Successes & Failures of 2016 U.S. Elections — Part 13

MODES OF COST CONTROLS FOR THE ESCALATING HEALTHCARE COSTS IN THE UNITED STATES (OBAMACAREI)


by Sunil J. Wimalawansa 

Contrary to the fundamental expectations of democracy, governments are not serving the people.  In practice, the super-rich and corporations fund governments (through campaign contributions and lobbyists), and the governments serve themselves.  They turned “we the people” (you), the ones governments are supposed to serve, into themselves.  When can we expect genuine changes?   

( January 17, 2017, Washington DC, Sri Lanka Guardian) In our lives, every one of us at some time needs the assistance of healthcare providers; thus, such services must be made accessible, affordable, and fair without any disparity.  However, the delivery and quality of care are not the same to everyone, and are somewhat determined by the amount spent by individuals or a government to pay for such care (or not having healthcare insurance).

Of course, one can purchase a high-end healthcare insurance package with the ‘assumptions’ that it would provide the best quality of care.  Since the care provided is heterogeneous, this is not necessarily the case.  The amount one pays for insurance is not necessarily proportionate to the services and/or the quality of care they receive.  Thus, our assumptions do not tally with the reality.

Most diseases are preventable:

For most of the common chronic diseases, such as obesity, metabolic syndrome, heart disease, arthritis, and type 2 diabetes, severity can be reduced significantly and onset prevented with adherence to healthful lifestyle choices.  This is a personal choice that one should take seriously.  As a part of maintaining good health, individuals must take responsibility for their own physical well-being and encourage such behavior in their family units.  Chronic diseases such as heart disease and type 2 diabetes can be significantly reduced and prevented, or delayed their onset with improvements in healthy lifestyle choices.

By 2018, it is estimated that the federal government will be spending more on healthcare than on Social Security.  If this trend continues, this is expected to add an additional $1 trillion deficit annually to the budget.  Can the country afford this?  Shouldn’t we all take some responsibility to take care for our own health, and thus, actively contribute to the reduction of healthcare costs?

Quality of healthcare delivery:

The purchase of healthcare insurance from for-profit corporations or from the government is one thing, but delivery of care by the providers is another.  Sometimes, there are marked disparities between the two; the quality of insurance and so the delivery of healthcare can vary much.  One classic example in the United States government-sponsored, Medicaid benefits.

While most services are free for the Medicaid recipients, benefits, such as medications, laboratory and radiological investigations, frequency of testing (e.g., blood sugar), and invasive procedures; referral to other physicians, specialists in particular, and across the state-line referrals even when indicated, are restricted.  Simply because Medicaid recipients pay nothing.  Different degree of the same is also apply to those clients participating in many Health Maintenance Organizations (HMO) and Accountable Care Organizations (ACOs).  These are negatively affecting the quality and the delivery of healthcare and increase frustration of patients and physicians alike.

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Third-party insurers who run these programs through government or private contracts make it difficult for recipients to get referrals, pre-approvals, and medications other than generic drugs.  Even commercial insurance, depending on the plan, may impose major restrictions that affect the receipt of healthcare.

If the overall goal of the healthcare system is to keep people healthy, these restrictions have a completely contradictory and unintended effects; thus, make no sense.  If one’s goal is to curtail costs, a path other than restricting access to healthcare should be taken.  Healthcare delivery sites such as doctor offices, health centers hospitals are not conducting ‘parties’ so that patients are lining up to see doctors on daily basis.  Just like with the market-driven decisions and competitions, if given the opportunity, healthcare visits and referrals patterns will also self-regulate with time.

Methods for controlling escalating healthcare costs:

Salaries of physician and nurse or the disease preventive services are not the cause of escalating healthcare costs.  The causes are poor management of the services by third-party insurers and haphazard and inadequate government policies.  While, drug prices per se are not pushing the healthcare system to bankruptcy; hospital costs, particularly related to cancers and end-of-care costs are the predominant factors contributing to the ever-increasing cost of care.

In recent years, there have been unfortunate incidences (and a trend) of unethical price increases of essential medications.  Companies can get away with such behavior because no federal guideline prevents it.  Healthcare providers (hospitals and insurance companies), including the government, should negotiate with pharmaceutical companies to place caps on all expensive medications, devices, and medical/surgical procedures, while allowing pharmaceutical and device companies to make a reasonable profit.

If this can be carryout through the Center for Medicare and Medicaid Services (CMS) through a new law and make it a federal mandate, then there is no reason for every organization to renegotiate with each pharmaceutical company, wasting tremendous amount of resources.  In addition, it is important that the federal government needs to impose legal and punitive measures to prevent pharmaceutical ad device companies from charging unrealistic amounts for products.

Consequences of the high cost of malpractice insurance and litigation:

Another key reason for high healthcare costs in the United States is the cost of malpractice insurance mandated for all healthcare providers and the widespread malpractice litigations.  This bogs down the system; instead of physicians’ practicing common-sense, proactive, evidence-based medicine, it pushes them to practice defensive medicine, which adds to escalating costs (at times doubling the cost of care).

In addition, increases in professional liability (malpractice) insurance charged by insurance companies for physicians and hospitals are massive.  Most of this high cost is attributed to the lack of capping, malpractice insurance claims.  In certain medical and surgical specialties and in obstetrics, one year of malpractice insurance coverage can exceed $500,000 and are forced out of service.  These exuberant costs are eventually bear by patients.

Consequently, large numbers of highly experienced physicians are moving out of states with high malpractice insurance premiums, such as New Jersey and Florida, and others are taking early retirement and even switching to other, non, direct patient care professions.  No wonder the U.S. healthcare system is in a big mess.

There are “big holes” in the U.S. healthcare system that neither political party willing to address, in part because of strong lobbying.  The impending replacement of the Obamacare is a real opportunity for the federal government to address these specific gaps (ideally using bipartisan efforts) to curtail and rectify these problems.  Fiddling the system would not help the country.

Solution to uncontrolled litigation is to legislate a cap for healthcare malpractice:

Considering that the healthcare litigations amounts to a significant cost of healthcare, a federal law should be enacted to cap all litigations (with the exceptions in cases with manslaughter or true/horrific negligence) under $250,000 per case.  Unfortunately, in the United States, it seems that the lawyers and legislatures refusing to enact a law to cap malpractice insurance are running healthcare, not the doctors.

Law professionals are waiting for any error or a mishap, or adverse effects of virtually any drug coming to the market to jump into litigation primarily against drug companies, and secondarily physicians and hospitals.  The only winners in this age-old game are lawyers.  We the people should encourage legislatures to mandate a law to prevent this continuing disaster, that is bad for everyone (except law firms) in the country.

Because of the intense lobbying, none of the states have been able to come up with solutions, such as capping malpractice claims under $250,000.  Thus, for the benefit of all constituents,  the Congress should enact an effective federal tort reform bill.  It is time for Congress to come up with federal laws to accomplish these, perhaps piggybacking it onto the replacement of the Affordable Care Act.

“We need to focus on the uninsured and those who suffer from health care disparities that we so inadequately addressed in the past”.¾Address by the Senator, William H. Frist, U.S. Senate majority leader on his priority for the 108th Congress.


Professor Sunil J. Wimalawansa, MD, PhD, MBA, DSC, is a physician–scientist, social entrepreneur, educator, and philanthropist, with strategic long-term vision.  The author can be reached via wimalawansa.org 

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