UO Magazine > The Picture of Health Care

The Picture of Health Care

It’s impossible to escape national scrutiny of the nation’s health care
system during an election year. Here’s a snapshot of the issues and ideas you’re likely to hear bantered around the water cooler in the coming months.

By Kelly Kirch Unique Opportunities, May/June 2008

As an orthopedic surgeon, John Dietz, MD, is up to speed on the latest procedures in spinal fusion. But medical knowledge alone won’t ensure he continues to find success and satisfaction in his career with OrthoIndy in Indianapolis. Like his fellow physicians, he stays on top of the latest health care talk coming out of Washington, DC, too.

In fact, when medical software firm Epocrates Inc. surveyed clinicians and health care professionals on their thoughts about reform in June 2007, 80 percent of respondents said health care reform will be a central topic in the 2008 elections. Fifty-eight percent of primary care physicians believe that the United States should move to a single-payer health care system; 60 percent of primary care physicians predict the U.S. health care system will worsen in the next five years. Even the youth are pessimistic—32 percent of medical students say we’re in for an even rockier ride in that time frame.

“There is a great philosophical battle in heath care as to whether competition is a viable way to control cost and improve quality or whether regulation and mandatory oversight or a single-payer system would be a better way to go,” Dietz says. Chalk him up as a fan of competition, a conviction he clings to after serving as a career military orthopedic surgeon working with a fully managed system. “The more control the physician has in the business, the more alignment of incentives and priorities will occur,” he says.

But that’s just one viewpoint swirling in a highly charged political year. Epocrates’ surveys reveal that 45 percent of health care professionals believe uninsured patients are the greatest challenge facing the industry; 36 percent point to restrictions placed by managed care; 35 percent say declining reimbursement; 34 percent cite not enough time with patients; 29 percent think our troubles lie with increasing cost of medical liability insurance, and 24 percent mention underinsured patients—which circles back to the top of the list.

Here’s what four experts (physicians and health care executives) told Unique Opportunities :

1. TEVI TROY: Deputy Secretary of Health and Human Services Working closely with Secretary Mike Leavitt, Tevi Troy oversees all operations, including Medicare, Medicaid, public health, medical research, food and drug safety, welfare, child and family services, disease prevention, Indian health, mental health services, and many other activities. He also serves as the Regulatory Policy Officer for HHS, overseeing the development and approval of all HHS regulations and significant guidance.

UO: What are the health related policies or laws put into effect since 2000 that you believe have had the most effect on our country?

TT : We’ve had some very important health care initiatives that have made this the most consequential health care administration in four decades. Number one is Part D under Medicare, where prescription drugs are now available to seniors on an outpatient basis. It used to be you had to be in a hospital to get prescription drug coverage—that was crazy. Not in line with the current practice of medicine.

We tried to offer up a floor of benefits and say private plans could come up with flexible ways to provide at least this amount. With the latest numbers that are just about to come out, 39.5 million seniors have some form of prescription drug coverage. Eighty-five percent of seniors are happy with their plan; 90 percent have chosen plans that offered more options than the Congress’ basic plan. It has shown that market-driven solutions can work in health care, and that’s extremely important.

Number two is the creation of health savings accounts. The idea is to remove distortions in the tax code and give families more control over their health insurance, independent of where they work. More than 4.5 million Americans already have HSAs, which in itself is an impact study. It shows when you give people choices, they will exercise them, and people who are more involved in health care make better decisions.

Finally, when President Bush came into office, he said he would fund, improve or increase the number of community health centers by 1,200 [the Health Center Growth Initiative]. He met that goal in December 2007. That has brought the total number of sites to over 4,000, serving more than 16 million Americans. Again, these are impoverished, uninsured Americans and giving them real options for health care: Access without people having to clog up the emergency rooms. You can go to a community health center where you are recognized and where the doctors and staff know you and treat you in a friendly way. In fact, I was up in Harlem recently and went to one of the community health centers there and it was such a friendly and open environment. It was a great place. They also provide dental care, which is extremely important, especially in lower income areas. So I think that’s a great way to help individuals who need access but also from the doctors’ perspective, it lets the emergency rooms deal with emergency cases. And let the people go for regular treatment to community health centers.

UO: What has been the impact for physicians and patients?

