Thursday, March 27, 2008

Three Trends Converge to Propel us into Universal Healthcare Coverage


Healthcare leaders have been predicting universal healthcare insurance for at least the past twenty-five years. It has been a long vigil and it we will probably wait longer. It was only in the last few months that the forces that will propel us into universal healthcare insurance have become clear, at least to me.

1. The economic pressure of caring for the uninsured – Some of our best clients are now caring for up to 15 percent of their patients in a category known as “self pay.” This is a euphemism for uninsured or under-insured. These so-called “self pay” patients can equate to less than one percent of cash receipts to a hospital or health system. To provide an example assume a hospital provides identical care to 100 patients. 15 of those patients pay less than one percent of the cost to care for the entire 100 patients. We see many hospitals and health systems installing the most elaborate management systems to squeeze every nickel out of hospital budget in an effort to breakeven from hospital operations. These are hospitals that have historically shown four to six percent of revenue in excess of operating expenses. At the moment, this trend is highly variable from one community to another. To the extent that this trend increases and becomes a national norm, the hospital industry will be emboldened to scream for help in a manner never experienced in our history.

2. The Federal Budget - One of my favorite hospital CEO’s is a Marine Corps Officer. He recently said to me, “No one could question my patriotism, but our $9 trillion national debt and $ 12 billion per month for the war is going to eventually have to be paid for and you know where Congress will look first?” For all of our protestations regarding the Balanced Budget Act of 1997, the medical and hospital industry survived. It is not clear to the public or the members of Congress that Medicare and Medicaid cuts might be harmful to the healthcare industry. It is just a matter of time before the healthcare industry will face a Federal Balanced Budget Act II or Act III or Act IV. Eventually, the bone marrow of the healthcare industry will be ruptured and lead to the third and most disturbing force for change.

3. Elevated Quality Standards will Fail –We have all read about one medical disaster or another. In the past, each of these errors has been attributed to medical errors or the most elemental human mistakes. Many of these errors have occurred at our nation’s finest medical institutions. During the past twenty years there has been an explosion of interest in elevating quality of care standards. People like Dr. Donald Berwick have convinced us that we can avoid human error and improve the care provided within the American hospital. This ethos is under-girded by one simple assumption: the healthcare delivery system has adequate money. I am a believer. However, it is altogether possible that an under-funded medical and hospital system will begin reporting medical disasters on a par with the national “death-o-meter” of wartime statistics. What will the public reaction be if fifteen years from now the American Hospital Association begins issuing a weekly report with headlines like the following, “Last week 93 people died in American hospital emergency rooms due to excessive waiting times.” It is altogether possible that an under-funded healthcare system will voluntary ration elective surgeries as life threatening cases have to be handled first. Will the life threatening cases be handled in a timely manner? Of course, there will continue to be wide variability with respect to which hospitals are most adversely affected.

As these three trends fully mature, there will be period of placing blame. When American people are being injured or worse in American hospitals, regardless of their insurance status and despite the best efforts of physicians, nurses and hospital leaders, it will be hard to argue against a level playing field for all Americans. If the American hospitals are uniformly under-funded, the problems that emerge will not be isolated to St. Smither’s by the Swamp Medical Center in Broken Arrow, Oklahoma. Under-funding any complex system does not discriminate on any basis. An engine without oil will destroy a new Lexus just as fast as a used Yugo.

I asked my most trusted reviewer of my articles to review this one. He openly wondered if I was being a little melodramatic predicting that medical and hospital care is going to fall off a cliff or “was I just having a bad day.” Well, you tell me. I see these changes coming with the speed of a turtle and immutable. My adverse vision is way off in the future. I have no idea how long it will take for routine crashes in American hospitals to occur. I would ask the informed reader this simple question. Do you see a single countervailing force to reverse any of the three trends suggested above?

At the moment, five out of six American people have some form of health insurance. When that number gets to four out of six or three out of six and the Federal budget chisels the life, literally, out of the American hospital, medical disasters will become normative. No pun intended, the American public will not take this lying down. We are likely to see a state experiment that works. Currently, we are watching the “Massachusetts experiment” carefully. The early signs are not promising. Stay tuned. Many innovative proposals are out and about.

Our universal healthcare system is likely to be extremely private. The Federal and state governments will continue to contribute to a system that is competitively bid among private health insurance companies. We will likely catch up to world powers like Mexico and competitively bid our pharmaceuticals when public dollars are involved. Ironically, it is from the politically ambitious that we are likely to find the champions for universal healthcare insurance. When people die routinely and unnecessarily in American hospitals it will be expedient to be a legislative hero.






Jan Jennings