|
OurBlook interview with Dr. Alford N. Vassall
Editor's Note: We're pleased to present views on the health reform issue from a guy who's been in the trenches ... he has practiced medicine in New Mexico for many years. Dr. Vassall is a contributing author to a recent book, "Audacious Aging."
 President Obama has made it clear he isn’t working to set up a precursor to a single-payer health care system. Meanwhile, the insurance industry says that any version of a public plan will kill private industry. Is there any precedent for a public/private partnership in health insurance? If not, how could this experiment be structured?
AV: There is no precedent for a public/private partnership in health insurance. The closest exists in Canada. This, however, is founded on the principle that the insurance for physician services is separate from hospital services.
There are several logical reasons for this separation. Physician fees by and large are not the major contributors to the high cost of care. By keeping this available to all, it maximizes the satisfaction felt by patients as 99 percent of the need is easily met. The cost is kept down by having an absolute rule that specialists are not available without first seeing general practitioners. This serves to minimize cost while maximizing satisfaction. By keeping this separate from hospital costs, it also serves to keep the rates down.
There can be no solution here of the consumption problem without controlling consumption. This can only be done by this type of separation and by having control of how the patient accesses the system. Some of these rules would be unpopular but they would serve to keep costs down. This of itself is not enough to keep the costs down. Several other portions would have to be included in the program. This would do very little to the 17 percent of the GDP, as physicians' fees represent only a small percentage of the costs generated.
The other costs are covered in Canada by a hospital premium. This is usually distributed from the provincial government after actuarially determining the anticipated usage of services. This is given in a budget to the hospitals, which determine the spending of the funds. Diagnostic studies are compensated from these funds. The number of diagnostic facilities and testing is budgeted this way. This controls the amount spent on these facilities. This would be one way to facilitate decreased consumption.
The basic issue to remember is that insurance as a stop loss cannot fund health care in the same way. This model does not work because all persons will eventually need health care and the loss cannot be actually shared as in the final analysis the user will have had to put in all that he takes out or the system will fail. This is the reason why if funded as insurance, there will have to be mandated consumption limits.
A modification of the Canadian structure where there is a separate premium for physician services combined with a separate premium for hospital and diagnostic and surgical services would have more of a chance of containing some of the expenses, though not all. It would need more.
Proponents of a public plan insist such a program is necessary to create competition to stop the skyrocketing costs of health. Why is our current market-based system unable to cut costs without government competition? Are there other forms of regulation that fall short of creating a new government program that could rein in costs?
AV: Proponents of a public plan believe that such a program is necessary to stop the skyrocketing cost of health care. This is in fact built on an illusion. There is the illusion that if there are many offering the same services, they will find ways to have economies of scale and decrease unit cost. Decrease of unit cost in health care in fact does not increase overall consumption. The best example of this is the system of dialysis as it exists now. This was created in the '60s as there was need for dialysis while patients waited on kidney transplants.
This started to be used in a fashion not designed, resulting in large cost overruns. The politicians tried to limit this by limiting fees. This resulted in the system being redesigned to provide care at a lower cost, increasing the availability and numbers being treated, actually driving the funds spent higher and higher. In fact, experience would suggest that decreasing the unit cost makes it more available to those who perceive a need, resulting in higher consumption and higher costs.
The fundamental issue is that there is unlimited disease and if one attempts to defeat disease by using finite resources, the resources will actually be exhausted before success is met. Market-based systems cannot cut costs unless the individual is able to make a choice between using scarce resources in one way or another. The individual has to be able to decide using his own resources if the system is to be market driven. One cannot have one’s cake and eat it.
Thus I cannot make a decision on utilizing scarce resources if my perception is that they belong to someone else. This is also the basic reason why government competition will not be able to decrease costs. Government regulation cannot drive costs down. The problem is that the majority of health problems are related to choice and that no system that does not relate consumption directly to choice will have a hope of decreasing consumption.
Consequently either there is a system where one pays individually for what one consumes and the fees related to charges are related to choices ... some here will choose not to pay but will try to consume ... the other is where the decision is made through the system such as the situation in Canada.
The last health care debate, a la Hillary Clinton, was met by an immediate backlash from health care providers and insurance companies. This year, the debate began with a ‘strange bedfellows’ meeting on cost cutting measures at the White House. The proposal of a public plan seems to be fracturing this fragile bipartisan atmosphere. Do you think there is any room for compromise now that detailed legislation is about to be debated publicly? Will we see Harry and Louise return?
