Monday, August 31, 2009

The Great US Healthcare Debate—Is There a Rational Solution?

While this blog normally discusses issues affecting the Pharmaceutical and allied industry sectors, I think that the health care reform being “discussed” in the US is worthy of some focus. It is quite unfortunate that at least to my mind, we in the US are in the midst of a most difficult debate that goes to the very core of what our country and our values are. What is very clear to me is that the “Health care Reform” effort by the Obama administration is an enormous challenge, coated with many mistruths by both sides, wrapped around powerful special interests who are dead set against it, layered with good intentions and poor management and execution. My point is to put a perspective on what I think is going on and what the potential benefits and problems are in solving this enormous problem.

As best as I can tell the following “facts” are known:

Healthcare is expensive consuming arguably between 17-20% of GDP
Healthcare costs are growing disproportionately higher than economic growth
Value for money received as measured against other countries is well below many developed and emerging countries
The quality of service is very uneven with a shortage of primary care physicians and a disproportionately higher concentration of providers (physicians and hospitals) in urban centers
There are over 650,000 doctors serving our population of about 300,000,000 people (1:460)
There are somewhere between 40-50 million uninsured people and several times that number who are underinsured.
Due to the litigious nature of our society, much “defensive” medicine is being practiced and insurance rates for practitioners are very, very expensive and contribute to high healthcare costs.
There is significant fraud and inefficiencies in our current healthcare systems
Healthcare will be rationed by a government based system and the government can't run anything efficiently and furthermore it's more “socialization” of our great country.
The pharmaceutical industry is viewed as gouging the public and making obscene profits
Most of the developed world has a “single payer” systems and while there are many horror stories, by and large the systems work “better” and are more cost effective
There is an enormous concern with the American people about losing existing benefits, excessive costs of a newer system and is it “fair” to provide healthcare to all on an equal basis.

Some issues to consider, at least in my opinion are:

While we vociferously argue about what healthcare is currently like and what it may be, there is no single proposal that is available for discussion.
As an ENT physician in Haymarket, VA said to me, who says that 17-20% is a bad number-if my practice bills $1 million/year, there is 4-5 times that created in goods and services including laboratory tests, hospital visits, diagnostics, etc. Isn't that a great way to stimulate the economy?
Assuming a way was found to include on a somewhat equal basis the 40-50,000,000 uninsured and the multiple of that in underinsured, how do we find the provider capacity (doctors, clinics, hospitals, testing facilities, etc.), the administrative capacity to process the additional workloads and the technology and smarts to manage all of these moving parts?
The thought that healthcare will be rationed is a red herring in that to a large extent, existing insurance companies are determining level and quality of care today. I wonder if they are any more effective and/or efficient than the government would be. By the way as I understand it, the government today does run a world class healthcare business called the Veteran's Administration (VA) which provides outstanding service and has implemented an excellent electronic patient record system (EPRS).
Notably absent from the discussions I have heard is the lack or absence of discussions about reforming malpractice suits and other associated legal issues-could that be because of the previous career choices of many of our Congress and Executive branch.
The Pharmaceutical Industry and its adjacent industry sub-sectors are in the rifle sites of congress, however as we have stated before, with 40-50 million new covered lives and an average spend of $800/year (even $500/year if there is the 40% reduction in spend many discuss), there are billions in incremental revenue available, and in my opinion actually enhanced by the Comparative Effectiveness Scheme.

Your thoughts are as always welcome at