Random Thoughts from a Restless Mind

Dr. Darrell White's Personal Blog

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An (Im)Modest Healthcare Proposal

I have been pretty generous in sharing my thoughts about some of the ills of our American Healthcare system, especially with regard to the barriers erected between physicians and patients. I find the various proposals now before our legislative bodies in Washington to be rather curious, even offensive. Since when does the United States of America adopt wholesale an economic solution from another country? Especially another country that is in some way otherwise riding the considerable coattails of the U.S. economy?

The “baby with the bathwater” approach in the halls of our Capitol and the editorial offices of our leading media outlets (WSJ excepted) is about as wrong-headed as you can get.  What we need is an AMERICAN solution to the challenges that we presently face with the economics of healthcare in the U.S., using our present system as the foundation.

Not surprisingly, I have some thoughts!

1) Malpractice tort reform. See my thoughts in “Tort Reform = Healthcare Reform”. Effective reform will dramatically reduce the scourge of defensive medicine with its attendant costs and risks to patients. Defensive medicine represents 15-25% of all medical costs in the U.S. That’s 15-25% of $2 Trillion. Do the math.

2) Tax Reform #1: Remove the tax deduction for employer-offered health insurance. Provide a 100% TAX CREDIT to the lowest 60% of wage earners for the purchase of health insurance. Provide a progressive TAX DEDUCTION for the upper 40% of wage earners.

Tax Reform #2: Remove the tax deduction for advertising as a business expense for Hospitals. If we are concerned about unnecessary increased utilization of medical resources why are we allowing advertising by hospitals? For that matter, remove the tax-exempt status of any hospital or  provider that advertises. How is it appropriate to allow a hospital system to advertise to increase revenue, deduct that advertising as an expense, and still be not-for-profit? If it looks like a business, acts like a business, and sounds like a business, tax it like a business.

3) Insurance Reform #1: Reverse all of the for-profit conversions of previously not-for-profit health insurance companies. Who was the genius who thought THIS was a good idea? I don’t remember insurance premium increase that were quite so massive when all of the Blue Cross/Blue Shield plans were not-for-profit, do you? And while there were $Million execs in the non-profits I don’t recall any $10, $20, or $100 Million execs. Removing the need to answer to the stock market will create companies that will compete quite nicely with the for-profit companies without the horror of a government run system. Let the equivalent of NGO’s compete with the United Healthcares of the world.

Insurance Reform #2: Remove state-level coverage mandates and create a minimum federal set of mandates for comprehensive insurance policies. A REAL minimum. REAL medically necessary items. No Viagra or artificial  insemination coverage. Allow cross-state competition for the business. Real competition always drives prices lower.

Insurance Reform #3: Mandate high-deductible catastrophic health insurance for all. Real insurance, the kind that protects against a life-altering financial death sentence, not the pre-paid service plans that we now call health insurance. See Tax Reform #1 to see how it can be covered.

Insurance Reform #4: Allow insurance companies (Medicare and Medicaid included) to discriminate IN FAVOR OF people who make healthy lifestyle choices (eg. no nicotine, no DUI, etc.). We are all so afraid of the stick that we refuse to allow any use of the Carrot.

4) Freedom of Speech/Restraint of Trade Reform #1: Abolish, once again, direct-to-consumer pharmaceutical advertising. There was a quantum leap in the utilization of all sorts of medications immediately following the 1997 rulings that allowed DTC pharmaceutical marketing. If it is so obvious that our ever-increasing levels of spending on medical care is a threat to the very existence of our fair Union, then DTC drug marketing is a version of yelling “FIRE” in a crowded theater.

Freedom of Speech/Restraint of Trade Reform #2: Begin a return to the professionalism of yesterday by prohibiting all forms of advertising by, or for, physicians. The AMA gets a lot of criticism, most of it well-deserved in my opinion, but the court and FTC rulings that prohibited the AMA from censoring physicians who advertised was a seminal event in the de-professionalism of doctoring and medicine. Doctors and other medical advertising was, is, and always will be wrong. While we’re at it, do the same thing for lawyers and the practice of law.

5) Public Health. Finally, and most importantly, go to the true root of whatever “Crisis” we may have here in the United States, be it a “Healthcare Crisis” or a “Healthcare Finance Crisis” or what have you. We as a people are not healthy; certainly not as healthy as we ought to be. We are not healthy because of some wrong-headed previous Public Health decisions (simple-carbohydrate based diets, abolition of school phys-ed programs, tort-fearing closures of playgrounds, etc.). We are not healthy because our ability to treat the diseases that result  from poor lifestyle choices (cigarette smoking, alcohol abuse, preventable accidents, etc.) is SO GOOD that we are able to keep more and  more unhealthy people alive longer and longer, paying ever more to do so along the way.

