Wednesday, July 3, 2019

Trump-GOP "Miracle" Alternative To Obamacare? - HRAs Or Health Care For The Rich And Healthy

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"We need to look at the German health care system!"

The latest scare that health care misers, i.e. conservatives,  are circulating is that all of the current medical "entitlements" will soon become insolvent unless a radical change is made so "medical costs drop".  And what is  the best way to lower medical costs? Well, either by implementing a wider basis for HSAs (health savings accounts, e.g. Scott Atlas, WSJ, June 7 p. A15) or via  HRAs or  'Health Reimbursement Accounts' (Laura Sanders,  WSJ, Exchange, June 21-22).

 In respect of the latter The Wall Street Journal editorial writers are absolutely giddy,  writing ('Trump's Healthy Tax Break',  July 2,  p. A14 ):

"The miracle is that the GOP has managed to find a political winner that doesn't reignite the debate over pre-existing medical conditions.  Republicans should spend time from here to 2020 telling voters that one party is thinking with  ingenuity about how to expand choice - and another is eliminating every option except government run health care."

But it's hardly a case of "ingenuity" when only the richest or at least the upper 3 percent of income earners will be able to afford this miraculous alternative the WSJ and many others tout.

In regard to the former WSJ piece, for example, we're informed by Dr. Scott Atlas (of the Hoover Institution) that "disclosing prices isn't enough" because patients don't care so long as "it's all covered by insurance".  In a sense this is correct, as I learned when I tried to make the case (in a prostate cancer support group) for halting further PSA tests for men in their mid- 70s or beyond. This was based on a UC Berkeley Health notice that found:  "The National Comprehensive Cancer Network recommending routine PSA screening for all but very healthy men with a significant life expectancy, who are most likely to benefit from detection of aggressive tumors."

  The issue being that given over $2 b is spent each year on the initial PSA testing and followup biopsies, other tests (e.g. MRIs), it's a significant chunk of change. Nearly all the respondents, however,  accused me of being a shill for drug or insurance companies.   Some of the blowback:

"What are you a politician running for office? An insurance company agent? I am sick of you guys coming in here and trying to tell us to try to control costs and not to get these tests!"

"I'm in no position to contradict medical science on this, but 70-75 seems a bit young. Yes, it leaves a "life expectancy" of 10 years (in 2018, living in the U.S., given today's technology), but healthy people with good genes and healthy  lifestyles routinely live well into their 90 "

Of course, the latter guy's claim is wrong as it's now been learned that barely 7 % of longevity is accounted for by "good genes".  Anyway,  they were going to get their tests come hell or high water, even if it meant ultimately leading to draconian treatments.  Usually ADT or androgen deprivation therapy- for which recent stats show more patients die from heart attacks (owing to complications from treatment, upsetting the hormone balance) than the cancer.

Where Atlas is right is that under the current systems - including Medicare - the insurance (i.e. supplemental plans) minimize the patient's share of costs. Hence, most advanced prostate cancer patients won't bother to comparison shop given what ever they need (Lupron, Casodex etc.) will be covered anyway.  He has a point in respect of this issue.

Where he is wrong is in claiming that HSAs are the ticket to better medical care for everyone, lower insurance premiums, and better access for all.   To make sure we grasp these entities, they are savings vehicles in which the person sets aside money tax-free for health expenses.  Atlas' argument is that patients will be more careful in how they use health care if they have to use their own dollars.  Else, if insurance companies are the providers, the "consequences are inflated prices, overuse of health care and unrestrained spending."

The problem with his argument is that even most middle class people in this country can't save enough to have viable HSAs.  The proof? The Federal Reserve's recent economic survey and analysis which found that up to 40 percent of the putative middle class is unable to save even $400 for an emergency.  Raise the amount to $1,000 and the proportion translates to a majority (65%) of citizens.

So let's say a guy gets prostate cancer and needs surgery or radiation therapy. We are looking at an amount in the range from $60,000 - $85,000 to be paid for treatments which means the HSA must have that kind of money to use it.  Clearly most middle class folks newly diagnosed with this cancer will be out of luck. They simply won't have the money to cover the expenses of care unless they're in the upper 1-2 percent.

Now, related to the HSA is the HRA being touted by the WSJ in its editorial yesterday as the GOP miracle alternative to the ACA and any other Dem proposal. The HRA stands for the health reimbursement account. and in many ways is similar to the HSA.  According to the WSJ Exchange piece cited earlier:

"Beginning Jan. 1, 2020, companies can provide employees with tax free dollars can purchase an individual policy rather than offer a group health plan."

Sounds like a bonanza. Is it? Nope.  It's the Trump- GOP' cheapo alternative to the ACA or Obamacare.  Or any single payer permutation, including the public option, the Dems might offer. The employer will give you tax free bucks (maybe $400 a month) and you can then use the money to stash until you need medical care. But what if you're faced with the prostate cancer diagnosis mentioned earlier?  Well, again, you'll be out of luck if those tax free dollars aren't commensurate with the medical treatment costs.  This will be the case if your income is middle class ($50,000- 85,000) as the Fed defines it, or below.

Also, even if you're better off than that, what if employers only raise the HRA payments with inflation (now 2%)?  While we know health care costs typically rise faster than inflation.  For example, the cryotherapy I received in 2017 which cost $55,000 than - according to the CMS Summary sheets- would cost nearly $75,000 now.  That would include the costs of the 3D biopsy, plus the cryo proper and the two anesthesia administrations.

