Covering the Uninsured Panelists Follow-up Questions

Questions

Healthcare Costs

Washtenaw Health Plan

Healthcare Reform and Universal Coverage

Taking Personal Initiative

Questions and Answers

Healthcare Costs

Is having insurance correlated with better health outcomes?

Catherine:
Yes, people with insurance have – on average – higher health status. But correlation is not the same as causation. That is, which came first – the better health status that affects the ability to get health insurance? Or the insurance that affects the ability to get better care that improves health status? We have little evidence that estimates the effect of having insurance on health status. What evidence we do have supports the premise that having insurance leads to better health outcomes for children and the elderly. We have no similar studies for adolescents and non-elderly adults.
Kevin:
Yes. There have been some studies that people who do not have insurance, and limited ability to pay, do not receive comprehensive care for chronic problems. They tend to be stabilized and released.

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Why does the United States spend more money on healthcare than all other countries, yet so many people remain uninsured? What key factor(s) created this issue?

Catherine:
The growth in costs across all countries is very similar, suggesting an important role played by technological improvements over the last 50 years. The higher level of costs in the U.S. may be explained by a variety of factors, one of which is the higher level of compensation to healthcare providers at all levels, including physicians, nurses, dentists, hospitals, pharmaceutical companies, medical equipment firms, and so on. It's important to remember that every dollar of expenditure on healthcare is a dollar of revenue to the millions of people who produce and supply healthcare.
Kevin:
In America, healthcare is a business and all those involved have a goal of making money from the system. This is quite different than other countries where all or a portion of the healthcare system is viewed as a social good. But, there are also a lot of other factors involved – American lifestyles, current medicine increasing morbidity in the population, expanding definitions of what we consider as health, provider supply driving demand, etc.
Marianne:
Most studies on healthcare spending across countries point to two major reasons for higher costs in the U.S.: (1) higher payments to healthcare providers, and (2) more services provided; in particular, considerable diffusion of technology. We know that there is enormous variation across the country in how healthcare is delivered. The work of Jack Wennberg and his colleagues at the Foundation for Informed Decision Making tells us that we could significantly reduce healthcare utilization and costs in many parts of the country and maintain or even improve health outcomes. The challenge we all have is to increase the use of evidence-based care and work with providers, consumers and others to change historical practice patterns.

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What do we know about the cost effectiveness of preventative care and public health?

Catherine:
Most experts agree that preventive care can reduce costs and improve health in the short run. But in the long run, those individuals who lived longer and healthier lives because of prevention will then be more likely to get cancers, dementia, and other diseases experienced by the elderly. The cost effectiveness over the lifetime, therefore, is difficult to measure.
Marianne:
The use of the term “cost effective” is important in this question. Much of preventive care is cost effective; that is, it is relatively low cost for the benefits it provides. Very little, however, is cost saving. Indeed, one of the only preventive services shown to be cost saving is immunizations. So, while encouraging preventive care is a good thing to do for public health, it is not going to reduce healthcare spending.

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Is there a way to constrain costs substantially without rationing care?

Catherine:
No. But "rationing care" can mean reducing care that has little evidence to support its effectiveness, and to look collectively at "need" vs. relying so heavily on "demand" in determining who gets what care when and from whom.
Kevin:
It is a question of how much you want to constrain costs. It is possible to implement reforms in the insurance sector that could save 10 percent or so and not get involved in rationing care. Beyond that I believe that there would be some rationing. The rationing would probably be mostly implicit, controlled by controlling the number of providers. This type of rationing really forces the provider community to prioritize needs through their everyday decisions regarding who they will treat.
Marianne:
It depends what you mean by “rationing.” There is no question that in order to reduce healthcare spending in a meaningful way, fewer services will need to be provided. However, as Catherine notes, there are many services provided that don’t have strong evidence to support them. Indeed, in many such cases, available research indicates that we may, in fact, be doing harm by providing these services. So, in these cases, we can actually both improve quality and reduce spending. There may well be other situations, however, where there may be some benefit to certain procedures but at an extremely high cost. Unfortunately, in many cases, technology development in healthcare, unlike other fields, is not cost saving. Those are the tough decisions that all countries will come up against as medical technology develops that puts increasing pressure on costs and spending.

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What is the effect of lifestyle choices on healthcare costs, specifically regarding obesity, smoking, lack or exercise, etc.? What role should personal responsibility play in determining the cost individual beneficiaries pay?