This is where true leadership can make a difference. Remember JFK and the President’s Council on Fitness? I do. 8 pull-ups in the fifth grade for me. Sweden identified saturated fats from whole-milk products as a significant cause of heart diesease in the 70’s; a full court Public Health press for low-fat dairy brought about a dramatic decrease in cardiac deaths in the 80’s. Polio, measles, smallpox and whooping cough were once the leading killers of children in the U.S. but are now historical footnotes due to Public Health initiatives.

We lead the world in per capita alcohol related accidents and deaths, losing young lives by the thousands each year. We have ever more increasing numbers of truly obese citizens who go on to suffer the diseases caused by that obesity, and we pay ever more for their diabetes, hypertension, strokes and heart attacks. These lifestyle choices are root causes for our increased expenditures on Healthcare, much more so than all of the targets of Beltway demagoguery like insurance company expense ratios and pharmaceutical company profit margins. A solution to this issue, more than all of numbers 1 through 4 combined or any other proposal yet floated, is the true crux of the solution to any “Crisis” we may be facing. Everything else is only there to buy time. Time to get healthy.

There are no votes to be had in making Americans healthier. Nothing but hard work on every side of the equation. Who will stand up and do the hard work? Who will lead?

Who will have the guts to not only say that the Emperor is naked,  but also drunk and fat and puffing away our economy.

22 Responses to “An (Im)Modest Healthcare Proposal”

  1. July 25th, 2009 at 1:55 pm

    Rick says:

    Some interesting ideas. But I do (and always have) questioned the legitamacy of the ‘tort reform/defensive medicine argument’. Nothing against your profession generally, but is it possible that much of the unnecessary tests and related practices are not because of fear of lawsuits but because the doctors and hospitals can bill the insurance company $25 for that extra aspirin? Even if there was no lawsuit coming, what makes you think the hospital wouldn’t love to do one more MRI and reap another 2k?

    I don’t know the solution, but one major cost problem I see is that there are unknowledgeable/unsophisticated consumers in the industry who are (rightfully) often scared bc they are facing a health crisis and so when their doctor tells them they need something, and they are not personally paying for it, they say ‘go for it’. I’d love to be able to tell my clients they need something (even if the need vs. benefit ratio is very low), they don’t have to pay it themselves, and so they of course say do it (and I get to collect money for it). Instead, I am constantly having to educate my clients on the benefits of a course of action and the costs, and they decide if the cost is outweighed by the risk of inaction. And then they often decide it is not worth the extra money (I supposed I’d be much richer if I was more unscrupulous and just told them they ‘must’ do it and can’t survive without it, such is life with morals).

    Capitalist markets function efficiently only when all sides of any transaction have as close to perfect information as possible. When they don’t (or one side has disproportionate info) the market is inefficent and does not function well (see, e.g., every time my car mechanic screws me!). Healthcare is (and law can be too) just one of those industries where the is an unequal playing field and so the market isn’t working as well.

    Not sure how you solve that issue in healthcare (perhaps this is why they want to ‘tax’ benefits, to keep people’s incentives in the right place (and increase their incentive to get information and make informed decisions) and possibly your argument for non-profits would help, but not entirely bc non-profits still want to cover expenses), but it is to me a real issue.

    But interesting insights all around. Thanks.

  2. July 25th, 2009 at 3:59 pm

    darrellwhite says:

    Rick, thanks for your thoughts. Take a peek at my earlier piece on malpractice tort reform, “Tort Reform = Healthcare Reform”. Briefly, the vast majority of defensive medicine involves testing that does NOT contribute to the income of the physician who orders the test. The doc ordering the MRI generally receives no fee for either ordering the test or reading the result. The first referral in the defensive medicine daisy chain that starts the process (eg. a referral for a colonoscopy or cardiac stress test) is not reflected in the revenue of the doc playing defense. To be sure everyone (specialist, hospital, testing center) downstream gets paid.

    Common things are common; the penalty for missing even the rarest of uncommon diagnoses is so onerous that no amount of extra care is enough if just a little more might prevent that lawsuit. Since patients suffer from an information deficit and are insulated from the cost of the care they have no disincentive to follow a doctor’s suggestion as you note.

    At ground level the phenomenon is real, even for ultra-confident docs like a certain eye surgeon you know!

  3. July 25th, 2009 at 9:40 pm

    Rick says:

    I understand that. But what makes you think doctors aren’t friends with other doctors in the ‘referral network’? I can tell you that at least in my area, almost every private practice medical firm I know has a marketing person and that person’s job is to network with other doctors so they can refer patients back and forth between each other. So while I’m sure what you are saying is true, it is also true that doctors scratch each other’s backs with referrals. It is also true (at least in Florida) that doctors over treat patients who have insurance (especially car accident insurance). So I think there are many culprits to the rising cost of medicine, and I concede defensive medicine may well be one. Talk to you soon.

