"Benefits" of For-Profit Medicine

QUESTION:  Now that physicians can sign on with any number of plans, isn't greater physician choice already assured for patients? 

Within any one plan a patient may have a choice of several primary care doctors , but often the choice of specialists is severely limited. And just because a specialist is listed in the book of participating physicians, does ot mean that a particular primary care physician will be allowed to refer to this specialist. Furthermore it is common practice for managed care companies to keep on their lists physicians (primary care and specialist) who have already left practice or who are not accepting any new patients.  Individuals new to the plan only learn slowly which physicians might actually be available for appointments.  

QUESTION:  Isn't there excessive and costly "doctor shopping" unless patient choice of physician is limited?

Patients must have the freedom to seek relief from pain and suffering and better treatment and care. Patients--who are after all, far more motivated than anyone else to seek effective relief of their problems-- must have the ability to find help and must be allowed to make use of the full range of clinical services that might reasonably be felt to benefit them.  Any health care system must recognize that there are many conditions about which we have limited scientific knowledge. 

Patients need the freedom to form relationships with clinicians they trust.  Clinicians should be competing over what really counts: knowledge, quality, and compassion.  

QUESTION:  What is the harm in physician incentive programs which are designed to keeping medical costs (and our premiums) low?

1) Denial of Service.  Many physicians are offered bonuses based on how little they offer patients. Under capitation, in which the doctor receives a fixed monthly payment for each patient, the doctor's economic interest is directly pitted against his or her patients. According to a report in the New England Journal of Medicine, in some high-risk capitation arrangements a physician's income could vary between $0 and $150,000 per year depending on how many services that doctor provides (the more denied the higher the bonus). 

2) EXCLUDING THE SICKEST FROM ACCESS.  Because a physician who has too many sick patients can literally go bankrupt, more and more physicians are explicitly rewarded for avoiding the sick. In July of 1996, for example, University of California Irvine Medical Center chief Philip Di Saia, M.D. sent a memo to his physicians stating that their HMO could "no longer tolerate patients with complex and expensive to treat conditions being encouraged to transfer to our group."

3) EXCLUDING DISADVANTAGED PATIENT POPULATIONS.  Due to education, work and even home environments indigent populations are likely to be in greater need of medical care than middle-class populations.  These too are increasingly excluded from service, as they are likely to bring a practice additional red ink. These populations are disproportionately African American and Hispanic in the United States.

All three of the above factors operate against even well-insured patients.  The uninsured (mostly low wage working families) have additional barriers to access (see uninsured) while the most indigent sector of our society usually has some level of public support, at least for women and children.  Even the insured suffer from less time with providers and resultant failure to get to the root causes of our conditions.

QUESTION:  Why haven't people been swarming to not-for-profit plans when they have the choice, if as you say for-profit medicine is so terrible?

Its not that common that a person has that choice.  Further, the not-for-profits have been converting and transforming themselves at a rapid rate during the era of "managed care".  Conversions are when the not-for-profit company becomes a for-profit (Blue Cross Blue Shield in several states now, for example).  The transformations are changes the not-for-profit makes in its business plan (patients it will accept, nurse staffing, physician time per patient etc.) attempting to stay afloat in a market dominated by for-profit companies.  Remember the for-profits are shedding their more expensive patients and services, these money losers fall then to the not-for-profits.

Of course even changing plans (if possible) to a supposedly "non-profit" plan like some of the Blue Cross Blue Shield plans, doesn't affect the overall for-profit nature of the US health care. The staggering profit rate of the profit rate of the pharmaceutical industry isn't changed. And these enormous profits ARE NOT due in large part to the drug industries dedication to research .

QUESTION:  Now that consumers can choose between competing plans doesn't the free market ensure that given enough time only the plans which have superior service will come to dominate?  

In fact most working people have little choice of health plan.  Fully 42% of those who are offered some health plan at work (and many are not offered any) are offered only a single plan. What's all this talk about "free market" when in reality the government subsidizes private insurance corporations to undertake new health insurance programs and earn six times the overhead & profit that it would have cost under traditional government-run medicare (not to mention the VA system which is acing out any other system in the USA and doing so at a bargain rate). 

More importantly, what the insurers understand very well is that a few cheap whistles and bells can be added for tremendous mileage in impressing the healthy majority (say 90% of policyholders) with the "great care" they receive.  Meanwhile they can cut back in the areas of great cost that affect only the relatively few who face real medical hardships.  Few consumers will realize about these cutbacks and even then only too late - at the point when the insurer would love for them to quit or switch. Very few patients (even those who are themselves health care professionals) have any idea how the quality of their plan would rates on the basis of serious illness or injury, or how much better off they would be with not-for-profit care.

