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Memo to My Fellow Physicians: We Have Reached the Moment of Truth

Posted By Daniel Johnson On July 27, 2009 @ 3:40 pm In Obamacare | Comments Disabled

Daniel “Stormy” Johnson, Jr., MD, FACR is a Visiting Fellow in Health Policy at The Heritage Foundation and is a former President of the American Medical Association.

The recent hard to understand actions of the American Medical Association notwithstanding, physicians in the United States need to understand that we have arrived at the moment of truth.

When I graduated from medical school in the summer of 1963, the political class was already locked in a struggle over whether to have the federal government control all health care financing and delivery in the United States. That struggle had been going on at least since the tenure of Franklin Roosevelt.

When neither Roosevelt nor President Harry Truman was able to accomplish a takeover of the health care system, the advocates of central control of our health system switched to a strategy of incrementalism. The game plan was to pick off one group at a time. The first group was the elderly.

When Lyndon Johnson became President in 1965, in his State of the Union address that year he advocated cradle-to-grave medical care provided for all Americans by the federal government. But the fallback position was the first step in incrementalism: the elderly. For good measure, the financially disadvantaged were included in a different program. Those two segments were Medicare and Medicaid.

Later, different programs were concocted for dependent women and children. More recently, coverage of insurance for children was vastly expanded and in some states includes coverage of their parents. In some jurisdictions, this expansion has reached three or four times the poverty level, bringing much of the population into the eligibility net.

Now, with elderly, poor, women, and children covered, all that is left is a segment of the population outside of those groups that is reasonably self-sufficient and most of which has private insurance. Those folks will be forced into government coverage because of a “public option” plan that all intellectually honest observers, including both proponents and opponents of single payer, realize is a Trojan horse for a Canadian-style single-payer system. Once private insurance is crowded out by the unfair competitive tactics of the federal government intruding into an already flawed marketplace, it will be a simple matter to consolidate all of these different groups into one single entity.

What does this mean to physicians and their patients? “Clinical effectiveness research,” when operated by government instead of the medical profession, will become “cost effectiveness” restrictions on what care is available and to whom—determined by the federal government. It will only be a matter of a short time before Americans will enjoy the pleasures of “quality adjusted life years” wherein people my age will be denied services from which they might benefit because of their age and/or some other infirmity.

We don’t have to make this stuff up: It is already the law of the land in some other developed countries, such as the United Kingdom, and has been long advocated here in the U.S. by voices from the left, including major media outlets. The federal government will exert total control over payment for all medical services.

It doesn’t take a rocket scientist to imagine what will happen when the payment-control mechanisms used by Medicare are extended to the entire private sector. The occasional inability of Medicare patients to find physicians who are willing to provide for their needed care at a loss will become the standard experience when the cost shortfall can no longer be shifted to the private sector.

Practicing physicians in the U.S. have become accustomed to the continued availability of ever better diagnostic and treatment innovations created by our academic and research colleagues. In my own specialty field of diagnostic imaging, the pace and breadth of scientific innovation to help us help clinicians be more effective in the management of sick and injured individuals or in the early detection of life-threatening illness, such as breast cancer, has been amazing. Yet I remember only too well the mid 1970s when the federal government and all but two states (Nebraska and Louisiana) did everything in their power to deny the American people access to the technology of computed tomography because of cost. As sure as the night follows the day, we will see that same kind of limitation imposed, but on a much larger scale. But in contrast to the ’70s, total federal control will prevent physicians and patients from overcoming the stricture as we were able to do back then.

When one takes into account that the far left controls the presidency and both houses of Congress, the situation seems hopeless. What are we to do?

The answer is that there is much that we can do, but it has to be done right now.

First we have to understand and be able to explain to others why a significant number of physicians would actually prefer a single-payer system. With that understanding, possible scenarios for significant change become more obvious.

Next, we have to understand why we have a cost problem. With the understanding of that very important feature comes the responsibility to propose alternatives that will work better than our current system.

Then, armed with better understanding, we need to move forward in three coordinated efforts to stop the threatened radical change and impose a better solution that will truly work.

It is easy to understand why many physicians prefer a single-payer system or a public insurance plan. Most of us, especially practicing physicians, are absolutely disgusted with the abuse of physicians and their patients by insurance companies. Consider the amount of time wasted by staff in physicians’ offices navigating through telephonic Hell to get permission for a particular evaluation or treatment for no other purpose than harassment in hopes that the physician’s office will give up. That is reason enough for many physicians to want to abandon the whole idea of private insurance. All of us in the private sector understand this all too well.

The other reason that many physicians support a single-payer system or a public plan is that most of us are troubled by the number of people who at any one time do not have health insurance. The actual number is repeatedly vastly overstated by those who advocate a single-payer system, but the fact is that too many people do not have health insurance. But there are other solutions besides single payer that will solve the problem in positive ways without the baggage that comes with a single-payer system.

With respect to cost, there is good news. Of the three big issues of health system reform—cost, access, and quality—the debate has finally come around to acknowledging that our major current dilemma is cost. Even in a “perfect” system, cost would be an issue. In our current system, much of the access problem we have stems from cost. With respect to quality, it costs less to do something right the first time.

So if we are finally going to focus on cost, we need to ask why we have a cost problem. Of the myriad explanations, I would argue that the most important one is also the most amenable to correction. The person consuming the services is insulated from the cost of those services in most cases because someone else is paying for them. The only exception in our system is those rare individuals who are truly self-sufficient. Uninsured folks with no resources are eligible for Medicaid, and someone else is paying the bills. The person who shows up at the emergency department or in the doctor’s office for charity care doesn’t care about the cost because someone else is paying. The person in an HMO or with full insurance has only a small co-payment, intended as a barrier to seeking care, but is otherwise insulated from the true cost. Only those who are self-sufficient or who attempt to be self-sufficient truly feel the cost exposure.

Therefore, if everyone had some type of insurance and if the options included mechanisms like health savings accounts that would reward individuals for using the system in a cost-effective way, we would obtain true cost-effectiveness and radically reduce, if not eliminate, the problems that come from having large numbers of individuals who lack insurance.

This solution could be accomplished very quickly using mechanisms that are already well tested and in place:

1) Rather than limiting choice, as will be done with a single-payer system, we should expand the choices of both financing and delivery mechanisms available to every U.S. citizen.

2) We should give individuals the opportunity and the responsibility to choose and own their own health insurance plan, with the periodic right to change if they are dissatisfied with their previous choice.

3) Whoever is offering a subsidy toward the purchase of insurance, such as the employer in the private sector or the government in the public sector, should put up the same subsidy no matter what choice the person makes.

All federal employees get their insurance through a mechanism that encompasses the above three items (except that they do not own their own insurance, and portability is limited to job changes within federal agencies). It is called the Federal Employees Health Benefits Program (FEHBP), and because of competition it has outperformed the private sector for years. Consumer choice and competition are the two key principles that govern the FEHBP.

Here’s a challenge to Congress. If they want to have a government-run insurance plan, let them try it out first on themselves and all federal employees. Members of Congress and their staffs should be the first enrolled. At the same time, move the rest of us into a new system driven by consumer choice and market competition among a variety of private plans, including health savings accounts.


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