What’s Wrong with American Health Care?

By Richard Jaffe Esq.

Tim Bolen’s Note:   My friend, attorney Rick Jaffe, is a lion in attorney clothing.  He fears no one.  In cutting edge health care circles he’s the litigator to call when the enemy is at the gate.  His client list is a who’s who of the cutting-edge health world.  I was having lunch with Rick at the Cal-Jam Event in Costa Mesa, California, talking about my BolenReport revision project – when I looked across the table and thought to myself “Holy Moley! This guy knows stuff about the problems of health care that even I don’t know…  Hmmmm?” – and an idea was born.  So, I said “Hey Rick, what’s wrong with the US health care system?   Just below is his response…

Recently, the esteemed publisher/editor/writer of the Bolen Report asked me what I thought was wrong with the US healthcare system.  I was taken aback. Even though I have been involved in health care cases, organizations, and legislative initiatives for a long time, I don’t often get asked big picture questions. I thought it might be a nice change of pace to put down some of my observations and general critiques of the system based on my 30 years in the healthcare arena and as a consumer of health care services. So here goes.

Let’s start with a few common macro facts/critiques:

1. The US has the most expensive health care system on the planet, per capita.

2. But by almost all recognized population benchmarks, the Americans have worse health care parameters than people living in other industrialized countries.

3. On the other hand, all types of expensive new technologies are available to Americans with good insurance or who can self-pay.

And speaking of new health technologies…

4. Most drug and device innovations in diseases and chronic conditions come from US companies and are tested, at least in part, in clinical trials in the US, though that is changing somewhat because…

5.  The US is the toughest and most expensive place in the world to get drugs approved. But in the last decade or two, access to investigational drugs in the US has opened-up a little, compared to many western industrialized countries.

However, access to investigational drugs is still woefully inadequate (in my opinion).  As a frame of reference, each year the FDA allows a thousand or two patients to receive investigational drugs outside of clinical trials.  This is a miniscule amount compared to the number of people who want or might benefit from investigational drugs.

The seemingly unavoidable conclusion is that we spend way too much on health care compared to what we get in terms of societal or population level health benefits.

But how can that be? We have so much medical innovation coming from the US and we surely have the finest physicians and medical facilities (just ask any US mainstream physician). How can this abundance not translate into the world’s best medical care based on recognized health care benchmarks?

The answer is no doubt complicated, but I suspect that part of our underperforming stems from the nature of statistics and the difference between our health care system and the rest of the industrial world.  Almost all other industrialized countries provide health care as a basic benefit to its residents; they have what many here pejoratively call, “socialized medicine.”

In this country, we have two kinds of health care consumers, those with health insurance and those without. Major and moderate medical interventions are far beyond what most people can afford to pay out-of-pocket. Without insurance, people either don’t get all of the health care they need, or get it through ridiculously expensive and inefficient means like ER facilities, and the costs for this inefficient care are ultimately borne by taxpayers or health insureds. That’s no way to run a health care system.

The large number of un or underinsured has to drag down these macro health benchmarks. If so, then a better comparison might be comparing US residents who have good health insurance to the rest of the industrialized world, and ignore the un and underinsureds (which is basically what our Government has done until the advent of Obamacare). If that comparison were made I suspect the gap would close significantly but not completely.

So beyond the fact that we chose (and continue to choose) to let a portion of our residents live without adequate health care, there are likely other factors which cause us to pay too much for too little.

 

Maybe another cause of the problem is that we need more health care than people in other countries. Why would that be the case? One answer might be lifestyle and diet. Michael Pollen calls us the “people of corn.” Maybe our diet which is predominately corn based carbs, processed foods and corn fed protein is causing us to need more health care because people in other places just eat better (or less).

Being a recent low carb convert/missionary, I suspect this to be the case. But that’s ultimately on us, as consumers. Once the collective mindset recognizes the dangers of the standard American diet, our collective health should improve which would cut our per capita health care costs.

Ok, I’m just fantasizing. It is more likely that we will realize some of the dire predictions about the adverse health effects of excessive carbs and sugar on baby boomers, which will even more dramatically raise health care costs. (See David Perlmutter’s Grain Brain, the books by Gary Taubes, and other books about the dangers of carbs and sugar and what may happen to us baby boomers).

But it’s not completely satisfying just to blame ourselves, let’s look at some of the usual suspects to see if we can lighten the load and stick it to the Man.

Health Insurers

Full disclosure – I hate health insurance companies. I spent much of my career fighting them, so I am admittedly biased.

You know what a health insurance company calls a payment to a provider for a critical or necessary health care service to an insured who pays premiums? A “loss.”

That says it all.

There is an obvious structural conflict in having any financial intermediary pay for or decide what medical services the insurer should pay for. Insurance companies are in the business of making money (even the so-called “not-for-profits” like the Blues who are as bad as or worse than the “for profits”). The more “losses” they have, the less money they make and the less bonuses for their overpaid, immoral executives. (I told you I was biased) And it’s not significantly different when the carrier is an administrator of a company funded plan. Plan administrators work for the company, and their only allegiance is to the company/client.

