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Aaron E. Carroll

Aaron E. Carroll

Posted: November 17, 2009 09:35 AM

I Am a Scorpion. It Is My Nature.

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The fable, as it is told, involves a scorpion and a frog.  The scorpion needs to cross a river, so he asks the frog to carry him on his back.  The frog is skeptical; after all, scorpions kill.  The scorpion calms the frog, explaining that if he stung him on the swim across, they would both die.  Therefore, the frog can be assured the scorpion will do no such thing. “Trust me,” says the scorpion. “We’re in this together.”

Halfway across the river, the scorpion stings the frog. As the frog seizes up and they both begin to sink, the frog croaks, “Why?”

“I am a scorpion.  It is my nature.”

This is not a morality tale.  It is a parable about the nature of things. The scorpion isn’t evil any more than the frog is good.  But the frog ignores what the scorpion is at its peril.

We, as a country, are in trouble.  If we don’t find our way out of this mess, the stability of the United States is in danger.  This year, we will likely spend more than $2.4 trillion on health care.  That’s 16% of our GDP.  It’s unsustainable, and if we don’t get a handle on it, it will sink us.

We know why health care costs so much in the United States.  It’s because everything costs too much.  It’s compelling to try and find the bad guy in this, the one entity to blame.  Some people blame the private insurance companies, others the pharmaceutical industry, and others the government.  The truth is that this isn’t a battle of good versus evil - we are all to blame.  And instead of reforming the system in such a way as to take care of these many moving parts, reform as currently prescribed does as much as possible to keep the current system in place.  That is why it will ultimately fail.

“Trust us,” say the insurance companies.  “We’re in this together.”  We are meant to believe that if we put regulations in place, they will stop cherry picking patients.  We are told that now they will start equitably enrolling patients regardless of pre-existing conditions.  They won’t.

In the 1990s, private HMOs began to offer their services to Medicare recipients.  If you were over 65, you could choose a (private) Medicare HMO or regular (public) Medicare on a month-to-month basis. In 1997, researchers examined how people moved in and out of Medicare HMO plans and traditional Medicare.  Regulations were in place to make sure there would be no cherry picking.  So what happened?

People who wound up joining the (private) HMOs used 66% less care before joining than those who stayed in the (public) Medicare group.  Somehow the private insurance HMOs figured out a way to get the healthy people to jump ship out of the public plan into the private one.  Not only that, but people who left the (private) HMOs and went back to the (public) Medicare used 180% more care after leaving than the people who stayed.  Somehow the private insurance HMOs figured out a way to convince the sicker people to jump back to the public plans.

So we had a system where a private system and a public system were in an exchange like environment.  Regulations prevented cherry-picking.  And yet – somehow – the private plans figured out a way to do it.  That is their nature.

“Trust us,” say the pharmaceutical companies.  “We’re in this together.”  We are meant to believe that the astronomical prices we pay in the Unites States for pharmaceuticals will be remedied.  Apparently, President Obama has gotten a pledge from them that they will reduce drug prices charged to Medicare on the order of about $8 billion dollars a year.

Forget that the pharmaceutical industry claims they need astronomical payments to pay for research and development, when those costs comprise less of a percentage of sales than profits, and much less of a percentage of sales than marketing and administration.  Forget that we already pay far more for drugs than any other country in the world – for the same drugs.  We should trust the pharmaceutical companies that they will do their part to reduce costs.  After all, if our health care system sinks, so will they.

And yet:

In the last year, the industry has raised the wholesale prices of brand-name prescription drugs by about 9 percent, according to industry analysts. That will add more than $10 billion to the nation’s drug bill, which is on track to exceed $300 billion this year. By at least one analysis, it is the highest annual rate of inflation for drug prices since 1992.

The drug trend is distinctly at odds with the direction of the Consumer Price Index, which has fallen by 1.3 percent in the last year.

Drug makers say they have valid business reasons for the price increases. Critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.

“Trust us,” says the American Medical Association.  “We’re in this together.”  And yet, as independent reports show that outpatient and inpatient care account for most of the unnecessary health care costs in the United States, the AMA fights first and foremost for increased reimbursement – effectively increasing the cost of care.

 “Trust us,” say the politicians.  “We’re in this together.”  And yet, it becomes impossible to distinguish the policy from the politics; the politicians from the lobbyists; the truth from the lies.

I am in no way suggesting that any of the groups I have mentioned here are bad people or have evil intentions.  But we must acknowledge that their interests and ours do not always align.  This is not a morality tale.  It is a parable about the nature of things. We recognize the danger, but we seem committed to reform that depends on the good will of these stakeholders.  They ask us to recognize that we’re in this together.  They ask us to trust them. 

But we ignore their nature at our peril.

 

Read more about health care policy and get your questions answered at Rational Arguments.

 
 
 

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