A Doctor’s Comment on Healthcare.

Can there be a Right to Medical Care?

(Thoughts of a retired surgeon)

To a significant degree, medical care tries to make our lives more comfortable and vigorous: healthy. It does fairly well with that in many instances. One thing it cannot do is prevent our ultimate mortality.

It is understandable that most people do not want to die, but we are mortal. Each of us will die. Medical care cannot prevent it.

To the extent that medical care fights an inevitably losing battle against our mortality, we can expend as much of our resources as our will and technology permit, but the result will be the same.

When I was in medical school, there was no insurance. People got care. Doctors charged and received payment with a direct doctor-patient relationship that was mutually sustainable and satisfactory, medically and financially. Poor people received care through the dedication and compassion of the doctor and community.

I was taught, “Save the widow the farm.” That is, when Farmer Joe comes in with a lung cancer, one might encourage him to undergo extensive, expensive surgery that would require that the farm be mortgaged. However, the results were dismal. After Joe’s death, the widow frequently was unable to pay the mortgage and lost the farm.

Instead, one could explain the situation with compassion and frankness and Farmer Joe and his wife, using the same frugality and value system by which they had otherwise lived, would accept the reality of the situation, a reality that bespoke a meager chance of benefit that was not appropriately affordable. Joe’s plight would be alleviated by all palliative means medicine had to offer. This rational, realistic decision was the norm. Indulgence in futile care to the point of threatening the whole system was not a problem.

Some patients would be wealthy, and with a full understanding, decide to take the slim chance of cure, paying for their treatment out of pocket, getting the “best money could buy.” Frequently, they would leave money in their will to help the hospital meet the expenses of the care given to the poor.

Patients who received charity care knew that the doctor was doing it without pay, out of compassion. That had an added healing effect on the illness and the patient had the ennobling experience of gratitude. The physician sensed fulfillment of the underlying reasons that called him to an honorable, healing profession, a reward greater than money. Thus, the patient and the physician derived a mutual benefit.

The intrusion of government as the provider for the poor came at a great price. The politician arrogated the role of being the source of care. He gave the poor a warrant for medical care through Medicaid and instilled an attitude in the patient of having a right to it. This deprived the patient of any sense of being a recipient of personal compassion and the physician of feeling appreciated. The patient was told that the medical bill had been paid by the government. The physician actually received a pittance on the bill. So the mutual benefit of patient gratitude and physician fulfillment was replaced by the patient feeling entitlement and the physician feeling exploited.

Insurance for the unpredictable catastrophe was desirable. That might properly apply to about 15% of medical events. Predictable occurrences should not pertain. One does not buy car insurance for coverage of accidents that also covers oil changes, although oil changes are important. Insurance should not cover pregnancies (especially in this day of fairly effective birth control), mammograms, office calls or colonoscopies. Those are events that are common and expected.

Can you imagine the added cost of an oil change if the service station had to check what was your car insurance plan, copy your card, hire additional employees to prepare an invoice, mail it to the insurance company that pays help to verify that an oil change was needed before issuing a check to the service station while sending an explanation of benefits to you and the service station so that you know what was the approved, adjusted bill, how much they paid on it and how much remainder you would be billed while the service station then bills you for that co-pay and then you pay the balance and everybody pays accountants, banks, billing experts and postal service instead of simply paying the bill? (A run-on sentence emphasizes the point.)

What does an insurance company provide that warrants this tom-foolery? How have they made themselves involved in everyday medical events?

The major benefit is that an insurance plan negotiates a discounted price. It then becomes, not a provision to respond to the unexpected, but an access to a negotiated price on routine care. People without that negotiation are charged at least twice the price charged the people who have obtained the negotiated price through their insurance.

Car insurance does not apply to the common need to buy a new car. There are car-buying services that do that. The commingling of these two functions by medical insurance has caused a great disruption in medical economics.

It started with Medicare in 1965. Medically taking care of the elderly was an attractive social goal to some, part of The Great Society. But as the years went by and peoples’ life spans increased, the costs of the program rose rapidly. That reality evoked a recommendation in the 1990s that the age of eligibility should be increased to 68 years of age. However, political expediency rejected that, and instead, a reduction of the age of eligibility to 55 years was considered. The senior citizens now had an entitlement and they would not be denied.

The costs of the hospital program became untenable while it was on a cost-plus basis. That meant that the hospital would be paid what its costs were plus a profit margin. That was seen as an incentive to increase costs: the more costs, the more plus. So Medicare changed its payment system in the mid 1980s to a fixed price for the different diseases and procedures with one allowed adjustment if the patient had a co-morbidity or complication. This fixed payment frequently did not cover the costs of care when that extended for many additional days with time in Intensive Care with expensive drugs and technology.