AV: There will be backlash always as people believe they have not only a right to health care but the right to consume as much as they determine that they need. In a real finite world this is not possible. This is not possible as resources are not unlimited. Therefore, consumption has to be rationed.
The only question is where the rationing will be carried out. Is this to be carried out by the individual? Or is it to be carried out by the system? If this government continues to perpetuate the illusion that all can have as much as they want because everyone deserves it, then the society will slowly sink into oblivion in much the same way that an agar plate with bacterial colonies in the incubator will eventually have all colonies die when the nutrients in the agar are exhausted.
Everyone wants to have the choice of as much as they desire. The proposal of a public plan will have nothing to do to decrease the cost. No costs will be decreased unless consumption decrease is considered. Physicians can never support any plan that desires to decrease fees as they are unable ... most of them ... to keep their heads afloat. In fact, the fees that Medicare perpetuates are below the cost of seeing the patient.
This will be worse if the physicians have to obtain electronic medical records. The idea that using EMRs will substantially decrease the cost of care is a pipedream. Hospitals are unable to take care of patients at a break-even rate right now and most are operating in the red, particularly county institutions. The insurance companies are doing the things they do with regard to withholding coverage, because they would be bankrupt if they took care of all the conditions even at the prevailing rates of premiums.
Opponents of a public plan have decried a potential government program as “socialism” and “rationing.” Yet, Medicare is one of the most consistently popular programs in our history. From your perspective, do you think that people relate the two? Do you think a public plan gives too much control to the government?
AV: The question of “socialism” is something of a red herring as containing consumption is really a question of rationing. Medicare is a system right now that is propped up by the fees paid by private insurance and by individuals who pay cash. The Medicare fees do not cover cost. Speaking as a physician who practiced both medicine and surgery, it makes no difference whether you are talking about medical or surgical patients. The Medicare program is financially insolvent and there is no reason to believe that another insurance system by the government will result in anything else.
The basic issues of over-consumption are never addressed in Medicare and stopgap measures such as reducing physician payment which make the whole system unstable and subject to potential failure are the only measures ever considered. The politicians never have the honesty to tell the electorate exactly what it is that can be afforded. The system can never be left to the government.
You have written that health care demand in the U.S. far exceeds that of any other country, and that as long as prospective patients are under the illusion that someone else pays for this care, that costs cannot be contained. Can you elaborate on what this means for the type of bill you would like to see passed?
AV: The reason that health care demand exceeds that in other countries is that the U.S. has a population that makes unhealthy choices. This is done far more frequently here than anywhere else. I had the opportunity to hear a returning Iraq vet comment on how healthy the Iraqi children were and the state of their dentition far exceeded the average American child in spite of the fact the Iraqi had few health care resources. This points to the heart of the issue, that American citizens make poor health choices.
As a result, they use the system far more frequently than other citizens of other countries. In addition, the average procedure or diagnostic test is more sophisticated and costly than in other countries. We have not yet faced the fact that increased technology or sophisticated testing does not equate with better results. This is because the results still have fundamentally to do with the choices. We translate that here as saying there should be more preventive care, but essentially preventive care has to do with being responsible for making better choices.
The type of bill necessary will have to address several issues. There is the high cost of educating physicians. This is borne by the individual physician with no ability to recover the cost. There is the matter of malpractice premiums which fund the defense attorneys, the plaintiffs' attorneys and the patient with a problem that cannot be resolved, as well as the administrative costs. The secondary cost of litigation where the physician orders additional testing to CYA. The cost of new technology, which is also driving up the individual unit cost will have to be addressed in a way to control consumption. The cost of new drugs will have to be addressed as well. The relative high cost of end of life care ... 90 percent of lifetime expense in the last six months of life. Without individually addressing each of these issues, this cannot be controlled.
What do you think of the more controversial Medicaid program? Do any substantial changes need to be made or keep it basically as is?
AV: Medicare is not substantially different from Medicaid except the latter is run by the state. Once more this is a government program and spends more than it has in funds. This is the norm in any form of insurance that is run by the government. There is need for substantial change. It has to be run from the perspective of spending what is available and not spending what is not. It is also a program that does not compensate the actual costs of providing services.
David Leonhardt, an economist and New York Times columnist, writes that rationing is already an unfortunate reality in health care, but mostly because of the way scarce resource are allocated, such as the high costs paid for experimental or unproven treatments that could be going to preventative care. Do you think there’s any reform that could increase the number of Americans covered without rationing?
