The Medical Issue

Think of this as Volume 15, Number 23 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

I spent some time yesterday looking at an American medical success story.

One of my oldest friends needed cataract surgery. Unlike me, however, he's a veteran, so he could get it done.

I drove him there and back, which is required when the patient is getting anesthesia. What I found was a crowded, bureaucratic, but efficient hospital where the workers always treat patients and families with civility. There was no luxury. There was a line for everything, even though we had an appointment. All the workers were on salaries dictated by a government schedule. But the veterans knew they had a good deal, and everyone from doctors down to clerks was polite and cheerful – even to me.

The VA is America's only “single payer” health system, and it provides more services to more people at lower cost than anything else we've got. By a lot. That's because, like the early Internet, it's mission-based – people aren't arguing about money. They're dealing with the problems in front of them. Veterans present their ID cards, everything goes into one computer system (running open source software), everything is bought in bulk, and it's often dispensed the same way.

Meanwhile, non-Vets deal with truly awe-inspiring inefficiencies. I've spent three months trying to pay a single $25 bill, for some x-rays done at a local hospital. No, they couldn't run the bill through the hospital's system, because the radiology unit is owned separately (probably by doctors) and besides, that would make sense. I tried twice to pay it online, and while vacationing last week got my second dunning call about “your unpaid balance” because (I learned later) the bank had bounced the second electronic check. Because the address I was given, on the phone, by this idiot's billing company was wrong. I sat there, on the phone, and went over their information before hitting enter, and they still screwed it up. It's going to cost this outfit $500 to collect my $20. And it will probably cost me my credit rating.

That's just the tip of the iceberg. I still have to fill out a paper form every time I see a new doctor. My internist has electronic records, but no one else is set up to receive them (except the hospital that installed the system, and promptly took over the doctor's office). The bills, when they come, are filled with phone numbers, and phonier insurance company payments, always resulting in yet-another hassle like the one with the radiology lab.

Now multiply this by 300 million.

And still we're just at the tip of the iceberg. Why do hospitals all have to be palaces, with huge lobbies? Why do doctors think they deserve to make $200,000 a year (or more) when all of their education (including their medical education) was subsidized by the taxpayer? Who made them gods? Why do their guesses on what treatment I should receive get treated like Holy Writ by the payment system, no matter how expensive, how untested, or how unreliable they may be?

I studied this question for 4 years at ZDNet, and I now know why. It's because everyone is protecting their own piece of the pie. No institution is focused on the mission of health or wellness. They're all like lawyers, looking to rack up the billable hours (in their case, measured in procedures they can link to HL7 codes).

The reason we don't have computerization is because of “privacy advocates” who think paper records are safer and “doctors” who think paper can do a better job of hiding their mistakes from scrutiny. Add to that IT companies each looking for proprietary advantage, a contracting system that makes that of the Pentagon look efficient, cost-shifting because people can't be left to die (although the uninsured can live a decade less than the insured in this country) and insurance companies without any true leverage over costs.

The answer is obvious if you just look.

Of course, each of these inefficient lardbutts is an interest group with a lobby. The insurance lobby. The hospital lobby. The IT lobby. The doctor's lobby. Each one looking out only for its own interest, each one claiming to be looking out for the patient. It's not true.

In the rest of the world there are two types of health care systems. There are insurance-based systems where the insurers have control over costs, because they have a true financial incentive to keep costs down. And there are government-run systems where the people, through their elected representatives (and a host of bureaucratic experts) decide what should and should not be done.

Both types of systems rely heavily on comparative effectiveness. That is, they know what works, they know what it costs, and that's what they do in most cases. They know which medicines are proven to work, they know what these cost, and if you want experimental treatments you're on your own. They also control doctor salaries, they decide how many hospitals and clinics will be built, hospitals look more like office buildings than palaces, and there are only a few (sometimes as few as one) billing systems so everything is tracked electronically.

The Affordable Care Act made some moves toward comparative effectiveness, the 2009 stimulus made some moves toward computerization, but basically – because of political compromises engineered by the aforementioned lobbyists – we still have the same failed system we had in 2008. No one is saying no. There are no limits on costs, from shared pools of money.

The Ryan budget, replacing Medicare's single payer system with a voucher that would go to private insurers, moves us from something that is starting to work to something we know does not work. Seniors aren't stupid. They're not that easily fooled. When they said in 2009 “get government's hands off my Medicare,” they meant exactly that. Republicans were fooled by their own bamboozlement.

But the Ryan plan does put the issue into sharp focus. We have three health care systems today – the public system of the VA, the public-private systems of Medicaid and Medicare, and the private system. One costs twice as much, per-patient, as the other two. The one Ryan wants to put seniors on.

In fact, if you want to really cut Medicare costs , you can do worse than looking at the VA model. Once we have the data on what works and what doesn't, once the Centers for Medicare and Medicaid have the authority VA doctors have, and the authority VA directors have in purchasing, why not just buy and staff some hospitals that will run on the VA model, and promise seniors no co-pays if they have their care done there? You'll save a ton.

It's not that government can do things better. It's that central authority is required to put a thumb down on the cost scale. Someone has to have the power to say “no” to doctors who always want to sell the most-expensive drugs and the most-complicated procedures, sometimes because they have a financial stake in them. Everyone has to be in the pool, because the “uninsured” will get sick and will get care. Someone has to be able to focus on the mission, and refuse to pay for anything that isn't mission-critical, when you're dealing with a common pool of money.

Someone, in other words, has to be the customer's man, not just at the bedside but in terms of costs. Insurers tried to be that in the 1990s and failed. Either provide them the incentives they need, the authority to say no and make it stick, or accept the need for government's role in doing just that.