Basically then, what Atlas and the Conservative-Corporate HRA promoters are hawking merely continues a barbaric and regressive health system for most Americans.  When the earlier cited WSJ editorial claims "this is good news for workers" - well, yeah, if those workers are earning $100,000 a year and up!  Or, as the same editorial admits: "the young and wealthy who don't consume many services."  But would any intelligent person really want to roll the dice on that?

Incredibly, it seems to be only nurses who grasp the U.S. health care system is regressive, even at times barbaric and grafting to the point patients consider killing themselves. This as opposed to heaping huge medical bills, debt on their families. Just look at all the Type I diabetics now having to travel to Canada to get their life-saving insulin (say for $100 for a month's supply) instead of shelling out $700-800 a month in the U.S.

Let me, however, agree also that one other area that Atlas is correct is in averring that the "supply of medical providers needs to increase" and vastly!   This is just basic math and common sense, which as I will show in a future post, also underlies the housing shortage and crisis. That is, no one seems to be taking into account the exploding population - which has increased in the U.S. by 45 million since 2001. The number of medical care providers, especially RNs - has not kept pace.

Look, if populations are continually growing that logically  means  sick conditions (as well as serious accidents) and diseases must grow with them. Even the healthiest person following a rigorous diet  can get cancer or be injured in an auto accident - and then what? Go into bankruptcy or massive debt after accessing needed care?  It is evident we need not only a more rational health care system but also more providers (doctors and RNs) to work within it.

In  a recent NY Times account one beheld the vile scope of profit over patient care in full view as told by  the caring RNs that oversee such care.  For example:

"Renelsa Caudill, a Washington, D.C.-area cardiac nurse, remembers being forced to pull a cardiac patient out of the CT scanner before the procedure was complete. The woman had suffered a heart attack earlier that year and was having chest pains. The doctor wanted the scan to help him decide if she needed a potentially risky catheterization, but the woman’s insurance, inexplicably, had refused to cover the test."


"Karla Diederich, also from California, remembers saying a final goodbye to her friend and fellow intensive care nurse Nelly Yap in their hospital’s parking lot. Ms. Yap was dying of metastatic cancer. She was scheduled for another round of chemotherapy, but the hospital had changed owners while she was on sick leave and she’d lost her job — and insurance — as a result. “Nelly spent most of her life taking care of other people,” Ms. Diederich says. “And when she needed that care herself, it was not there.”

Perhaps that’s because they see so much time and money wasted by the bureaucracy of the current system. By most estimates, the administrative costs of American health care surpass those of any other developed nation. Or maybe it’s because of the innumerable avoidable medical crises they constantly find themselves confronting. Patients go into heart failure because they can’t afford blood pressure medication, or gamble with their diabetes for want of insulin, then turn up in the hospital needing care that’s far more expensive than any preventive measure would have been.

Nurses, who encounter the system daily for years or decades, have hundreds of experiences, and they know better than most how brutally such stories can end.  Ms. Diederich, quoted in the Times piece, asserts: It’s barbaric. Crucial medical decisions are being made by businessmen whose primary goal is to make a profit. Not by medical professionals who are trying to treat their patients.”

It comes as no surprise that both HSAs and HRAs fit into this model.  As the author of the WSJ Exchange piece notes in respect to the coming of HRAs in January:

"What's clear about this landmark change is it will make a complicated process more complicated."

And what will be the result of that? Well, what the wonks call "adverse selection".    A concept in economics, insurance and risk management  describing a situation where buyers and sellers have different information which is known as "asymmetric information." 

Thus those who avail themselves of HRAs will possess vastly lower information than the businesses, employers who offer them.  The net result? They are bound to lose - in their finances, as well as quality of care.

This elicits the question of whether there is a better, more rational system - say which allows those who wish to keep their private insurance, but also doesn't bankrupt millions who can no longer afford it.  The answer, to me, would be the German health care system which has the following key features the Democrats might wish to examine:  

-All workers contribute 7.5% of their salary each week which is matched by their employer.  The money goes into a public health insurance pool ensuring everyone gets coverage.

- When a German is hospitalized no bill is sent to his -her address afterwards.  The money will have already been deducted from the income to over the amount of the procedure will be known beforehand - no surprises (see next item).

- The system imposes strict limits on out-of-pocket costs  so there is no such thing as a "surprise" medical bill which seems to be the norm in the U.S.

- Germany regulates drug prices and medical costs through an independent agency. This system applies realistic and rational standards so Germans do not have to choose between buying food, keeping heat on, or buying meds.  The independent agency is comprised of doctors, insurance companies, patients and lawmakers. Hence, there is input from all stake holders.

The clueless may well scan the preceding attributes and conclude the system can't be as good as the U.S. hodge-podge, but they'd be totally wrong.  As my long time German friend Reinhardt has said:  "I would wager we are a much better system than the one Americans have. In fact, if I were in the U.S. I'd likely have been dead years ago because of the unaffordable costs of drugs, treatments."  Point taken and WHO and other stats support his claim.

Let's also acknowledge the Germans have the oldest health care system in the world so they must be doing something right.  The U.S. - both sides, red and blue- could learn from it. And look, anything we find has to be better than the HRAs pushed by the finance and 'zero government' input mavens.

See also:


by Dr. Sanjeev K. Sriram | June 13, 2019 - 6:16am | permalink


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