Bottom lining it: When you have businesses which have an incentive to pay out as little as possible, so they can make a fair or unfair return on their investment, watch out.

The alternative is a government single-payer system. That is how health care is paid for in all or virtually all other industrialized countries. However we do have government pay health care in the United States for the old, the poor, veterans and government workers.  Results of these programs are complicated and mixed.

I spent a number of years in Israel which has a government single payer plan for all residents. However, they also have a private pay program for supplemental or additional care for anyone who has the funds and desire to retain private physicians or obtain treatments not approved or paid for by the government payer. I think that is the best of all possible worlds. And we already have part of that system here since most unconventional/complementary/integrative care is not insurance reimbursable, and hence is only practically available to the middle and upper-class.

The main criticism of single payer is exemplified by the fact that Canadians wait a long time for non-immediate life threatening operations, and some expensive, cutting edge technologies are not available in government pay England and other such places. But the rich English, Canadians and other foreigners suffering under single pay systems come here for such therapies or to go under the knife quicker, they do medical tourism in other places like South American and Asia. Even if we had single payer here, there is always going to be a demand for new technologies and uncovered services. Where there is a demand, the market will find a way to meet the demand, regardless of how many payers there are for standard, covered care.
Regardless of whether you buy into single-payer, I think all reasonable people acknowledge that the current private pay insurance system we have is a part of the problem. So any comprehensive solution has to involve a fairly radical change from what we now have. And anyone who claims that Health Savings Accounts and/or erasing state lines to promote competition is going to solve the problem is delusional or an ignoramus, or both.

Relatedly, there is one thing I begrudgingly give to those insurance bastards; if the system is going to force carriers to take the preexisting sick and really sick, mandatory enrollment for healthy people is a necessity. The numbers don’t add up any other way. I remember when this was a Republican thing, part of the “personal responsibility” mantra.

Somehow, mandatory participation has been transformed into an oppressive government/freedom of choice issue. People supposedly have the God or Constitutional given right to choose not to purchase health insurance. That works fine until the freedom lover shows up at the ER without the money to pay for the needed care, at which point the freedom lover becomes a health care socialist, deadbeat or goes bankrupt. But the result is the same; freedom lovers end up not paying for their care. The rest of us foot the bill.

However, reforming health insurance even via single payer will not solve our problems because costs are out-of-control and are not connected to regular market forces.

Hospitals and Providers

After receiving a hospital bill, most people are stunned and realize that the system is broken. The charges for hospital services and testing is staggering, and I would argue unsustainable.

One of the biggest problems with Obamacare is that it did not address the cost of services, let alone impose any cost containment measures on facilities, providers or products. It seems to me that any real solution to health care has to involve some kind of price controls/tax/bulk negotiations or some other way to limit the ever escalating cost of medical services for basic necessary medical services.

Many integrative practitioners operate on a cash basis and I don’t see that any such cost containment measures would directly affect them, for the same reason that cosmetic surgeons can charge whatever the market will bear. If you’re cash based, the market, your skill set and your marketing savvy will ultimately determine the true and fair cost and value of your services.

However, when the insurance companies rather than the patient pays, the market gets distorted. In that market, without some kind of cost containment mechanism, I think our health care problems are insurmountable.

Apart from lack of cost controls, I think physician mindset and education are major sources of our health care problems. As the CAM mantra goes, we have a disease system, not a health care system, and there is not enough focus on prevention (with some notable exceptions like the anti-smoking and Trans fats campaigns). Money may be behind this as well since medical interventions for diseases and conditions is where the money is, not prevention. While this may be primarily a public health issue, it’s also a physician mindset issue. The best concrete example of this is the lack of medical school training in diet and nutrition. Most CAM practitioners who receive nutrition training at one of the nutrition academies understand how woefully inadequate their medical school training was on the subject.

Finally, I know a lot of CAM practitioners live in the hope/fantasy that all their CAM services will eventually be insurance reimbursable. There are some clever insurance reimbursement ideas which float around from time to time. And every once in a while something good happens, like the American College of Nutrition and its certifying board’s success in getting their nutritionist members qualified for Medicare reimbursement. But on the whole, my opinion is that Medicare and the private pay carriers are never going to knowingly pay for hard-core CAM services like chelation or first-line CAM therapeutics. But there’s no downside to keep hoping and for the community to keep fighting the good fight.

By the way, I tell my chiropractor clients and audiences that if they can live without insurance carriers, they’re better off. I feel the same way about CAM physicians. The current and future reality is that the services of CAM practitioners are not for the poor of pocket.

 

And Let’s Not Forget Big Pharma

In the CAM community, big Pharma is a natural and inevitable target. One issue is of course high drug prices, but it’s complicated because of the length of time and extreme expense it takes to get drugs approved in this country.  Still, it was a bad move not allowing the Government to negotiate with Pharma the prices for Medicare drugs. We can thank the Pharma lobbyists and the folks in congress they paid-off. Reversing that enormous Government handout to Pharma is one of the first thing our probable future Dear Leader should do after his coronation, since he’s such a good negotiator (self-described).

