Real health care reform is needed, should include patient responsibility

Reform should be more than cost shifting and price fixing.

Issue: October 2004

ByDouglas W. Jackson, MD

Douglas W. Jackson, MD [photo] --- Douglas W. Jackson, Chief Medical Editor

Our country’s spending on health care continues to grow faster than the overall economy. Government data tell us the current costs represent approximately 15.5% of the nation’s gross domestic product. Those of us involved in health care are made aware daily of ineffective changes being made and proposed to finance the ongoing health care crisis in this country. The challenge of providing affordable health care by the government and employers is growing, along with the need to further address how to provide health care for underinsured and uninsured patients.

A solution to the current situation will require significant reform throughout the system. Over the years, many think tanks and specially assembled groups have brought forward proposals for reforms to address our health care problems. A recent nonpartisan coalition that included representatives from unions, consumers, employers, politicians, providers, insurance companies and pension funds made several recommendations. One of their recommendations that seem to be the most easily accepted for implementation by bureaucrats and politicians was to further limit physician and hospital reimbursement and limit insurance premium increases. This is not new and is the approach Medicare is already implementing.

What is wrong with this as a “solution?” For one thing, it neglects the increasing costs involved in treating patients. How can we function if the approach continues to limit reimbursement for physicians and hospitals with no regard for the costs to maintain support personnel, to pay increasing malpractice premiums, to purchase new technology, and to fund health care insurance and workers’ compensation coverage for employees, etc?

Price fixing, cost shifting will not work long-term

Medicare reimbursement price fixing approach has intensified the cost shifting throughout the system. Since the early 1990s, managed care contracting has followed this pattern of decreased reimbursements. Higher reimbursements from other health care payers have supported these cuts for a while, but as more insurance companies have followed Medicare’s lead, the revenues that have enabled care for the lower payers have been milked out of the system.

During this same time, orthopedic surgeons — like other small business owners — are feeling the financial squeeze from increasing overhead costs. We are hearing from more of our patients that they are now enrolled in a health plan with lower reimbursements than our office overhead will support and accept.

Adapting to higher costs

We are experiencing another aspect of cost shifting when we try to provide medical coverage for our employees, our families and ourselves. Where will the revenue come from to support the increasing health insurance premiums paid as benefits for our valued employees? As most small businesses have to do, many physicians’ offices have had to shift portions of these costs (another cost shift) to their employees by requiring them to make larger premium contributions or pay higher out-of-pocket expenses.

We are not alone. The Center for Health System Change has reported that all small businesses are trying to adapt to increasing health care costs by increasing the employee share of the premium, increasing employee cost sharing, switching products and carriers, reducing services covered, and tightening eligibility requirements and/or reducing their role in insurance. (See http://www.hschange.org.)

Reward responsible behavior

While all of this is perplexing and frustrating, there is a definite trend emerging to shift more of the health care costs to individuals. Patients are being held more financially accountable for their non-emergency and routine health care expenses. This is more reasonable if they can also benefit from the savings they achieve through assuming more responsibility for their own health. Those patients who have healthy lifestyles should benefit from lower costs for their health care. We see this in auto insurance where good drivers have reduced premiums. Auto insurance does not cover oil changes, tire maintenance and the routine servicing of the vehicle. It covers the more expensive costs associated with unexpected and more catastrophic events.

In some future reform of our health care system, patients should be held more accountable for their destructive health habits and behavior through education and financial incentives. Certainly continuing to subsidize unhealthful behavior with health care dollars is not the answer. People who smoke, abuse alcohol and drugs, are obese, follow unhealthful diets and do not exercise need to be accountable. Those who are disciplined enough to avoid destructive behaviors can accept more financial risk in their health care.

As long as the insurance coverage in our country continues to finance the consequences of social problems like drugs, alcohol, obesity, smoking, promiscuous sexual behavior, violence, etc., there will be continued cost-shifting to those who are more responsible in their health and lifestyle. Pooling and covering all the nonresponsible social habits, activities and behavioral costs is another example of significant cost shifting to those who take an active role in their own well-being.

A more holistic approach to one’s health care has some advantages. Susan Samueli recently stated in a discussion we were having that “Conventional medicine gives too much of the responsibility to the physician and very little to the patient — one of the beauties of a holistic approach is that the patient learns to take responsibility for their own health.”

Just one example of an area that could result in very significant reductions in health care costs in this country would be control of the obesity epidemic. Obesity exemplifies our current approaches to health care, which is to cover more conditions. Secretary of Health and Human Services Tommy G. Thompson announced that Medicare would remove barriers to covering anti-obesity interventions if scientific and medical evidence demonstrate their effectiveness in improving health outcomes among beneficiaries. (http://www.hhs.gov/news/press/2004pres/20040715.html)

We are approaching a stalemate on the current financing of health care in this country. We need reform. A major deterrent is that our politicians do not have the courage or conviction to jeopardize their political lives to undertake real health care reform. Cost-shifting and price fixing is going to run out of time. It will continue to impact us as we are sandwiched between reduced reimbursements and increasing costs. There will come a time where the cost shifting to our patients will eventually lead to the necessary reforms. Individuals will pay directly for more of their own care and will directly receive benefits from prudent utilization of health care resources and from making healthful lifestyle choices.