DISCUSSION ON THE HIDDEN COSTS OF OUR UNINSURANCE PLAGUE AND ON THE IDEA OF RATIONING HEALTH CARE

This dialogue was based on two of Don's Quotes of the Day. First his feature on the Institute of Medicines recent publication "Hidden Costs, Value Lost - Uninsurance in America and then a quote from Humphrey Taylor including comments on rationing health care.  Project EINO believes that it is sensible to deal with these two topics together.

• Hidden Costs Of Uninsurance, Lost Value To Nation

• Harris Poll Chairman, H. Taylor, On Rationing Care

• Don McCanne Comments on Rationing

• R. Mueller Comments On "Hidden Costs" And What Book Left Out

• Kip Sullivan Responds To The H.Taylor Quote On Rationing

• Mike Luff Of Canada's NUPGE, Second Largest Union, Responds To H.Taylor

• Summary and Interconnections of Preceding Six Contributions

• Dennis Lazof on On Hidden Costs, Rationing and Democracy

HIDDEN COSTS OF UNINSURANCE, LOST VALUE TO NATION

The best available estimate of the value of uncompensated health care services provided to persons who lack health insurance for some or all of a year is roughly $35 billion annually, about 2.8% of total national spending for personal health care services.

The Committee's best estimate of the aggregate, annualized cost of the diminished health and shorter life spans of Americans who lack health insurance is between $65 and $130 billion for each year of health insurance forgone.

Estimates of the cost of the additional health care that would be provided to the uninsured once they became insured range from $34 to $69 billion per year, assuming no structural changes in the systems of health care financing or delivery, average scope of benefits, or provider payment.

Conclusion

This report and the work of the Committee on the Consequences of Uninsurance not only provide information about the costs resulting from the lack of coverage and some of the costs and benefits of expanding it to everyone, it also presents us with an ethical dilemma. In light of the information and analyses that the Committee has developed about choices we have not made as a society, as well as those we have made to invest heavily in health care, we cannot excuse the unfairness and insufficient compassion with which our society deploys its considerable health care resources and expertise. Providing all members of American society with health insurance coverage would contribute to the realization of democratic ideals of equality of opportunity and mutual concern and respect. By tolerating a society in which a significant minority lacks the health care and coverage that most Americans enjoy, we are missing opportunities to become more fully the nation we claim to be.

From the Institute of Medicine, The National Academies Press, "Hidden Costs, Value Lost - Uninsurance in America",  this book and a PDF-format summary are available at CLICK HERE 

HARRIS POLL CHAIRMAN, H. TAYLOR, ON RATIONING CARE

Harris Interactive, Health Care News, May 13, 2003, "The Health Care Debate We Are Not Having", 
By Humphrey Taylor, Chairman of The Harris Poll

What is common to all health care systems is the mismatch between demand and the available supply. There is a big gap between... what we'd like and what we are willing to pay for.

Virtually all experts (and, in my opinion, all health ministers) recognize that we ration care now. We ration it by what is reimbursable (by both the public and private sectors). Many countries ration supply by limiting the number of doctors, hospital beds or high tech equipment. In the U.S. we ration by price and the use of high copays, coinsurance and deductibles, and we ration by not providing insurance coverage to forty million people.

However, we don't tell the public that we ration care. Governments and politicians are loath to use the dreaded "R" word. They, and almost all who debate health care policy, talk as if there are solutions to our problems that would make rationing unnecessary. Increasing productivity, reducing errors, lowering costs, improving lifestyles and prevention, and cutting waste, fraud and abuse are all admirable goals which would make the money go further - but never far enough to avoid the need to ration care.

Uwe Reinhardt has raised the question of whether health care is, or should be, more a common good (i.e., an entitlement) or more a private economic good, where you get what you are willing and able to pay for. We should debate that.