Thus, the cost shift developed. When the hospital did not receive sufficient money to cover the cost of care for its Medicare patients, it had to charge extra to other patients. The Medicaid program for the poor similarly did not usually pay fully for the costs of caring for those patients.

The business community with its employee health benefits realized they were charged for those extra costs. They banded together forming community networks to achieve bargaining power and demand relief. After overcoming some antitrust problems, they achieved it.

Now, a large majority of patients were receiving a negotiated price. The remaining non-negotiated patients had to make up for the shortfall between the costs incurred by the hospital and the payment received under the negotiated price. This was leveraged increasingly upon a dwindling group.

Hospital prices jumped over 50% in two years, but only the few had to pay it. Medicare, Medical, HMOs, PPOs and negotiated health plans were shown what a big discount they were getting from this sticker price. They, in turn, were able to boast to their employees and clients what a value they were to them. For the non-negotiated patient the old saying, “You get what you pay for,” was no longer true. What they paid for included care that someone else got.

Insurance became necessary then, not just to cover the costs of unexpected events, but to obtain the negotiated price on all services, avoiding the sticker price that was twice the actual cost of care. The involvement of insurance went from 15% of medical care events to 100%.

Metaphorically, the price of an oil change leapt to a level that forced many people to buy the car insurance policy to obtain a negotiated price for the oil, necessitating the foolishness described above. The value added for such a policy was avoiding the exorbitant price for an oil change to which the non-negotiated were subjected, a price that was artificially created by the cost shift.

Satisfying the shortfall in payment for government programs was not done with candor, openly taxing a customary tax base. Instead, it was a hidden tax taking place within the hospital by the shifting of costs not paid by the negotiated patients to those patients subject to the exorbitant, non-negotiated price. The tax base was comprised of those that had the misfortune of becoming ill, a truly shifty, sick tax.

There are laws against unfair business practices. I am not conversant with those codified legalities. However, my sensibilities of fairness are violated when there is this tremendous disparity in what one person is charged versus another, especially when medical care can be urgently needed, depriving a patient of the opportunity of a fair personal negotiation at the time of need. This is compounded by the inability to have hospital price comparisons in advance of need. The hospital administrators say they are not required to reveal their charges to the public, but only to an anticipated patient for the specific services needed.

When a cash-paying patient is going to have elective surgery, he frequently is not told that a discount of 30-40% of the raw bill can be obtained with prompt payment. It is like buying a car and then being told what the sticker price is rather than negotiating the price first.

Having third-party payers thus displaced the finances from the immediate doctor-patient/family relationship and led to abuse of other patients with unconscionable costs.

Insurance then evolved into development of health plans to which both patient and doctor belonged by contract. These took many forms that had the goals of maximizing the profit (even in not-for-profit organizations), attracting patient members (lives) and obtaining the services of doctors dependent upon the plan at a minimum cost.

The coverage for the patient necessitated co-pay from the patient to curtail usage. Medicare began payment of the physicians under part B at 80% of an allowable amount while requiring 20% from the patient. It was illegal for a doctor, as an advertised policy, to accept the 80% as payment in full and not charge the patient the 20%. That could be done only on an individual, justified basis. This was to curtail excessive use of Medicare by the patient and doctor. However, Medigap private insurances began to cover the co-pay, achieving a fully insured patient. Thus, we went from no insurance to full coverage.

This catapulted the patient from being a responsible consumer in a transaction, concerned about the appropriateness and cost, to one who wanted everything possible.

In the mid 50s in Indiana, Blue Cross-Blue Shield insurance began. There was an immediate lengthening of hospital stays. “Never mind the cost, Doc, I’ve got insurance.”

Under Medicare, when great-grandmother was dying, the family who bore none of the expenses wanted everything done. After days of expensive effort, prolonged suffering and ultimate death, the family now consoled themselves with, “What a blessing. Her pain is over.”

Where was that insight a few days ago?

In addition to financial disruptions, having third party payers induced inappropriate medical decisions.

This over-utilization of the program prompted identification of those procedures that rarely succeed. They were categorized as “futile.” Doctors were taught that they could ethically withhold those treatments without always discussing it with the patient/family.

(Note that the co-pay for drugs under Medicare part D cannot be covered by Medigap policies. Should the coverage of all co-pays be banned, restoring their original purpose?)

Rationing care by the patient/family and compassionate doctor now was transferred to the third-party payer. Beside co-pays, this was achieved through the nature of the contract under which the physician worked: managed care.

