Just Caring: Health Reform and Health Care Cost Containment Leonard M. Fleck, Ph.D. College of Human Medicine Michigan State University
No Pain, No Gain
Keep your enemies closer???
Key Questions What are the major deficiencies, ethically speaking, in our health care system as things are now? That is, what are the specific injustices that are protected and legitimated in our health care system as things are now? How effectively does the Patient Protection and Affordable Care Act address these injustices?
Justice Issues Is it unjust that there are 50 million Americans without health insurance? Is it unjust that insurance companies can refuse to provide insurance coverage for those with pre-existing expensive medical conditions? Is it unjust that employers can refuse to hire healthy individuals with potentially costly health problems? PPACA addresses all the above issues
Justice Issues Is it unjust that the middle class would get 45% tax deductions for the value of insurance premiums while low-wage workers would have to pay for insurance with after-tax dollars? Is it unjust that our health care system has pure administrative costs of 16-22% of all health dollars in the private sector? PPACA does NOT effectively address these issues
Justice Issues Failing to meet serious health needs because individuals lack the ability to pay Expending large volumes of health dollars for only very slight health gains (when lots of other unmet health needs could be met effectively and at a relatively low cost) [not addressed by PPACA] Asserting the equal value of all lives but only meeting the health needs of well insured
Justice Issues Allowing opportunities to maximize profits to corrupt or take precedence over core moral values of medicine Providing only minimal amounts of medical care to those who are least well off health-wise even though they could clearly gain substantially from more health care Physicians refusing to care for Medicaid patients due to lower reimbursement rates Unclear if PPACA addresses these issues well
Justice Issues Young uninsured individuals failing to purchase health insurance, thereby often foisting the cost of their care upon society at large. This issue is addressed by the individual mandate and gradated subsidies for the purchase of health insurance up to 400% of the poverty level.
Other Social Values Individual liberty is protected in that uninsured individuals have a choice of health plans through the exchanges (and choice of care providers) Quality of care is enhanced through Accountable Care Organizations (better continuity of care, better management of chronic illness, reduced duplication of tests,) and through electronic medical records
Key Claims Significant health reform is an impossible dream unless: The Just Caring problem is explicitly acknowledged and forthrightly addressed The Just Caring problem is addressed through a very broad, prolonged, fair, and transparent process of rational democratic deliberation.
SOME STATISTICS In 2010 in the US we spent $2.6 trillion on health care, or about 17.6% of GDP. Compare to 1960 when we spent $26 billion on health care, or about 5.2% of GDP Project to 2019 when we will spend $4.5 T, or about 20% of projected GDP Canada, UK, most European nations currently spend 8-11% of GDP on health care.
Key Implication Health reform will not be affordable or sustainable unless effective measures are taken to control escalating health care costs. Painful choices will be required to control health care costs Painful choices can be implemented only if the pain is fairly spread (which is very difficult to achieve in a highly fragmented health care system)..in ADDITION
Take Home Message #1 Health care is a VERY BIG business measurable in trillions of dollars per year. In the US a larger and larger share of health care has come under the control of for-profit enterprises (hospitals, insurers, long term care facilities, free-standing radiology centers and surgi-centers, etc.) [This is a major obstacle to more comprehensive and more just health reform.]
Take Home Message #2 Two Great Equations in health care (Uwe Reinhardt) which serve as major obstacles to achieving reform COST CONTAINMENT = INCOME CONTAINMENT COST CONTAINMENT = CARE CONTAINMENT (One person s wasteful and inefficient care is another person s life-sustaining care.
SOME STATISTICS In 2010 roughly 35% of total health expenditures were consumed by the 13% of the US population over age 65 (39 million people), or about $900 billion. In 2012 roughly 15% of our population will be over age 65 and consume $1.2 Trillion in health care In 2019 Medicare program will cost $1 trillion In 2025 roughly 21% of our population will be over age 65, about 78 million individuals. CONCLUSION: Medicare cost containment MUST be addressed, but Ryan proposal is worst possible way to address that issue so far as justice is concerned.
Why Health Costs Increase Inexorably Insurance mechanism New medical technologies Extremely fragmented system for financing health care>>high administrative costs Competition among health care providers Increase in burden of chronic illness Social belief in pricelessness of human life Lack of shared social understanding of health care justice/ limits on demands NOTE: PPACA does little to address any of these issues.
Cost-Escalating Reasons Beta-interferon for MS Statins Implantable Cardiac Defibrillators MRIs/CTs/PET scans Totally Implantable Artificial Hearts/ LVADs Pre-Implantation Genetic Diagnosis Renal dialysis Factor VIII for hemophiliacs Herceptin/ Iressa /Avastin/ Erbitux etc--very expensive anti-cancer drugs Rehab for spinal cord injuries AIDS drugs (triple and quadruple combos)
Drug Cost---Survival gain Cetuximab (Erbitux) $80 352 1.2 mo ( 1 ) Sorafnib (Nexavar) $90 816 1.5 mo Bevacizumab (Avastin) $15752 10 d Erlotinib (Tarceva) $34373 2.7 mo Stats from Fojo/Grady, How Much is Life Worth: Cetuximab, non-small lung cancer, and the $440 billion question Journal of the National Cancer Institute June 29, 2009
Take Home Message #3 Unless we (citizens of a just and caring society) are willing to take on the rationing/ prioritysetting/ cost containment question thoughtfully and fairly and respectfully, there will be no effective cost control and health reform will remain a mirage.
Problems Rationing must be discussed explicitly, not disguised. It is very much a part of our health care system now, but it is hidden and arbitrary and irrational. But rationing has become a dirty word, and intense partisanship fueled by distorted presentation of facts has made civil conversation about such difficult choices almost impossible.
Problems Those whose incomes/profits depend upon health care do not want to see health care costs controlled. This includes all hospitals (whether for-profit or not-for-profit), all insurers, all drug producers, all health suppliers, the vast majority of physicians. These are very powerful interests who will support health reform efforts only to the extent to which they can control its effects on their bottom line. Recall Medicare Part D.
Take Home Message #4 If nothing effective is done to bend the health care cost curve downward, the result will be unsustainable growth of health care deficits in the federal budget (which will mean gradually undermining whatever good was accomplished by insuring the uninsured). NOTE: European countries spend 8-11% of GDP on health care and cover everyone with high quality care. In theory we ought to be able to match that, but it would require politically painful choices.
Health Reform Fails? Access problem becomes much worse; we have 50 million uninsured today, another 25 million underinsured.by 2014 we should expect 60-62 million uninsured (and more underinsured) Cost-control problem becomes much worse, likely large shift to individual responsibility for controlling costs with large implications for inequities and reduced quality of care (because of bad consumer judgment).