The global community clamors for American innovation and ideas. But no one wants our health care system.
Americans spend trillions of dollars on health care only to generate some of the worst health outcomes in the world. Addressing health care’s problems with incremental solutions cannot generate the transformational change that’s desperately needed. Janis Powers offers a visionary alternative—the Dream Plan.
Powers advocates for a system rooted in the values of the American Dream: personal accountability, longitudinal goal-setting, and community support. Her proposal requires a complete decentralization of the current payment system, ostensibly eliminating both health insurance and Medicare while dramatically altering Medicaid. Some of the thought-provoking points in this rigorously researched book include:
• Why health insurance will soon be obsolete
• Why a longitudinal perspective on health is critical to improving outcomes and saving money
• Why the private sector, not the government, must drive health care innovation
• Why all Americans must brace for rationing in health care spending
The Dream Plan elevates the role of preventative care, creates a more market-based economy for health care goods and services, and shifts more accountability for outcomes to the patient. Powers offers an ambitious plan that serves as the first step in the transformation of the American health care system.
Janis Powers is a health care strategy consultant who lives in Austin, Texas.
Related collections and offers
|Publisher:||Greenleaf Book Group, LLC|
|Product dimensions:||6.00(w) x 9.00(h) x 0.51(d)|
About the Author
Read an Excerpt
HEALTH CARE PRIMER: UNDERSTANDING HEALTH CARE'S UNIQUE LANGUAGE
Health care, like any other industry, has its own vocabulary, acronyms, and terms. I've highlighted some key terms that are used regularly in this book. These are not technical definitions. I've outlined layman's descriptions, and I emphasize the aspects of each of these areas that most relate to the topics in this book.
Much of the source data for my research was provided by governmental agencies. It can be difficult to weed through, but there is an absolute treasure trove of information available, should you be so inclined to review it. Other nonprofit organizations offer excellent industry summaries and data compilations. Some great sources for health care information include the Centers for Medicare and Medicaid Services, the U.S. Census Bureau, the World Health Organization, the Henry J. Kaiser Family Foundation, and the Commonwealth Fund.
Providers. This is an all-encompassing term for the folks and institutions who provide care — from doctors and nurses to phlebotomists and pharmacists. The term also refers to the location of the care, meaning that hospitals and clinics are considered providers. Basically, any entity that gets paid to deliver health care is called a provider.
Payers. Whoever is paying for the care. So that would be insurance companies and public insurance programs like Medicare and Medicaid. If you pay out of pocket for an elective surgery, you're the payer.
Primary Care Provider. Primary care providers (PCPs) provide services for a patient's basic health care needs. If you get a physical, you'll see a primary care provider. When you go to a clinic, you'll see a primary care provider. Doctors can be primary care providers, but so can registered nurses (RNs) and physician assistants (PAs). Regulations are loosening regarding the authorized functions of non-physician primary caregivers due to a shortage of primary care doctors. Depending on the activity and the state, nurses and other primary care providers can conduct exams independently and prescribe certain medications.
Specialist. A physician who has advanced training in a specific area of medicine such as surgery (we all know what that is), cardiology (medical care related to the heart), orthopedics (care related to bones, joints), dermatology (the skin), etc.
Medicaid. The public health program for low-income Americans. Low-income senior citizens who cannot pay the costs not covered by Medicare may also qualify for Medicaid, making them dual- eligible beneficiaries.
Medicare. The public health program providing insurance for people aged sixty-five and older, younger people with selected disabilities, and individuals with end-stage renal disease.
Inpatient versus Outpatient. Inpatient care is delivered to individuals who are admitted to a hospital and stay for twenty-four hours or longer. Patients who can go home in less than twenty-four hours after being treated in a hospital are outpatients. There are some interpretations based on whether a patient has spent time in the emergency room under observation, but the twenty-four-hour metric is the simplest way to differentiate these patients.