Sometimes a physician was on salary with careful statistics kept on his practice profile. It documented how much he was costing the health plan in frequency of use of the laboratory, imaging, consultations and hospital admissions. Spreadsheet reports were tabulated monthly showing where he placed in the array of the other doctors in the plan. Gentle encouragement for change accompanied any placement in the bottom 10%. (The existence of a bottom 10%, though ever present, was anathema to the administrator.) Goals were set for the entire group. Finally, it was suggested that a doctor who was not complying sufficiently might be happier elsewhere.

Sometimes a large group of doctors worked under a total amount of money obtained from companies for whom care was contracted. The amount of payment for the various services was divided monthly in a pro-rata form. “More care means less pay, doctors told” declared the newspaper report of the urgent letter from the head of the group to the member doctors.

When doctors met to discuss the situation and family doctors complained about the paltry payment for doing an annual physical, the medical director said that he could do an annual physical in five minutes, so that payment times twelve was a satisfactory hourly income.

Other times the amount of money to pay the doctor was calculated on the number of patients who signed up with him individually, the opposite of having a large actuarial base. The doctor, then, was at risk for the amount of his services those patients would need. Sometimes, a doctor was given one credit for service in a three-month period no matter how many times the patient was seen. “Come back in three months” became a common instruction.

Then doctors pay became increasingly tied to a bonus. The bonus was earned by conforming one’s performance to the strategic goals of the plan. Would you care if 5% of your doctor’s pay depended on his curtailment of the services provided? Maybe not much, but how about 15%, 25% or 35%? What if the contract required that the doctor would have to refund money already received back to the plan should the doctors incur cost overruns for the plan in caring for patients such as you?

If the importance of wealth warrants a truth-in-lending law, then surely, health warrants a truth-in-mending law.

If you are in a health plan receiving care from a doctor who has contracted with your plan, what feature of that contract should not be available to you? Those contracts definitely abridge the total dedication of the doctor to his patients. Your very existence in that “approved” doctor’s office is dependent on his having contracted with, and having accepted the features of, the plan. He has a continual awareness of the desires of the plan that conflicts with total allegiance to you when you are seeing him as a doctor on an approved list.

Traditionally, the relationship of a personal doctor with you was one deserving your confidence. That doctor referred you to a specialist to whom he had no financial relationship, solely on the basis of a professional judgment of which specialist was best for you. A payment by the surgeon to the referring doctor for the referral was decried ethically as fee-splitting. It tended to influence the referring doctor to use the surgeon who gave the bigger kickback. Professional societies banned the practice and dismissed members who engaged in it.

With contracting, the same elements of retrospective kickbacks were able to be included prospectively in the terms. One could easily recognize that a large multispecialty clinic must involve the various doctors agreeing to work with each other. Understandably, the primary care doctors were expected to use the specialists in the group. The distribution of all money received for doctor services was apportioned by a formula negotiated at interesting annual meetings.

But then the “clinic without walls” was conceived. The doctors contracted with a similar assortment of doctors that maintained their usual office locations. The clinic was owned by the primary care doctors who contracted with the specialists to provide their services and the patient was unaware of the relationship. The specialist had to bill various insurances through the billing service provided by the primary care doctors. For this service, 15% of the amount received from insurance was kept by the clinic, much more than a community rate. “This is how we will make our money,” they were overheard to say. This profit opportunity in billing would be enhanced by increased use of the specialists.

Some wished to get more than 15%. That was thought to be justifiable by the primary care physicians having the contracted surgeon see the patient for the first visit in their spaces. Thereafter, the surgeon would care for the patient in his own office as usual. Because the first visit and the billing of insurance would be through their location and their clinic’s overhead was 50%, keeping 50% of the insurance payment received for the surgeon’s services was defended.

The fact that the primary doctor could end up getting a greater financial reward by failing in non-operative care and requiring the patient to undergo surgery would not be appealing to patients should the word leak out. Besides, this would be illegal under Medicare regulations as it would result in overuse of the program.

Rationing became a necessity, then, for whoever paid the bill. Instead of that being the close-knit unit of a family doctor, unencumbered by contract, and the patient/family, it was decided by a distant agency. That agency will become even more distant if we proceed to universal, single-payer care. That is what a right to health care would entail.

Actually, how can there be a right to health care when it usually requires the services of others? You certainly should have the right to rub your own sore knee with oil, but do you have a right to command that someone else do it? You have the right to free speech and religion, but that does not include a right to demand the services of others in the exercise of them. A right to health care ultimately means the government would have the power to mandate the very existence of health care workers and the power to conscript individuals to become nurses and doctors if there were insufficient volunteers.

