Tuesday, May 12, 2009

The Unfortunate Health Care Industry Letter

(Disclaimer: Though a physician, I am not and have never been a member of the AMA. This essay highlights one good reason why not. Of course, the Groucho Marx-ism also applies.)

There is a tremendous amount of hubbub surrounding a recent letter from the leadership of the American Medical Association, the American Hospital Association, the Advanced Medical Technology Association, the Service Employees International Union and America’s Health Insurance Plans to President Obama. In this letter,

"they are pledging to cut the growth rate of national health care spending by 1.5 percentage points each year — an amount that’s equal to over $2 trillion."


No one in their right mind does not recognize that the health care pie needs to be shrunk and that thereafter, growth of the pie needs to be constrained. Mr. Krugman, in a recent op-ed piece, is, to my mind, rightfully, skeptical. The crux, as he states so succintly, is,

"Remember that what the rest of us call health care costs, they call income."

There is no doubt that we, physicians, need to recognize that we need to shift the income, efficiency and accuracy curves toward the latter away from the former. If, as a medical student or physician that bothers you, then you should probably consider a career in widgets or plastics. The same can be said for health care institutions represented by the AHA.
The AMA and the AHA have, however, made a huge mistake in allying themselves with the rest of the industry. Of the six signatories of the letter, which one most clearly doesn't belong? The AMA represents (unfortunately) doctors. The AHA represents hospitals. One could argue that SEIU represents, at least, a class of patients. No question, these three need to be at the table.
But what about PHRMA and AMTA? As Mr. Krugman notes,

"After all, several of the organizations that sent that letter have in the past been major villains when it comes to health care policy."

... and

"There’s also the Pharmaceutical Research and Manufacturers of America (PhRMA), the lobbying group that helped push through the Medicare Modernization Act of 2003 — a bill that both prevented Medicare from bargaining over drug prices and locked in huge overpayments to private insurers."

Yet, Phrma and AMTA, their drugs and devices, are critical components of healthcare. Their problem lies in capitalism. To misquote Churchill (“It has been said that democracy is the worst form of government except all the others that have been tried.”), "capitalism is the worst form of economic model for healthcare except for all the others that have been tried". In capitalism, "Greed is good", devices and drugs don't get inspected and tested as much as they should and not everyone can drive a Cadillac.
No, the real outlier, is AHIP, America's Health Insurance Plans. The health insurer's make no meaningful contribution to the delivery of health care. In fact, they are a barrier to the social contract between the provider and the patient. An expensive impediment at that. Once there is recognition that universal health care is a fundamental human right then we no longer need health insurers to profit from risk stratification; we are all in this together.
We need to grow beyond the fear-mongering myth that a single payor plan would mean "government control" of health care. As the recent financial industry meltdown showed, we just need responsible "government regulation" of a single payor system.
The AMA and the AHA were wrong to join in a letter with AHIP. They legitimized AHIP as part of the solution rather than exclude them as a source of the problem.

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