Obese versus Overweight. Healthy (and unhealthy) weights for individuals are measured as a function of Body Mass Index, or BMI. BMI is an individual's weight in kilograms divided by the square of his or her height measured in meters. Per the Centers for Disease Control, if your BMI is 25 or more but less than 30, you are considered overweight. If your BMI is 30 or greater, you are considered obese.
Premium. The monthly payment an individual pays to an insurer for health insurance.
Co-Pay. An amount a patient is responsible for paying to a provider under an insurance plan. Co-pays vary by the type of coverage and by the service the patient accesses. Some plans may waive co-pays to primary care doctors, and most plans require a higher co-pay to see a specialist than to see a PCP.
Deductible. Similar to car insurance, this is the amount an individual must pay out of pocket before the insurance company will pay for certain aspects of coverage.
Elective. A procedure or test that is recommended by a provider but is not urgent. Patients can put off elective procedures, like knee replacements or cataract surgery, for months or even years. Yet in many cases, a condition not addressed by an elective procedure can worsen to the point that it becomes urgent. Patients are counseled to follow provider advice related to the recommended timelines for completing elective procedures.
ACA/Obamacare. Affordable Care Act. Officially called the Patient Protection and Affordable Care Act, this is President Barack Obama's signature legislation passed in 2010. Its intent was to provide all Americans with affordable health care coverage.
AHA. The American Hospital Association. This is the main lobbying group for hospitals in America that produces proprietary research and reports about the industry. The AHA's key goal of late is to figure out how to make sure hospitals can get paid as much as possible given the cost crunch impacting the industry.
AMA. The American Medical Association. This is the premier trade organization for physicians. It is the go-to resource for the medical community's view on clinical treatments and their relationship to policy. The AMA wants to make sure that no politician tells a doctor how to do his or her job.
CBO. The Congressional Budget Office. This nonpartisan group conducts economic impact analyses on proposed legislation. Lawmakers rely on the CBO's work to help them understand the short- and long-term financial impact of policy proposals across multiple industries.
CDC. Centers for Disease Control and Prevention. CDC is a component of the Department of Health and Human Services, but it is headquartered in Atlanta, not Washington, D.C. The CDC tracks disease, tries to find cures, and protects the nation against health threats.
CMS. The Centers for Medicare and Medicaid Services. I have no idea why it's not called CMMS, but that wouldn't be the first thing I don't understand about the organization. This federal agency is part of the Department of Health and Human Services and has the awesome responsibility of administering the major public health programs in America.
EMR. Electronic medical record. Also known as an EHR, or electronic health record. This technology is used to house medical and demographic information about a patient's health history. EMRs also support billing and payment functions and have modules customized for specific clinical departments such as surgery, radiology, and pharmacy. Common EMRs used by hospitals are those developed by Cerner, Epic, and Allscripts.
HDHP. High-deductible health plan. An insurance plan with a low monthly premium but a higher than average deductible. These plans are attractive for healthy Americans who do not expect to incur significant health care expenses.
Private insurance, also known as commercial insurance, refers to health insurance coverage provided through many employers or bought directly from insurance companies by consumers. About half of all Americans get their health insurance from their employer, and another 7% buy it outright. Private insurance spending accounts for about a third, or approximately $1.1 trillion, of health care dollars spent in America.
Most commercial health insurance companies operate with the same business model. An insurer acts as a middleman between the patient (referred to as a member or an enrollee) and the provider (the doctor, hospital, clinic). The member contracts with the insurer for a twelve- month period. The member agrees to pay the insurer a monthly premium, which can run several hundred dollars but can be over $1,000. The member also agrees to pay different amounts of money for access to different goods and services.
Most plans require the member to pay a flat fee, called a deductible, before the insurance company will start paying for the member's health care per the contract. The deductible is typically several thousand dollars but can be over $10,000. Between the premium and deductible payments, many policyholders can spend well over $10,000 a year if they require significant medical care.