  4. July 26th, 2009 at 8:08 am

    darrellwhite says:

    Interestingly Rick, in private practice I can’t ever remember, no once, being asked to do the “you scratch my back…” thing with any other kind of doctor. Although large institutions like The Cleveland Clinic are held up as paragons of efficiency, etc. they are actually the WORST offenders in the scenario you suggest. Endless internal referrals are part of the culture, something more than encouraged. It is a very effective way to practice tertiary care medicine, the care of the unique, complex, or rare. Unfortunately, all similar institutions into the care of the common without changing their modus operandi, hence contributing mightily to the increase in medical expenditures.

    But the informal ‘referral network’ established to drive up revenue is a phantom.

  5. August 27th, 2009 at 3:19 pm

    Alex says:

    Not a doctor here. An engineer. Practicing in a very high liability arena. Foundations/Structures. If we overdo the defensive design, on behalf of factors of safety, someone else will simply out bid us for the contract.

    Like in medicine, we never know who was right. We only know that if the design fails, someone was wrong.

    Everytime I attend a conference, lawyers are villified. I find it ironic. My firm really is considered one of the best in the industry. But, particularly given the downturn in the economy, we are losing work to smallers who will cut factors of safety and do the design cheaper. The only thing that prevents an absolute race to the bottom is the fear of a lawsuit. That and the ethics of each individual engineer. But ethics can’t be legislated.

    The other day on NPR I head an interview with 2 cardiologists. One conceeded that it is better for him to run another test than to chase down a previously performed test by another doc. Actually, he admitted that he gets paid to run the second test, whereas he does not get reimbursed to both track down and to interpret the results of a previously performed test. He said he always runs the second test.

    I used an HSA when I was younger. No offense, but when I asked how much a check up was, people got offended. How can we evaluate the value of what we get when we really can’t know what we get for our value? And I live in the city with the highest per capita doc ratio of anywhere in the world.

    Lastly, sometimes I think people forget how insurance works. That or they never knew. It is a zero sum game. The only way to pay for all the end of life care is to charge healthy young people. That is why it’s so frustrating to be a very fit crossfitter paying the same premiums as the overweight, smoking, desk jockeys at the office.

  6. August 27th, 2009 at 7:29 pm

    darrellwhite says:

    Alex, thanks for your reply. What your cardiologist buddy is describing is less defensive medicine and more laziness bordering on boorishness. His attitude may or may not be common, but either way it is reprehensible.

    The notion spread by the plaintiff’s bar that they are all that stands between the population of patients and rampant malpractice is folly. Unproven and without any basis in fact. It is little more than marketing. It is no different in your world. We do what we do to the best of our abilities because that’s the way it is to be done. Been that way for pretty much ever. Same in your world. Bad work leads to no work, whether you are a doctor or an architect, with or without the plaintiffs bar.

  7. September 2nd, 2009 at 5:48 am

    Bill Bartmann says:

    Excellent site, keep up the good work

  8. September 20th, 2009 at 12:42 pm

    Bill Bartmann says:

    Great site…keep up the good work. 🙂 I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say I’m glad I found your blog. Thanks, 🙂

  9. January 21st, 2010 at 11:08 pm

    Kyle Jackson says:

    Did the political defeat stop any chance of Obama’s health reform going through?

  10. January 22nd, 2010 at 9:16 am

    darrellwhite says:


    Unfortunately, no. There is too much of a sense that “Washington knows what’s good for you” to derail the entire process. Command and control is the flavor of this administration and the present Congress. I’ll post a response soon outlining what I feel is a better, less expensive, more patient-friendly solution, one that I am sure will also be roundly ingnored.

  11. April 17th, 2010 at 12:59 pm

    Young Macanas says:

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  12. August 15th, 2010 at 12:05 am

    short term health insurance says:

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  13. August 15th, 2010 at 12:37 pm

    darrellwhite says:

    Sure, Clint. Send me a link to your blog and perhaps I’ll have a comment in return.

  14. August 19th, 2010 at 11:36 pm

    Filterless Air Purifier says:

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  15. September 20th, 2010 at 5:05 am

    Suzie Mire says:

    It is unbelievable that the cost of health insurance rises at the current rate. I have individual coverage, and my rates have increased over 30% in each of the last 2 years. And I am not including a change in age group. That will be coming next year as I turn 30. This rate of cost increases is unsustainable. What’s going to happen to people who make less than I do? (And are typically younger, and who typically make less money.) They will start to drop off of those who have insurance. And the cycle continues. Does the recent health care reform change any of this? For me, it’s only a matter of time before I either have to drop off the roles of the insured, or change my lifestyle completely by selling my house, or worse. Maybe I’ll have to move to Canada. Opinions?

  16. October 11th, 2010 at 8:15 pm

    Attorney Shannon Yerby says:

    This point of this page relates to your other posts on the home page. Outstanding article!

  17. October 13th, 2010 at 7:57 am

    darrellwhite says:

    So, Ms. Attorney Shannon yerby, how does this post relate to my offerings on Medical Malpractice?

  18. October 22nd, 2010 at 2:41 am

    Big Lebowski says:

    And what about the new Obamacare? Anyone has any thoughts about it?

  19. November 2nd, 2010 at 9:07 am

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