Reforming the Healthcare “Debate”: Admitting We have a Problem

What can I really say at this point in the healthcare debate besides “Shut up!” It’s the same reaction I have in some meetings at work, except I keep it to myself (unless, I’m saying out loud and no one is telling me because they all think I have turrets). If you think you attend too many worthless meetings at work, you’re probably right. It’s easy for meetings to go haywire, especially the more people you have in them. More often than not, the main problem is no one will have set a meeting objective up front or provided any path towards resolution of the issue—a key point here being, there should be an issue. The entire point of a meeting should be to resolve something which could not have been done without getting everyone in the same room. So, if you have everyone in the room, you should probably have a plan to get something out of it.

Similarly, people’s time has been wasted on this Healthcare Reform “debate” in the last few months. Like a haywire meeting, there is no structure or direction for a constructive resolution. Much like most political wrangling of the past couple of decades, we haven’t started with the basic agreement on the current accepted definition of the “Healthcare System” nor is there an accepted definition of the problem of that system. Can we at least agree to that? Without this foundation we cannot possibly agree to a solution, because we don’t know what we are trying to fix.

Let’s think of the Healthcare debate as a more concrete problem. Suppose your car started acting funny (its fuel efficiency dropped recently; it’s making funny noises, and it doesn’t respond to you as quickly as it used to), and you take it to a mechanic. After you drive it into the shop, the lead mechanic brings in everyone into the bay and has you start it up. Everyone is watching and listening to your car from the back of the bay—its hood closed and no one looking at the dash—he has you shut it off and asked for solutions from everyone there. Everyone chips in an idea and they establish a few camps: replace the engine, fix the NOX system, and do nothing.

You probably think this is a ridiculous scenario. You may not run a mechanic shop, but you know there are some steps to go through before jumping to solutions. First, understand the vehicle--we can’t normally understand the peculiarities of a Pontiac by reading the repair manual for a Porsche. Second, try to isolate the problem, normally by gathering as much data about that problem as possible. Listen to it run, yes, but also open the hood, look at the lights on the dash, check all the fluids, hook up a diagnostic computer, etc. One can’t be confident in a fix unless the problem is given some context which may also include what is working correctly. This research and investigation, a contextual foundation, is not part of this Healthcare Debate, and if we admit first that there is a problem, then we have to build the context of that problem. Our President and Congress are deadlocking in a debate of solutions without establishing the foundation of the problem and how their solutions resolve these points.

All sides are taking advantage of this ambiguity by playing on emotions, misrepresentation and tangents. What’s worse is that those who should be getting the debate on track are taking the bait and falling prey to these emotional misdirections. As I see it, the problem with the Healthcare System is a technical issue, just like the problem with your car. The system has definition: it has things it must do; it has particular ways it responds to individuals. Just because it is made of people and not metal, doesn’t mean it can’t be handled like a broken car. Emotions shouldn’t come into play when you’re trying to fix your car or when you’re trying to fix the Healthcare System. (A good rule of thumb for almost all political “debates” is “if you’re getting emotional, you’re getting played.” Emotional appeal is the weapon of choice for politician and those trying to manipulate the government for as long as there have been governments. People are emotional and some of us tend to use political philosophies as part of our identities, just as we do with our favorite sports team, or band. Unfortunately, in politics this makes us quite a bit more susceptible to manipulation and personal injury. Normally, the best answers are approached in a cold logical fashion (Live long and prosper)) Addressing this as a technical problem also means that we’ll suck the life out of the debate, but boring is good in this case.

To begin this emotional drain let’s define the Healthcare System as it is now. Now this has nothing to do with the future form of the system (a cuban/commie/barcoding system, an unregulated/free market/credit score-based system, or a witchdoctoring/juju wearing/tattoo-based system). A “system” just means we have some boundary to the thing. When we talk about the problems of the “Heathcare System” we probably mean doctors, pharmaceuticals, hospitals, health insurance, patients and the relationships between them. We won’t talk about agriculture, police departments, the military or clown colleges (unless they provide some related examples).

As part of this definition we need to also define the current healthcare system’s function. Can we say, “Provide medical care to all individuals when their health is at risk”?

This function seems kind of odd, and you may debate the “all individuals” statement, but as the system is defined right now, that is what it does. Since 1986, the Federal Emergency Medical Treatment and Active Labor Act has required that all Emergency Rooms accept ALL individuals no matter their ability to pay for those services. If you disagree with this, ask yourself what you would want an ER to do with you if you were mugged and beaten; wait until they could confirm you could pay? It might be a while, particularly if you were unconscious with no identification, and in that state would you really want them to wait to see if you were bleeding in your brain? More than likely, you would want the service immediately. The problem most people have with “ER for all” is the payment aspect of these services. The act did not provide for any type of funding for ER’s to provide this mandate. As a result of this act, hospitals just have to “work it out”, and they thought it was wise to make the insured patients pay for it. This payment aspects falls into the problem category of the system.

Let’s take the second step and try to define the problems with this system at a high level. The more measurably we can define this problem(s) the better chance we will have at finding a solution that we can prove will work. The numbers are most available for one of the most common complaints about the System. The following chart comes from data available at the Organization for Economic Cooperation and Development. The following data compares the capabilities of the healthcare systems with the cost of those systems per capita. In this table I have included the U.S. against the most efficient industrialized nation, South Korea, and the best “scoring” nation, Japan. (I considered the score to include the number of “Deaths per 1000 Live Births” and the “Total Life Expectancy at Birth.” My rationale for these parameters was as follows: if the “Death per Live Births” for these other nations were higher than the US then they would loose more at the “front end” of their system, just as if their “Life Expectancy” would cover their “back end.”) Both nations beat out the US in both of these categories while costing about a third to a sixth of what it does per each US citizen. If you care to cruise the OECD, you will also note that almost all industrialized nations are far closer to S. Korea and Japan in their numbers than to the US.

