Saturday, April 27, 2019

The Medicare For All Heptagon

I am going to make a prediction here. No matter who we elect in 2020, Bernie or Trump or anything in between, Medicare For All is not going to happen in America. One can run an electrifying campaign on the promise of Medicare For All, or indignantly against it, but this is pure theater on both sides. I don’t know if God can make a rock so big and heavy that even He can’t lift it, but I do know that government can make corporations so big and powerful that even government itself can’t break them.

For decades our government encouraged the health care industry to consolidate vertically, horizontally and obliquely so it can achieve “economies of scale” and therefore lower consumer prices. In the last couple of decades, the government also compelled the industry to computerize its operations, because technology makes everything better and cheaper. Once the resulting monopolistic behemoths were summoned into existence, it was time to nationalize the whole lot, into one super monopoly, with super technology and super economies of scale. The only other example of such government monopoly in America is the Military.

Obviously, our standing armies must be, by definition, a national monopoly, but note that the Navy is not building its own ships and the Air Force is not building its own planes and the Army is not manufacturing tanks. The government is contracting with private suppliers for pretty much everything, from butter to bullets. The Military Industrial Complex is a network of very large and utterly corrupt contractors for the government, yielding more power over foreign and fiscal policy than Congress, the President, and all citizens put together, while delivering practically nothing either on budget or on time. A powerful Military is essential to America’s safety and global success, so we grind our teeth and keep paying. And medical care for hundreds of millions of people is at least as important.

I am not entirely sure how people think Medicare For All is going to work. Are you folks envisioning an angry President Bernie dragging Samuel Hazen into the Oval, wagging his finger at him and making an offer Mr. Hazen cannot refuse? Something like, “I will pay $50 per head and not a penny more, because health care is a human right, and if you want to be a disgusting millionaire or billionaire, go write a bestselling book, like I did…”, at which point Mr. Hazen will be hanging his head down in shame and gratefully take the $50 deal. Upon his return to Nashville, Mr. Hazen will immediately schedule book writing workshops for all HCA department chiefs to compensate for cutting all salaries in half. Yeah… no, that’s not how this works.

Go ask Northrup Grumman or Lockheed Martin or General Dynamics or even Boeing or Booz Allen or any other “beltway bandit” how getting money from the Feds really works. There are well-greased revolving doors between the Pentagon and its contractors. There are stock options and executive positions for high ranking Federal employees. There are 535 people in Congress responsible for allocating budgets, and all 535 are for sale. Most of this infrastructure is already in place for health care too and building the HHS Heptagon shouldn’t take very long. The American President has little to no power over Federal spending, and even less so when it comes to large procurement contracts, as the current occupant of the White House discovered the hard way, during the Lockheed F-35 kerfuffle.

Clearly large health systems will survive and thrive under a Medicare For All law, but how about private health insurance? Future President Bernie says they will all be banned. Is that so? Currently a full third of Medicare beneficiaries are insured and “managed” by a handful of large private health insurers. Medicare is paying those private contractors fixed amounts of money per head for their services. Medicaid is doing the same for most of its beneficiaries, and all military health insurance (TRICARE) is contracted out to the usual suspects. Basically, the vast majority of people covered by public insurance, are really insured by gigantic insurance corporations. Fact: under the hood, taxpayer funded health care is the bread and butter of private health insurance companies.

When future President Bernie and the hordes of uninformed supporting characters in the 2020 elections festival say that private health insurance will be banned, they are lying to you. What will be banned under a Medicare For All law, is your ability or your employer’s ability, to purchase health insurance directly from a private company. Instead, the government will procure contracts in bulk as it sees fit, assign people to them as it sees fit, and pay for these contracts with tax revenue as it sees fit. Just like they pay for battleships, fighter planes, bombs, tanks and such.  The United States Military is known for lots of great things. Value-based purchasing, and cost-effectiveness in general, are not among those things.

Depending on who you ask and what is included in the definition of health care, Medicare For All is projected to cost between three and four trillion dollars per year, which is five times the amount we spend on the Military. This number is calculated based on costs under current law, minus the waste generated by the cacophony of hundreds and thousands of different insurance plans, different health care facilities and their too many to count service and product vendors. The projections do not include the effects of the inevitable massive consolidation of everything health care into a dozen or so Federal contractors, able and willing to demand multi-billion dollars contracts for services worth a few million dollars at most on the open market. Remember the Obamacare marketplace website? Multiply that by orders of magnitude and you have Medicare For All.

Medicare For All is as egregious a misnomer for this plan as the Affordable Care Act was. When they say Medicare For All, they mean Federal government procured health insurance for all. When they say everything soup to nuts will be covered, they mean everything the heavily indebted Federal government thinks should be covered, and can afford to cover, will be covered. When they say health care will be better, more plentiful and much more affordable, they mean please vote for me in 2020. Medicare For All will be built on the largely immovable foundation our government chartered and nurtured for half a century. If you want a glimpse into a Medicare For All future, go look at any Medicaid Managed Care plan in any impoverished southern State, and look at the balance sheets of the associated contractors and sub-contractors.

