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In 'Managed Care,' Who's Doing the Managing?   (March 14, 2007)

According to a recent Parade Magazine piece, healthcare is Issue Number One with Americans. No wonder. As costs spiral ever upward, people struggle to pay the bills or insurance premiums even as questions arise about the quality and efficacy of the medications and care being provided for the $2 trillion we spend on healthcare.

Correspondent Paul M. raises an important question about the latest "solution," managed care: exactly who's doing the managing, and to what purpose?

I saw the CSPAN Democratic candidates forum recently held in Carson City, and listened closely to each one's remarks on health care. Only Dennis Kucinich plainly stated that the high cost and low coverage aspects of the current system are guaranteed (and welcomed) under a private insurance based model. This recent article reaches a similar conclusion:

Profit for Some, Care for All.

If private health insurers really believed they could compete against a Medicare-style government alternative, you'd think they would be endorsing such a system, which John Edwards promotes. But they can't, and they won't. Instead, they will continue to generate more smokescreen, which many of your own readers subscribe to, much of which sounds like: "The government is against alternative therapies", "The government is restricting freedom of choice". "The government wastes money on delivering health care", "The government promotes unhealthiness by its failure to ration health care based upon lifestyle choices and behaviors", or "I can cut a better deal with private providers if only the government would allow me to", etc., etc.

Left to the free marketplace, why would providers charge any less than what emergency rooms today charge? That's where the 47 million uninsured Americans get their primary medical care, and if you look at a typical bill from one of those encounters, you will immediately see a need for managed care. But the question now is who manages?
Excellent question, Paul, and let's get right down to the heart of the matter: who benefits in any "managed care solution," and who controls the levers of money and power?

In so-called private enterprise (I say so-called, as much of it is actually paid for by the government), the motive for providing competitively priced, excellent care is profit: if you do a better job for less than your competitors, then you gain customers. This seems to work with computer parts and DVD players, but as many others have noted, it doesn't map over to healthcare very well.

Let's say I have a heart attack and need surgery immediately. Hmm, let me go shopping among providers. Gee, this one is only $120,000 for the operation and a week in intensive care. Too bad I only have $5,000 in cash.

The biggest distortion of the "profit motive" is that health is unprofitable; it's illness, medications and surgery which generate the big bucks. Let me tell you a brief story about a common chronic disease called hypertension, otherwise known as high blood pressure. This condition has been tied to increased risks of heart disease and strokes, and affects tens of millions of Americans.

I have an interest in the condition because I was diagnosed recently as "pre-hypertension," i.e. with blood pressure readings of 140/90 or so rather than 120/80 or lower. My doctor at Kaiser (a non-profit HMO, for which I pay my own insurance premiums) told me hypertension was largely genetic, that blood pressure increased with age and that there were many medications to control the condition. Fair enough.

Not being a big fan of medications, I looked into other ways of lowering my blood pressure. The standard advice is: lose weight, exercise, eat healthy, and watch your salt. In many cases, this advice seems routine, i.e. what you're supposed to hear before they prescribe the heavy-duty meds. But it seems to me that these lifestyle changes should be the only prescription you get until you've done all you can to control the disease yourself.

Frequent contributor U. Doran was kind enough to send in this link to a book on the role of salt and potassium in hypertension:

High Blood Pressure Solution

To my dismay, I found it rather difficult to find a potassium salt substitute on the shelves of America's stores. Walgreens? Nope. Long's Drugs? Nope. Interesting, isn't it, that the pharmacies of these chains are stocked with expensive hypertension medications, but there's no $2 salt substitute on the shelves for people who want to control their disease via the simple method of substituting potassium for salt in their diet.

To me, this situation neatly sums up all that is terribly wrong with "healthcare" in this country. Nobody profits from eliminating the excessive quantities of salt in the American diet, or from insisting that "patients" (otherwise known as responsible adults) control the disease through lifestyle changes. (Note that eating less salt and walking around a park don't generate any fees whatsoever. Yikes!)

What difference does it make if it's a government-run clinic or a "private enterprise" if the prescriptions for often-ineffective drugs are distributed in lieu of actual healthcare, which starts with the patients' diet, lifestyle and frame of mind.

Of course not all illnesses can be resolved with lifestyle changes. When a cancer can be removed via surgery, then the patient needs surgery immediately. The inefficiencies of deciding who pays for what portion of this surgery should be the first thing we as a nation address. This should be the first step in any "managed care" solution--eliminate the 30% (estimated by studies) of "healthcare" costs spent on shuffling papers between bureaucracies. As for who manages the actual care, I think the answer is obvious: the doctor(s) and the patient.

My own conclusion is that the Kaiser model is the only workable model for a national healthcare system. It is a non-profit business, which means that its income must cover its expenses, so it's operated as a business. The doctors are well-paid but do not profit from unnecessary care or procedures. The organization promotes wellness via classes and self-help, for the simple reason that if patients start taking care of their own health, costs are lowered throughout the system. With a co-pay (mine is $50), patients have a disencentive to come in to complain about trivial issues; if you're really ill, then you find the $50. Yes, there are inefficiencies, as there are in any large organization, but I think Kaiser "gets it right" in all the big issues: patient responsibility for their own health, doctors in charge of care, patients pay a fee for visits and tests, and there is no over-riding profit motive to generate needless surgeries, prescriptions or other "care."

In a national plan, then everyone would pay something--perhaps a percentage of their income. Without co-pays, the system is ripe for abuse. Those with no income would have to be subsidized-- but as Paul points out, if you consider the outrageous costs of emergency room care, then Kaiser-like monthly premiums start looking like a bargain. I myself don't have drug, dental or eyecare coverage; it's too expensive. Perhaps the subsidized insurance premiums could be equivalent to my own coverage--basic healthcare, where if you're ill you can see a doctor for $50. (Or $10 if you're unemployed--but everyone has to pay something.)

Could there be three or four Kaisers competing with each other? One would hope so. If it's a "good business," then there will be. Kaiser has been around for 60 years, so it is obviously a good business in the sense of being a sustainable business model.

Thank you, Paul, for raising an important issue.

For more on this subject and a wide array of other topics, please visit my weblog.


copyright © 2007 Charles Hugh Smith. All rights reserved in all media.

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