The insurer agrees to provide a select set of services, such as doctor visits, tests, surgeries, hospitalizations, or physical therapy. The insurer makes arrangements with providers to perform these services for their members. Members must use these contracted providers in order for their care to be covered by the plan. The insurer may have specific rules that a member must follow in order to access care, such as the need for a referral from one doctor in order to see another. Some insurers can deny care if they deem it experimental or if the type of care is not covered under the terms of the contract.
Health insurers function like other insuring agents. They seek to minimize risk by spreading potentially high-cost accounts over many other lower-cost accounts. Health insurers want as many healthy members as possible on their plans because these individuals do not require significant amounts of service. Insurers can use more of the healthy contingent's financial contributions toward funding the care required by sicker enrollees. Remaining funds are used to operate the insurer's business, are reinvested in the company, and/or drop to the bottom line as profit.
IMPACT OF THE AFFORDABLE CARE ACT
The implementation of the Affordable Care Act rattled the consumer health insurance market because it challenged insurers' abilities to satisfy the law's requirements and still provide care that was affordable. The law has many components which have been implemented either fully, partially, or reversed through Supreme Court verdicts, executive orders, and other legislative efforts.
The plans are mostly sold through ACA "marketplaces" or "exchanges," which consolidate a market's offerings in one online community. This is why ACA plans are sometimes called marketplace or exchange plans. Some states have created their own exchanges where their residents can shop for plans. Consumers whose states do not have an exchange can find offerings on the federal healthcare.gov website.
The legislation affects health insurance plans offered to consumers, which is less than 10% of the population. Yet for reasons described below, the ACA is one of the factors contributing to instability and uncertainty in both the public and private insurance markets.
The most popular element of ACA, at least as far as consumers are concerned, is the prohibition of insurers to be able to reject applicants based on a preexisting condition. While the provision has opened up the market to those previously denied care, it has also been the major driver in cost increases. Individuals with preexisting conditions may require thousands, even millions of dollars to cover the cost of their care. Since insurers don't know whether very ill individuals will sign up for their plans, they can't estimate the risk level associated with their potential members. That, in turn, makes it hard for them to set prices. As a result, insurers may overprice to mitigate their risk.
The ACA also requires that marketplace plans provide ten essential benefits. These benefits include services such as hospital care, outpatient care, rehabilitation, and mental health services whether potential buyers want them or not. The ten essential benefits requirement makes the plans more expensive because of the broad coverage that must be offered. Only insurers with sophisticated contracting expertise and comprehensive industry contacts are able to cobble together the comprehensive suite of services required by law. That makes it harder for smaller insurers to offer ACA plans.
The ACA included provisions that changed the income qualification for Medicaid, thereby enabling more low-income Americans to enroll in the program. The ACA provided federal funding to cover most of the cost of the expansion, but some states objected to expanding a program they considered inefficient. Some believed that the ACA's de facto mandate to add dollars to their state budgets to pay for their portion of the expansion was federal overreach. Legal arguments ensued as more than twenty states initially rejected the Medicaid expansion requirement of the ACA.
The issue went all the way to the Supreme Court in the case the National Federation of Independent Business (NFIB) v. Sebelius. In June of 2012, the Supreme Court ostensibly ruled that the expansion was voluntary. Since then, more states have expanded their Medicaid programs, although some have negotiated to add their own state-specific terms, such as work or volunteer requirements for enrollees. At print, seventeen states had still declined participation in the expansion authorized by ACA (although one could argue that Maine should also be included in the count, as its adaption is currently hung up in an intrastate legal battle).
The National Federation of Independent Business (NFIB) v. Sebelius ruling determined that a separate but also contentious aspect of the law, the individual mandate, was constitutional. As noted earlier, the individual mandate is an aspect of the law that requires every American to buy health insurance or face a financial penalty. Despite the Court's opinion, many objected to the individual mandate because the plans that Americans were required to buy were arguably bloated by the ten essential benefits requirement and too expensive because of the high number of sick individuals in the market.
In response to these concerns, Congress eliminated the individual mandate as part of the Tax Cuts and Jobs Act of 2017. Many are concerned that healthy Americans will now opt out of buying insurance altogether, leaving those who remain in the pool of applicants sicker and thus more expensive to insure.