TT : With Medicare Part D, doctors can now prescribe drugs to that person without putting them into the hospital on an inpatient basis. It makes a huge difference for any individual doctor, opening up the practice of medicine to give them more flexibility in how they practice.

HSAs get families more involved in health care. They’re not just blind reactors to what the insurance company dictates. Families look at what their costs will be and discuss with their doctor the best type of health care for them.

UO: What should the next administration do in the health care arena?

TT : The president set a goal of half of all Americans having transportable health records by 2014. We don’t think this will work if it’s imposed by government. But (HHS) Secretary Leavitt has helped set the standards for the marketplace. There are a lot of emerging leaders in this area. For example, Microsoft has the HealthVault initiative, where they are offering personal health records and shooting for 40 million customers in the next several years. That would go a long way toward meeting our goal.

The President called for in the State of the Union, both this year and last year, a standard deduction for health insurance. I talked a bit about the market distortions in our current system where you have to be employed by a company willing to provide health insurance, but only the company gets the tax deductibility. The President wants that to go to the individuals, which will make health insurance that much more portable. It will make people more likely to purchase health insurance thanks to a very strong, powerful tax incentive. In an election year, things don’t move as quickly as we’d like, so if that does not get done we’d like to see that done in the next administration.

We’d like to see more progress on medical malpractice reform, and that will have a real impact on doctors. We just talked to my wife’s OBGYN, who said that his annual malpractice insurance costs are $140,000 a year—that’s for each member of the practice. It drives a lot of people out of the practice. Unfortunately, malpractice reform been stuck in the Senate a couple of times and we’ve not been able to get that out. That would really help drive down costs.

2. MARK PAULY: health care economist with the Wharton
School of the University of Pennsylvania

Mark Pauly, PhD, is a professor, the vice dean, and the chair of the health care systems department in the Wharton School at the University of Pennsylvania. He teaches courses on health care, public policy and management, insurance and risk management, and economics. Pauly was previously a professor at Northwestern University for 16 years. He has also consulted for a number of organizations including the Greater New York Hospital Association, the Urban Institute, various pharmaceutical companies, and National Economic Research Associates.

UO: What are the health-related policies or laws put into effect since
2000 that you believe have had the most effect on our country?

MP: The tax treatment of health savings accounts. I don’t think we have reached the peak yet, although when candidates talk about changing the law one way or the other, it slows down people’s day-to-day decision making beyond the merits of the case. My own judgment—and it’s really just guessing—I would be surprised if the fraction of the population that took these plans was more than 10 percent.

It’s better than nothing, but I wouldn’t have done it that way. I would have changed the tax treatment of health insurance but, more in line with the President’s proposal [in 2007] to offer a cap, a limited fixed dollar deduction or ideally a tax credit. It would have been a simpler program than the HSA went with. After all, there are a lot of rules that you have to abide by to get your tax break.

For instance, the requirement that you take out a catastrophic policy of a certain level to be eligible. I would be in favor of just saying you would be eligible if you just set aside money for medical spending. It wouldn’t be reasonable for people to take out a first dollar policy, because what would they need the money for? Having rules that you have to meet just deters people and are unnecessary in this case. So if someone is only willing to set up an account and nothing else, I would be willing to let them do that.

UO: What has been the impact for physicians and patients?

MP: I couldn’t hazard a guess. I don’t think we have enough evidence that it really changed dialogue [between doctors and patients] that much. It probably did, but I don’t think anyone knows definitively.

UO: What should the next administration do in the health care arena?

MP: Something more serious about the uninsured as a starting point. There are a lot of options, and I would personally be happy to see any one of them done compared to nothing.

On the positive side, virtually all the proposals envision subsidies that are related to income, which I think is a good thing. The other feature that is common on both sides of the aisle is multiple choice options on coverage—public or private—and the nature and extent of coverage, managed care, big deductible, small deductible. If you were a devotee of choice, you would be worried that some of the Democrat plans have a lot of regulatory limits. You are perfectly free to choose a good plan, but they would define what a good plan is. On the Republican side it’s about setting budget priorities. The candidates aren’t imaging that they could somehow raise $100 billion immediately, which is what you would need for an effective program. At some future date, maybe it would be possible.

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