Everybody Pays 2

When I read this post by my friend, Jim Lewis*, I had to share it, with his permission, because I think it provides sound analysis of the healthcare quandary we Americans are in.  It was originally posted on his Examiner.com page.

Everybody Pays
In the debate over health care
, it seems that the proponents of the status quo have an edge over the rest of us. I think it’s fair to say that their primary spokespeople are members of the insurance industry. In the main, they are not suffering a lack of care, nor are they victimized by high rates. As individuals they are covered by their own best products and profit from their sale. They are unlikely to be among the people who fall through the cracks of insurance coverage. They were the victors in opposition to the last national healthcare reform led by Hillary Clinton in the early 1990s. Their chief tactic was the dissemination of fear to all of the enfranchised parties: consumers, physicians, healthcare workers, pharmaceutical companies, equipment manufacturers, hospitals and HMOs. Additionally, they evoked the American spirit of independence and emphasized the success of free market capitalism in creating the most versatile, flexible, and dynamic economy in world history. They convinced a majority of people, from pundit to pauper that they would be best served by doing nothing. What an attractive choice! No wonder they’re at it again.

After reading David Brooks’ recent article regarding the late Senator Kennedy’s evolution as a lawmaker, I was struck by his assessment of the American character and his opinion that this is why we, as a nation, have resisted national healthcare. He writes:
  “We in this country have a distinct sort of society. We Americans work longer hours than any other people on earth. We switchjobs    much more frequently than Western Europeans or the Japanese. We have high marriage rates and high divorce rates. We move more, volunteer more and murder each other more.
Out of this dynamic but sometimes merciless culture, a distinct style of American capitalism has emerged. The American economy is flexible and productive. America’s G.D.P. per capita is nearly 50 percent higher than France’s. But the American system is also unforgiving. It produces its share of insecurity and misery.
This culture, this spirit, this system is not perfect, but it is our own. American voters welcome politicians who propose reforms that smooth the rough edges of the system. They do not welcome politicians and proposals that seek to contradict it. They do not welcome proposals that centralize power and substantially reduce individual choice. They resist proposals that put security above mobility and individual responsibility.”

I don’t disagree with Brooks in this characterization, but I believe it points the way for the next generation of healthcare reformers to show how national healthcare fits our character.

 Healthcare is a unique kind of consumer “product.”  In its necessity to the pursuit of happiness it is like national defense, freedom to travel, free speech, clean air, clean water, the rule of law and private property. Without these we do not have a free society. Just imagine if we each had to contract different providers for each of these “products.”

An individual’s freedom to change jobs is profoundly affected by a prospective employer’s health care plan or lack thereof. Our insurers dictate the kind of care we receive.The prices we pay for services are not the result of a free market where information is readily available, but by a byzantine and accidental cabal of government and insurance near-monopolies who adjust willy nilly to support an overall structure of profit and gain, often at the expense of health and almost always at the expense of transparency.

As an example of this, I ask you, and this is not meant rhetorically, does anyone know how much a mammogram costs? I use mammogram as an example because this is one of hundreds of diagnostic tools that is widely accepted and used throughout the country. It has been touted as the best way to detect early stage breast cancer. Insurance companies pay for it without question once a year. But what if a woman has a feeling a month after her annual check up that she should get another one, and her doctor disagrees, how would she go about getting one. If her insurer won’t pay for it, can she buy one? What will it cost? Who will administer it?Furthermore, does anyone know if a mammogram really works? Does anyone know if there is a risk to flattening a woman’s breast to the point of pain? Does anyone know if a mammogram is more effective than breast examination by a qualified physician? Is there a marketplace where these questions are answered?

In determining the price for a mammogram, like the price for anything, a seller of mammograms must take into account the cost of the machine, the cost of the service (which includes examination and administration), the cost of real estate, the cost of advertising, marketing, and modernization and the number of mammograms it will deliver. Within each of these costs there are deeper and hidden costs such as the upkeep of the machine, the education of the personnel, the tax on the real estate, the market study, etc. etc. etc. Over centuries, businesses have developed sophisticated techniques for managing and anticipating those costs.The price is set and in every component of that price, there is a built-in profit. For the most part, that is at it should be. It’s the American way. So how much does a mammogram cost? If you ask your HMO or your physician or your insurer, you’re bound to get different answers if you can get any answer at all. Healthcare is in a special marketplace not governed by typical rules.

