FAILING HEALTH: A Wasteful System that Doesn't Work

...In order to ensure flexibility, the states would submit plans that meet all the basic requirements of the national system, but would have considerable latitude to devise ways to improve the system...

...Part of the answer lies in the nature of health insurance in the United States...

...Hunger reappeared in the 1980s...

...Studies have shown that in the late 1970s, the wealthiest fifth of Canadians lived 4.5 years longer than the poorest fifth and avoided disability eleven years longer...

...The fact that 90 per cent of all physicians in the United States are specialists, and that we have a surplus of surgeons, means that many Americans suffer not from a lack of medical care but from too much care, some of which may be harmful and much of which is unnecessary...

...they meekly follow doctors' orders...

...Although unemployment dropped slightly from 7.1 to 7.0 per cent between 1977 and 1986, the poverty rate rose from 11.6 to 13.6 per cent, and the number of persons in poverty rose from 24,720,000 to 32,370,000...

...What accounts for these discrepancies...

...Paradoxically, our enormous health expenditures don't begin to assure better heaith for Americans...

...What we lack, so far, is a commitment to human welfare and social justice, and the political will to make health a right, not a privilege, in the United States...

...The system would be administered by Federal, state, and local health departments responsible to boards of health composed entirely of public representatives drawn from all sections of the population...

...Canadians are learning the painful lesson that their medical program assures equity in health care, but not in health...

...There is no justification for any region to have a rate higher than 10 to 15 per cent...

...Clearly, this decline in living standards needs to be reversed if the United States is to become a healthy nation...

...Part of the cost increase can be explained by the development of technology, another part by the increased need for care of an aging population...

...radiologists, $165,000...

...Medicaid, the Federal-state program for the poor, was always insufficient and has been further reduced by the states...

...Alberta froze medical fees in 1984, but physicians increased their gross incomes that year by almost 12 per cent...

...Our country has the capacity to solve the health-care crisis, support vigorous and effective preventive measures, and improve the standard of living for all Americans...

...4) consultation, training, and other governmental assistance, and (5) regulatory action to correct abuses and gross deficiencies...

...for all medical care, it rose by 85 per cent...

...Specialists charge considerably more than general practitioners, and their incomes are higher...

...rate of more than 25 per cent...

...Private health insurance, which began to grow in the 1930s, received an enormous impetus during World War II, when wage controls and tax policy encouraged employers to provide nonwage fringe benefits...

...Anational health-care system, however, is not the same thing as a national health program...

...Despite the doctors' propaganda to the contrary, most patients don't demand to be operated on or to undergo tests...

...In Canada, which also pays doctors on a fee-for-service basis, attempts by the provinces to control health budgets by restricting doctors' fees have failed...

...and general surgeons, $130,000...

...And the insurance plan is not tied to employment...

...The most rapid and dramatic improvements in the health of the public will result not from medical care but from preventive measures...

...Specialists are trained to use expensive high-tech diagnostic and therapeutic procedures, whether or not these make a significant improvement in the patient's health...

...ophthalmologists, $170,000...

...Quality of care would be improved by (1) the imposition of Federal standards...

...only 2.9 per cent of all U.S...

...Salaried group-practice plans and community health centers have 40 per cent lower hospitalization costs and 25 per cent lower overall costs than individual-practice fee-for-service plans, with equal or better results in terms of patients' health...

...Other patterns of private insurance have also se* the stage for the current crisis: (1) Dr...

...Cesarian sections in Canada have skyrocketed from fewer than 5 per cent of births in 1968 to about 20 per cent today-second only to the U.S...

...Payments would reflect the demographic characteristics of the persons served and the estimated cost of providing care, based on the experience of salaried group-practice prepayment plans and community health centers...

...private health insurance pays for only 31 per cent, and 40 per cent is paid by government...

...The system would be financed by the Federal Government and the states...

...Medicare—the Federal health-insurance program for the aged that is financed through Social Security—now covers only 40 per cent of their health costs...

...health-care crisis so acute is the enormous escalation of costs...

...Such a program must emphasize the two major determinants of health: prevention and the standard of living...

...Bitter strikes have centered on this issue—by telephone workers and the Pittston miners, among others...

...urologists, $145,000...

...2) distortion of the medical-care system by concentration on surgical services and inpatient hospital care...

...thoracic surgeons, $165,000...

...For another, Canadian fee schedules are not so generous as those in the United States...

...Private health insurance has failed to meet the need...

...The result was a drastic decline in the number of general practitioners, from eighty-three per 100,000 population in 1940 to only thirty-two in 1967, a decrease of 61 per cent...

