Tuesday, August 26, 2008

Getting back to how to reform health care.

I am sorry that I've been away so long. Many factors influenced that. Partially because I was so disgusted at what's gone on politically in this country in the last several months. Before I start talking about all of that again, and I do believe what's going on is going to impact health care reform, I wanted to remind everybody that this is a healthcare reform blog some going to put as some of my latest writings on healthcare reform that I have just rewritten in my hopefully forthcoming book:

we need to remember that when dealing with healthcare reform, we need to understand that health care is a lot like electricity; in that it is essential and everyone should have access to it. We need to leave as many aspects free market as possible, but at the same time. It needs to be run with a lot of regulations. Not only dealing with safety, as it has up to now, but it's dealing with access and financing as well.

The reasons are many why we need to preserve what's best about the United States healthcare system. The attacks on our system are numerous, but many are specious as well. While obviously something needs to be done about costs, because it is pointed out that we spend the most on healthcare, it is wrongly pointed out that it obviously is not worth it because we don't have the best longevity rates of a modern population. But of course, we are the most modern population, the richest country, and raise our standard of living for the majority of Americans many years before the rest of the modern world Court up. Because of this, in some ways we are more obese and slovenly than the rest of the world. But as our nation comes to grips with this and starts to work on this, the rest of the world is busily trying to catch up. They are consuming more empty calories, more refined sugars and flour and actually see smoking rates rising in their countries. As one of the earlier pioneers of the modern industrialization movement, America also had the good fortune and subsequent burden of utilizing materials and processes that turn out to be dangerous and/or greatly polluting. While some materials, because of our discoveries and other nations discoveries, will be spared from use in other emerging nations now, we are still seeing the cycle of initial over polluting because of emerging industrialization.

As we are ahead of the curve in "rich country" diseases, I believe we will be ahead of the curve in regaining good health. You will see as America's longevity rates increase that many other modern era countries will stagnate or begin to decrease, before making their own U-turn back to health.

It is of the utmost importance that the amazing research and good work that we do here in the United States is not hampered by a bureaucratic, shortsighted government system. This is why we need government controls and oversight, but a free market solution to the healthcare crisis.

Looking at the total amount that America spent on all healthcare in 2007, I am of the belief that we spend enough. The areas that were going to tackle our waste, realignment of insurance, realignment of physician practice, oversight. In general through process improvement techniques and various cost-cutting initiatives, while you might find it tough to take 20% of your family's budget, a large corporation that hasn't been through extensive cost-cutting in the recent past can often remove 10 to 40% of costs without a significant deterioration of functioning. I think it would not be unreasonable to be able to remove 20% of costs out of our healthcare system and then work back in a vigorous inflation rate so that going forward practitioners, suppliers and providers would all find comfortable increases built into the system.

The realignment of physician practices going to be uncomfortable to many. It is going to reek of government controls because it is literally redefining physicians roles in society. However the proof fashion of physician is just not a profession that has gotten out of control with independence and entrepreneurialism. In reality if we look at physicians as healthcare executives, we can conjure whether so many should be independent? You don't meet a lot of independent vice presidents of corporations. Sure some executives become consultants, or they take a new idea and start a Corporation. Doctors can do the same. But the fundamental system of delivering healthcare through independent entrepreneurs encourages waste. These independent physicians are not adding anything in the form of lower pricing, better services or products or new innovations as would happen when the entrepreneurs begin new companies. These practitioners just go out into the fields to do business as usual like everyone else in the medical field and hope to bring in enough patients for them to make ever more money. It would be like if a McDonald's employee left and started another chain of hamburger joints, and created an exact duplicate of McDonald's and charge the exact same prices. Of course, he would be sued for copyright infringement, but more so, if he did not add to the equation by making everything better or cheaper, he would fail because nobody would find a reason to go to him instead. With physicians, it's true that all things being equal you might choose a physician whose a block or two closer to your home, but more likely you will choose one in your health plan, and that's the extent of most people's shopping. We need a certain amount of physicians in this country to take care of everybody so there is room for them to exist. But just like the copycat of McDonald's the majority of these physicians don't add anything by being independent as opposed to hospital paid employees in offices placed throughout the community.