When I have asked politicians, here and abroad, why they don't engage in this debate, they say that talking about rationing is unpopular, and that the public would not appreciate their candor. One response is that if you don't want to use the "R" word, call it "prioritization" or something else... But my main reply is that when you ration something as important as health care (or ask the private sector, through managed care, to do this for you) and don't admit that you are rationing it, two things are certain: The public will continue to think that the health care system is in bad shape, and they will blame their leaders for it. This commentary may still be available at CLICK HERE 

Don McCanne Comments on Rationing

Rationing, by definition, refers to the equitable distribution in limited portions of a scarce but necessary resource, most commonly food. But in the United States we are already spending enough in health care to pay for all necessary care for everyone. We can treat all pneumonias, control all hypertension, replace all severely degenerated hips, provide all prenatal and well child services, and, in general, provide all medical care that most reasonable persons would consider to be necessary.

But can we afford to pay for MRIs and arthroscopies of every sore knee, when the history and examination fail to establish the likelihood of internal derangements or surgically correctible arthropathies? Can we afford to pay for an inappropriate cranial MRI on every unilateral, throbbing headache preceded by a scotoma, merely because the physician wants to reduce his/her perceived malpractice exposure? Can we afford to pay for spiral C-T scans as part of a health checkup when the results of those scans are likely to result in a net negative in health care outcomes? Can we afford useless or inappropriate diagnostic tests and interventions that patients have decided they want based on inadequate medical information? 

Can we afford to pay for technologically advanced interventions which are highly profitable for the providers but have not been demonstrated to improve outcomes? And, for the most difficult type of decision of all, can we afford to pay for an extremely expensive and unpleasant treatment program, as for certain malignancies, when the studies demonstrate the statistically significant finding that the program prolongs life by a few days, even if those are not quality days?

The health care delivery system in the United States is not a scarce resource; therefore we don't have to ration access to it. But we should have in place a system that would prioritize the allocation of our resources so that they are not wasted on inappropriate or contraindicated care, especially if that might mean that we would need to ration necessary care for the rest of us.

R. MUELLER COMMENTS ON "HIDDEN COSTS" BOOK AND WHAT IT LEFT OUT

Rudolph Mueller, M.D., is the author of "As Sick As It Gets".

It's interesting to see the IOM report showing that "the best available estimate of the value of uncompensated health care services provided to persons who lack health insurance ... is roughly $35 billion annually...and the best estimate...of the diminished health and shorter life spans of Americans who lack health insurance is between $65 and $130 billion for each year of health insurance forgone." Also estimates "of the cost of the additional health care ...to the uninsured once they became insured range from $34 to $69 billion per year". At least the report shows that lack of health coverage to the uninsured ends up costing society overall more than providing insurance to the uninsured. However I think the IOM significantly underestimated the problem.

What the IOM report failed to report was the extra medical costs sustained in our society from people being underinsured or also previously uninsured. I have seen many patients previously uninsured or underinsured who become seriously ill from lack of timely and affordable medical care. If they survive, they frequently fall into poverty and qualify for Medicaid. Should they live long enough, they reach or continue on in Medicare sicker and more costly to care for than if they had been previously "well insured" or "universally covered". I now call these additional costs and illnesses "Care Denial Induced Effects" or "CDIE," and in the book "As Sick As It Gets" these additional direct medical costs reached $160 billion in 1998. The costs of CDIE in 2003 are probably many billions more considering millions of even more Americans are uninsured and underinsured since 1998.

The IOM also recently estimated "18,000" young uninsured adults die from lack of health insurance. Again, I think they have significantly under estimated the losses in our nation. When one compares the potential years of life lost before age 70 in the US vs. the average of the next nine largest wealthy democracies, nearly 200,000 Americans die prematurely every year more than those wealthy nations that have had universal health systems in place for decades.

The people of the United States continue to suffer enormously high medical costs and only mediocre medical outcomes relative to the other wealthy nations. Unfortunately these costs to our society and the human losses are even much greater than what the IOM courageously reports.

KIP SULLIVAN RESPONDS TO THE H.TAYLOR QUOTE ON RATIONING

Humphrey Taylor wrote:

"Increasing productivity, reducing errors, lowering costs, improving lifestyles and prevention, and cutting waste, fraud and abuse are all admirable goals which would make the money go further - but never far enough to avoid the need to ration care."

