THE 2014 PHYSICIAN’S PRESCRIPTION FOR HEALTH CARE REFORM
Docs4PatientCare is an organization of physicians committed to the establishment of an American health care system which preserves the sanctity of the physician-patient relationship, promotes quality care, supports affordable access to care for all Americans and protects patient’s personal health care decisions.
The economic and professional dysfunction of America’s health care economy has developed as a result of policy decisions made over the last seven decades. These decisions are often driven by political ideology and expediency over rational economic and ethical principles.
While the need for American health care reform has existed for many years, we believe that the Affordable Care Act is fatally flawed. Good intentions based upon faulty assumptions failed to address the underlying root causes of America’s health care system dysfunction.
This has compounded the existing problems, rather than providing necessary remedies.
Lack of transparency, market distortion, limits on patient choice, and pressure to alter medical ethics have led to escalating prices and reduced patient access. These tragic consequences were predictable and unnecessary.
Successful reform, based upon a rational and factual analysis of the issues, needs to be a non-partisan effort. Sincere reform efforts will require legislative solutions which directly address the core issues addressed by the following principles.
All Americans must have access to an insurance market devoid of tax discrimination.
Health insurance must once again become “true insurance”- a hedge against a catastrophic loss, instead of an expensive pre-paid health maintenance plan.
Individuals and families need to own their health insurance policies which need not be connected to or dependent upon employment.
A true national competitive market for health insurance is necessary, where insurance is available across artificial state boundaries and may be purchased in a variety of ways.
Medicare, Medicaid and SCHIP must be gradually transitioned to fiscally responsible programs which would support individuals in need and give them the same consumer choice and market controls available to Americans who purchase their own health insurance.
Reform of the current wasteful and dysfunctional medical malpractice system must be addressed.
Health information technology, currently dictated by the federal government in a top-down, centrally controlled manner, needs to be freed from government control and allowed to flourish in a true market as has been the case for all advanced electronic technology.
States need to be empowered to act as laboratories for innovation in the design and implementation of new health care delivery models, including those outside of the traditional third party payment systems.
Physicians must be freed from the weight of burdensome and ineffective regulation promulgated by governments and other regulatory bodies.
Charity care and participation in current low paying government programs could be encouraged by allowing tax deductions for doctors who participate in these activities.
During the debate of 2009 and 2010 Docs4PatientCare offered a "Physician's Prescription for Health Care Reform" as an outline for legislative alternatives to the Affordable Care Act. While this can be a complex discussion, the basic foundational problems have yet to be properly addressed. These principles are outlined below.
In 1942, during WWII, wages were fixed by The Standardization Act. Businesses were allowed to offer health insurance with pre-tax dollars as a benefit to attract employees. This was subsequently codified by the IRS and allowed to be collectively bargained in union contract negotiations by the National Labor Relations Board.
This is the origin of employer sponsored health insurance which has had many negative effects. Individuals are disconnected from the true cost of health insurance, and policies became rich collections of health maintenance benefits, driving up premiums and moving health insurance away from the definition and functionality of true insurance.
Employment and health insurance became linked, limiting portability when an individual changes jobs or loses employment.
Regulation of the health insurance industry has primarily been the responsibility of the states since the late 1800s. The McCarran-Ferguson Act of 1945 allowed health insurance companies narrow exemptions from antitrust law, resulting in states retaining primary regulatory authority over the health insurance market.
The net effect has been the creation of 50 separate markets, with narrow offerings and intense political influence, resulting in legislative mandates that require the inclusion of benefits, in order for an insurance policy to be sold in a particular state. Premiums increase as individuals and employers are forced to pay for benefits that many simply do not want or need.
Docs4PatientCare has outlined this issue and the necessary changes in our Policy on Health Insurance.
The exchange system resulting from the passage of the ACA was never necessary, and is not a true marketplace. Private web sites would develop as entrepreneurs are incentivized to enter a true, competitive market.
The role of the federal government would be to enforce contracts and protect American consumers from fraud, which are the essential and appropriate responsibilities of government.
As the employer sponsored insurance market developed and insurance policies included richer benefits extending to all types of routine care, Americans gradually became disconnected from the economics of medical treatment. When unseen third parties are paying and the employer is purchasing the coverage, the experience of most patients is that medical care is “free”. Physicians are equally unaware of the cost of the tests and treatments they prescribe. This is particularly disruptive to routine and outpatient care, most of which is predictable and potentially quite affordable.
The growth of Direct Primary Care (DPC) services in America, as well as other outpatient cash services, has clearly demonstrated that routine medical care can be inexpensive and that patients can successfully shop for and choose these services in a competitive market. The DPC concept provides the missing piece for what was previously an Achilles’ heel of the HSA/HDHP concept. When a DPC plan is added, patients have no need to forgo routine medical care or chronic disease management for fear of high deductibles.
States need to be free to serve as laboratories for innovation and exploration of new health care delivery systems. Federal and state regulation should encourage physician entrepreneurship in this arena.
In a DPC model, medical practice overhead can be reduced by as much as 40%. Elimination of first-dollar coverage by third party payers allows both patients and physicians the freedom to form a mutually beneficial relationship and the flexibility to
use new and exciting communication tools to enhance their interactions. Doctors can spend their time and energy on their primary task-patient care and communication, while patients receive the quality they expect but have been missing in the “old” system.
Transparent pricing for health care services, which is currently not the case, would rapidly become the norm in such a marketplace. Competition would drive costs even lower and patients would have the freedom to choose their physician, rather than being forced into a network they may not want or like.
