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Curbside Consult with Dr. Jayne 5/13/19

May 13, 2019 Dr. Jayne 4 Comments

We as CMIOs are often called upon to try to use data, information, and knowledge to try to solve complex problems that are caused by specific factors within the US healthcare system. They might be tied to low health literacy, funding barriers, or the high cost of care. I’ve worked with people to try to strategize around school-based health centers, community outreach programs, healthcare for the homeless, and more.

Since I often see situations where health insurance coverage (or lack of coverage) becomes part of the care equation, I was interested to see this piece in the Journal of the American Medical Association. It asks the question: “Does Employment-Based Insurance Make the US Medical Care System Unfair and Inefficient?”

On the surface, it seems like the answer to the question is yes. I often see people trapped in jobs they don’t like or aren’t suited for because they are afraid of losing their insurance coverage. I see people staying in dysfunctional marriages or domestic partnerships because of the insurance issue. Insurance in general adds inefficiencies to our practice, as we have to hire a fleet of people to handle claims creation, management, denials, appeals, and other billing functions. The complexity of insurance rules and differences in coverage are significant and it’s nearly impossible for the average clinician to try to make sense of it without significant assistance.

The coverage offered by employers can differ in striking ways. I was privileged to grow up in a family that had excellent coverage that was tied to my father’s membership in a union, insurance that was independent of the contractor for whom he worked and which could be continued in the event of a job loss through credits that workers could bank over time. I didn’t realize until medical school how amazing it was that my parents still had a $5 co-pay and that they didn’t need a referral to go see a specialist. (Of course that was in the bad old days when you were kicked off your insurance when you finished college, so I didn’t think the coverage was that great when I had to pay out-of-pocket to have my wisdom teeth extracted after they caused issues during my first semester.)

This was during the time when HMOs were growing in the US and many patients were having to get used to the ideas of working through a primary care gatekeeper and of being restricted to certain groups of physicians or particular hospitals. Now that we’ve seen that approach wax and wane and morph into what we’re working with now in the realm of value-based care, people are still complaining about their insurance. Employers may limit the plans available to employees due to cost. Changes in coverage can lead to frequent switching of physicians that can cause fragmented care for patients with chronic conditions.

Having heard about those factors over the years, I was interested to see an academic’s impression of the situation. The author notes that in the US, “the interests of high-income individuals dominate decisions about what medical care is offered and how it is financed. The result is a less efficient and less equitable medical care system than in other high-income countries.” He offers a review of the history of employer-based insurance, which initially started as a benefit to recruit employees during World War II. Other factors fueled its growth, including group insurance and tax advantages for employer contributions to the cost of coverage.

Employer-based coverage is cited as a contributor to rising costs when it includes wide networks, fee-for-service payments, and self-referral to specialists. The author notes other cost factors, including a focus on specialty / subspecialty care, high-cost technologies, relatively low hospital occupancy rates, and better hospital amenities, including space and privacy. He goes on to note that higher-income patients might be likely to pay for those amenities, but that “many low- and middle-income households would be better off if medical care was less costly and they had more money for other public and private goods and services.” He likens the high-cost product of the US medical system compared to other high-income countries as the difference between Whole Foods and Walmart.

He agrees with rank-and-file physicians about the high cost of administering the US system and its “mix of employment-based insurance, other private insurance, numerous government programs, including Medicaid and Medicare, each with its own eligibility rules and payment schemes and out-of-pocket payments.” Because of that hodgepodge, it’s impossible to understand the true cost of care, either to the patient or to the overall healthcare system, because of financing across patients, employers, and government entities. Ultimately in the US, patients bear the cost as employers lower wages to cover insurance premium payments and as the federal government collects money for Medicare through payroll taxes.

He notes that the US could save a significant amount of money if administration were simpler or if the healthcare “products” offered could be tailored to create a lower-cost alternative. However, government regulations would need to change for this to occur. He concludes that additional exploration is needed, although it appears that the way our system is financed causes inefficiencies and unfairness.

Trying to move from this hypothetical state to one that actually has an impact on our medical system is a tall order. People aren’t going to be lining up for narrow networks, stripped-down experiences, or a return to general ward care. Hospitals are in a veritable arms race as they compete to put heads in beds by offering in-room services that rival some of the nice hotels I’ve stayed in. However, those services don’t change the rate of handwashing or operative complications regardless of how much they appeal to patients.