Catherine:
This isn't my area and I don't have figures to give. The general issue, however, points to the question of pooling across unequal risks. The "etc." is important. What should be the role of living in areas with radon or effluents in the air or water? Driving a motorcycle? Engaging in sports like skiing, soccer, ice hockey, all with high rates of short-term and long-term knee injuries? If we start adjusting premiums based on each risk factor, we will move further away from community rating and closer to individual rating, which will make it more and more difficult for high-risk individuals to afford health insurance.
Kevin:
We know that lifestyle choices do have an impact on healthcare costs. We also know that their impacts are not usually immediate in nature and they are not experienced in a predictable fashion by each individual. We also know that the list of potentially negative lifestyle choices is endless and that it will be difficult to reach consensus on which choices to penalize through higher beneficiary payments. This is all further complicated by significant difficulties in administering financial penalties for individuals who practice unhealthy behaviors. Nevertheless, I tend to agree there should be greater individual responsibility. I just don’t think that it is practical or effective to enforce this responsibility through higher co-payments.

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Washtenaw Health Plan

What role do you envision for small businesses within the Washtenaw Health Plan? What are the barriers to WHP attracting a greater number of small businesses to the plan?

Ellen:
The involvement of small business was integral to the design of the program. From the outset, we worked with local area chambers of commerce and other small business associations to gather feedback from these key stakeholders and eventual participants in the program. This enabled us to tailor the program design and financing to meet the needs of the small business community.

I think the major barrier to attracting a greater number of businesses to the plan is related to cost. As low as the premium is, and as small as the employer contribution is relative to other health plans, it still appears to be a financial hurdle for small businesses operating on the margins.

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Based on your experience with WHP, what types of activities can hospitals engage in to further address the needs of the community they serve?

Ellen:
In this community, the local hospitals contribute substantially to addressing the community's needs. They have been at the table since the beginning, working with the county and other key stakeholders to address the needs of the medically indigent. They contribute substantially in the form of uncompensated care, they contribute to the planning and implementation of the program, and they contribute by providing fabulous care to the individual members of the community. Their willingness to be a major participant in the program has enabled us to create a system of comprehensive care.

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Healthcare Reform and Universal Coverage

Would a health insurance mandate work if the government assumed catastrophic costs, and what implications would this have for employer-sponsored insurance coverage?

Catherine:
It's not clear what you mean by “work.” We do know that if the government assumed responsibility for covering costs over some dollar threshold experienced by an individual during a fixed time period (usually a year) that the average costs of insuring the remaining financial risk will fall considerably, usually by 25 percent or more. This makes health insurance more affordable for many people, which in turn increases coverage levels with or without a mandate.
Kevin:
I personally think that this is the most logical approach to reform. I believe that there is a consensus that individuals should be covered for catastrophic costs. Shifting these costs from the employer community to a tax-based system would provide significant relief to employers. It also allows employers to fill the gap if they should choose.
Marianne:
An approach that involves the federal government funding catastrophic healthcare has a lot of merit. The original idea for insurance was to provide protection from major costs that were unpredictable and that a family would have a difficult time saving for. That is very much the framework that would be reflected in catastrophic coverage and it would be an important step to providing universal coverage in this county. Employers who are already providing healthcare coverage would be likely asked to continue to contribute at some level but it would also free resources to be devoted to wages or other benefits.

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If the U.S. switches to a single-payer or other national healthcare system, what would or should be done about the professions that rely on the current privatized system?

Catherine:
A single-payer system does not necessitate any change in the employment of healthcare professionals. Medicare is a single-payer system, but the physicians and other healthcare professionals who provide care to our elderly have a variety of private and public employment arrangements.
Kevin:
I believe that the greatest impact would be on the insurance sector. There will still be jobs for actuaries, claims processors, insurance agents, provider-based billers, etc. But there will be fewer jobs. To me this is a transition that will need to occur if we are going to be serious about cost control. Also, we will probably find that some downsizing in the health/insurance sector improves U. S. competitiveness in other sectors and many of these skills are readily transferable to other sectors.
Marianne:
A single-payer insurance system like that in Canada first and foremost reduces administrative spending. The Canadian healthcare system and Medicare both have lower administrative spending than the private insurance sector in the U.S. That is because a single-payer system standardizes benefit designs and billing procedures, significantly reducing complexity. By definition, the functions that would be eliminated would be those associated with variations in benefit design, claims payment and the like. Kevin is correct that most of these activities are associated with health plans, though there are staff within the delivery systems that would also be affected. There could be job losses that result from this change.

