“The health care system needs reform, but not the types of changes enacted under the new health care law. The Patient Protection and Affordable Care Act moves the health care system in the wrong direction. This highly unpopular law would assert federal control over health care benefits and financing, erect a complex one-size-fits-all health system, and centralize America’s health care decisions in Washington. Instead, Congress should transform the health care system into one that empowers individuals and families, not Washington, to control more of their health care decisions.” (Page 25)

They then mention the “Facts” which focus on the out of control costs of health care, $2.6 trillion per year and rising.

Then they offer five solutions.  Not a single solution addresses the cost of health and how to bring it under  control.  I can’t help myself, “IDIOTS”.  Their solutions can be characterized as, “Power to the people.”  Trouble is, most people don’t have a clue how to effective manage their own health care decisions.  Modern medicine is too complex with too many interests.

The truth is that the only people who have a chance of managing health care and controlling costs are in the health care community itself.  Because we don’t want health care and its cost to differ by region or locality, there is an implication that we have to have a national, centralized, and coordinated medical community.  Any other alternative will only continue more of the same – out of control medical costs.

I do agree with the Heritage folks in that I do not believe that the government should run such an effort.  It should be a non-profit medical management organization run by the medical community.  Properly established, it can be self funding.  It can assure appropriate care while eliminating unnecessary medical treatment.

The Heritage solution is simply another example of how ideology gets in the way of reason.  We need better from these people.

Several forces are at work which, when combined, work against reform.  The countervailing forces include the health insurance industry, the medical community, the plaintiff bar, and patients.  Looking at this list, one might laugh and conclude that the list includes just about everyone with an interest in health care.

The health insurance industry seeks to make a profit by investing insurance premiums paid by employers and individuals.  Insurance premiums comprise both medical costs (losses) and administrative costs along with profits.  Insurers typically justify raising rates, increasing premiums, by citing increased medical losses.  The bottom line for health insurers is that if they substantially reduce medical losses, their premiums  fall and so do their profits.  Not a good business plan.  Don’t expect  any real support for reducing medical losses or over treatment from insurers.

Many elements of the medical community also directly benefit from over treatment.  With $600 billion flowing into their coffers each year, the major beneficiaries (hospitals, centers for tests and studies, medical and surgical specialists, pharmaceutical houses, medical supply operators) fear the possibility of real reform.  The only ones not benefiting greatly are the primary care doctors who are underpaid.

The plaintiff bar wants the status quo even though the fear of medical malpractice is one of the costs drivers behind over treatment.  Removing this threat could help bring costs of care under control.

Finally, it comes down to patients.  The patients who demand more care, additional tests, studies, and treatment.  They want referral to a specialist for a sprained ankle.  But most of all, patients are simply ignorant about health care and their own bodies.  They demand more because they don’t understand.

We have not had the reform we need because we have no leadership to take on the task of herding these health care cats into a corral called appropriate care.  But that is a subject for another day.

Controlling over utilization without rationing will require that we start where the problem first begins – primary care doctors prescribing too much care.  Too many studies, too many tests, too many referrals to specialists.  We actually have a name for care that does not over utilize.  It’s called “appropriate care”.  This is what doctors are taught in medical school but somehow forget when they enter the practice of medicine.  There are many pressures on doctors to over treat.  Patients make demands, fears of medical malpractice, time constraints, etc.  Sometimes it is easier to order tests and studies than actually spend time with the patient to better understand the complaint.  After all, primary care doctors are not paid to spend time with patients.  Most insurers and HMO’s want doctors to process patients like Ford does automobiles.  Assembly line fashion.

If, however, we want to change health care, we have to change primary care doctor behavior.  We have to get them to provide  appropriate care.  We need them to practice Lean Medical Care, which is just another way of saying, “don’t over prescribe.”  While we tend to think of changing behavior as difficult, in the case of doctors and the manner in which they practice, it is not.  Doctors and other providers will voluntarily change if, and only if, we can change how the game is played.