We’re also addicted to technology and that raises costs. I was working with a medical student last week who trained in China. He’s seeking residency training in the US and was asking for strategies and feedback to improve his chances of being offered a training slot. We had an extensive discussion about physical diagnosis skills and how in the US we often jump to technology rather than using our ears and eyes and brains when we order CT scans and echocardiograms. I suggested that his ability to manage complex patients in a low-tech environment might be appealing to residency training programs given the alignment of those skills with what is desired in value-based care. It’s not going to change the fact that patients want an MRI, CT, X-ray, or lab test because they trust it more than physician skill, but it creates interesting food for thought.

The JAMA piece only had one comment. I would be interested to hear what readers think about the role of employer-based insurance in our complex healthcare system. Is it a blessing or a curse? Leave a comment or email me.


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Currently there are "4 comments" on this Article:

  1. “I would be interested to hear what readers think about the role of employer-based insurance in our complex healthcare system. Is it a blessing or a curse?”

    It is a better than nothing mitigation to a bad system. Until fundamental reform is attempted you’d be foolish to discard or significantly weaken employer insurance. However you will never get very far with mitigations.

    In clinical terms, employer-based health insurance is symptomatic treatment.

  2. Employer coverage may have contributed to the highest-cost healthcare system in the universe, but how do we replace it in our politcal environment. Employers are highly unlikely to agree to pay an equivalent amount into a govenrment fund to cover their employees’ care, and will prevail due to lobbying and advocacy.
    As long as our political sytem is fued by campaign contributions and lobying by every special interest – doctors, hospitals, drug companies, technology vendors, insurance companies – effective change is unlikely. A cursory search through opensecrets.org shows that both political parties are fueled by those funds.
    Similarly, as long as we lead patients to believe that they are entitled to every medical teatment they can think of, irrespecitve of proven clinical effectiveness or cost-effectiveness or advanced age, we will not have a rational conversation about getting healthcare costs under control. The heathcare industry likes to claim it is advocating the patient’s best interests, ignoring the revenue going into its collective coffers when another high-priced treatment is invented or another decision to authorize hundreds of thousand of dollars to treat the patient unlikley to recover in any case.

    • Very much agree with your comments Bill. With the size of the healthcare economy and all the campaign contributions it creates we’re unlikely to see any beneficial changes until the current system collapses or we have another 2008 type national financial crisis.

      Employers are comfortable disparaging heatlhcare (like Charlie Munger did this weekend) but don’t seem to direct the politicians they influence (or control in some cases) to act in a rational manner to push for real sustainable change.

      ObamaCare / ACA was known to be unsustainable when enacted and was generally understood to be a first step, but without a commitment to follow through to create sustainability and lost support mid way through Obama’s administration.

  3. This post resonated a lot with me on so many levels – ironically I had penned this piece:
    Would you Divorce Your SPouse over Health Insurance:
    (I would if it would help but as I note this depends on the divorce rules in your state)
    On the one hand, employers want out and complain about the cost and that it is not their business focus with complaints about 30%+ of the cost of a car made by Ford or General Motors coming from health insurance costs. But as Dr Jayne points out it helps lock in employees (albeit that may not actually be good). Many (most?) of the leaders probably don’t even share the same healthcare plan with more senior executives enjoying better healthcare coverage in exclusive plans limited to senior officers in companies so are will not be leading the charge to change.
    Having come from a system with less access to technology the training and focus we received was on the clinical diagnosis that was confirmed with testing if available and cost-effective and I have seen that borne out on multiple occasions with clinical colleagues experiences in the US. But as others point out this is “defensive” medicine thanks to the litigious nature of this country – but that’s not the only driver here as fee for service plays its part as well.
    I agree with Bill that the political system that has devolved into binary viewpoints (fueled and amplified by the active encouragement of social media systems like Facebook designed to push people into “their” group) creates a big challenge in effecting any kind of meaningful change.
    Employers should be removed from the healthcare system imho – they have no place at the table and complicate an already challenging system as a 4th unrelated party – but how would that ever happen except by creating a new better system that people can opt into by choice
    My first incremental step is cost and price transparency – its impossible to have a meaningful conversation with anyone (even if they don’t end up paying a bill) about the economics and value of their choices without a full understanding of the price and cost. I recognize the huge lobbying machine that has already spun into action to protect economic interests will fight this to their dying breath. As one commentator suggested it is going to take a total and catastrophic failure for real change to be effective which might be true – the question is what is that failure? Isn’t any of these points and the slew of other points and stories already those catastrophic failures? I know they are for each every one of the individuals personally harmed in these instances – has there not been enough of them yet?

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