This means that in general, the US system costs us more while giving us less. When compared to most industrialized nations it costs us far more.

Problem 1: General System Inefficiency. Costs are High and Return Value is Low

The second problem we feel more personally than any other—the growth in cost of the healthcare system. We see this in the cost of our medications, deductibles, and the growing number of things insurance refuses to cover. We can see this through data from the Centers for Medicare & Medicare Services site. The chart, below, is the per person cost of healthcare from 1960 to 2007. It looks like the elbow of an exponential curve, but we need to look at this data more realistically by using the growth in per capita income.

If we chart the cost of healthcare as a percentage of personal income (from the Bureau of Labor Statistics), we can see that this is not as harsh of a runaway—not exponential at least, but we can see how much healthcare is biting into our personal incomes, a 194% increase since 1960. We’d all probably like to be paying 7% as opposed to 22% of our incomes to healthcare. (We should also recognize that this per capita isn’t really representative since there is a more complex distribution of who actually ends up paying versus receives care just as there is a more complex distribution of income. For what is a rather long blog post already, we’ll stick with these averaging assumptions—a “what would it cost if we shared it all evenly.”)

Problem 2: The growth in the personal cost of healthcare as a % of personal income.

Speaking of uneven distributions, we find another problem regarding the means of access to the Health Care System. As of 2008, 15.4% of the United States citizens (46.3 million) were uninsured. As we stated earlier, this doesn’t mean that they can’t get into the Health Care System—they can get into ER’s—they just can’t get into the places through which Health Insurance lets them in—a normal doctor’s office, to the pharmacists counter, etc. This access limitation normally means that instead of being able to see a doctor about some ailment that could be taken care of earlier, they have to wait until it is debilitating enough to send them to the ER. This of course means that the ER’s get backed up with issues that could have been handled earlier and cheaper elsewhere.

This access limit means that ER’s get overstrained because of their government mandate, health insurance providers have to negotiate the fair price of payment because they know they are being used to pay for the uninsured visits, and the insured patients are carrying the brunt of the cost of the system. In the end this means that hospital charges go up, deductibles go up, the percent of personal income that goes to healthcare goes up, and the number of people who can’t afford health insurance goes up which causes this feedback loop to feed itself to oblivion. Health Insurance providers don’t just respond to this loop by increasing deductibles, but also by pairing their clientele back to lower risk individuals. This means they can charge higher deductibles but be less likely to pay out, strengthening their bottom line, but at the same time increasing the pool of uninsured people who will eventually cause prices to go up.

This problem does not translate directly into “lack of access to health insurance” though we could go there. To be more general, it is fair to say that the problem is that there is a lack of access to all aspects of healthcare. Even the insured are limited in their access to the Healthcare System. As a function of their insurance provider, insured people can’t just go to any doctor or hospital. They are limited in their choice. This not only causes challenges to patients, but it means that any free-market competition with hospitals and doctors is based on their appeasement of insurance providers not patients.

This problem is most correctly put as “the limitations of patient access to all aspects of the healthcare system.” Meaning something to the effect of, few individuals can get to the services they need even if they are the best thing for them and the system as a whole.

Problem 3: The limitations of patient access to all aspects of the healthcare system.

The Healthcare System has some operational problems in itself. It might be hard to get some agreement to what the “Healthcare System” consists of, because it isn’t actually formally defined anywhere. It has been allowed to grow complex and implicit relationships so that it has become next to impossible to isolate just exactly what is going wrong. Take the ER examples discussed above. The reason we know it is a problem is because the function of the ER is defined by law—it’s a known quantity we can deal with. The rest of the definition is spread between other legislation, company contracts and industry traditions. None of this is compiled into a single document called “The U.S. Healthcare System.” Imagine if this was the case with our Air Traffic Controllers. Would you have confidence in flying, if you couldn’t guarantee that each airport handled traffic by the same set of laws?

It’s been said that the costs of the healthcare system spends about a 1/3 of its total costs on administrative tasks. Though, I couldn’t find this number specifically, I wouldn’t doubt it. From some experience with the hospital aspects of the Healthcare System, I can say that each health insurance company can have its own set of documentation which is required to be completed by the doctors, technical specialists, etc. for their patients which causes more overhead for keeping it all organized.

Aside from the paperwork problem, the challenges of mistakes and misdiagnosis also plague the system. I will lump this in with the paperwork problem because it is about how effectively the system as a whole operates. This involves not only mistakes by doctors but the interpretation of malpractice by patients. Again, we are missing a definition of expectations for the systems operation, and this vagueness seems to be leading to costly and deadly mistakes. Like the paperwork problem, since there is nothing defining how things “should be” how do we know what we can fix? This problem can be stated rather generally, “System operations are prone to failure without a clear path to resolution.”

Problem 4: System operations are prone to failure without a clear path to resolution.

These problems are a high level description whose intent is to cover with broad brush strokes the major aspects of our Healthcare Debate. I also tried to keep out any idea of solutions from those problem statements. From this set of problems we can begin to look at the system in more technical terms in a more rational way than is currently going on. In subsequent posts, I will devolve the problem into more technical terms so that we have a better chance at isolating the problem and in turn find the right technical solution.