While the ACA only directly impacts the approximately twenty million Americans buying ACA plans, the legislation indirectly affects the rest of us. First, the ACA allowed for government-funded subsidies paid to insurers to cover the cost of insurance premiums that were too expensive for low-income shoppers. Taxpayers foot the bill for these subsidies, for which 85% of the buyers on the healthcare.gov website were eligible in 2016. The Trump administration moved to eliminate some of these subsidies in 2017, although negotiations with insurers are ongoing. Without the subsidies, the ACA insurance market would be on the verge of collapse.
Without the individual mandate and with the threat of eliminating the subsidies, health insurance on the marketplace will continue to be too expensive for many to afford. When the uninsured require medical care, they put themselves at risk of financial ruin. One recent study indicated that seven out of ten uninsured individuals who required trauma care in the ER were left with financially catastrophic medical bills.
If individuals can't pay for their care, then it's up to the rest of the health care system to fund it. That means that other Americans indirectly pay for the care through taxes, donations, and increases in health care costs throughout the system. Between 2013 (when ACA went into effect) and 2016, the price of family premiums offered through employer- sponsored plans increased 11%.
But many more costs were shifted to employees through a dramatic rise in deductibles. From 2011 to 2016, the cumulative increase in single coverage (nonfamily) deductibles was 63%. And between 2010 and 2017, the number of Americans enrolled in high-deductible health plans (HDHP) doubled to over twenty-one million people. An HDHP offers a lower monthly premium in exchange for a higher-priced deductible. These plans are advantageous for healthy Americans, but if these members require medical care, they'll foot much more of the bill with an HDHP than they would with more traditional insurance. While these increases cannot be solely attributed to the ACA, there's no doubt that the effects of the legislation are being felt financially to some degree by all Americans.
INSURERS' COST CONTROL STRATEGIES
Regardless of what transpires with ACA, the cost of health care in America is increasing. Health outcomes in America have been declining, as evidenced by our increasing rates of obesity, chronic disease, and drops in life expectancy. As more Americans become less healthy, insurers have to figure out a way to provide for care while remaining financially viable. There are several mechanisms insurers can and have used to make sure they maintain their profitability.
Insurers have been passing on more of the cost of care to members. As noted previously, premiums and deductibles have been rising, which provides more revenue to the insurer. More and more individuals are enrolling in high-deductible health plans. HDHP can be good for insurers because patients with these plans use fewer health care services than individuals not enrolled in HDHPs. For example, HDHP enrollees use fewer inpatient services and are much more likely to postpone elective care because they'll have to pay for it out of their own pockets. That means the cost of paying for the care for HDHP enrollees can be less for the insurer, making these individuals more attractive, financially.(Continues…)
Excerpted from "Health Care"
Copyright © 2018 Powers Enterprises, LLC.
Excerpted by permission of River Grove Books.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
PART 1 America's Health Care System: Today,
INTRO The ER: A Case Study in Misaligned Incentives,
CH 1 Health Care Primer: Understanding Health Care's Unique Language,
CH 2 The Money: Where It All Goes,
CH 3 A Historical View of Health Policy: How Did Things Get So Complicated?,
CH 4 Perspectives on Health Insurance,
CH 5 Attempts at Health Care Transformation,
CH 6 The Case Against a Single Payer System,
CH 7 Value-Based Care: An Academic Policy Solution,
PART 2 America's Health Care System: The Dream Plan,
INTRO A Blue Sky Proposal,
CH 8 Longitudinal Health Care Plan,
CH 9 The Obsolescence of Traditional Health Insurance,
CH 10 Business Case for the LHCP,
CH 11 How the Dream Plan Can Reduce Costs in Health Care,
CH 12 Public Health,
CH 13 Making or Breaking: Critical Success Factors,
CH 14 Recommendations for Short-Term Change,
LHCP BUSINESS CASE DETAIL,
ABOUT THE AUTHOR,