When a physician works for a hospital and is placed in a field office and knows what salary he's going to make then, just like an executive at a Corporation, he knows the only way he's going to get above average raises will be to do a good job, get good results, do well for the customers and do his best to keep costs in line for the Corporation. Therefore, an adequate physician can expect to get raises in line with inflation, a superb physician keeping his eye on all these things we just mentioned can expect to get excellent raises. A physician who does a subpar job would lose his job like any executive of the cooperation, I would not have to wait to be sued by enough people that his license and ability to earn an income would become in jeopardy. This should be a much tighter run ship and a better self policing agency. This will wring out costs from the system and remove stress from the physicians. Those who are most entrepreneurial, whoever better way to do things, a way to save money for the patient, or who can do a better job for the patience, will still rise to the surface and will be able to open their own independent practices. I do not aim to outlaw independent practices. But it will become necessary to charge more, to have a higher co-pay, for those in independent practice. Therefore, only those that add to the value proposition, that do something better than their colleagues, will be able to run a private practice because they will be the only ones will be ever convince people to pay a higher co-pay to come to see them. In one fell swoop we would have cut costs and created a system where only those who can better the system and improve care will be doing the work independently.

Our system is not broken, it simply was designed with no cost controls. The cost controls that are trying to be placed on the system now, especially by government, are ridiculous. They simply arbitrarily decide that they're not going to pay more for something, they don't cut costs a cutting reimbursements on procedures, they trying to turn back the clock by medical providers at the same time that they voted raises for themselves and allow executives to have ever more exorbitant pay packages. The way the government tries to do it is unconscionable. But we do at a cost controls because the costs are out of control. The methods I speak of will bring in controls after creating a more efficient less expensive system, and then we'll build then comfortable increases into the future. Some form of change is coming, over that we can be sure because the system cannot continue to stand the way it is. Forgetting about how much it's pointed out in the rest of the world, we will point out here many times that they were too many people uninsured, too many underinsured and we already pay more than enough for all of it. There it changes that will be less painful and at the same time more beneficial. While you will see many systems offered to control costs by controlling K. our was simply limiting expenditures, you will see that these are not healthcare reform but healthcare reduction and limitation. When I speak of here is reform, and while change is scary, I believe reform will be embraced far more than reduction and limitation as proposed by the government.


Bruce said...

Welcome back my friend. Your thoughtful proposals won't win you many friends among physicians. But that's no reason to fret.

Too much money goes to specialist care and the most cost effective medical care ["primary care" which is made up mostly of Family docs and Internists] is devalued. But even specialty care docs are just playing the game to their advantage. The real demons are insurance companies trying to syphon out profits from the pockets of docs into their own.

LHwrites said...

While there will be some physicians that will not like the system, I do believe that the vast majority of physicians will find they do quite well under my system. Insurance companies are another matter. I do not find that they are actually trying to siphon profits away from providers onto themselves exactly. However, I do find they are a big part of the problem. It is always dangerous to have someone in charge of paying for the care and deciding whether you need the care, then compounding it by giving them the profit motive as well. I think the system could be repaired in part by a separate government oversight utilization review committee, however, I do not think that actually goes far enough. Those insurance companies that demonstrated the best and most fair practices could be utilized as administrators under a new system. Before I can go into this in more detail I would have to flesh out more of what I'm proposing, which will happen in time in this blog and hopefully in book form. I daresay that insurance companies would be much more unhappy with my system than the physicians and other providers would.

Bruce said...

I like the sound of that...anything that pisses of insurance companies is probably a good thing.

Look forward to reading more.

LHwrites said...

The insurance companies have mishandled things and helped to create the runaway medical inflation we suffer from now. I am trying to post much more regularly,often and quickly, so will try to get that up soon.