The Private Health Care Juggernaut Needs Jilting
Presidential hopeful Bill Bradley has placed health care reform on the national agenda as well it should be. However, the Bradley plan does not go far enough to resolve real need and it protects the insurance industry - the very culprit which is undermining access to quality health care in the nation.
Bradley's "universal" health care reform plan would abolish Medicaid and use Medicaid plus budget surplus funds to provide subsidies to 95% of the 43 million uninsured Americans so they could join (with little or no premiums) the Federal Government's employee health insurance system or utilize tax credits to buy private insurance. Bradley rationalizes his blueprint will "let the market do what it does best and government do what it does best."
It is a mystery to this writer what the market has done best. Health care in the U.S. is a trillion dollar industry. It is obliviously driven by profit motives, not social responsibility. Could this be more pronounced than in the market-heightened HMO/giant health care conglomerate era of today? Columbia/HCA executives, for instance, were recently convicted of intentionally defrauding Medicare of millions of dollars after a run of soaring profits on Wall Street. Humana Inc. and Aetna/US Healthcare face class action lawsuits alleging, amongst other things, that they pay doctors for withholding costly treatments and offer them other financial incentives to diminish the cost of the care the companies deliver.
Here I want to focus on how the private system does least by those who utilize health care the most.
The medical insurance game is played like this: the industry first studies data and calculates rates that will assure profits. It then "cherry picks" by denying insurance to bad risks. A 1996 study, for example, revealed that 47% of those insurance applicants who had been screened for "defects" were denied health insurance. Another way insurers turn risky subscribers away is by limiting their obligations through underwriting practices. They may insert pre-existing condition clauses which disallow treatment for periods of time. They may limit coverage so that specific treatments, drugs, or medical equipment are not included. They may cap benefits or they may charge exorbitant premiums for those with a history of a disabling condition.
(One paraplegic's premium, for example, was $750 per month. Others have reported premiums as high as $1,100. Such rates are not affordable for most working people and they discourage employers, who do not want to see insurers jack up their premiums, from hiring or retaining disabled workers.)
Unlike nondisabled people, those diagnosed with conditions such as diabetes or asthma, cannot go without treatment for six months or one year. Restrictions placed on benefits coupled with high premiums mean that those who experience disablement from birth or acquire one later in life may be forced to apply for health care from a public program like Medicare and/or be reduced to penury to qualify for Medicaid.
Essentially, market forces have shifted people needing ongoing health services onto the public health care system by out pricing, undercovering, or denying essential care for periods of time. Indeed the government stepped in to provide Medicare and Medicaid to serve those segments of the population the private system squeezes out: seniors and those under sixty five who are disabled from birth or acquire a disability later in life.
These systemic underwriting practices which leave many "uninsurables" out of the private insurance loop are meant to shift the burden of cost onto government. They assure that "non-profitable" people will not narrow the profit margins of health corporations. In a display of such intent, the business lobby fought for and won passage of a law, (USC 42 1395 y (b), which allows private insurers (and employers) to rid themselves of their disabled retirees by dumping them onto Medicare.
In the Managed Care Era, "cherry picking" has taken a more insidious form. Ever wonder why HMO advertising leaves out images of disabled people? Advertising and promotions meant to attract Medicare beneficiaries mainly target healthy senior citizens and leave out younger disabled people who are eligible to join. This is because "cost containment," the managed care mantra, has led to a payment paradigm shift. Hospitals and doctors no longer get paid for individual services rendered (fee-for-service), they get paid a flat fee as they would if medicine were socialized. However, unlike a socialization scenario, there are financial incentives for physicians and hospitals to keep costs low. As a consequence of market forces shifting the payment and delivery system from fee-for-service to managed care, those needing the most health care are no longer perceived as an asset (bringing more money in), they are seen as a liability (draining the profits).
A brief history of Medicare HMOs offers an example of how cherry picking and HMO business structures result in a disastrous combination for those utilizing the health care system the most. HMOs' desire to sign up only those who would cost them the least to care for clashed with federal Medicare contracts because the government held the HMOs to enrolling ANY Medicare beneficiary wanting to subscribe. But gatekeeper physicians and administrators found other ways to get more costly subscribers out. Studies by the General Accounting Office(GAO), for example, show that one out of every 5 Medicare HMOs had disenrollment rates above 20%. Further, the GAO found "the rates of early disenrollment from HMOs to fee for service were substantially higher among those with chronic conditions." Why? The GAO (and other studies) found that most subscribers left HMOs due to "problems receiving medical treatment." Medicare beneficiaries found it necessary to revert to fee for service for vital care. The upshot -- subscribers most needing services were forced out of HMOs by denial of care.
In the end, several large HMOs abandoned the Medicare population and did renew their Medicare contracts. They dumped 400,000 Medicare beneficiaries in 22 states off their plans.
As managed care encroaches upon public health care, corporate bottom lines have come to dominate the entire health care delivery system, both public and private. In most states, fee-for-service Medicaid is being replaced with HMO contracts. But government, so far, does not mandate enrollment of the disabled population into Medicaid HMOs because studies reveal systemic problems with disabled people getting the care they need. There are problems, for example, with HMOs inability (or unwillingness) to provide high level individualized care for "nonstandard" subscribers who are blind, deaf, developmentally disabled, mobility impaired or require psychiatric support. Pwds may have conditions which require treatment beyond gatekeeper physicians' training, yet often HMOs do not make access to specialists easy or possible at all, nor do all HMOs retain the specialists some pwds require. In addition, pwds may not be "curable" but still require modes of care in order to maintain optimal functioning and quality of life which go against the HMO grain to save money by rationing care. And, HMOs tend to trim rehabilitation services which often routes pwds, unnecessarily, into nursing homes.
Yet, Bradley's reformed system would wipe out Medicaid fee-for-service and throw the disabled population onto the private HMO system that does not want them.
Bradley's plan does not square off against the real problems the market juggernaut erects: cherry picking, underwriting practices which restrict benefit packages, HMOs' outright denial of care, restricted access to specialists and lack of personal assistance services (now available through Medicaid in some states). Bradley's plan does not address the possibility that employers will dump coverage and that premiums will rise left under the auspices of a private market.
According to the World Institute on Disability, the vast majority, or 80% of the population, will experience some form of disablement in their lifetimes- either permanent or temporary. Genetic screening forebodes that in the future most, if not all, will be subjected to health insurers' scrutiny. It behooves us to assure that all people get the care they require when they need it.
Despite its ideological opposition to collectivism, the private health insurance juggernaut has done its best to force government to subsidize (collectivize) their risks. The budget surplus could be put to a more complete and satisfactory use. Why not be sensible this go-round and jilt the unworkable market system? A universal single payer system -- if designed to be disability sensitive -- could go a long way to close gaps inherent to the private market place.
Marta Russell author Los Angeles, CA
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