaid services. States will now have the option of deciding whether or not to take additional Federal money in order to expand Medicaid coverage. Rather than all or nothing, states can decide to receive the same level of Medicaid support as they are currently. Or a state can chose to expand that level of federal support in order to provide health care coverage for all citizens with incomes below 133% of the federal poverty level. We can only hope that what our own state legislators decide is based on real needs and not on partisan politics.
While the political process has dominated recent news, it’s important to remember that the real issues here are not political. We have a health care system which is badly in need of improvement. Too many people are either uninsured or underinsured; mostly because they can’t afford health insurance, not because they don’t want it. Our personal, business, state and national budgets are unsustainable unless and until we make major changes in how we finance and receive health care.
Many people believe that the Affordable Care Act did not go far enough. For them, what we really need is a single payer system similar to Medicare, for everyone. At the other end of the spectrum, some people apparently feel that medical care is optional and should be dependent on one’s ability to pay. Now, fortunately for all of us, the Affordable Care Act means that we can approach problems in our health system from somewhere in the middle. Most people will pay at least something in order to receive health insurance. For those who really can’t afford it, we have the option of expanding Medicaid. As a society we certainly have the resources to make sure that no one is denied medical care because of cost. It’s past time to make this happen.
But access by itself is not enough. At the same time we need to control spending and improve quality. We know this is possible by looking at how health care is supplied in different parts of our country. Spending for treatment of the very same illness may vary as much as 3 or 4 times from one locale to another. The compelling part of this is that the quality of medical care and the outcomes are no better and sometimes are worse in the high spending areas. Spending more does not mean better care. This doesn’t mean that we can simply cut payments to areas with high spending. What it does mean is that we can and should find ways to make high spending areas more efficient. At the same time we need to improve the quality of medical care in all areas.
As those of us working in the medical system know, a single payer program like Medicare does not guarantee good outcomes or efficient medical care. Likewise, having individuals pay for their own medical care does not necessarily lower costs and improve quality. These are complex issues that need careful answers. As much as we would like it, there is not a simple solution, and sound bites won’t help. No single federal law by itself will solve all of these problems. Fortunately we have made a start with the Affordable Care Act. We will begin to address complex issues like supporting primary care based Medical Homes and learning which treatments actually work best. Many people believe we have to migrate away from our current fee for service payment system. This Act supports the creation of health organizations that are accountable for the costs and outcomes of the medical care they provide. Hospital systems need to focus on improving population health, not the bottom line. The best outcomes can often be achieved by using the least expensive approach, not the most expensive. We need to turn our insurance industry into one that pays for needed medical care, not one that makes money by avoiding high risk consumers.
It’s an exciting time. With the constitutional issue now decided, we have opportunities to move forward. We can only hope that our leaders are ready to move ahead with new approaches and that we will not continue to be stuck in partisan politics.