...Did technology improve by 76 per cent in five years...

...Such a system would cover the entire population for all medical-care services, including dental, mental, and long-term care, without deductibles, co-payments, or extra charges by providers...

...general practitioners in 1987 was about $80,000, a third less than the median for all physicians...

...obstetricians/gynecologists, $140,000...

...everyone is covered, and the costs are paid through provincial and federal taxes...

...What makes the U.S...

...Although the ratio of physicians to population is about the same in the two countries, the United States has 33 per cent more surgeons per capita...

...In Canada, a quarter to a third of each provincial budget is determined not by the provincial government but by the medical profession...

...These are grossly underfunded at the present time...

...neurosurgeons, $235,000...

...It would be supported by progressive, graduated income taxes, corporation taxes, and excise taxes on tobacco, alcohol, foods rich in saturated fat and cholesterol, firearms, and toxic substances used in industry, agriculture, construction, and the community...

...Provider organizations would be classified as public utilities, with their records open to public scrutiny, and with profit margins and uses regulated...

...anesthesiologists, $160,000...

...Milton Terris is the Editor of the Journal of Public Health Policy, published in South Burlington, Vermont...

...No attempt was made to match the number of specialty-training programs to the estimated needs of the public, so that we now have a surplus of surgeons and other specialists who are trained to provide services that aren't needed...

...Physicians paid by fee-for-service are small businessmen, like lawyers, investment counselors, dry cleaners, and auto mechanics, who also sell services, and like small manufacturers, farmers, and retail merchants, who sell products...

...Poor nutrition lowers resistance to many diseases...

...thirty-seven million Americans have no insurance at all, and many more millions have too little insurance to cover the costs they incur...

...Most physicians in this country are paid by fee-for-service instead of salary...

...This would leave the current system intact, with all its waste, complexity, and ever-rising costs...

...3) failure to cover services fully, including the use of deductibles and co-payments paid by the consumer, and (4) building in a cost-inflation factor by permitting physicians and other providers to make additional charges to the consumer beyond those covered by insurance...

...In Canada, there are no deductibles, no co-payments, no extra charges by physicians...

...Take, for example, the spectacular recent rise in physicians' total charges for Medicare patients...

...Our life expectancy for men is surpassed by nineteen countries and for women by fourteen...

...In Canada as in the United States, doctors often perform tests, procedures, and surgical operations without regard to medical necessity...

...It is the physician who controls the costs and makes the decisions on what needs to be done...

...When Quebec froze doctors' fees in the early 1970s and their real-dollar value dropped by 9 per cent, doctors increased their billings by almost the same amount, 8.3 per cent...

...The highest median incomes went to the surgical and other specialists who did their work primarily in hospitals: cardiovascular surgeons, about $270,000...

...If the Government tries to reduce doctors' fees, they make up the loss by increasing services...

...Large-scale government grants and loans would be available to assist consumer-controlled and health-worker-controlled provider organizations to form community health centers and salaried group-practice organizations that offer a wide range of health services...

...The Federal share would be 75 to 90 per cent of the total, with the higher proportions going to the poorer states...

...This incentive system also pushes up hospital costs, since many procedures are performed in the hospital...

...One reason is that Medicare policy has been to pay doctors at their "usual and customary" rates, which is an open invitation to raise fees...

...Poor people in Canada have, on the average, only fifty-five years of disability-free life, while rich Canadians have sixty-six years...

...In Canada, where private insurance companies play no role and the medical-care program for the entire population is administered by provincial governments, administrative costs come to a little more than 1 per cent of total health expenditures...

...There is a great incentive, therefore, to provide un-needed services...

...From 1972 to 1984, the provinces cut fees by 18 per cent in real terms, but by an amazing coincidence, doctors' total billing claims rose by 17 per cent...

...In Liverpool, England, and Uppsala, Sweden, where surgeons are all on salary, the rates were twenty-six and seventeen per 10,000...

...And the administration of Medicare at the state and local level was handed over to private insurance companies...

...Poor working conditions cause many preventable diseases and injuries...

...In Canada, 50 per cent of all physicians are general practitioners, as against only 10 per cent in the United States...

...2) evaluation of the services of all provider organizations with respect to the quality and performance of personnel, suitability of facilities, compliance with performance standards, and effectiveness of care...

...Most of the proposals being advanced to solve the health-care crisis are concerned with providing some insurance coverage for the uninsured...

...health dollars are spent for government public-health activities...

...In the United States, however, the doors to specialty training were thrown wide open after World War II...

...The system pays fully for the services provided...

