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Ourblook interview with Dr. Robert Levine, author of “Shock Therapy For America’s Health Care System: Why Comprehensive Reform Is Needed."
You state that unnecessary medical care and administrative overhead drains our economy of nearly $1 trillion each year. Could you expand that on that statement? Additionally, what do you think is the biggest obstacle that plagues the American healthcare system?
RL:Administrative costs of the American health system are estimated to run between 15% and 25%. Accepting a figure of 20%, $500 billion out of $2.5 trillion goes for administration. (Medicare’s administrative costs are in the single digits.) The Congressional Budget Office last year noted that about 30% of health care spending is consumed by unnecessary care- over $800 billion this year. Even if these projections are off by 10% or 20%, the numbers are still staggering. With the proper program, much of this money could be harvested to fund health care reform and universal coverage. This is laid out in my recent book, "Shock Therapy For The American Health Care System- Why Comprehensive Reform Is Needed."
The biggest obstacle to a sensible reform program with realistic costs constraints is the power exerted over Congressmen and Senators by the stakeholders in the system- the insurance companies, organized medicine, and the pharmaceutical industry. These special interests and their lobbyists contribute vast sums to political campaign war chests which makes the legislators beholden to them. The stakeholders also have deep pockets and are willing to run extensive advertising blitzes in all the media against any reform measures they disagree with.
You also recommend the creation of a Federal Medicare Board, which would be run like the Federal Reserve. Could you explain what exactly this would do, and how it would work? Could you also address how we can create a healthcare system with no tax increase and no increase in government spending, as you recommend?
RL:The Federal Medicare Board (FMB) would have eleven members appointed by the President and confirmed by the Senate to lengthy, staggered terms, and would include businessmen, economists and physicians. The FMB would be independent of the federal government and immune to pressure by politicians because of members’ lengthy terms. The FMB would be aided in running the health care system by standing committees of experts in various fields, such as therapeutics, diagnostics, hospitals, oversight, reimbursement. Regional Health Entities (medical schools, consortiums of hospitals, HMOs, IPAs) would be responsible for the delivery of care to populations of 2- 5 million and the payment of providers. To curtail unnecessary care, physicians would be on salary, as over 30% already are. Care would be patient-centric, without interference by the insurance companies and without physicians seeing patients as a source of profit.
The savings available by curbing unnecessary care and reducing administrative costs could be utilized to pay for reform and universal coverage. In a simplified version, all the players- the federal government, state governments, businesses, taxpayers- could pay into the system what they are paying now, with the money re-directed. More than enough funds would be available to pay for appropriate care without increased taxes or additional government spending.
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? Why do you think opponents seem scared of government control?
RL:The program envisioned in “Shock Therapy” would be independent of the government and run by a corporate-like board of businessmen, economists and physicians. This would be far from the“ socialism” that opponents use as a buzzword to induce a visceral response against needed changes. There is rationing in our current health care system depending on the quality of one’s insurance and the ability to pay, and whether a person has insurance at all. Rationing would be eliminated in Shock Therapy’s program, with more than enough funding for all appropriate care.
Many of those opposed to reform refuse to accept that Medicare has been tremendously successful, with many others failing to realize that it is a government program. People are afraid of change and the reasons why it is needed has to be reinforced repeatedly. Those who say they are satisfied with the current system don’t understand that they are receiving considerable amounts of unnecessary care, including invasive procedures and operations that are potentially dangerous. They also don’t understand that the current system is not financially sustainable and will lead to economic disaster if costs are not controlled.
The World Health Organization ranked the US healthcare system 37th. However, opponents of healthcare reform consistently state that people from all over the world come to the US for cutting-edge treatments they cannot get elsewhere. Can you please comment on this, and maybe explain this paradox?
RL:While life expectancy and infant mortality in the U.S. are worse than in any other developed nation, America still has some of the most advanced facilities and best trained physicians in the world. The problem is that a high level of care is not present everywhere throughout the country and that unnecessary care is pervasive.
Are there any other points you would like to make about health care reform?
RL:The current proposals for reform are doomed to failure because they do not seriously address the problem of escalating costs. Comprehensive health care reform can be achieved in a fiscally responsible manner, without additional government spending or new taxes, if unnecessary care and administrative costs are tackled. It will happen eventually because the nation will have no choice. The question is how much pain (and additional trillions of dollars) will America have to go through.
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