Kip Sullivan:

I'm amazed at how often health care experts and insurance industry officials make statements like this with utter confidence. The claim that rationing is inevitable is pure ideology.

Part of the problem is the failure of those who use the term "rationing" in a health policy context to define it, which in turn permits loose usage. "Rationing" in the health policy context, as opposed to most other contexts, currently has two meanings. In the hands of right-wing critics of the health systems of other countries, "rationing" always means denial of NECESSARY medical services. (It's no fun accusing Canada of denying UNnecessary services to its citizens.) But in the hands of people like Taylor criticizing opinion makers in this county, "rationing" means ANY denial of medical care, necessary or unnecessary.

In every other context that I can think of offhand, one needn't define "rationing." That's because in other contexts we assume that -- or at minimum we do not debate the proposition that -- if people want the item in question their wants should be respected. Thus, if a history book says sugar was rationed in World War II, or if a newspaper says Cuba is rationing electricity on hot days, we assume that all of the sugar and electricity demanded was needed, or, at minimum, it doesn't occur to us to question whether all those slobs on the home front really needed all that sugar, or whether the demand for electricity in Cuba was 80 percent legitimate and 20 percent frivolous. Because rationing means in most other contexts denial of necessary or, at minimum, legitimately demanded goods or services, we ought to insist that it be used that way in the health policy context.

Ergo, we should conduct guerilla warfare against "rationing" when it is used to refer to ANY denial of medical services, needed or not needed. It is utterly unenlightening to say that I have been "rationed" if I asked my doctor for a medical service I didn't need and my doctor refused to order it. We have perfectly good words to describe what has been done to me that don't imply that I was denied medicine I needed.

Similarly, it is of no interest to me to learn from Taylor that "rationing" occurs all over the industrialized world. Unless speakers like Taylor present some evidence that the health systems of the French, the Canadians, etc. are routinely denying NECESSARY medical services, I consider it meaningless to say that "rationing" is universal.

MIKE LUFF OF CANADA'S NUPGE, SECOND LARGEST UNION, RESPONDS TO H.TAYLOR

Humphrey Taylor's commentary on rationing health care is a classic exercise in manifestly missing the point. It's also a prime example of how the truth can be found to be inconvenient and incompatible with hidden agendas and ideology but nicely layered over with the guano of "expert" evidence.

The truth is, almost all Canadians, and I suggest most Americans as well, want, like, and need universal and comprehensive health coverage. Yet, we are saddled with this Great Medicare Debate. How can that be? Canadians and Americans live in a democracy. We are citizens in a nation where the will of the people is paramount. How is it that Canadians and Americans can be so long denied something we like and want so much? Who is doing this to us and why?

It's clearly not everyday Canadians that are making an issue out of medicare. We already did that. It's how we got medicare in the first place. Elections were won and lost on this issue until the politicians got the message and we got what we wanted: a medical care plan that covered every Canadian citizen, everywhere in Canada, no matter what we suffered from and no matter how much money we had in our wallets.

Comprehensive, universal medical coverage was our priority, often our top priority. It was the best hedge we could provide to ourselves against life's unending uncertainties. We knew that without our health, we had nothing. With it, we always had a chance.

So we got our medicare. It worked well for a long time. Now politicians and "experts" like Mr. Harris are telling us it can't last. Not without rationing it. Not without changing it beyond all recognition. Not without disregarding and dismissing the will of the people.

So the armies of actuaries, squads of statisticians and platoons of policy analysts debating the best way to ration health care will do no good. Because the heart of the Great Medicare Debate in Canada and the United States is not simply about the provision of medical care. It is, first and last, about responding to the will of the people. It is about democracy.

I would like to remind Mr. Harris that no one ever thought to ask whether we could afford World War II, whether we could afford to fight for our right to have our life to be the way we wanted it. In the same way, the question "can we afford comprehensive and universal public medicare" need never be asked. Of course we can afford Medicare, it is our life and our money and we can "afford" to spend it any way we like.