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How would you respond to those that say the problem of the uninsured or underinsured is actually “overblown” and may not be as serious or dire as everyone says it is? For example, over the last several decades we have developed programs like Medicare, Medicaid, SCHIP, the WHP, safety nets like the emergency room, free clinics, charity care, etc. While not optimal, an incredible interlocking array of services has developed to try to address, at least in part, this problem. Could the suggested cures be worse than the disease?

Catherine:
The number of people without coverage and the number with insufficient coverage are growing. The distribution is not even. For some of us, recent increases in relatively small numbers of uninsured and underinsured members of our community are barely felt. In some communities, however, the result is an unsustainable burden on both the state coffers and the safety net providers. Revenue streams are drying up at the same time need is increasing. Some communities have lost significant numbers of emergency rooms, others have lost hospitals. Some providers are shutting their doors, either altogether or to enrollees in public programs. To use an often heard analogy, the patchwork quilt of our current healthcare delivery system is getting thinner and thinner with more and more squares on that quilt developing holes. While your square may look pretty good today, it's only a matter of time before the weight that was previously borne by those squares with holes spills over to you.
Kevin:
The political system has generated a complex array of programs because no one has actually had the courage and the short-term resources to engineer a more comprehensive, systematic solution. So the political system sees and understands a need for a certain population segment and it creates a categorical program to address this need. Over time this has resulted in a complex array of programs intended to meet needs of different categories of people. This approach has created too much administration and too much confusion. But it has also often fallen short of meeting the needs of these covered populations. Medicaid is a good example here. The Medicaid dental program does not meet the needs of adults. Access is severely compromised for most Medicaid recipients. The Medicaid program does not function well as a mechanism to meet its intended purposes.

There is also the problem with the populations who do not have a program to meet their needs. This is largely the adult, unemployed or uninsured population that relies on the charity care system. Research shows this population is served by providers on an emergent basis. The basic approach to care is to “stabilize and release.” This is simply not good care.

Beyond that, any good Republican should see how a discretionary employer-funded system is anti-competitive and really not sustainable, given the high cost of healthcare. There is little question that the financing system is broken.

I think that it is also important to note that the lack of individual access to needed care is largely an individual thing. It is really not very visible. Therefore, the actual crisis that exists for individuals is not fully understood by the general public.
Marianne:
There is no question that various patchwork approaches to filling gaps have developed over time. However, these approaches are extremely inefficient and insecure. Many people still fall through the gaps in the so-called safety net and we have good data that the lack of comprehensive coverage results in worse and disparate outcomes for many of the most vulnerable.

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How do industries with a vested interest in the healthcare system – such as pharmaceuticals, health insurance, and other profit-making healthcare industries – influence potential for universal healthcare?

Catherine:
Clearly anyone receiving income in the current system has a vested interest in any change in that system. It is only natural that they would be concerned. Universal healthcare, in general, will increase the income of many providers who now provide pro bono care to those without coverage, just at Medicaid and Medicare did in the 1960s. However, as all of us experienced as children when we were dependent on our parents for all of our income, those who control the dollars control other aspects as well. We should expect everyone who is a receiver of healthcare dollars to be just as active in determining what is changed and how as everyone who is a payer of those dollars.
Kevin:
They influence it through the political process. In our system, each interest group is expected to advocate for its self interest. The political process is supposed to broker all these self interests to formulate the public interest. We know that this is an imperfect process and it often means that a private interest will prevail over a public interest. This is why it is important to keep working on an issue. Universal healthcare is not a one-time issue. It is an issue where we need to make progress, understanding that there will be an ongoing need to fix the unintended consequences of what we accomplished in previous years.
Marianne:
Many sectors of our economy benefit from maintaining the status quo in the healthcare structure. Given the size of the healthcare sector, any proposal for significant change will meet tremendous resistance from those who benefit from the current design. Those who benefit from the current system will lobby heavily against change and create messages to raise the public’s concern about proposals for change. With the last effort at major healthcare reform in the mid 1990s, it is clear that consumers who say they want change do become increasingly concerned about the shape of that change when the details become more explicit. For many, “the devil you know is better than the devil you don’t.” So, while there is great theoretical support for universal coverage from all vested interests in healthcare, the details of how we achieve that are likely to be resisted by at least some of the interest groups. For example, universal coverage would help reduce bad debts and uncompensated care currently experienced by providers of care. However, if a provider tax was put in place to fund that universal care (as is proposed by some) there would be many providers who pay more tax than they currently lose on uncompensated care. Those providers are likely to resist that solution to the problem. Those kinds of issues exist for every possible solution to the current coverage gap.

