Friday, July 30, 2010

Answer to question # 9: When can a patient reasonably choose care, when are choices reasonably limited and who decides under those circumstances?

Reasonable and desirable choices by patients:

1) Avoid destructive behaviors such as tobacco, alcohol, illegal drugs, severe obesity, reckless driving, use of knives and guns.
2) Learn as much as possible about any present disease/s states and be diligent in caring for oneself.
3) Refuse any or all undesired treatments at any time within the confines of sound mind and of legal age.
4) Find a trusted physician so as to develop a therapeutic relationship, difficult in this age of 10 – 15 minute visits, to help create and sustain a constructive dialog between patient and physician.
5) Realize that the motive of drug and device advertizing directly to the public is to maximize profit and not necessarily maximize patient care.
6) Educate oneself as to realistic expectations from modern medicine and its limitations.
7) Learn about the cost of medical care in the United States, why it is so much higher than in other developed countries and how significantly this affects the standard of living of the middle class.

When are patient choices limited?

1) In obvious end-of-life situations, aggressive care is actually not in the patient’s best interest as it prolongs suffering with no hope of benefit and often causes a more painful and protracted mourning period for the family.
2) In the presence of serious organ dysfunction, depending on the organ/s involved options become progressively limited as dysfunction progresses.
3) In technical situations requiring the acquisition of considerable medical knowledge and judgment the physician is in the best position to define the options and understand the limitations.
4) Patients frequently overestimate the capabilities of modern medicine leading to unrealistic requests for various treatments. In this situation it is the physician’s responsibility to address these unrealistic expectations and not accede to the irrational.

Who should be making these decisions?

1) In most instances the patient along with the physician should decide on a care plan that is both reasonable and beneficial.
2) Physicians and the medical team must not deliver treatments knowing it/they will not be beneficial or superior to a simpler course of action.

Thursday, July 29, 2010

Answer to question # 8: How are state budgets affected by having to assume about 50% of the cost of Medicaid?

Medicaid, founded in 1965 along with Medicare, provides health care for U.S. citizens and legal immigrants who are under financial duress, with funding shared between the federal government and the states. As of 2008 the federal government funded, on average, about 56% of Medicaid costs with the remainder paid for by the individual states. On average, the states component amounted to 17% of their general fund spending. Eligibility for Medicaid unlike Medicare is relatively complex. Besides poverty other criteria include childhood, blindness, pregnancy, disability, residents of nursing homes and those with HIV/AIDS. In 2007 Medicaid provided insurance for 60.5 million people, including 29.5 million children and 5.6 million adults over age 65 (dual eligible with both Medicare & Medicaid), mostly for nursing home and long term chronic disease care. Medicaid payments subsidize about 60% of nursing home residents and about 37% of all child births. Without significant changes in the program, projections for future Medicaid costs as a percentage of state budgets is expected to reach 35% by the year 2030 (Deloitte Center for Health Solutions – 2010). This projection is based on our aging population (those with dual eligibility) which will require increasing amounts for the care of chronic conditions in both nursing homes and in the community.

This projected large drain on state budgets is due to the unfortunate circumstance we have with our entitlement programs (Social Security, Medicare and Medicaid). They are in effect government sponsored ponzi schemes where one generation, instead of paying for its future care (i.e. with health savings accounts), is dependent on its funding by the succeeding generation. With our aging population and less workers per retiree this method of funding becomes impossible. Another factor is the addition of about 14 million people to the Medicaid roles by the newly passed Patient Protection and Affordability Care Act with the federal government paying 100% of the additional care costs from 2014 through 2016, decreasing thereafter from 95% in 2017 to 90% in 2020. However, the states will have to absorb all the additional administrative costs estimated to be $32 billion from 2013 -2019 (Heritage Foundation Jan 14, 2010 Edmund Haislmaier). With the additional 14 million added to Medicaid, we as a nation are documenting that about 75-80 million Americans not of retirement age (about one-fourth of our total population) live near or below the poverty line. In essence, many, if not most, of this segment of our population lack the skills to be productive in an advanced worldwide economy.