AV: Rationing has always been a reality in health care as one has previously only been able to consume what one is able to pay for. It is noble indeed to feel that it is unfortunate when one is unable to pay for services and these are provided. In the past, traditionally this has been limited by the resources available. This system in which rationing takes place now is rationed in some fashion because care is not available to everyone.
There is no time that there has ever not been rationing and this is not an unfortunate reality but an actuality as there are never enough resources to cover all possible choices. Choices are always made ... one at the expense of the other ... otherwise you could have your cake and eat it. It is always a matter of making a choice that maximizes the benefit to as a large a number as possible.
Resources are by nature scarce and have to be shared. In the larger ecosystem, this is done in a way that perpetuates the system. This can only be done when what is removed from the system is replaced allowing for the formation of an infinite loop. In the absence of this, resources are exhausted and the system crashes.
Rationing is, therefore, absolutely necessary. It is impossible to have high cost treatments for common problems. It is not even possible to have high cost treatment for uncommon maladies. This is the kind of thing that will exhaust the system quickly. High cost treatment can actually only be given to those who have the resources to pay for them. This may seem grossly unfair but actually is the only system that can be perpetuated. Otherwise we would need a lottery to decide who would benefit from a high cost procedure.
What role do you see small business owners playing in the debate? The major players in the debate so far represent powerful interests such as drug companies and doctors, but small business plays a vital economic role in any discussion of costs to employers.
AV: Small business owners should participate in the matter but care can never be paid for by the business owners. Here there is a perception that this is provided by someone else. Health care should be in such a system a deduction from the employees' wages. Furthermore, any cost that is created by poor choices must come from that individual’s premium. This is not something that can be passed on to others. If this is not so, then there is no incentive for the individual to change his outcome by making different choices.
It may seem that physicians have an interest here, and they do, however they have no power to change the system. They cannot even guarantee that they are paid adequately in the present system. Drug companies are one of the few within the system that are guaranteed payments. Drug companies, equipment manufacturers, suppliers of other material needed do get compensated for the material they supply. However, they generate a large proportion of the cost that is inherent in the system.
Do you feel that a public plan is necessary if reforms include mandated health coverage?
AV: A public plan that is based on a fixed percentage of the GDP and assigns funds to different portions of the system would be the most efficient model. A system which controls the cost by directly funding hospitals, physicians and such is the most efficient. Incentives have to be geared at changing behavior by encouraging patient responsibility. This system would need to abolish the tort system for medical injuries and have a system of assigning financial support in the amount needed. Such a system would obviate the need for privately taking care of individuals who have medical problems or medical accidents.
If it paid for the education of all health care professionals and then compensated them at an appropriate living expense, this would maintain the system. If funding of diagnostic services were mandated this way, then further consumption above this level would have to be purchased individually. This would keep the cost of any further consumption reasonable as no one would voluntarily pay a significantly higher rate.
Health care reform has been on the table in Congress before, but the resulting reforms, once they meet the president’s desk, are often more tweaks then overhauls. How do you see the debate on health care reform playing out in Congress this year? Do you think we will see sweeping reform at the end of the day when these proposals are negotiated? Do you see any Republicans crossing the aisle to support a public plan? Do you see any Democrats crossing the aisle to oppose one?
AV: The debate in Congress this year is different. The system has swung so far out of kilter that it is not possible for it to go back to what it was. Any remedy will necessitate a radical overhaul. Any tweaking of the situation will fail immediately.
The real issue is that the large part of this program will have to be convincing the population that they cannot have real change in outcome without changing behavior. Change in outcome is what is most desired as well as decrease in amount spent. The funny thing is that the outcomes determine the amount spent and not the other way around. Thus the amount spent will not change the outcome.
This is a very hard place to go when everything in the system is invested in creating the belief that it will change the outcome. I do not see us making the sweeping reforms that are needed as the public is not convinced. The Republicans and the Democrats are in the same place believing the same illusion that somehow market forces or government forces can solve the problem. The problem can only be solved when persons are responsible for their outcomes. They cannot decrease the consumption without fundamentally going to this place.
Are there any other points you would like to make about health care reform?
AV: Health care reform has to be addressed as the utilization of resources has to be apportioned appropriately. This is much like the model of cover, water, food that is met when considering the relationship of predator and prey animals. This has to do with the sharing of resources such that the system can be perpetuated. The problems have to be addressed with the primary motivation of perpetuating the economic system, the country as a system and the entire ecosystem of the planet as none of these decisions are in fact separate.
Links for Dr. Vassall: ... www.audaciousaging.com )
|