When the purchaser of a service (patient) and the provider of a service (physician) are both unaware of the economics (pricing), there is no market and no cost control.
Meaningful cost-benefit analysis is simply impossible. This economic opacity emerged from the market distortions (employer sponsored health insurance and lack of competition) described in the above paragraphs.
While the ACA promised to “bend the cost curve” down, instead of relying on patient choice and the resulting price signals and market forces, the law relied on top down government mandates, rationing and regulation. The massive failure inherent in this approach is evident in the government’s two primary health care systems, Medicare and Medicaid. The inability to control costs was predicted prior to passage in 1965. However, both then and today with the ACA, ideology was favored over economic reality, resulting in 40 trillion dollars of unfunded future liability in the Medicare program alone. Demand will always outstrip supply when supply appears to be free and the true economics remain hidden.
The cost will only “bend down” when both the purchaser(patient) and the providers (doctors, hospitals, etc.) of health care services can see prices, make their own cost- benefit evaluations and have the choice and responsibility to spend their own dollars.
The current medical liability system isn’t working for patients or physicians. It is adversarial, expensive and inefficient. The system drives a wedge between patients and physicians and forces the practice of defensive medicine which drives the cost of American health care up over $200 billion per year in federal and state programs alone. Furthermore, many legitimate medical injuries are not compensated. That leaves many patients – especially the poor, minorities and elderly, without the compensation they desperately deserve.
The Affordable Care Act not only ignored liability reform, but actually penalized states that had existing tort reform measures in place. We believe that medical liability reform is a key element of any health care reform proposal.
Medicare and Medicaid, passed during the Johnson Administration in 1965 were fiscally irresponsible from their inception and remain so today. Medicare alone was projected to cost $10 billion by 1990; however the actual cost by 1990 was $110 billion, underestimated by a factor of over ten.
No attempt by the federal government to control spending in these massive programs has succeeded, with the exception of unusual, specific state initiatives in Medicaid; notably a block grant system in Rhode Island.
The critical economic flaw in Medicare was that instead of working to assist low income seniors, a law was passed that provided essentially unlimited benefits to all seniors, even those who did not require help.
Docs4PatientCare supports the gradual transition of Medicare to a premium support program in which eligible seniors would purchase insurance in the same national market as individuals under age 65, with sliding scale federal support for low income individuals. Promises made to current seniors and those approaching retirement should be kept, but America simply cannot afford to continue Medicare on this unsustainable economic path.
Medicaid should also be gradually transitioned to a fiscally sustainable model by allocating funds to low income individuals, assisting their purchase of private health insurance. Subsidies to establish health savings accounts for routine and outpatient services, (which could include a Direct Primary Care medical “home”), could provide additional assistance while still preserving personal choice and control.
A separate issue is Medicaid support for long term care needs. Current law encourages states to spend more on Medicaid simply to receive more federal dollars. Such incentives are economically irresponsible and should be phased out.
The financing of graduate medical education is currently linked to Medicare which has distorted and crippled this system. New and innovative financial support for GME must be developed to allow our excellent educational facilities to thrive unencumbered by the federal bureaucracy.
Expanding individual ownership of health insurance policies creates portability with the potential to eliminate most of the problems related to pre-existing conditions.
Economically responsible reform must address the issue of those who developed pre- existing medical conditions under the current system. There are many innovative ways to address this. One, which was mentioned in our original Prescription, is the development of state/private partnerships, from which high risk patients would obtain premium assistance to purchase private health care insurance.
There are many other innovative models for these difficult situations which combine new forms of insurance with taxpayer assistance.
The ACA mandates that all insurance companies must cover every patient without regard to health status or previous medical conditions. While this may appear to be “socially compassionate”, the economic reality is that the high costs for these patients are born by the healthy individuals who behaved responsibly and took better care of themselves.
Many insurers have already dropped out of the health insurance market in response to this.
No effective and sustainable reform plan would be complete without discussing the disastrous implementation of government mandated electronic medical record systems. The current federal requirements have forced systems on physicians and patients that do not lower costs, do not prevent medical errors and do not result in increased physician efficiency or ability to communicate more effectively.
These goals can be met. Digital information technology is being embraced enthusiastically by many Americans who are free to work outside of the over-regulated third party payment systems.
The private sector has always led the way in producing the best, the most efficient and the most cost effective ways of developing new technology. Unencumbered by federal regulation, this will happen in medical informatics. When it does, doctors and hospitals will embrace it, and patients will be the beneficiaries. As outlined in our Policy on Medical Information Technology, we support halting federal government intrusion in this area.
Becoming a competent physician takes a tremendous amount of time and preparation. As physicians, we are dedicated to providing high quality care to our patients. Therefore, we support rigorous education and post graduate training, initial certification, and inidividualized lifelong learning through continuing education.
We do not support the onerous development of recertification requirements, maintenance of certification activities, or maintenance of licensure laws. These activities have not been shown to improve physician performance or quality; therefore they should not be a basis to determine hospital credentialing or inclusion in insurance plans.
Docs4PatientCare supports the full repeal of the Affordable Care Act and at the same time offers this outline as a constructive and responsible alternative to a massive and callous federal health care bureaucracy.
America has an opportunity to enact health care reform that works for all citizens as well as for the professionals who devote their lives to providing Americans with the very best health care possible.
Docs4PatientCare is a 501(c)6 organization of concerned physicians committed to the establishment of a health care system that preserves the sanctity of the doctor-patient relationship, promotes quality of care, supports affordable access to all Americans, and protects patients’ personal health care decisions. http://docs4patientcare.org