There will be no resolution to the Great Medicare Debate in Canada and the U.S. until the "experts" and our elected leaders acknowledge and accept that reality, no matter how disturbing it is to their big-money friends.

Politicians and "experts" must stop trying to talk us out of what we like and want. We must not let the talk, talk, talkers grind us down. We must not let the shills and shamans of private enterprise sway us with flash talk of better service by allowing them to ration care and make a buck out of it. We must hold out for ourselves. We must hold out for democracy. We must hold out for the kind of medicare we want.

Mike Luff
National Representative
NUPGE

SUMMARY AND INTERCONNECTION

Don's QoD from Jun 17 makes a point of central importance to anyone concerned with the inadequacy of our current health care system and its redesign into a system that will provide for the needs of all Americans. According to a recent book from the Institute of Medicine, some $135 BIL/year is available towards this redesign as this money is being poured down the double drain of (1) uncompensated care, or money that providers and institutions of care lose and (2) loss of productivity to the society. R. Mueller adds that the IOM failed to account for the $160+ BIL/ year that is lost because conditions are not treated in a timely fashion and in the most appropriate setting. That brings the total savings from UHC to about $295 BIL /year. Meanwhile the costs of additional health care once all the uninsured are fully covered is estimated by the IOM to be between $34 and $69 BIL - a ninth to a fourth of the amount saved.

Furthermore, "Hidden Costs" clearly states that administrative savings from converting to a UHC system were not included. We know that Medicare operates with an administrative overhead of about 2% while private insurance operates with 25 - 30% administrative overhead. So, another very large source of funding was not included in the study - as long as we are willing to consider a system administratively similar to medicare. Of course, the value of the 18,000 young Americans who die prematurely due to lack of being insured (and its direct consequences) and the 200,000 premature deaths of all Americans in excess of those who would be dying if the nation had a UHC system similar to every other industrialized nation is difficult to calculate. However, one would guess that their loved ones, friends and co-workers would have been willing to contribute, scrounge and borrow significant funds had the connection between uninsurance and loss of life been a more direct one.

But are there also "hidden costs" in insuring the uninsured? H. Taylor argues that there always are and always will be since there is a disconnect between demand and supply - what we'd like and what we want to pay for. The argument is that with UHC we would remove the factors now restraining excessive demand from the insured and opening ourselves up to the same demands from the 43 million or more uninsured. The US rations health care currently not only by the unaffordability of care for the uninsured, but by deductibles and out-of-pocket expenses to the insured (and under-insured) as well - so the argument goes. So Mr. Taylor claims that increasing productivity, reducing errors, lowering costs, improving lifestyles and prevention, and cutting waste, fraud and abuse while making the money go further, would never go far enough to avoid the need to ration care.

Don McCanne answers Mr. Taylor that our nation can indeed afford all appropriate and medically indicated care:

The health care delivery system in the United States is not a scarce resource; therefore we don't have to ration access to it. But we should have in place a system that would prioritize the allocation of our resources so that they are not wasted on inappropriate or contraindicated care, especially if that might mean that we would need to ration necessary care for the rest of us.

But Mr. Taylor stated himself that it was okay to avoid the "R" word and call it "prioritization" but its still rationing and with something as important as health care and we don't admit that we are rationing it, the public will think the system's failing whenever they are confronted with the supply/demand disconnect.

Kip Sullivan points out that critics like Taylor have developed a special meaning for the word "ration". Usually any item rationed is assumed to be something scarce yet needed by the population. In discussing sugar distribution during World War II we simply don't focus on the fact that some small portion of demand was to use sugar frivolously. We should also not focus on this trivial aspect of health care utilization. It is not an example of rationing at all if patients request treatments which they don't need or which are medically inappropriate. Taylor's statements about the current rationing all over the world are nonsense, because no one has shown (or even claimed?) that medically necessary services are being denied in countries with universal access to care.