 
Another widespread problem is how Pharma is corrupting scientific research by burying negative research and buying-off physicians. There has been some small corrective action in the last few years. However, savvy physicians shouldn’t accept everything that’s written even in the most prestigious journals, because as some have argued, the mainstream publication system has been corrupted by Pharma money. I also think part of the publication problem is what I referred to in Galileo’s Lawyer as “the church of medical orthodoxy” type thinking, or in Kuhnian terms, the terror of normal science.

 
One recent positive is the proliferation of open access, online journals. Their increased popularity among scientists is in part based on the faster turn-around time from draft to publication than mainstream print journals. Open access journals should also lessen the corrupt pharma influence and the anti-CAM stranglehold on the mainstream print journals. There are rumblings and start-ups promising even faster and almost immediate sharing of data, which could change the paradigm in research, the dissemination of results, and expedite access to new technologies.

A final thought: I am hoping there’s a special place in Hell for the Pharma companies and their physician co-conspirators who are getting our kids hooked on ADD drugs so they can be worked up the chain to SSRI’s and be life-long Pharma customer/addicts.

I also think some of the teachers may be complicit by too quickly demanding that their high spirited students be drugged. I’d like to see teaches get mandatory training on the dangers of ADD drugs and SSRI’s. May the manufacturers and their pushers get what they deserve?

And yes, that special place will also house some of the vaccine manufacturers, especially those who still use thimerosal.

Provider Shortages for Basic Healthcare

As a consumer, I think there is a shortage of primary care physicians. Witness the uptick in the “concierge” medical model. The idea that you need to pay an annual fee just to have reasonable access to a primary care physician suggests to me that there are not enough of those folks out there.

The other big factor might be that it’s still incredibly hard to get into medical school, and/or there aren’t enough medical schools. It could be that the medical profession likes it that way, to limit competition, and keep the pay higher than it might otherwise be if there were 20% to 30% more medical school graduates each year. So trade protectionism might be a factor.

Interestingly, I’ve seen an increase in the use of physician extenders like NP’s and PA’s in some medical practices and clinic chains. If the model works out, it might help increase access to basic care.

My Brethren, the Lawyers

Of course, let’s not forget the lawyers, and in particular the plaintiff’s malpractice bar. As a result of probably justified complaints from physician groups and others, many legislatures like Texas imposed tort reform.  Among other things, these laws limit the pain and suffering component of malpractice awards, which is where the big money is for small and mid-size cases. After the changes took effect in Texas, the plaintiffs’ (and defendants’) malpractice bar was decimated.

While there may still be defensive medicine because of feared malpractice cases, tort reform hasn’t slowed down the spiraling costs of health care. So either the lawyers weren’t the problem or tort reform didn’t put enough of them out of business. (I’m guessing most of you subscribe to the latter view.)

And Last But Not Least, the (Over) Regulators

Let me start with a positive. Because of DSHEA, we have very good access to anything that can reasonably be called a nutritional supplement. The bad news is that because of the regulators and the same law, there’s not much which companies or even physicians can say about supplements or herbs, in writing at least. The FTC and FDA police the supplement companies, and increasingly, the state medical boards are going after physicians who make “unsubstantiated” or “false and misleading” claims about supplements and their CAM treatments.

Parts of the federal law could have been written by Kafka. It is a violation of federal law for the manufacturer/seller and it is a violation of state law for the physician to provide truthful information about the research supporting a supplement, herb or CAM modality unless the research meets the regulators’ threshold of adequate scientific substantiation, a standard which very few supplements or CAM modalities can meet.

I had a case where the FTC went after an herb seller for making the truthful claim that chaparral was used by Native Americans to treat cancer, because of the “implied claim” that it cures cancer. An “implied claim” can be anything the regulators want it to be, and in effect eliminates a supplement manufacturer’s ability to provide any scientific information about virtually all nutritional products.

Physicians must be circumspect and vigilant about what they say about their services and products because the sceptics and quack busters are filing false advertising complaints against CAM physicians based on their web site claims. Nasty stuff; no doctor-patient relationship required. Just a wacko zealot with a computer sitting a thousand miles away with too much time is all it takes to cause grief to a CAM practitioner. Medical boards love these complaints since it’s an easy and cheap way to get practitioners. No medical experts reviewing charts. Just a review of the web site.

The regulators’ position is that they are protecting the public from misinformation. But it seems that much of their efforts are truth inhibiting and are based on an outdated paternalistic view from the days when medical information only came from Marcus Welby, M.D. and Reader’s Digest. So for sure, the regulators are part of the problem, at least for the CAM part of health care.

Anyway, that’s my take on at least some of the problems with our health care system.

Thanks Tim, this was fun and got my juices flowing. I think I’ll keep on doing this and start a blog and rant some more. At www.rickjaffe.com. Stay tuned!

Rick Jaffe, Esq.
rickjaffeesquire@gmail.com