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Can you briefly explain how our current healthcare model came to be based on ones’ employment status? In relation to this, how does the diminishing power of unions and outsourcing influence the provision of healthcare?

Marianne:
The employment-based link to health insurance came about as an artifact of wage and price controls during World War II. At the time, there was an extreme labor shortage and employers were looking for ways to attract workers. Benefits were excluded from the wage and price controls and health benefits were extremely low cost at the time. So employers began to offer that coverage. Subsequently, unions saw health benefits as a bargaining tool and a means to attract members, further embedding the link between employment and healthcare coverage.

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How do racial and socioeconomic disparities affect healthcare reform efforts?

Catherine:
The design of a healthcare reform proposal should reflect the stated goal. In some cases, reducing racial, ethnic, and socioeconomic disparities is the primary goal. If this is the case, various elements of access to appropriate, timely, and high-quality healthcare should be included, not just financial access. If reducing financial risk faced by individuals is the primary goal, then the focus on universal coverage is appropriate.
Marianne:
We know that significant disparities exist in our healthcare system today. Any proposal for reform must address this issue explicitly if we are going to increase the equity of healthcare delivery in this country.

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We hear that the Veteran’s Administration is a model of single-payer, universal access healthcare – is this true? What can we learn and what should we emulate (or avoid) based on the VA’s experience?

Catherine:
The patient base of the VA system is very different from the broader population. This difference limits what we can learn from its successes and failures. But having said that, in some respects the VA has been a testing ground for a variety of financial and administrative systems, including diagnosis related groups (DRGs) and patient record tracking across providers.
Marianne:
In addition to the points Catherine makes, the VA has been an innovator with regard to approaches to increasing quality of care and patient safety. We can all learn from these approaches as we work to improve other healthcare systems.

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Taking Personal Initiative

What specific steps can we, as individuals, take to help bring about the changes necessary to ensure universal healthcare coverage at the local, state, and national levels?

Catherine:
Educate yourself about the facts – and help educate others – so we are less likely to be drawn in by unrealistic wishes and dreams or run away from change because of scare tactics.
Ellen:
Contact your congressional delegation. Write letters to the editor. Wherever you can, work to raise awareness and keep the issue on top of the policy agenda.
Kevin:
I believe in the end this is a national issue that must be resolved by the President and Congress. In our political system, our elected officials are intended to be representatives of their constituents. Therefore, it is important to become active locally, raising the issues and suggesting potential solutions. It is very clear that all the moneyed interests will be involved. Community involvement is a safeguard to ensure that the debate is not controlled by private interests and is appropriately balanced by a broader public interest.
Marianne:
We all agree that this issue needs to be addressed at the national level for a comprehensive solution. As Ellen says, it is important for members of our Congressional delegation to hear from you. They need to know that you think this issue is important. Since this is also a Presidential election year, it is also important that you become knowledgeable about the positions the candidates have taken on healthcare and make sure you take that into account as you vote. Finally, you can help educate others. Fundamental change in the way we cover healthcare in this country will only occur when there are enough informed voices raised on this issue. It is essential that those in the political process believe that their constituents want serious change and are willing to make trade-offs to achieve that change. You can help motivate others to let their representatives in Congress know that there are many citizens who will actively support universal healthcare.

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For those of us who are just starting our careers, what skills should we cultivate in order to contribute to covering the uninsured?

Catherine:
The answer depends on what your career is and what your skill advantage is. Policymakers, grass roots organizers, researchers, providers, teachers, and parents can all play a role.
Ellen:
There are many important skills to cultivate. First and foremost, have empathy. Understand the stories and the incredible challenges of life in poverty. Second, advocate in every venue to make policy changes to insure universal coverage.
Marianne:
Make sure you gain good analytic skills so that you can interpret what is being said in debates and policy proposals that are designed to change the healthcare system. As a colleague said so well, in healthcare, it is very difficult to make real change but it is very easy to convince others that you are making change. Make sure you understand the difference between spin and reality as you interpret the policy alternatives that are being proposed to address these issues.

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