Doctors are by nature solo players.  They are accountable to themselves even when in group practices.  There may be oversight but the doctor is the arbiter of care.  It is not reasonable to expect that they will happily change this aspect of their practice.  Indeed, insurer interference in their practice has been a major factor in driving doctors from the practice of medicine and their advising their children to stay out of it.  To keep primary care strong, therefore, we must keep the doctor’s primary role as the arbiter of care.  The change will have to come elsewhere.

At some point in assessing the possible improvements to health care, we need to apply logic.  If we wish to effect change across the entire country then we have to address the change in  behavior to all primary care doctors.  If we want all primary care doctors playing by the rules of appropriate care, then we need a national medical network to which they all belong.  This is where we start.  Health care reform must start with a primary care network of doctors who remain the arbiters of care but subscribe to the principles of appropriate care.  There are many elements to such a network but what is absolutely clear is that we cannot control health care without it.  It’s time to get started.

Who will form such a network?  Probably not primary care doctors.  As said, they play a solo game.  It won’t be the insurers.  They see advantages in the status quo.  Their access to networks is viewed as proprietary.  They also benefit from the over treatment in that higher medical losses lead to higher premiums.  Insurers make their money from investments, not premiums.  Higher premiums allow greater investments.  Will the federal government step in?  I doubt it, Obama shot his bolt on insurance reform under the guise of health care reform.  One must doubt that he has the political capital or will to take on establishing a national medical network. State governments cannot form a national program.

Probably the best bet is with the medical community advocating a single payer system.  Of course, they will have to get off the single payer bandwagon but if they can be persuaded to get behind the single network concept, there might be enough political clout to advance the cause.

Knowing this, it is relatively easy to understand why doctors, in the majority, report that they are dissatisfied with their careers.

In my view, the failure to pay doctors fairly results from a failure of imagination.  Insurers simply cannot see the way to controlling medical costs except on the backs of doctors and policyholders.  There is an alternative, however, that has worked in the past and can work again if applied uniformely across the country.  It is a managed medical network.

To be effective, the medical network must pay providers fairly.  This means that the fees paid must be fair and the medical community must be the arbiters of care… not the payers.  With this system in place, we can ask the health care providers to cooperate in controlling utilization and over treatment.  Bringing over treatment under control can reduce total medical costs by more than $600 billion per year. Paying doctors fairly is a small price to pay for the resultant savings. In addition, by eliminating waste in health care costs, we can help ensure that care will be appropriate.  Thus, the patient benefits.

By creating a National Managed Medical Network, we may be able to change the dynamics of medical malpractice.  In our current system, the physician stands alone when a lawsuit is filed.  In a Managed Medical System, the management of care and responsibility for outcome is shared.  Any legal action, therefore, would be applied against the managed network as well as the provider. Someone now has the provider’s back.  Together, they can defend their management of care.  Of course, if there was truly malpractice, then the claim should be paid and the patient or patient’s family properly compensated.  But if the claim is not just, then the network and physician must fight.

One might also consider removing medical malpractice claims from the current system of torts and placing it into an adjudicative system with a panel of administrative law  judges.

This system, built around a Nationwide Managed Medical Network, could significantly change the face of health care by helping to free doctors from the threat of medical malpractice.

Managed Medical Networks can change all that.  By bringing all cooperative providers together into a single, well managed medical network, we  can improve health care while taking out the trash (getting rid of waste and unnecessary care).  The key is in having a single, non-competitive network.  This will allow us to rationalize health care in a way that is impossible now.  For example:

• The Network would provide health care services to all insurers and their policyholders; this would eliminate the possibility of health care providers playing insurers off against each other and setting their own fees – in other words, providers cannot game the system;
• The Network can collect data on best practices nationwide in one  coherent database; this aspect is critical for rationalizing health care.  If we don’t know what works, we can’t advise providers on best practices;
• The Network can pay providers based on negotiated contracts in which the objective is to pay fairly and promptly.  Do we want doctors to prescribe based on clinical finding or do we want to fight with them?  Pay them fairly and get them on our side;
• The Network can obtain voluntary agreements for all participating providers to provide services under the principles of “lean medical care”; that is, care providers only prescribe services indicated by the clinical findings; this is key to eliminating the waste and unnecessary care in the current health care system;
• The Network is managed by medical professionals, not payers; payers always are concerned with costs, the Network is only concerned with appropriate care for patients and factors necessary to provide that care;
• In a rational system, all participants must benefit equally; we must recognize their needs and respond clearly and unequivocally;

What the Managed Medical Network is not.

• The Network is not an insurer;
• The Network does not determine who gets health care and who does not; that is the role of the insurer, private or public;
• The Network does not ration care;
• The Network does not focus on cutting health care costs; rather, it tries to assure that all patients receive appropriate care as defined by “lean medical care” and best practices.

The use of a Managed Medical Network offers a type of health care reform that can truly work.  It allows for a single payer system without government intervention.  It lowers medical losses and insurance costs which can translate into lower insurance premiums. Most importantly, it is the only approach that can “Take Out The Trash” (lower costs) without rationing.

It has been reported that there are hundreds of demonstration and pilot programs but they are stymied by a lack of provider participation due to lower payments. Maybe the answer is not found in lowering payments to providers. Perhaps we should pay them fairly. Now, there’s a novel idea. Why don’t our elected officials see this? Why do they fear fair and reasonable payments for something as important as medical care?

Perhaps we can find to answer in the nature of insurance itself. First and foremost, insurance is concerned with limiting losses and not paying claims. From its inception, insurance was viewed as a form of investment for wealthy individuals who were not investing to lose money. Today, health insurers operate in exactly the same manner. First deny the claim, second pay less whenever possible. When seen in this light, reducing the fees paid to providers makes perfect sense.

Now, in my own mind I make a distinction between professional fees and service fees such as those paid to hospitals, MRI centers, and so on. It is my view that professional fees should be based on usual and customary while service fees reduced to a minimum. After all, it’s the medical professionals we need working with us, not against us. I would be prepared to argue that all services should operate as medical non-profits. We should pay only the cost of the service, not a profit. But, of course, the real key is in limiting the  use of these services. Too often tests, studies, and referrals only represent waste, not services necesssary to promote health. Pay professionals fairly and limit the use of services. Allow only appropriate care based on actual clinical findings and diagnostic impression not treatment for convenience or defensiveness.

Rationally, we all understand that the medical community largely controls these costs and owns 100% of the unnecessary treatment. While insurers will try to limit care, they are not seen as trying to increase it. If we accept that the medical community owns this problem, then reasonably we should seek the answer there.

All medical care is prescribed by doctors. If we want to control health care costs, we have to start there.

Medicare must control medical costs if it is to survive. The can reduce fees, begin rationing, or gain control over treatment. Reducing medical fees means fewer physicians providing care, rationing means patients not getting care they need, controlling over treatment means patients getting appropriate care. Which would you choose?

I previously wrote that the bill as constituted was possibly the result of a reform strategy focusing initially on health insurance reform rather than health care reform. In no way was this health care reform. In this strategy of grand misdirection, it was thought that reformers could get back to real, and necessary, reform once the insurance availability promise was met. Clearly this was not the strategy. I now conclude that Obama and congress never really understood the crushing problems in health care related to costs and unnecessary treatment.

It also does not appear to me that there is any appetite for further reform. I rather think that health care reform is dead in the Obama presidency. If so, this is sad. Health care costs continue to rise to unacceptable levels; the amount of unnecessary care costs us more than $600 billion per year; many providers are woefully underpaid (primary care).

It may be that the change has to come from the bottom up rather than the top down. A health care plan that can eliminate unnecessary care, should appeal to employers and employees alike.