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A British View of the US Health Reform and US Health Journalism
April 24, 2011
As a Brit looking back on the AHCJ conference which ended just a week ago, I have to say that the overwhelming impression I took away was that Americans appear to love their health insurance companies more than almost anything else, and that US health journalists appear to be less critical and analytical in approaching health reform and health policy than when they report on new drugs and treatments.
The jargon phrase which indicates both issues – which to my surprise went without question by any of the American journalists in the sessions I attended – was the words "medical loss" – as in "medical loss ratio" to describe the money spent by health insurers on patient care.
I would venture to suggest that if such terminology were to be used in almost any other advanced capitalist country it would be seized upon and challenged as evidence that the insurers are focused not on patient care, but on the ‘bottom line".
The fact that it has been seen by some US insurance companies as a controversial aspect of the Obama reforms, with warnings that some may pull out of the market if they are required to spend at least 80% on of premium income on patient care in small-group and individual policies (where up to now they have been able to retain 25-30% of premium income) also shows that wealth care rather than health care is their main focus.
Why should journalists question this particular jargon term? Because it makes absolutely explicit the counterposed interests – between the big corporations which are in health care for profit on the one hand, and tens of millions ordinary people seeking affordable health care (i.e. most of the readers and audience of health journalists) on the other.
Far from being "partners" with patients, the insurance companies resent every cent spent on what their subscribers regard as the main reason for buying insurance, and regard it as a "loss".
And not only do the insurance bosses hold this view secretly in their conversations behind the closed doors of the boardrooms, but they feel able to share it publicly, without being questioned or criticised in the news media – let alone by the Obama administration and those working to bring about health reform.
This became very clear in the session on health insurance where Karen Pollitz from the Center for Consumer Information and Insurance Oversight described the unbelievable complexity of the web of varying insurance schemes from which individuals will be obliged to choose, and thus the necessity for a new agency to help people deal with these problems. In one state potential subscribers will have to choose from well over 100 rival schemes, many of them only slightly different from each other.
She also outlined the ways in which the government will subsidise those on low incomes to buy insurance they could not otherwise afford, despite the fact many of these policies will still leave them liable to heavy – and potentially unaffordable – out of pocket costs if they actually need health care.
The one thing guaranteed in all of this is the profit margins of the health insurers, who will pick up the subsidies and the premium payments, and be allowed to increase premiums by up to 10% per year with no questions asked, regardless of the impact on affordability. Only increases above this limit may be called in for scrutiny.
Despite the obvious enthusiasm with which Karen outlined what her Center was doing, at no point during the entire workshop session was there any explanation on how patients and the wider public actually benefit from this hugely expensive multiplicity of rival policies, unwanted and unintelligible "choices", and potential financial insecurity.
Of course for the patient, the margin retained as overhead and profit by the insurance company is only part of the overhead cost of the US system, since a considerable share of the remaining 80% to be spent on "patient care" will in fact be consumed by the overhead bureaucratic costs and profit margins of hospital chains, physicians and pharmaceutical companies.
This is why the US system has become infamous throughout the world for its inequality (state of the art high-tech care for those with the ability to pay, or with the most lavish insurance cover, versus exclusion from many services for the uninsured working poor) and bureaucracy (up to one health dollar in three consumed by administration and overhead in the for-profit sector).
Up to now the US has been spending one dollar in six of GDP on health, 40% of the entire world's health budget on just 5% of the world's population, but leaving almost one American in six without proper insurance.
So it's rather shocking to find a conference of knowledgeable and independent-minded journalists apparently uncritical of the system, and failing to ask some of the basic questions that should be asked about new treatments – not least exploring potential benefits and harms, comparing the new ideas with existing alternatives (of which there are many around the world), and discussing potential conflicts of interest.
Don Berwick's Thursday evening speech to the AHCJ conference spoke glowingly of the ‘Partnership for Patients", in which the private sector insurers and providers appear to be batting on the same team as the administration.
Nobody questioned the viability of this "partnership", which aims to "lower costs by improving care" and in particular to cut the level of hospital acquired health conditions and avoidable readmissions, all of which is laudable.
But at the back of the room, Berwick's own handout spelled out the massive scale of the problem, citing new figures from Health Affairs showing a staggering average of 1 on 3 patients admitted to hospital suffering a medical error or adverse event, 1 in 20 suffering a hospital-acquired infection and 1in 7 Medicare patients suffering harm in the course of their care.
Something is seriously wrong with this system: surely no other private sector provider (other than the tobacco industry) could be so cavalier in its treatment of its customers and survive in the marketplace.
As Berwick argued, it's also obviously better and cheaper to improve public health and keep people from needing Emergency Departments than to face a growing demand for emergency care: but this requires investment and takes time to deliver results. Instead, across the US, states are cutting back on spending on precisely this kind of services.
That story was a grimly familiar one to me, since successive British governments since at least 1992 have pledged to replace costly hospital care with what are claimed to be cheaper and more effective primary and community health services: yet every year since then has seen a relentless increase in numbers attending Emergency Departments and being admitted as emergency in-patients.
It's not enough to talk the talk on health promotion and preventive services, primary care and community-based services: before they can make any savings in hospital care, governments have to ensure that nationally and locally those taking decisions walk the walk.
They have failed in England, despite much stronger government control over the vast majority of health care provision, and a negligible role for the private sector which remains completely marginal to our much-improved National Health Service.
Given the byzantine complexity of the US system of government and even more complex health care system, in which the only consensus appears to be on the right of the private sector to make profits and the "right" of individuals to make choices whether they want to or not, it seems doubtful whether any more progress will be made. The promised savings may not materialise.
There was a wake-up call in the form of a fascinating handout from The Commonwealth Fund ‘What Will happen Under Health Reform – and What's Next?' It uses much clearer language to discuss "medical loss ratios" but describes them as "premium share spending". And a telling graph on page 7 shows that even with the full impact of the reforms, health care spending is projected to rise by 6% per year, soaring by 80% to $4.5 trillion by 2019.
With current levels of overhead costs, between $1-$1.5 trillion of this will be siphoned off into private pockets.
I came away wondering whether, and at what stage, American health journalists might begin routinely to ask more searching questions about the system itself, its key players – and its constantly spiralling cost. Because until these issues are raised in the media it is unlikely they will spontaneously raised by the American public: and that, no doubt, is just the way the for-profit insurers and hospital chains like it.