...The number of Americans covered by private health insurance tripled from ten million to thirty million during the war, and the basic pattern set then is still dominant: Private health insurance is tied to employment, with industry paying part or all of the premiums...

...We have, therefore, inherited a complex, wasteful system with a bewildering variety of benefit plans offered by a multiplicity of private insurance companies that incur enrollment costs, maintain reserves, skim off profits, and impose enormous burdens of paperwork on both consumers and health-care providers...

...Out-of-pocket payments by consumers come to 28 per cent of all personal health care expenditures...

...Did the older population expand by 76 per cent...

...One alarming aspect of the current situation, in both Canada and the United States, is the widening gap between rich and poor in preventing disease...

...Such studies make it clear that the most important determinant of health—in the United States, Canada, and every other country—is the standard of living...

...From 1982 to 1987, they rose by 76 per cent, from $15.1 billion to $26.6 billion...

...Hit with a fee cut, doctors simply see patients more often and provide more services...

...From 1980 to 1988, the Consumer Price Index, excluding medical care, rose by 41 per cent...

...The funds available to prevent heart disease, cancer, stroke injuries, chronic lung disease, infant mortality, occupational and environmental diseases, alcohol and other drug problems, AIDS and other infectious diseases, should at least be doubled...

...The Government programs established by Congress in 1965 have also proved inadequate...

...In common with other businessmen, physicians are in the business of making profits, and their profits depend on the prices they receive for their services and how many services they sell...

...orthopedic surgeons, $195,000...

...A more rational solution would be to establish a Canadian-type health-care system, modified to accord with American conditions...

...Did old people's demands for care grow by 76 per cent...

...More likely, doctors' appetites for higher incomes were responsible...

...separation of payment for hospital care from payment for physician services...

...Payments would not be made to individual practitioners but to provider organizations: community health centers, group-practice organizations, and individual-practice associations...

...FAILING HEALTH A Wasteful System that Doesn't Work BY MILTON TERRIS Americans spend more than 11 per cent of the gross national product on health services—more than any other country—but adequate care for all is still out of reach...

...If Canada also pays doctors by fee-for-service, why are health expenditures 40 per cent higher in the United States...

...These estimated costs would be applied to all provider organizations, including individual practice associations which pay practitioners on a fee-for-service basis, in order to prevent unnecessary hospitalizations, surgical operations, and procedures...

...There is no scientific basis for the wholesale removal of children's tonsils, for example, but one study found that tonsillectomies were performed on 107 of every 10,000 people per year in British Columbia and on 200 per 10,000 in Ontario...

...During the 1980s, poverty increased in the United States...

...It is hardly surprising, then, that Americans undergo 40 per cent more surgical operations per capita than Canadians...

...But the most important causes of escalating health-care costs in the United States relate to two factors: the method of paying physicians, and the structure of the medical profession...

...As a World Health Organization expert committee has pointed out, "Countries with some of the lowest perinatal mortality rates in the world have Cesarian-section rates of less than 10 per cent...

...Illiteracy is a serious obstacle to learning about preventive measures such as personal hygiene, immunization, and lifestyle changes...

...the Physician Task Force on Hunger in America reported in 1985 that some twenty million Americans experience hunger at least some days every month...

...As costs have risen, so have insurance premiums, and so have complaints by employers, who have mounted a determined and increasingly successful drive to shift costs to their employees...

...All of these features of private health insurance were incorporated into Medicare, except that coverage of ambulatory care was included as a voluntary option...

...In Canada, the number of residency-training programs in the specialties is limited...

...The more services, the more income...

...Twenty-one countries have a lower infant-mortality rate than the United States...

...About 5,000 residencies were available in 1941, but the number had grown to 51,000 by 1972...

...In this five-year period, surgical services increased by 85 per cent, physicians' visits by 52 per cent, consultations by 127 per cent, diagnostic x-rays by 133 per cent, xray treatments by 109 per cent, and clinical lab services by 84 per cent...

...Administrative costs amount to at least 5 per cent of total health expenditures in the United States...

...Controlling the costs for fee-for-service payment is extremely difficult...

...Every provider organization would be required to establish a consumers' council and an employees' council, each of which would meet regularly with the administrator and have the right to appeal to local, state, and Federal health departments for investigation and action on deficiencies in the care and treatment of patients...

...plastic surgeons, $180,000...

...3) prompt response by health departments to appeals by consumers' and employees' councils...

...The median income of U.S...

...Poverty produces low self-esteem, mental dysfunction, alcoholism, drug addiction, and violence...

...The main reason, however, is the differing structures of the medical profession in the two countries...