While a healthcare provider can make many typical business assumptions, there are many it cannot make. For example, if a drug became available that could virtually heal breast cancer, the maker of that drug could expect, with an ordinary product in a traditional business model, to be able to charge an incredibly high price for it and quickly recoup its research and development costs. As the new treatment became more widely used and subsequently produced, the price would fall as production became cheaper. But in fact the reality is, if a company was to deny its customers a wonder-drug, we would decry its inhumanity and probably force it to forego the windfall profits so that our daughters and wives and mothers could benefit. We all want the benefits of healthcare breakthroughs and we all feel entitled to them. Additionally, we have come to a point in our cultural growth where we believe that denying those breakthroughs to others, especially children, is inhumane.

 How do we manage this special situation? It’s fairly simple, a system that creates benefits for everyone should require everyone to pay. 

There is already a system in place for requiring everyone to pay; it’s called national income tax. We use it now to do the most American of things: national defense, enforce clean air and water standards, administer a national legal system and provide social security and healthcare to our oldest citizens. We even use it for arguably narrow interests such as the space program, the national endowment for the arts and national programs for higher education for our soldiers. We do not find these to be an
athema to our self-definition. We all agree, it is as American as apple pie to pay for what we get. I posit that our national stubbornness in clinging to our outdated healthcare system comes not from an expression of our national character, but a denial of the principles we espouse, a failure of individuals to acknowledge our common humanity and a failure of our politicians to recognize and articulate the way in which universal healthcare rises to the greatest common good and guarantees individual mobility and personal responsibility.
Jim Lewis
All I can say in response to this post is: Preach!

* Jim Lewis owned Mississippi’s Restaurant in the Mission Hill section of Roxbury, MA for many years.  He is a wonderful poet and has a poetry blog that I read several times a week.  I blogged about his poetry in May 2009 in a post, Mr. Poetry Man.  Check it out.  

I plan to have guest blog posts from time to time that strike my fancy.  Thanks for indulging me.

About Candelaria Silva

Candelaria Silva-Collins is a marketing, community outreach and programming consultant; writer; and trainer/facilitator who lives in Boston, Massachusetts. She has designed and facilitated workshops on a wide variety of topics including communication, facilitation, job search skills, team building, and parenting issues. She currently coordinates the Community Membership Program of the Huntington Theatre Company. Her work as Director of ACT Roxbury was profiled in several publications, including The Creative Communities Builders Handbook. Candelaria’s children’s stories, short stories, essays and reviews have been published in local and national publications and she is an active blogger. Her publications include the booklets, Handling Rejection; Pushing through Shyness: Networking Tips when You’re Shy, Slow to Warm Up or Just don’t Feel you Belong; and Real Questions about Sex & Relationships for Teens: A Discussion Guide for Parents. She has served on the boards of Goddard College, Wheelock Family Theatre, Boston Foundation for Architecture, and Discover Roxbury. She is currently Chair, Designators of the Henderson Foundation.

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2 thoughts on “Everybody Pays

  • Whalehead King

    While the actual cost to providers of mammograms is known only to them, the price which someone pays is typically determined by the Medicare fee schedule. Medicare determines what it will pay for a procedure through a formula called RVRBS (Relative Value Resource Based System) which it devised a number of years ago (20?) and updates annually. The amount Medicare will reimburse a provider for a set procedure is determined by a number of weighted factors that include technical components, supplies, and professional components, medical complexity. These are plugged into a formula and a dollar amount is determined to reflect the average value/cost and a margin of profit for the total number of a given procedure performed over the course of a year over the total patient population.

    Private insurers usually pay somewhat more than Medicare does for a given procedure in the hopes of attracting health care providers into contracting with their plans. Medicaid usually pays substantially less (my estimate is about a third). A patient purchasing a service on his or her own can usually expect to pay the Medicare rate plus 40% as a general rule of thumb. This is because the patient bargaining on their own behalf is paying retail for the service rather than wholesale, as an insurance company because the insurer delivers a volume of patients to providers who participate in their network.

  • Jim

    Thank you for that Whalehead. That’s a perfect illustration of how screwed up things have become. In your example, the actual cost is a mystery and the price can fluctuate as much as 300%, and furthermore if a mammogram produces no better detection results than a breast exam, it is still paid for by every insurance plan including Medicare. A physician/hospital is rewarded for prescribing it, albeit at different rates depending on who is paying while the actual consumer of the test cannot shop for it because there is no transparency. That’s a broken system. In an efficient universal healthcare plan, the Medicare price would be the only price, the health providers who could manage their business to deliver the best service at the cheapest price would be the vendors chosen by the system. If we don’t have the national will to create such a system, I’d go all the way to the right on this issue and say eliminate insurance plans almost altogether and let people buy services as they need them. A small annual national tax for catastrophic coverage would be needed for those among us who become dangerously ill and need all the benefits of the most advanced medical care. We would no longer be held captive by the tangled and bloated system we pay for now.