It doesn’t have to be this way. We don’t need to bulldozer everything we have, and we certainly don’t need to pretend that we can, or that we must. And we need to remember that the proper role of government in a free country is not to manage the health or the care of all its citizens. Free people are not the wards of a State responsible for keeping them healthy, productive and happy. The role of a democratic government is to keep predators, foreign and domestic, including corporate ones, at bay, while providing a sturdy safety net for the few who cannot care for themselves. Let’s do that instead. It will be better, faster and cheaper than the fictional construct called Medicare For All.

Tuesday, April 2, 2019

What the hell do we have to lose?

If you live or work in Washington DC, your number one health care question is how do I (or my meal ticket people) win the next election. If you live or work in Caruthersville MO, chances are that your most pressing health care question is how do I (or my immediate family members) get a hold of some insulin this month. Theoretically speaking, in a healthy democracy, the answers to both questions would be one and the same. In America, in the year 2019, this is no longer the case.

The Washington jetsetters most aligned with the Caruthersville culture (whatever that means), will pop up on your TV screen promising at least fifty insulin shops on Main Street, all competing for your insulin business, until insulin prices plummet to gas station coffee levels. Not to be outdone, the opposing Washington faction, will promise you free insulin for life, and to sweeten the deal, they will throw in free college for your semi-literate children who couldn’t pass a college entrance exam with a gun to their head. They will also promise free childcare for your grandkids, so just in case your daughter does not make it into that free college and does not become an astrophysicist as planned, she can still pursue her Walmart career.

We are being hoodwinked. We are being robbed. We are being disrespected and infantilized. Stealing our votes has become easier than stealing candy from babies. There are more of us by orders of magnitude than there are of them. They certainly have better and bigger weapons. They are better trained and better organized and have better discipline. We also have collaborators in our midst, who are difficult to spot. Let’s face it, in every conceivable way, Washington DC and its sprawling appurtenances have become what the Court of St. James was to our forefathers.

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Health care is complicated because it has so many degrees of freedom, few of which we can reliably identify. Some degrees of freedom are yet to be discovered, others look independent, but are not, and vice versa. Furthermore, the boundaries of what we call the health care system are ill-defined and in a perpetual state of flux. At our current state of knowledge, deterministic theories of health care systems are not possible, i.e. you cannot infer past states or future developments of the health care system based on its current state, which is why both health care historians and “futurists” consistently fail to produce any valuable insights, let alone solutions.

Option One

The first and most common strategy for changing complex systems is to essentially ignore the complexity, zero in on one’s pet peeve, kick it hard in the shins, and hope for the best. That’s what LBJ did in 1965 and that’s what President Obama did in 2010. One was wildly successful, the other less so. Why? Both LBJ and Obama identified a segment of the population driven into misery and poverty for lack of affordable medical care and passed legislation to have the government assume financial responsibility for their medical care, to various degrees. Both LBJ and Obama faced militant opposition to their proposals. Both had to compromise and twist arms to make it happen.

However, the health care system wasn’t nearly as complex when LBJ acted on it. As luck would have it, LBJ was able to separate a piece of the system from the whole in a relatively clean way and move on that piece and that piece alone. It would take half a century for the ripple effects of LBJ’s kick in the shins to reach all other parts of health care, for better or for worse. By the time Obama got his shot, the health care system became almost impossible to detangle. Almost. Instead of working hard to carve out his pet peeve from the bigger mess, expose its shins, and deliver a blow, President Obama chose to kick the whole system softly in multiple spots, hoping the change will materialize only where intended. It did not.

Obamacare’s main thrust was to provide health insurance to the 45 million Americans who were then uninsured, mostly because they couldn’t afford to buy insurance. If that’s all Obamacare endeavored to do, it would have probably been a resounding success. Instead, Obamacare chose to partially address the uninsured problem directly, while simultaneously attempting to lower the overall costs of health care, so the unaddressed portions of the problem will address themselves. It was too much intervention for the system to absorb at once, particularly since the underlying philosophy was old, unimaginative and empirically proven to be morally and operationally bankrupt.

At the very core of Obamacare is Richard Nixon’s (or rather Edgar Kaiser’s) notion that health care is best when throngs of people, devoid of agency, submit themselves to medical decisions of expert organizations whose job is to minimize the costs of health care. This idea is why we are told that the job of doctors is to “keep” people healthy and be “stewards” of scarce resources, why we need a health system instead of a “sickness” system, and why Obamacare mandated preventive care to be “free” across all health care. This idea is why most Medicaid, large chunks of Medicare and the Obamacare exchanges were surrendered to “managed care” and “accountable” organizations, why fee-for-service is incessantly vilified, and why massive medical surveillance by computers has been instituted.  And this idea is why independently minded private practices had to be demolished.

Remember those vaguely defined degrees of freedom? It turns out some of them had to do with pricing. You want free preventive care? Sure, no problem, just pay a higher deductible. You don’t want to pay a fee for each service? Oh well, then pay a hell of a lot more for each “bundle”. You want a “health” system? Perfect, just pay more for “sickness”. You want billion-dollar precision surveillance of the herd? Easy peasy, just pay more for everything. You don’t like how things turned out? Too bad, because while you were busy pontificating, we all merged ourselves into too-big-to-push-around “health” entities, so take it or leave it, see if we care.