QUESTION:  What's wrong with the consumers' rights approach, just making information on health plans public and letting workers choose what kind of coverage they prefer?

The consumerist version of the "free market" approach to health coverage is a thinly veiled fraud.  It is impossible for workers to evaluate the critical details of competing health plans for the great variety of possible illnesses and their many possible treatments.  Furthermore, the vast majority of consumers are basically healthy and have little direct knowledge with the critical health care services until they or a family member become critically ill.  The preventive medicine (see prior question).

Most workers shift health plans because they are forced to do so, not because they even think they have found a plan that might better serve them.  The forced changes usually disrupt their continuity of care with a physician who knows them more thoroughly and who can continue treating them with greater efficiency.  They are also less likely to find a strong advocate in a temporary physician who will fight to get them needed care (example).

QUESTION:  Even if it is difficult for the layperson to evaluate details without expert advice, still what could be wrong with offering a financial incentive for consumers to make judicial use of expensive health resources once they are in a given plan?

Indeed a great number of professional "health policy analysts" do advocate such incentives.  However this seems to make no sense whatsoever to Project EINO.  As argued directly from data in the preceding question, since so few of our fellow citizens (the least fortunate) expend the overwhelming preponderance of health care resources (and always will) talk of saving our health care dollars by "patient responsibility" seems base and callous (if not outright fraudulent and prosecutable).  Lifestyle may play a role (of often unknown significance) in some minor portion of critical illnesses.  It is callous and cruel though to speak of patients being responsible for their illnesses and health care costs generally.   Such ignorance is especially onerous when it flows from the mouths of physicians.  It may be an easy and assuring fallacy to the well-majority that they are responsible for their good health, but it is false, cruel and divides the nation.

QUESTION:   What will automatically follow from adopting a universal care system will be the institution of rationing health care, since its obvious that we can't afford all treatments for all our people.  

But we already have rationing of our health care in this country.  We do it by income class and we do it dishonestly.  As stated by Princeton Professor U. Reinhardt: 

The American health system is inherently dishonest because it steadfastly refuses to convey before treatment to Americans who must pick up part or all of the tab for their health care the prices they will be charged later. In fact, most prices in our health system are a well kept, proprietary secrets. Even Medicare's fee schedule is not routinely and easily made available to patients.

So, patients often cannot even know what costs they are incurring and yet critics worry about excessive spending that could only be controlled by "rationing".  Project EINO believes it is unethical to even talk about rationing care while we allow 20-30% adminstrative overhead to be extracted by for-profit insurers (medicare operates with about 2%).  Some in the US Congress the expansion of "Medicare Advantage" wherein private insurers are injected into the system, subsidized by the government and are extracting six times the overhead that traditional Medicare would have cost. Are we talking about people going without needed treatment so that some insurance CEO's can continue to earn hundreds of millions every year?  See a great discussion on "rationing health care" in the Discussion Threads  CLICK HERE. We have several FAQ dealing with rationing in the section on Overutilization of Care. Economic historical stories show that it is not schemes in marketing but public systems, almost entirely medicare in the USA, which have functioned to keep health care costs under control (against the major trends during privatization).

QUESTION:  For people who are willing to work our present system is great. There's even a program to guarantee that workers have 18 months of continuing coverage from an employer while looking for a new job isn't there?

First of all most of the uninsured are working (often more than one job) even while they are uninsured CLICK HERE. Furthermore, COBRA coverage which you are refering to is not affordable for some 3 of every 4 presently insured workers, and thus, rarely purchased (because they can't afford it while unemployed) DETAILS HERE. Workers who have the option for purchasing COBRA must pay the full share of what their employer was paying plus their own continuing contributions.

When workers are out of work more than 18 months they lose their cobra option, likewise if they need to let the coverage lapse at any point for two months. Then they are subject to any rate the insurer cares to offer (market control only). If they now have a medical condition than their new coverage can be through the roof, or might exclude expenses for that condition.

These events are a matter of fortune, not a matter of good planning or healthy lifestyles. Any worker, no matter how capable might lose their job (relocation of plant, plant closing, bankrupcy of business, outsourcing etc.) If you get ill (or your child or spouse does) during your COBRA period you might have special difficulty being able to find another job. Possibly you will have a disability, or not be able to work full-time (maybe due to care-giving yourself). You then lose your COBRA after 18 months, your available coverage is astronomical and your family spirals down into destitution if the medical expenses are great enough and the illness is chronic. But if you want to talk about how great our For-Profit system of care is look at how well these American patriots are doing and how great that has been working out for the broad range of Americans.