Mandates by the government would also restrict patients from having a free choice of care for their children and themselves. Systems of universal health care provide health care to everybody, but require that everybody give up the freedom to have health care outside the system, a spreading/equalizing of the health.

A woman in Britain recently faced a failure of the standard care provided by the Universal Health Service to control her metastatic breast cancer. A drug existed, Avastin, that had been shown to be effective in prolonging the life of such women, but it was not provided by the U.H.S. When the U.H.S. refused her request for it and she said that she would pay for it herself, she was told that if she did, she would be denied all care for her disease under the U.H.S. The powers that be had decided that there should not be two-tiered medical care. No one, enabled by money, should be able to obtain better care than what was provided to everyone else.

This is not unique to the U.H.S., but is a common social belief amongst proponents of universal health care. Maybe, it ensures that there is not a contrast with better care existing in the private sector.

Under current U.S. Medicare regulations, a doctor cannot separately contract with a patient on a private basis for services purportedly covered by the Medicare program unless the doctor opts out of the Medicare program totally for two years.

With the payment under Medicare dwindling, a doctor must limit the average time with each patient to cover overhead and have some net income. A busy person might be discontent to travel to the doctor, spend inevitable time waiting, only to have a brief visit and return later. Payment out-of-pocket for a longer visit without need of a return might be well worth it to an occasional patient, but Medicare prevents doctors from giving such service unless they drop out of the Medicare program completely for two years.

Under Hillary-care there were criminal sanctions for that.

Currently, a patient cannot even drop out of Medicare without also giving up the benefits received under Social Security retirement. You have become a captive of the program. That was begun under the Clinton administration.

Oregon realized that under the Medicaid program there was limited money for the care of the poor. Intelligently, they judged which services would give the most benefit for the unit cost and ranked each service down to the least benefit per unit cost. They estimated how frequently each service would be required, calculating the total cost for each. They then went down the list from the greatest cost-benefit until the money ran out and said that those services further down the list could not be provided. That was reasonable.

However, an ethicist that thinks no one should be able to have better health care than what is provided by the government for the poor told doctors they would be unethical, even on the basis of personal payment, to provide a patient with those services below the cut-off point for the poor.

If a person is missing, the government provides everyone a search and rescue effort, but it does not preclude friends from using personal means to make further effort. The government provides police protection, but it does not prevent one from obtaining additional private security. The government provides food stamps for a basic amount and expense of food, but it does not prevent those recipients from buying food beyond those provisions. The government mandates that all cars have driver and passenger air bags, but it does not proscribe buying additional side air bags.

If health is a top priority to you, you can join a gym for exercise, take walks, choose a special diet, take supplements and vitamins, etc., but under universal health care you will not be able to set aside money to obtain a level of medical care services above what the government provides for all. The Canadian courts recently held that such prevention of care outside the system was unconstitutional because the waiting lines for care in the system were intolerable.

Life is full of arenas in which we have freedom for multi-tiered priorities and life styles, but the central planners in medical care insist that there cannot even be two tiers.

A right to universal medical care requires, then, a loss of freedom of care.

Medicare has thus caused disruptions in the quality of medical care and distortions in medical economics, not to just those within the program, but as a rippling disturbance to all.

Having had more than forty years of experience with it, the government might be expected to have achieved a well-functioning, sound basis for it.

However, the Trustees tell us the opposite is true. We are appalled that the finances of the Fannie Mae/Freddie Mac programs, dependent on subprime mortgages, could be neglected for so long in spite of clear warnings so that a financial crisis impacting the whole world finally resulted. We are told by the Trustees that the current deficiency of the Medicare program is far, far larger.

The current program entails yearly benefits for an increasing number of recipients extending in perpetuity with sources of yearly revenue purportedly to pay for them. The growth in the cost of the benefits increases yearly faster than the revenue stream to pay it.

To understand the extent of the problem, one can figure how much true money actually in the bank drawing true interest (not a faux trust fund such as we now have) would be needed today to pay for those yearly deficits as they become due. If one is planning for an expense in the future, one does not need to have today the full amount of that foreseen expense provided that one deposit in advance the amount of money that can grow with compounding interest to equal that needed amount when it comes due.

The problem, then, does not require that the total of the nominal deficiencies of all future years be on hand now. It is the discounted, current value of those amounts, however, that does need to be deposited now. The bill currently due for Medicare, Medicaid and Social Security retirement is $76 trillion, of which the major portion is Medicare. Confiscating all the wealth of the rich could not possibly begin to pay it.

On this basis, then, have we shown sufficient ability in running (or ruining) the Medicare program, which is limited to just the elderly, to warrant expansion of health care to all as a right?

Money may be in limited supply; compassionate folly is not.

David F. Thomas, M.D.

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