Option Two

The health system we have today is very different than the one we had when Obamacare became law. It has bigger teeth, sharper claws and spectacularly buff muscles, and its grip on our lives has tightened significantly. You can’t close your eyes and click your heels to go back to pre-Obamacare times. You may be able to strip twenty million people of the lousy health insurance they now have, but you can't “repeal” the mergers and acquisitions of the last nine years, you can’t resurrect thousands upon thousands of small practices and pharmacies, and you can’t rip out trillion dollars of computerized surveillance. You can certainly indulge in fantasies of shooting it dead with your Medicare for All silver bullet, but the post-Obamacare health system is no fictional werewolf. It’s a very real animal. You can certainly wound it, but nothing is more dangerous than a wounded beast.

The only way forward is to do what Obamacare should have done, albeit under much more difficult circumstances. You still have around 30 million people with no health insurance, and over 100 million who are underinsured because they can’t afford the new deductibles. You also have small limited opportunities to lower expenditures on certain health related items such as prescription drugs and extra payments to hospitals. You also have a slew of Federal regulations and administrative programs that make everything a bit more expensive, with no added benefits to either buyers or sellers of medical services. Before you do anything though, you must overcome a very painful mental hurdle. Medical care is and will remain very expensive for the foreseeable future, and that’s okay.

We don’t know how to cure Alzheimer’s. We don’t know how to cure diabetes, kidney disease, heart disease and most cancers. These things make medical care expensive. Five percent of Americans use fifty percent of health care funds every year. Fifteen million people use around one million dollars each, in any given year. If these very sick people didn’t exist, or if medicine had nothing to offer them, health care would be affordable for everybody else. Alternatively, if medicine had a fully restorative cure for these and other afflictions, health care would be dirt cheap and life would be much better for everybody. Science will do its thing eventually, and nudging it won’t hurt either, but for now, we need to bite the bullet and pay up.

First, we spend lavishly:
  • Expand Medicaid to 200% Federal Poverty Level (FPL). The Obamacare Medicaid expansion was up to 138% FPL. Where did they come up with that number? The FPL is a joke. No person can live on $6.245 an hour when working full time, which is equivalent to the FPL. Expand Medicaid a little bit more (yes, I just said expand Medicaid).
  • Get rid of the individual market for health insurance. Create locally managed group plans for counties or whatever geographical measures make sense in a given area. Let those groups shop for health insurance just like employers do. This will put to rest all the “preexisting conditions” sound and fury.
  • Subsidize these group plans so nobody pays more than a certain percent of their income and establish parity with current employer sponsored insurance. Yes, it is going to cost money, probably more than Obamacare, but it won’t break the bank.
Now let’s save a few pennies:
  • Do the prescription drugs thing. Don’t reimport from Canada, thus taking advantage of “Socialized” medicine, while badmouthing it with gusto. Grow a pair and take on the drug cartels. If the President can threaten China with tariffs, Mexico with shutting down all trade moving through the border, the EU with dismantling NATO, and North Korea with nuclear annihilation, he can certainly negotiate a better deal for America with a bunch of pharmaceutical sleaze balls, no?
  • Get rid of the “free” preventive care and allow direct primary care, and any cash services that are priced lower than plan negotiated fees, to count against deductibles.
  • Speaking of deductibles, cap those nationally at ten percent of premiums.
  • Incentivize competition in physician services, and discourage shady referral schemes, by paying independent small practices, more than hospitals for the same service. Look at this as a form of reparations for past discrimination.
  • Get rid of all Medicare and Medicaid funded “initiatives” that have no clear purpose or return on investment and disallow anything that is not a direct payment to a medical professional, facility or supplier, from being included in health insurers’ medical loss ratios.
  • Require all sellers of health insurance to submit to yearly value-based performance evaluations and publish the results. This is not about clinical quality. It’s about quality of service, and value-based is the proper term here (for a change).
There is obviously more, a lot more, that we could do, but these are my pet peeves. Other people will have their own. If we keep it simple, and if we are careful when detaching little pieces from the tangled mess that is our health care system, we should be fine. The folks in Caruthersville MO will be getting plenty of insulin, and the wise men and women brave enough to take this or a similar route to solving the health care conundrum, will get reelected in a landslide. The alternative is that in a pointless battle against Obamacare, those who defend the Obamacare status-quo will win in that landslide (regardless of Medicare for All empty promises), because starving people will not trade the piece of stale bread in their hand, for promises of champagne and caviar due to arrive in two years or so, if all goes well.

The President’s political instinct was correct. Health care must be addressed in a positive and generous manner at this exact moment in time, or the party will be over sooner than anticipated (pun intended). Those who advise the President to postpone the discussion are not serving him or the nation well. These are the same people who pushed the stingy and cruel Paul Ryan agenda that brought the house down last year (pun fully intended).

The truth is that right now, nobody in Washington DC has a realistic solution for health care, so why not try something different? What do you have to lose? I mean, seriously... What the hell do you have to lose?