As of 2006 Medicaid costs to state budgets were $100.6 billion, while that of Kindergarten to grade 12, $208.3 billion. The recent recession has significantly increased state expenditures for Medicaid putting a further strain on the ability of the states to properly fund public education. Although both state and federal funding for Medicaid consumes many hundreds of billions of dollars annually, it does not cover provider costs which necessitate cross-subsidization by private health insurance (see question #7).

As state funding is the major source for public education, the need to fund ever increasing Medicaid expenses by the states compromises our ability to adequately educate our young, thereby putting our nation’s future economic well being at risk. An Op-Ed in the Washington Post (Matt Miller, July 24, 2010) documents the recent decrease in the standard of living of many millions of our middle class. This is because post World War II we were the only advanced economy left intact so that the world had to buy from the U.S. There are now many advanced economies in the world and the U.S. is not developing the capital or the properly educated work force to re-industrialize our nation, increase our productivity and thus improve the standard of living for many Americans. We need a massive investment in public education, such as, much greater teacher to pupil ratios, longer school days and a 48 week school year, so that all Americans can participate in an advanced worldwide economy. For the states to afford this expenditure Medicaid would have to become a totally federal program necessitating a much more rational health care system (see question # 2).

Thursday, July 15, 2010

Answer to question # 7: How Does Private Insurance Essentially Subsidizing Medicare and Medicaid Affect Working Americans?

A study published in 2006 using 1993-2001 data from California helps answer this question. (1)
1) California hospitals in general reflect those in the nation as a whole, but are more urban and with a higher percentage for-profit.
2) For each 10% decrease in Medicare and Medicaid payment there was a 1.7% and 0.37% increased cost to private payers respectively.
3) By 2001 hospital Medicare/Medicaid revenues were 9.77% below cost which caused a 1.66% increase in private payer costs.
4) These increases in private payer costs were $632,000/hospital/year totaling $210 million for the 311 general acute care hospitals.

The authors commented that reductions in Medicare/Medicaid payments to below cost could be addressed by hospitals in several different ways: lower staffing ratios, increases in efficiency, changes in service mix (emphasis on more costly procedures), less uncompensated care, lower profitability, and increased income from private insurance. All these mechanisms are used to varying degrees by different hospitals as government programs arbitrarily decrease payments.

But what does the average worker with a family of four pay for this cross-subsidization of government programs? This question was addressed by a 2008 study by the Milliman Consultants and Actuaries funded by the American Hospital Association, American Health Insurance Plans and two Blue Cross associations. (2)

Milliman examined national hospital and physician costs along with Medicare, Medicaid and private insurance payment data to calculate their results. Medicare and Medicaid paid 48.9 billion and 39.9 billion yearly less than and private insurance 88.8 billion more than the cost to offset the government programs underpayment. This amount raises private insurance costs for hospitals by 18% and doctors by 12%. The Milliman study calculated that for a family of four with private insurance cost-shifting increased their yearly health care premiums by 10.7% or $1,788. They reported that the employer paid $1,115 more and the family $673.

There is no question that our government must decrease its healthcare expenditures. The present method of arbitrarily decreasing reimbursement however, has not decreased expenditures and has caused cost-shifting to those with private insurance, in other-words a hidden tax that is decreasing the standard of living for working Americans. Cost-shifting has caused a detrimental sequence of events: private insurance becomes more expensive thus more companies and individuals drop their health insurance, many become uninsured and some become Medicaid patients, budgetary pressures lead to more decreases in government program payments thus causing more cost shifting, etc.

The prudent way to decrease expenditures for both governmental and private health insurance alike is to decrease health costs for both entities. This can be done by understanding and dealing with the reasons why we as a nation spend about $700 billion dollars/year (see question # 2) on non-beneficial inappropriate care. By doing the following we can decrease costs for both government and private insurance: Congressional amendments to the Patient Self Determination Act, The Americans with Disabilities Act, The Emergency Medical Treatment and Active Labor Act with the phrase, “within the bounds of good medical practice”, initiate the immediate availability of physician review to assure beneficial care, and create a Federal Health Care Bank to handle several administrative issues.
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1. Zwanziger J and Bamezai A. Evidence of cost shifting in California hospitals. Health Affairs 2006; 25: 197-203 (PMID 16403754)
2. Available on http://www.ahip.org/content/default.aspy?docid=2516 and click on full report (accessed 7/7/2010)