Mike Luff, a Canadian union leader, supports Mr. Sullivans points by arguing that opponents of Canadian Medicare (the system providing health care for all Canadians) try to raise fear of future "rationing" in order to destabilizing the public's overwhelming support for their current system of care. He argues that the public has a right to demand the fulfillment of their needs, as the resources are theirs. It all comes down to a matter of democracy and being able to afford what the public sees clearly to be in its interest.

ON HIDDEN COSTS, RATIONING AND DEMOCRACY

The recent dialogue in Don's QoD concerning the "hidden costs of uninsurance" and "rationing" (or supposed hidden cost of insuring the uninsured) is one of the most interesting and critical discussions among UHC advocates in recent history. The entire dialogue is now available at www.EverybodyInNobodyOut.org click on "Discussion Threads".

In particular, I would like to comment on the insights offered by Kip Sullivan and Mike Luff. The unusual usage of "rationing" by some health policy experts is certainly something of which we need to be well-aware of and ready to respond to (see Sullivan's comments). Likewise we need to remain vigilant against arguments about "how much public money is available for the public's health and life". That certainly is a matter of democracy as Mr. Luff points out. There are a couple of items which were not yet touched on explicitly and are central to this discussion.

First with respect to democracy, in the US our health care system is discriminatory both against low-income workers (even if they work hardest and longest) and people of color. Much of this unjust distribution of resources is a consequence of these groups being disproportionately uninsured. Of course, the 64% of US health care expenditures coming out of public funds is paid by all of us, even those deriving little share in the resources. Now that we, UHC activists and concerned health policy experts, are discussing and working towards the health-enfranchisement of these Americans we find ourselves talking about "rationing care"? Indeed, several friends of UHC and current books supportive of UHC commit just this error. We better be damn sure of ourselves before we start arguing that it will be necessary to "ration care" at that moment when we begin including ethnic minorities and those working for low wages.

What Mike Luff is pointing towards is the public's acceptance of the "Right to Health Care" on the same basis as we now accept the "Right to Education" (primary/secondary). The Right to Education was also a state-by-state struggle that went on for 100 years before the federal government got involved. Many of the same arguments were used (too expensive, big government, interference with individual preferences, no basis for entitlement) as we hear today against the "Right to Health Care". Its still not in our Bill of Rights, but you would be hard-pressed to find many working Americans who did not believe it was their right to send their children to school. Are we talking about whether we can afford to "educate every child"? Why not, its very expensive in certain unique cases after all? Because we understand it as a right, a need and a minimal expectation in return for a lifetime of work (readiness to die for our country and freedom when call is legal and appropriate).

The grassroots work of raising public awareness and mobilizing around the "Right to Health Care" is an effort we cannot avoid. It is not enough to sit and debate politely with fellow academics. The reception is always much different when one talks at an African-American church, to farm workers or to low-wage workers. Americans must recognize and demand their "Right to Health Care".

We should not be discussing how much health care our country can afford, what medically necessary procedures we will allow, or to which treatments we will give a high priority, while we still allow 25-30% overhead to be extracted by the insurance industry, even while Medicare operates at 2% overhead. We should not be discussing which health care procedures we will allow while we are not discussing how many nuclear submarines, how many stealth bombers and how many manned space missions we can afford.

This is why in the past decades the enormous efforts expended on incremental health reforms have been largely wasted. Incremental reforms do not reinforce a belief in the "Right to Health Care" as they demand meekly that some people here, others there should gradually attain access to care. This is so even if pretenders to UHC advocacy repeat the proper slogans, while they work for incremental reform, or repeat claims that pursuit of incremental reforms will eventually lead to UHC. Real advocacy for UHC (real advocacy for the uninsured) involves looking at our society's global budget for health care, where should the funds go? for care or for private profiteering? Once we get those priorities straight than let's democratically discuss how much we can budget for health care and education in the light of total national priorities.

Dennis Lazof, Ph.D. is director of ProjectEINO at www.EverybodyInNobodyOut.org a project committed to the state grassroots organizations working for UHC (not by increments).